<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 9, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SC INTERNATIONAL SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 6719 75-2607219
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
------------------------
FOR INFORMATION REGARDING ADDITIONAL REGISTRANTS, SEE "TABLE OF ADDITIONAL
REGISTRANTS."
------------------------
<TABLE>
<S> <C>
524 E. LAMAR BOULEVARD MR. PATRICK W. TOLBERT
ARLINGTON, TEXAS 76011-3999 EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL
(817) 792-2123 AND ADMINISTRATIVE OFFICER
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE SC INTERNATIONAL SERVICES, INC.
NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S 524 E. LAMAR BOULEVARD
PRINCIPAL EXECUTIVE OFFICES) ARLINGTON, TEXAS 76011-3999
(817) 792-2123
(NAME, ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
</TABLE>
COPIES OF COMMUNICATIONS TO:
JOEL I. GREENBERG, ESQ.
KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP
425 PARK AVENUE
NEW YORK, NEW YORK 10022
(212) 836-8201
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================
PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PRICE PER SECURITY OFFERING PRICE(1) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
9 1/4% Senior Subordinated Notes
due 2007....................... $300,000,000 100% $300,000,000 $90,909
- ----------------------------------------------------------------------------------------------------------
Guarantees of 9 1/4% Senior
Subordinated Notes due 2007.... -- -- -- (2)
==========================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(f) solely for the purpose of calculating the
registration fee.
(2) Pursuant to Rule 457(n), no additional registration fee is payable with
respect to the Guarantees of the Additional Registrants.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
=======================================================================================================
STATE OR OTHER PRIMARY STANDARD
JURISDICTION OF INDUSTRIAL I.R.S. EMPLOYER
EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS INCORPORATION OR CLASSIFICATION IDENTIFICATION
CHARTER ORGANIZATION CODE NUMBER NO.
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sky Chefs, Inc................................ Delaware 5812 13-1318387
- -------------------------------------------------------------------------------------------------------
Caterair International, Inc. (II)............. Delaware 5812 75-2607218
- -------------------------------------------------------------------------------------------------------
Caterair International Corporation............ Delaware 6512 52-1640561
- -------------------------------------------------------------------------------------------------------
Arlington Services, Inc. ..................... Delaware 6794 51-0344713
- -------------------------------------------------------------------------------------------------------
Arlington Services Holding Corporation........ Delaware 6719 51-0368977
- -------------------------------------------------------------------------------------------------------
JFK Caterers, Inc. ........................... Delaware 6719 52-1312557
- -------------------------------------------------------------------------------------------------------
Caterair Consulting Services Corporation...... Delaware 5812 52-0936585
- -------------------------------------------------------------------------------------------------------
Western Aire Chef, Inc. ...................... Delaware 6719 52-0974724
- -------------------------------------------------------------------------------------------------------
Bethesda Services, Inc. ...................... Delaware 6794 51-0369138
- -------------------------------------------------------------------------------------------------------
Caterair New Zealand Limited.................. Delaware 6719 51-0369139
- -------------------------------------------------------------------------------------------------------
Onex Ohio Finance Corp. ...................... Delaware 6141 75-2184952
- -------------------------------------------------------------------------------------------------------
Onex Ohio Finance Corp. II.................... Delaware 6141 75-2228384
- -------------------------------------------------------------------------------------------------------
Onex Ohio Equity Corp. ....................... Delaware 6141 75-2184952
- -------------------------------------------------------------------------------------------------------
Onex Ohio Equity Corp. II..................... Delaware 6141 75-2641451
- -------------------------------------------------------------------------------------------------------
Onex Ohio Credit Corp. ....................... Delaware 6141 75-2137074
- -------------------------------------------------------------------------------------------------------
Onex Ohio Credit Corp. II..................... Delaware 6141 75-2641443
- -------------------------------------------------------------------------------------------------------
Onex Ohio Acceptance Corporation.............. Delaware 6141 75-2137075
- -------------------------------------------------------------------------------------------------------
Onex Ohio Capital Corp. ...................... Delaware 6141 75-2344670
- -------------------------------------------------------------------------------------------------------
Onex Ohio Capital Corp. II.................... Delaware 6141 75-2641452
- -------------------------------------------------------------------------------------------------------
Onex Ohio Fiscal Corp. ....................... Delaware 6141 75-2273325
- -------------------------------------------------------------------------------------------------------
Onex Ohio Fiscal Corp. II..................... Delaware 6141 75-2641448
- -------------------------------------------------------------------------------------------------------
Onex Ohio Funds Corp. ........................ Delaware 6141 75-2272625
- -------------------------------------------------------------------------------------------------------
Onex Ohio Funds Corp. II...................... Delaware 6141 75-2641444
- -------------------------------------------------------------------------------------------------------
Caterair International Transition
Corporation................................. Delaware 5812 52-1947041
- -------------------------------------------------------------------------------------------------------
Sky Chefs International Corp. ................ Delaware 6719 13-3800220
- -------------------------------------------------------------------------------------------------------
Caterair Airport Properties, Inc. ............ Delaware 6719 52-1047952
- -------------------------------------------------------------------------------------------------------
Caterair St. Thomas Holdings Corporation...... Delaware 6719 52-1805211
- -------------------------------------------------------------------------------------------------------
Sky Chefs Argentine Inc. ..................... Delaware 6719 52-1689276
=======================================================================================================
</TABLE>
The address, including zip code, and telephone number, including area code,
of the principal executive offices of, and the name, address, including zip
code, and telephone number, including area code, of agent for service for, each
of the Additional Registrants other than Caterair International, Inc. (II),
Arlington Services, Inc., Arlington Services Holding Corporation, Bethesda
Services, Inc. and Caterair New Zealand Limited is the same as for SC
International Services, Inc., as set forth on the facing page of this
Registration Statement. The address, including zip code, and telephone number,
including area code, of the principal executive offices of Caterair
International, Inc. (II) is 6550 Rock Spring Drive, Bethesda, Maryland 20817
(telephone number (301) 897-7800), and the agent for service for Caterair
International, Inc. (II) is Thomas A. Statas, Vice President, Caterair
International, Inc. (II), 6550 Rock Spring Drive, Bethesda, Maryland 20817
(telephone number (301) 897-7800). The address, including zip code, and
telephone number, including area code, of the principal executive offices of
each of Arlington Services, Inc., Arlington Services Holding Corporation,
Bethesda Services, Inc. and Caterair New Zealand Limited is 300 Delaware Avenue,
Third Floor, Suite 315, Wilmington, Delaware 19801 (telephone number for
Arlington Services, Inc. and Arlington Services Holding Corporation (302)
427-7860 and telephone number for Bethesda Service, Inc. and Caterair New
Zealand Limited (302) 427-7863), and the agent for service for each of Arlington
Services, Inc., Arlington Services Holding Corporation, Bethesda Services, Inc.
and Caterair New Zealand Limited is Steven R. Director, Morris, James, Hitchens
& Williams, 222 Delaware Avenue, P.O. Box 2306, Wilmington, Delaware 19899
(telephone number (302) 888-6800). Copies of communications to any Additional
Registrant should be sent to Joel I. Greenberg, Esq., Kaye, Scholer, Fierman,
Hays & Handler, LLP, 425 Park Avenue, New York, NY 10022 (telephone number (212)
836-8201).
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED OCTOBER 9, 1997
PRELIMINARY PROSPECTUS
[LSG/SKYCHEFS LOGO] [CATERAIR INTERNATIONAL LOGO]
[SCIS LOGO] SC INTERNATIONAL SERVICES, INC.
OFFER TO EXCHANGE
9 1/4% SENIOR SUBORDINATED NOTES DUE 2007, SERIES B
FOR ALL OUTSTANDING
9 1/4% SENIOR SUBORDINATED NOTES DUE 2007, SERIES A
------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1997, UNLESS EXTENDED.
------------------------
SC International Services, Inc., a Delaware corporation (the "Issuer" or
"SCIS"), is hereby offering (the "Exchange Offer"), upon the terms and subject
to the conditions set forth in this Prospectus and the accompanying Letter of
Transmittal (the "Letter of Transmittal"), to exchange $1,000 principal amount
of its registered 9 1/4% Senior Subordinated Notes due 2007, Series B (the
"Exchange Notes"), for each $1,000 principal amount of its outstanding
unregistered 9 1/4% Senior Subordinated Notes due 2007, Series A (the "Private
Notes"), of which $300,000,000 in aggregate principal amount was issued on
August 28, 1997 and is outstanding as of the date hereof. The form and the terms
of the Exchange Notes are identical in all material respects to those of the
Private Notes, except for certain transfer restrictions and registration rights
relating to the Private Notes and except for certain interest provisions related
to such registration rights. The Exchange Notes will evidence the same
indebtedness as the Private Notes (which they replace) and will be issued
pursuant to, and entitled to the benefits of, an Indenture, dated as of August
15, 1997, governing the Private Notes and the Exchange Notes (the "Indenture").
The Private Notes and the Exchange Notes are sometimes referred to herein,
collectively, as the "Notes." See "The Exchange Offer" and "Description of
Notes."
Interest on the Notes will be payable semi-annually on March 1 and September
1 of each year commencing March 1, 1998, at the rate of 9 1/4% per annum. The
Notes will be redeemable, in whole or in part, at the option of the Issuer, at
any time on or after September 1, 2002, at the redemption prices set forth
herein (payable in cash), plus accrued interest to the date of redemption. In
addition, on or prior to September 1, 2000, the Issuer may redeem in the
aggregate up to $105,000,000 in principal amount of the Notes with the net cash
proceeds of one or more Public Equity Offerings (as defined herein) at a
redemption price of 109.25% of the principal amount of such Notes (payable in
cash), plus accrued interest to the date of redemption; provided that at least
$195,000,000 in principal amount of the Notes remains outstanding immediately
after any such redemption.
The Notes are general unsecured obligations of the Issuer, and are
subordinated in right of payment to all existing and future Senior Debt (as
defined herein) of the Issuer, including the Issuer's obligations under the
Senior Bank Financing (as defined herein). The Notes are guaranteed (the
"Guarantees") on a senior subordinated basis by Caterair International
Corporation ("Caterair") and certain domestic subsidiaries of the Issuer
(collectively, the "Guarantors"). The Guarantees are general unsecured
obligations of the Guarantors, and are subordinated in right of payment to all
existing and future Guarantor Senior Debt (as defined herein) of the Guarantors,
including guarantees and borrowings under the Senior Bank Financing. At June 30,
1997, on a pro forma basis after giving effect to the Offering (as defined
herein) and the application of the net proceeds therefrom, the Offer to Purchase
(as defined herein) and the Senior Bank Financing, including the Caterair
Refinancing (as defined herein), the aggregate amount of outstanding Senior Debt
of the Issuer (including borrowings and guarantees under the Senior Bank
Financing) would have been approximately $250.0 million and the aggregate amount
of outstanding Guarantor Senior Debt (excluding borrowings and guarantees under
the Senior Bank Financing) would have been approximately $31.8 million. LSG
Lufthansa Service GmbH is not an obligor on the Notes.
(continued on next page)
------------------------
SEE "RISK FACTORS," BEGINNING ON PAGE 19, FOR A DISCUSSION OF CERTAIN RISKS
THAT INVESTORS SHOULD CONSIDER IN CONNECTION WITH THE EXCHANGE OFFER AND AN
INVESTMENT IN THE EXCHANGE NOTES.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is , 1997
<PAGE> 4
(continued from previous page)
If a Change of Control (as defined herein) occurs, the Issuer will be
required to offer to repurchase the Notes at a purchase price equal to 101% of
the principal amount thereof, plus accrued interest to the date of repurchase.
There can be no assurance that the Issuer will have the financial ability or
will be permitted by its other indebtedness agreements to repurchase the Notes
upon a Change of Control. In addition, the Issuer and, under certain
circumstances, Caterair, will be required to offer to repurchase Notes with the
net cash proceeds of certain asset sales at a purchase price equal to 100% of
the principal amount thereof, plus accrued interest to the date of repurchase.
See "Description of Notes."
The Exchange Notes are being offered hereunder in order to satisfy certain
obligations of the Issuer and the Guarantors contained in the Registration
Rights Agreement, dated as of August 28, 1997 (the "Registration Rights
Agreement"), among the Issuer, the Guarantors, and BT Securities Corporation,
J.P. Morgan Securities Inc., Credit Suisse First Boston Corporation, Goldman,
Sachs & Co., Smith Barney Inc. and Bankers Trust International PLC, as the
initial purchasers (the "Initial Purchasers") of the Private Notes.
Based upon interpretations by the staff of the Securities and Exchange
Commission (the "Commission") set forth in no-action letters issued to third
parties unrelated to the Issuer, the Issuer believes that the Exchange Notes
issued pursuant to the Exchange Offer in exchange for Private Notes may be
offered for resale, resold and otherwise transferred by a holder thereof (other
than (i) any person who is an "affiliate" of the Issuer within the meaning of
Rule 405 under the Securities Act of 1933, as amended (the "Securities Act"), or
(ii) a broker-dealer who purchases Notes from the Issuer to resell pursuant to
Rule 144A under the Securities Act or any other available exemption under the
Securities Act) without compliance with the registration and prospectus delivery
provisions of the Securities Act; provided that such holder is acquiring the
Exchange Notes in the ordinary course of its business and such holder is not
engaging, and has no intention to engage, and has no arrangement or
understanding with any person to participate, in the distribution of the
Exchange Notes. Holders of Private Notes wishing to accept the Exchange Offer
must represent to the Issuer that such conditions have been met. Each
broker-dealer that will receive Exchange Notes for its own account in exchange
for Private Notes must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by such a broker-dealer in connection with resales of
Exchange Notes received in exchange for Private Notes, where such Private Notes
were acquired by such broker-dealer as a result of market-making or other
trading activities. The Issuer has agreed to make this Prospectus, as it may be
amended or supplemented from time to time, available to any such broker-dealer
that requests copies of such Prospectus in the Letter of Transmittal for use in
connection with any such resale for a period of up to 90 days after the
Expiration Date. See "The Exchange Offer" and "Plan of Distribution."
The Issuer will not receive any proceeds from, and has agreed to bear the
expenses of, the Exchange Offer. No underwriter is being used in connection with
the Exchange Offer.
The Exchange Offer will expire at 5:00 p.m., New York City time, on
, 1997, unless the Exchange Offer is extended by the Issuer in its
sole discretion. The Exchange Offer is not conditioned upon any minimum
aggregate principal amount of Private Notes being tendered for exchange.
The National Association of Securities Dealers, Inc. ("NASD") has
designated the Private Notes as securities eligible for trading in the Private
Offerings, Resales and Trading through Automated Linkages ("PORTAL") market of
the NASD, and the Issuer has been advised that the Initial Purchasers have
heretofore acted as market makers for the Private Notes. Holders of Private
Notes whose Private Notes are not tendered and accepted in the Exchange Offer
will continue to hold such Private Notes and will be entitled to all the rights
and preferences and will be subject to the limitations applicable thereto under
the Indenture. Following consummation of the Exchange Offer, the holders of
Private Notes will continue to be subject to the existing restrictions upon
transfer thereof and the Issuer, subject to limited exceptions, will have no
further
(ii)
<PAGE> 5
obligation to such holders to provide for the registration under the Securities
Act of the Private Notes held by them. To the extent that any Private Notes are
tendered and accepted in the Exchange Offer, a holder's ability to sell
untendered Private Notes could be adversely affected. No assurances can be given
as to the liquidity of the trading market for the Private Notes.
Prior to the Exchange Offer, there has been no public market for the
Exchange Notes. There can be no assurance as to the liquidity of any market that
may develop for the Exchange Notes, the ability of holders to sell the Exchange
Notes, or the price at which holders would be able to sell the Exchange Notes.
Each of the Initial Purchasers has advised the Issuer that it currently intends
to make a market in the Exchange Notes. The Initial Purchasers are not obligated
to do so, however, and any market-making activities with respect to the Exchange
Notes may be discontinued at any time without notice. Future trading prices of
the Exchange Notes will depend on many factors, including among other things,
prevailing interest rates, the Issuer's and the Guarantors' operating results
and the market for similar securities. Historically, the market for securities
similar to the Exchange Notes, including non-investment grade debt, has been
subject to disruptions that have caused substantial volatility in the prices of
such securities. There can be no assurance that any market for the Exchange
Notes, if such a market develops, will not be subject to similar disruptions.
See "Risk Factors -- Lack of Public Market for the Notes."
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE ISSUER ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF PRIVATE NOTES IN ANY JURISDICTION IN
WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND THE LETTER OF
TRANSMITTAL IN CONNECTION WITH THE EXCHANGE OFFER, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE ISSUER OR ANY OF THE GUARANTORS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN
THOSE TO WHICH IT RELATES, NOR DOES IT CONSTITUTE AN OFFER TO SELL, OR THE
SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR THE EXCHANGE PROPOSED TO BE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE ISSUER OR ANY OF THE GUARANTORS SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act. The Issuer and the Guarantors are hereby
providing cautionary statements identifying important factors that could cause
the Issuer's and the Guarantors' actual results to differ materially from those
projected in forward-looking statements made in this Prospectus. Any statements
that express, or involve discussions as to, expectations, beliefs, plans,
objectives, assumptions or future events or performance (often, but not always,
through the use of words or phrases such as "will likely result," "are expected
to," "will continue," "is anticipated," "estimate," "intends," "plans,"
"projection" and "outlook") are not historical facts and may be forward-looking
and, accordingly, such statements involve estimates, assumptions and
uncertainties which could cause actual results to differ materially from those
expressed in the forward-looking statements. Accordingly, any such statements
are qualified in their entirety by reference to, and are accompanied by, the
(iii)
<PAGE> 6
factors discussed throughout this Prospectus, and particularly in the risk
factors set forth herein under "Risk Factors." Among the key factors that have a
direct bearing on the Issuer's and the Guarantors' results of operations are the
substantial indebtedness and significant debt service obligations of the Issuer
and the Guarantors; changes in the airline industry, the airline catering
industry and the catering industry generally; acceptance of new business
initiatives; the Issuer's and the Guarantors' ability to implement their
business strategies and to successfully integrate acquired companies;
availability of key personnel; intensified competition; changes in general
economic conditions; fluctuations in foreign currency exchange rates; changes in
operating costs or volume; availability of funds; the loss of a significant
customer; product liability litigation; and changes in government regulation.
These and other factors are discussed herein under "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
elsewhere in this Prospectus.
The risk factors described herein could cause actual results or outcomes to
differ materially from those expressed in any forward-looking statements of the
Issuer and the Guarantors or made by or on behalf of the Issuer and the
Guarantors, and investors, therefore, should not place undue reliance on any
such forward-looking statements. Further, any forward-looking statement speaks
only as of the date on which such statement is made, and the Issuer and the
Guarantors undertake no obligation to update any forward-looking statement or
statements to reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated events. New
factors emerge from time to time, and it is not possible for management to
predict all of such factors. Further, management cannot assess the impact of
each such factor on the Issuer's and the Guarantors' businesses or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
(iv)
<PAGE> 7
SUMMARY
The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and financial data, including
the Financial Statements and notes thereto, appearing elsewhere in this
Prospectus. Unless the context otherwise requires, the "Company" refers to (i)
subsequent to September 29, 1995, the combined businesses of SC International
Services, Inc. ("SCIS" or the "Issuer") and Caterair International Corporation
("Caterair") and their subsidiaries and (ii) until September 29, 1995, the
business of Sky Chefs, Inc. ("Sky Chefs"). The term "Guarantors" refers to Sky
Chefs and Caterair International, Inc. (II) ("CII"), both wholly-owned
subsidiaries of the Issuer, certain other indirectly wholly-owned domestic
subsidiaries of SCIS, and Caterair.
THE COMPANY
The Company is the world's largest provider of airline catering services,
with food service revenues (as defined herein) for the twelve months ended June
30, 1997 of approximately $1.6 billion. Management believes that these revenues
are more than 50% higher than those of its next largest competitor in the
airline catering industry. The Company had Adjusted EBITDA (as defined herein)
for the twelve months ended June 30, 1997 of approximately $168 million. See
"-- Summary Unaudited Combined Pro Forma Financial Data." The Company currently
operates, directly or through joint ventures, 135 kitchens located at or
adjacent to 113 airports in 27 countries. Approximately 63% of the Company's
food service revenues for the twelve months ended June 30, 1997 were derived
from United States operations and 37% from international operations. On a daily
basis, the Company services an average of over 7,000 domestic and international
airline flights and prepares an average of 650,000 meals. SCIS is a Delaware
corporation, incorporated in 1995 in connection with the transactions which
effectuated the combination of the businesses of Sky Chefs and Caterair (the
"Combination"). See "Certain Transactions -- The Combination."
STRENGTHS
The Company believes that the following factors contribute to its position
as the world's market leader in the airline catering industry:
- - WORLDWIDE COVERAGE. The Company is the only airline caterer with a
significant operating presence in both the United States and international
markets. Management believes that the Company's global network of kitchens,
strategically located to service major international airlines, provides
significant competitive advantages. As a result, management believes the
Company is well positioned to take advantage of the anticipated growth in
international airline traffic and the higher and more stable food service
levels provided on long-haul flights (over two and one-half hours), some of
which offer up to three meals. Management also believes that the breadth of
the global network operated by the Company and its strategic marketing
partner, LSG Lufthansa Service GmbH ("LSG"), provides a significant
opportunity to attract international airlines with a single supplier
approach worldwide. The Company currently operates kitchens at or adjacent
to 25 international gateway airports, including substantially all of the
international gateway airports in the United States, Latin America and
Australia, and the Company or LSG also operate kitchens at a significant
number of international gateway airports in Europe, including London,
Paris, Frankfurt and Rome. See "Business -- Strategy -- Promote Single
Supplier Approach."
- - LSG STRATEGIC ALLIANCE. The Company's worldwide coverage is enhanced through
a strategic marketing alliance formed in 1993 with LSG, the airline
catering subsidiary of Lufthansa German Airlines ("Lufthansa"). The
alliance creates an international marketing network with kitchens at or
near 153 airports in 39 countries, including 29 international gateway
airports. The Company and LSG, while remaining separate companies,
generally conduct operations under the "LSG Lufthansa Service/SKY Chefs"
name and logo and organize their respective marketing activities with the
goal of achieving a coordinated approach to customers on a worldwide basis.
See "Business -- Strategy -- Promote Single Supplier Approach" and "Certain
Transactions -- LSG Lufthansa Service GmbH."
<PAGE> 8
- - DIVERSE AND STABLE CUSTOMER BASE. The Company provides airline catering
services to over 250 airlines, comprising substantially all of the world's
major airlines. The Company's five largest North American customers are
American Airlines ("American"), Delta Air Lines ("Delta"), Northwest
Airlines, United Airlines and Canadian Airlines and the Company's five
largest international customers are Qantas Airways, British Airways, Japan
Air Lines, Lufthansa and Cathay Pacific Airlines. The Company has conducted
business with each of these customers for at least ten years. Since its
acquisition from AMR Corporation ("AMR"), the parent of American, in 1986,
Sky Chefs has provided services to American under long-term contracts. The
current Sky Chefs contract with American runs through the end of 2003 and,
together with Caterair's contract with American, which runs through the end
of 2001, accounted for approximately 30% of the Company's 1996 food service
revenues. No other customer of the Company accounted for more than six
percent of its 1996 food service revenues. See "Risk Factors -- Dependence
on Key Customers" and "Business -- Customers -- Contracts."
- - LOW COST STRUCTURE. In 1992, Sky Chefs implemented an extensive operating
improvement plan which reduced annual operating costs by approximately $47
million in 1994 as compared with 1992. Due in large part to its operating
improvement plan, Sky Chefs increased EBITDA from $29 million in 1992 to
$59 million in 1994 and improved EBITDA as a percentage of revenues from
6.1% to 12.6% over the same period. As part of the Combination which was
consummated on September 29, 1995, management estimated that approximately
$55 million of net cost savings on an annualized basis were achievable by
the end of the third year of combined operations of Sky Chefs and Caterair.
Management believes that as of June 30, 1997 a significant portion of these
net cost savings have been achieved as evidenced by an increase in the
combined companies' Adjusted EBITDA from $123 million for the year ended
December 31, 1994 to $168 million for the twelve months ended June 30, 1997
and an improvement in Adjusted EBITDA as a percentage of the combined
companies' revenues from 8.0% for the year ended December 31, 1994 to 10.6%
for the twelve months ended June 30, 1997. See "-- Summary Unaudited
Combined Pro Forma Financial Data." These net cost savings have been
achieved through, among other things, increasing labor productivity and
reducing labor and employee costs at certain of the kitchens formerly
operated by Caterair (the "Caterair Kitchens"); consolidating certain
corporate level management and administrative functions of Sky Chefs and
Caterair; reducing food waste spoilage and shrinkage at certain of the
Caterair Kitchens; eliminating redundant kitchens; and reducing other
kitchen operating expenses at certain of the Caterair Kitchens. In order to
achieve these net cost savings, the Company estimated that it would incur
approximately $52 million in non-recurring costs through September 1997
principally relating to (i) severance payments and other employee costs,
(ii) external consulting services primarily associated with the
implementation of labor savings programs and (iii) other items in
connection with the integration of the business of Sky Chefs and Caterair.
Through June 30, 1997, the Company had incurred approximately $47 million
of such non-recurring costs and the Company currently estimates that the
remaining $5 million of non-recurring costs identified to achieve the $55
million of estimated net cost savings on an annualized basis will be
expended during the balance of 1997. See "Business -- Strengths -- Low Cost
Structure," "Selected Historical Financial Data -- SCIS" and "Certain
Transactions -- The Combination."
STRATEGY
The Company's business strategy is to: (i) promote a single supplier
approach to the marketing of services through the Company's worldwide network
with LSG; (ii) expand international operations by pursuing new business at
existing locations and by expanding to new locations at international gateway
airports; (iii) develop non-airline catering opportunities; and (iv) achieve
additional net cost savings, while maintaining service quality.
- - PROMOTE SINGLE SUPPLIER APPROACH. The Company and LSG, through their
respective global kitchen networks, intend to continue to promote the
benefits that a global catering network can offer to worldwide airlines.
These benefits include enabling customers to streamline planning for meals
and service scheduling, as well as enhancing communications with airline
caterers and improving their capacity to monitor the quality of catering
services. This approach has enabled the Company and LSG to obtain
2
<PAGE> 9
long-term contracts with Delta, Northwest Airlines and Canadian Airlines
and the Company and LSG intend to continue to pursue long-term contracts
with other existing and new customers. See "Business -- Strengths -- LSG
Strategic Alliance" and "Certain Transactions -- LSG Lufthansa Service
GmbH."
- - EXPAND INTERNATIONAL OPERATIONS. The Company intends to continue to pursue
an international market
development program by competing for new business at international gateway
airports where it currently operates, engaging in strategic acquisitions of
international airline caterers and stand-alone kitchens, and entering into
joint venture arrangements with airlines and other parties in markets
outside the United States. In particular, the Company plans to focus on the
development of opportunities at international gateway airports. Such a plan
is expected to provide the Company with the benefit of higher and more
stable food service levels from long-haul flights and greater access to
international airline traffic from such airports. During 1997, the Company
acquired a 49% interest in an airline catering business in Mexico and
acquired the airline catering business of Air New Zealand at Auckland,
Wellington, Christchurch and Rarotonga. Since September 1995, the Company
has also acquired airline catering businesses in Bogota, Colombia,
Asuncion, Paraguay and Guayaquil, Ecuador through an existing joint
venture.
- - DEVELOP NON-AIRLINE CATERING OPPORTUNITIES. The Company is pursuing a
strategy to sell food services to non-airline customers in order to further
diversify its revenue base. The Company will focus on developing the
business of preparing and delivering meals from its kitchens to
supermarkets and convenience stores in the United States and employee
cafeterias at industrial plants and office buildings in Latin America. The
Company currently produces fresh food products in two major geographic
markets for The Southland Corporation for sale in 7-Eleven stores and is
operating a pilot program with a subsidiary of The Sara Lee Corporation for
the production of home meal solutions. The United States market for
supermarket and convenience store home meal solutions was approximately $8
billion in 1996 and is expected to grow rapidly as dual income families
seek alternatives to in-home preparation of meals and restaurant dining.
The Company believes that these alternative markets, particularly the
United States home meal solutions market, represent substantial future
opportunities. See "Business -- Non-Airline Catering Operations."
- - ACHIEVE ADDITIONAL NET COST SAVINGS. The Company will continue to implement
its operating improvement plan in an effort to achieve additional net cost
savings. See "-- Low Cost Structure."
PRINCIPAL STOCKHOLDERS
The Company is controlled by Onex Corporation ("Onex") and its affiliates.
Onex, based in Toronto, Canada, is a publicly listed (on the Toronto Stock
Exchange and the Montreal Exchange) diversified holding company that operates
through autonomous subsidiaries and strategic partnerships. In addition to its
interests in the Company, as of June 30, 1997, Onex had investments in a broad
range of companies, including Celestica Inc., ProSource, Inc., Tower Automotive,
Inc., Dura Automotive Systems, Inc., Scotsman Industries, Inc., Phoenix Pictures
Inc. and Vencap, Inc. Onex had consolidated revenues of C$8.9 billion for the
year ended December 31, 1996 and consolidated assets of C$3.8 billion at
December 31, 1996.
LSG is the airline catering subsidiary of Lufthansa. In connection with the
formation of the strategic marketing alliance with Sky Chefs, LSG acquired from
stockholders of Onex Food Services, Inc. ("OFSI"), the parent of SCIS, a 23.3%
interest in OFSI for $75 million. See "Certain Transactions -- LSG Lufthansa
Service GmbH." Neither Onex nor LSG is an obligor on the Notes.
HISTORICAL BACKGROUND
Sky Chefs was formed in 1941 as the captive airline catering subsidiary of
American and was acquired in 1986 from AMR, the parent of American, by Onex
Capital Corporation ("Onex Capital"), the indirect parent of OFSI and an
affiliate of Onex, and members of Sky Chefs' management.
Marriott Corporation ("Marriott") founded the airline catering industry in
1937 when it began providing meals on commercial airline flights in the
Washington, D.C. area. Caterair acquired Marriott's airline catering business in
December 1989 through a management-led buy-out.
3
<PAGE> 10
On September 29, 1995, the Sky Chefs and Caterair businesses were combined,
creating the world's largest airline catering business. See "Certain
Transactions -- The Combination."
The principal executive offices of SCIS and the Guarantors (other than CII)
are located at 524 East Lamar Blvd., Arlington, Texas 76011 (telephone number
(817) 792-2123). The principal executive offices of CII are located at 6550 Rock
Spring Drive, Bethesda, Maryland, 20817 (telephone number (301) 897-7800).
THE REFINANCING
On August 28, 1997, the Issuer and the Guarantors consummated an offering
of the Private Notes and the related Guarantees in a transaction exempt from the
registration requirements of the Securities Act (the "Offering"). The price to
investors of the Private Notes was $299.6 million in the aggregate and the
principal amount of the Private Notes is $300.0 million in the aggregate.
The net proceeds to SCIS from the Offering, after deduction of discounts
and offering expenses, were approximately $289.9 million. SCIS used $209.4
million of the net proceeds to repay and retire all of its outstanding term loan
indebtedness under the Credit Agreement, dated as of September 29, 1995, among
SCIS, Caterair, Caterair Holdings Corporation ("Caterair Holdings"), the parent
of Caterair, OFSI and the lenders named therein (the "Old Credit Agreement").
The indebtedness of SCIS under the Old Credit Agreement which was repaid had
maturities ranging from September 15, 1997 to September 15, 2003 and accrued
interest at fluctuating rates (an average weighted rate of 8.7% per year at
August 21, 1997).
On August 25, 1997, SCIS commenced a tender offer for all of its $125.0
million principal amount of 13% Senior Subordinated Notes due 2005 (the
"Existing Notes"). In connection therewith, SCIS offered to purchase all of the
Existing Notes at a price equal to 117% of the principal amount thereof plus
accrued and unpaid interest to the date of purchase and solicited consents to
certain amendments (the "Existing Indenture Amendments") to the Indenture
relating to the Existing Notes from the holders thereof (collectively, the
"Offer to Purchase"). Holders of Existing Notes who consented to the Existing
Indenture Amendments received a payment equal to 2% of the principal amount of
the Existing Notes for which a consent was delivered. Holders of the Existing
Notes were not permitted to tender their Existing Notes without consenting to
the Existing Indenture Amendments or to consent to the Existing Indenture
Amendments without tendering their Existing Notes.
The Offer to Purchase expired on September 24, 1997. All of the Existing
Notes were tendered by the holders thereof and accepted for payment by SCIS in
connection with the Offer to Purchase. SCIS paid $148.75 million (excluding
$7.85 million of accrued interest) in the aggregate in consideration of the
repurchase of the Existing Notes and the related consents. SCIS used $80.50
million of the net proceeds from the Offering and $68.25 million of borrowings
under the Term Loan Agreement (as defined herein) to fund such payments.
In connection with the Offering, SCIS, certain other parties and certain
lenders entered into a senior secured revolving credit agreement (the "Revolving
Credit Agreement"), and Caterair, SCIS, certain other parties and certain
lenders entered into a senior secured credit agreement (the "Term Loan
Agreement," and together with the Revolving Credit Agreement, the "Senior Bank
Financing"). See "Description of Certain Indebtedness -- Senior Bank Financing."
Concurrently with the Offering, Caterair, a Guarantor of the Notes, repaid
and retired all of its outstanding indebtedness under the Old Credit Agreement
(approximately $155.9 million) with borrowings under the Term Loan Agreement
(the "Caterair Refinancing"). See "Description of Certain Indebtedness -- Senior
Bank Financing."
4
<PAGE> 11
CORPORATE STRUCTURE
The following chart summarizes the ownership structure of OFSI, SCIS, Sky
Chefs, CII, Caterair and Caterair Holdings and certain of their subsidiaries,
and certain relationships among such parties.
[CHART]
- ---------------
(1) Represents shares indirectly owned by Onex (63.9%) and shares for which Onex
has voting control (12.3%).
(2) Onex indirectly also holds in excess of 25% of the shares of Class A
non-voting common stock of Caterair Holdings.
(3) Certain indirectly wholly-owned domestic subsidiaries of SCIS are Guarantors
of the Notes. See "Description of Notes -- Guarantees."
5
<PAGE> 12
THE EXCHANGE OFFER
The Exchange Offer......... The Issuer is hereby offering to exchange $1,000
principal amount of Exchange Notes for each $1,000
principal amount of Private Notes that are properly
tendered and accepted. The Issuer will issue
Exchange Notes on or as promptly as practicable
after the Expiration Date. As of the date hereof,
there is $300,000,000 aggregate principal amount of
Private Notes outstanding. See "The Exchange
Offer." The Exchange Offer is not conditioned upon
any minimum aggregate principal amount of Private
Notes being tendered for exchange.
Based upon interpretations by the staff of the
Commission set forth in no-action letters issued to
third parties unrelated to the Issuer, the Issuer
believes that the Exchange Notes issued pursuant to
the Exchange Offer in exchange for Private Notes
may be offered for resale, resold and otherwise
transferred by a holder thereof (other than (i) any
person who is an "affiliate" of the Issuer within
the meaning of Rule 405 under the Securities Act or
(ii) a broker-dealer who purchases Notes from the
Issuer to resell pursuant to Rule 144A under the
Securities Act or any other available exemption
under the Securities Act) without compliance with
the registration and prospectus delivery provisions
of the Securities Act; provided that such holder is
acquiring the Exchange Notes in the ordinary course
of its business and such holder is not engaging,
and has no intention to engage, and has no
arrangement or understanding with any person to
participate, in the distribution of the Exchange
Notes. Holders of Private Notes wishing to accept
the Exchange Offer must represent to the Issuer
that such conditions have been met. Each broker-
dealer that will receive Exchange Notes for its own
account in exchange for Private Notes, where such
Private Notes were acquired by such broker-dealer
as a result of market-making or other trading
activities, must acknowledge in the Letter of
Transmittal that it will deliver a prospectus in
connection with any resale of such Exchange Notes;
however by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to
time, may be used by such a broker-dealer in
connection with resales of Exchange Notes received
in exchange for Private Notes acquired by such
broker-dealer as a result of market-making or other
trading activities. See "The Exchange
Offer -- Resale of the Exchange Notes" and "Plan of
Distribution."
In addition, to comply with the securities laws of
certain jurisdictions, if applicable, the Exchange
Notes may not be offered or sold unless they have
been registered or qualified for sale in such
jurisdictions or an exemption from registration or
qualification is available and complied with. The
Issuer and the Guarantors have agreed, pursuant to
the Registration Rights Agreement (subject to
certain specified limitations set forth therein),
to use their reasonable best efforts to register or
qualify the Exchange Notes for offer or sale under
the securities or blue sky laws of such
jurisdictions as any holder of the Notes reasonably
requests in writing.
Registration Rights
Agreement.................. The Private Notes and the related Guarantees were
sold by the Issuer and the Guarantors to the
Initial Purchasers in a transaction exempt from the
registration requirements of the Securities Act on
August 28, 1997 pursuant to a Purchase Agreement,
dated August 22, 1997, by and
6
<PAGE> 13
among the Issuer, the Guarantors and the Initial
Purchasers (the "Purchase Agreement"). Pursuant to
the Purchase Agreement, the Issuer, the Guarantors
and the Initial Purchasers entered into a
Registration Rights Agreement, dated August 28,
1997, which grants the holders of the Private Notes
certain exchange and registration rights. The
Exchange Offer is intended to satisfy such rights,
which terminate upon consummation of the Exchange
Offer. The holders of Exchange Notes will not be
entitled to any exchange or registration rights
with respect to the Exchange Notes. See "The
Exchange Offer -- Termination of Certain Rights."
Expiration Date............ The Exchange Offer will expire at 5:00 p.m., New
York City time, on , 1997, unless the Exchange
Offer is extended by the Issuer in its sole
discretion, in which case the term "Expiration
Date" shall mean the latest date and time to which
the Exchange Offer is extended. See "The Exchange
Offer -- Expiration Date; Extensions; Termination."
Conditions to the
Exchange Offer........... The Exchange Offer is subject to certain customary
conditions, certain of which may be waived by the
Issuer. See "The Exchange Offer -- Certain
Conditions to the Exchange Offer." The Issuer
reserves the right to terminate or amend the
Exchange Offer at any time prior to the Expiration
Date upon the occurrence of any such conditions.
Procedures for Tendering
Private Notes.............. Each holder of Private Notes wishing to accept the
Exchange Offer must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, in
accordance with the instructions contained herein
and therein, and mail or otherwise deliver such
Letter of Transmittal, or such facsimile, together
with the Private Notes and any other required
documentation to The Bank of New York, as exchange
agent (the "Exchange Agent"), at the address set
forth herein. Private Notes may be physically
delivered, but physical delivery is not required if
a confirmation of a book-entry transfer of such
Private Notes to the Exchange Agent's account at
The Depository Trust Company ("DTC" or the
"Depositary") is delivered in a timely fashion. By
executing the Letter of Transmittal, each holder of
Private Notes will represent to and agree with the
Issuer that, among other things, (i) the Exchange
Notes to be acquired pursuant to the Exchange Offer
are being acquired in the ordinary course of
business of the person receiving such Exchange
Notes, whether or not such person is the holder,
(ii) that neither the holder nor any such other
person is engaged in, or intends to engage in, or
has an arrangement or understanding with any person
to participate in, the distribution of the Exchange
Notes, and (iii) that neither the holder nor any
such other person is an "affiliate" of the Issuer
within the meaning of Rule 405 under the Securities
Act (or, if such holder or other person is an
affiliate, that it will comply with the
registration and prospectus delivery requirements
of the Securities Act to the extent applicable).
Each broker-dealer that will receive Exchange Notes
for its own account in exchange for Private Notes,
where such Private Notes were acquired by such
broker-dealer as a result of market-making or other
trading activities, must acknowledge in the Letter
of Transmittal that it will deliver a prospectus in
connection with any resale of such Exchange Notes;
however, by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the
meaning of the
7
<PAGE> 14
Securities Act. See "The Exchange
Offer -- Procedures for Tendering" and "Plan of
Distribution."
Special Procedures for
Beneficial Owner........... Any beneficial owner whose Private Notes are held
through a broker, dealer, commercial bank, trust
company or other nominee and who wishes to tender
such Private Notes in the Exchange Offer should
contact such intermediary promptly and instruct
such intermediary to tender on such beneficial
owner's behalf. See "The Exchange Offer --
Procedures for Tendering."
Guaranteed Delivery
Procedures............... Holders of Private Notes who wish to tender their
Private Notes and whose Private Notes are not
immediately available or who cannot deliver their
Private Notes, the Letter of Transmittal or any
other documentation required by the Letter of
Transmittal to the Exchange Agent prior to the
Expiration Date, must tender their Private Notes
according to the guaranteed delivery procedures set
forth under "The Exchange Offer -- Guaranteed
Delivery Procedures."
Acceptance of the Private
Notes and Delivery of the
Exchange Notes........... Subject to the satisfaction or waiver of the
conditions to the Exchange Offer, the Issuer will
accept for exchange any and all Private Notes that
are properly tendered in the Exchange Offer prior
to the Expiration Date. The Exchange Notes issued
pursuant to the Exchange Offer will be delivered on
the earliest practicable date following the
Expiration Date. See "The Exchange Offer -- Terms
of the Exchange Offer."
Withdrawal Rights.......... Tenders of Private Notes may be withdrawn at any
time prior to the Expiration Date. See "The
Exchange Offer -- Withdrawal of Tenders."
Certain Federal Income Tax
Considerations........... For a discussion of certain federal income tax
considerations relating to the exchange of the
Private Notes for the Exchange Notes, see "Certain
Federal Income Tax Considerations -- Tax
Consequences of the Exchange Offer."
Exchange Agent............. The Bank of New York is serving as the Exchange
Agent in connection with the Exchange Offer. See
"The Exchange Offer -- Exchange Agent." The Bank of
New York also serves as trustee under the
Indenture.
8
<PAGE> 15
THE NOTES
The Exchange Offer applies to $300,000,000 aggregate principal amount of
the Private Notes. The form and terms of the Exchange Notes are identical in all
material respects to the form and terms of the Private Notes except that the
Exchange Notes will have been registered under the Securities Act and,
therefore, the Exchange Notes will not bear legends restricting the transfer
thereof and holders of the Exchange Notes will not be entitled to any of the
registration rights of holders of the Private Notes under the Registration
Rights Agreement (or related rights to certain interest payments upon the
failure of the Issuer to fulfill certain conditions set forth in the
Registration Rights Agreement), which rights will terminate upon consummation of
the Exchange Offer. The Exchange Notes will evidence the same indebtedness as
the Private Notes (which they replace), and will be issued under, and be
entitled to the benefits of, the Indenture. The Private Notes and the Exchange
Notes will be considered collectively to be a single class for all purposes
under the Indenture. See "Description of Notes."
Issuer..................... SC International Services, Inc., a Delaware
corporation.
Securities Offered......... $300.0 million aggregate principal amount of 9 1/4%
Senior Subordinated Notes due 2007.
Maturity Date.............. September 1, 2007.
Interest Rate and
Payment Dates............ The Notes bear interest at a rate of 9 1/4% per
annum. Interest will accrue from the date of
original issuance and will be payable semi-annually
on each March 1 and September 1, commencing on
March 1, 1998.
Sinking Fund............... None.
Optional Redemption........ The Notes will be redeemable at the option of the
Issuer at any time, in whole or in part, on or
after September 1, 2002, at the redemption prices
set forth herein (payable in cash), plus accrued
interest to the date of redemption. In addition, at
any time on or prior to September 1, 2000, the
Issuer may redeem in the aggregate up to $105.0
million in principal amount of the Notes with the
net cash proceeds of one or more Public Equity
Offerings at the redemption prices set forth herein
(payable in cash), plus accrued interest to the
date of redemption; provided that (i) at least
$195.0 million in principal amount of the Notes
remains outstanding immediately after any such
redemption and (ii) such redemption is effected not
more than 60 days after the consummation of such
Public Equity Offering. See "Description of Notes
-- Redemption."
Change of Control.......... If a Change of Control occurs, the Issuer will be
required to offer to repurchase the Notes at a
purchase price equal to 101% of the principal
amount thereof, plus accrued interest to the date
of repurchase. Prior to making any such offer to
repurchase the Notes, the Issuer and/or Caterair
are required to repay in full all indebtedness
under the Senior Bank Financing and the Issuer may
be required to repay other Senior Debt of the
Issuer, the terms of which require repayment upon a
Change of Control, or obtain the requisite consents
under the Senior Bank Financing and any such other
Senior Debt to consummate such offer. At June 30,
1997, on a pro forma basis after giving effect to
the Offering and the application of the net
proceeds therefrom, SCIS' Offer to Purchase and the
Senior Bank Financing, including the Caterair
Refinancing, the aggregate amount of outstanding
Senior Debt of the Issuer (including borrowings and
guarantees under the Senior Bank Financing) would
have been approximately $250.0 million (excluding
$25.0 million of letters of credit). After
repayment of all indebtedness under the Senior Bank
Financing and all such other Senior Debt, there can
be no
9
<PAGE> 16
assurance that the Issuer would have sufficient
funds available or would be permitted under its
other indebtedness agreements to repurchase the
Notes upon the occurrence of a Change of Control.
See "Risk Factors -- Change of Control" and
"Description of Notes -- Change of Control."
Offers to Purchase......... The Issuer and, under certain circumstances,
Caterair, will be required to offer to repurchase
Notes with the net cash proceeds of certain asset
sales at a purchase price equal to 100% of the
principal amount thereof, plus accrued interest to
the date of repurchase. See "Description of Notes
-- Certain Covenants -- Limitation on Asset Sales."
Guarantees................. The Private Notes are, and the Exchange Notes will
be, guaranteed (the "Guarantees") by Sky Chefs,
CII, Caterair and certain other indirectly
wholly-owned domestic subsidiaries of SCIS, on a
senior subordinated basis. The Guarantees are
general unsecured obligations of the Guarantors,
and are subordinated in right of payment to all
existing and future Guarantor Senior Debt. See
"Description of Notes -- Guarantees."
Ranking.................... The Notes are general unsecured obligations of the
Issuer, and are subordinated in right of payment to
all existing and future Senior Debt of the Issuer,
including the Issuer's obligations under the Senior
Bank Financing. At June 30, 1997, on a pro forma
basis after giving effect to the Offering and the
application of the net proceeds therefrom, SCIS'
Offer to Purchase and the Senior Bank Financing,
including the Caterair Refinancing, the aggregate
amount of outstanding Senior Debt of the Issuer
(including borrowings and guarantees under the
Senior Bank Financing) would have been
approximately $250.0 million (excluding $25.0
million of letters of credit) and the Issuer would
have had approximately $65.0 million available to
be borrowed pursuant to the Revolving Credit
Agreement, and the Guarantors would have had
approximately $31.8 million of Guarantor Senior
Debt outstanding (excluding the loan by SCIS to
Caterair and the Guarantors' borrowings and
guarantees under the Senior Bank Financing). In
addition, the Notes are structurally subordinated
to all liabilities of the Issuer's subsidiaries
(other than subsidiaries which are Guarantors)
because these liabilities have priority over the
claims of the Issuer as the stockholder of such
subsidiaries. Accordingly, any right of the Issuer
to receive assets of any of its subsidiaries (other
than a subsidiary which is a Guarantor) upon such
subsidiary's liquidation or reorganization (and the
consequent right of the holders of Notes to
participate in those assets) will be subordinated
to the claims of such subsidiary's creditors. The
Senior Bank Financing also is secured by
substantially all of the assets of the Issuer and
Caterair and their respective domestic
subsidiaries. See "Description of Notes --
Subordination."
Certain Covenants.......... The Indenture governing the Notes contains
covenants which, among other things, impose certain
limitations on the ability of the Issuer and its
Restricted Subsidiaries (as defined herein) and
Caterair and its subsidiaries to incur additional
indebtedness, incur liens, pay dividends or make
certain other restricted payments, consummate
certain asset sales, enter into certain
transactions with affiliates, merge or consolidate
with any other person or sell, assign, transfer,
lease, convey or otherwise dispose of all or
substantially all of the assets of the Issuer. Upon
consummation of the Exchange Offer, the Issuer will
be in material compliance with all financial and
operating covenants contained in its principal
indebtedness agreements.
10
<PAGE> 17
For additional information regarding the Notes and the Guarantees, see
"Description of Notes."
USE OF PROCEEDS
The Issuer will not receive any proceeds from, and has agreed to bear the
expenses of, the Exchange Offer.
RISK FACTORS
See "Risk Factors" for a discussion of certain risks that investors should
consider in connection with the Exchange Offer and an investment in the Exchange
Notes.
11
<PAGE> 18
SUMMARY UNAUDITED COMBINED PRO FORMA FINANCIAL DATA
The following summary unaudited combined pro forma financial data of SCIS
(including consolidated financial data for Sky Chefs and CII) and Caterair for
the periods set forth below are based on the historical financial statements of
SCIS and Caterair. The information under the caption Combined Financial Data has
been adjusted to give effect to the Combination as if it had occurred on January
1, 1994. The information under the caption Offering Pro Forma Data has been
adjusted to give effect to the Offering and the application of the net proceeds
therefrom, SCIS' Offer to Purchase and the Senior Bank Financing, including the
Caterair Refinancing, as if such transactions had occurred on January 1, 1996.
See "The Refinancing," and "Capitalization." Management believes that the
following presentation will assist potential investors in evaluating the ability
of SCIS and the Guarantors to meet debt service requirements and other
obligations.
The summary unaudited combined pro forma financial data does not
necessarily reflect the results of operations or the financial position of SCIS
and the Guarantors that actually would have resulted had the Combination, the
Offering, SCIS' Offer to Purchase and the Senior Bank Financing, including the
Caterair Refinancing, been consummated as of the dates referred to above.
Accordingly, such data should not be viewed as fully representative of the past
performance of SCIS and the Guarantors or indicative of future results. The
summary unaudited combined pro forma financial data has not been prepared in
accordance with generally accepted accounting principles. See "The Refinancing,"
"Capitalization," "Selected Historical Financial Data," "Certain
Transactions -- The Combination" and the Financial Statements and notes thereto
included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS TWELVE
YEAR ENDED DECEMBER 31, ENDED JUNE 30, MONTHS ENDED
---------------------------------------- --------------------- JUNE 30,
1994 1995 1996 1996 1997 1997
---------- ---------- ---------- -------- -------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
COMBINED FINANCIAL DATA(1):
Food service revenues(2).............. $1,534,185 $1,541,162 $1,559,555 $748,396 $775,915 $1,587,074
EBITDA(3)(4).......................... 123,151(5) 76,574 119,628 41,120 67,438 145,946
Adjusted EBITDA(3)(4)................. 123,151 128,418 149,989 57,960 75,726 167,755
Net cash flows from:
Operating activities................ 23,672 16,955 69,238 48,042 22,672 43,868
Investing activities................ (108,873) (59,539) (39,200) (13,992) (33,155) (58,363)
Financing activities................ 65,543 (29,841) 5,500 (3,285) (4,032) 4,753
Depreciation and amortization......... 51,046 50,118 46,434 22,282 23,583 47,735
Capital expenditures.................. 46,379 26,802 39,200 13,992 13,800 39,008
OFFERING PRO FORMA DATA(6):
Cash interest expense(7).............. -- -- $ 57,643 $ 29,680 $ 29,592 $ 57,555
Ratio of Adjusted EBITDA to cash
interest expense(7)................. -- -- 2.6x 2.0x 2.6x 2.9x
Ratio (deficiency) of earnings to
fixed charges(8).................... -- -- 1.2x $(14,651) 1.2x 1.4x
Net combined debt(9).................. -- -- -- -- -- $ 539,080
Ratio of net combined debt to Adjusted
EBITDA.............................. -- -- -- -- -- 3.2x
OPERATING STATISTICS(10):
Number of flights serviced(000's)..... 2,590 2,572 2,567 1,269 1,256 2,561
Number of airports served at end of
period.............................. 103 100 102 102 113 113
</TABLE>
- ---------------
(1) Data set forth under the caption Combined Financial Data has been adjusted
to give effect to the Combination as if it had occurred on January 1, 1994.
(2) Represents pro forma revenues of SCIS and Caterair (including revenues from
discontinued operations of Caterair resulting from the Combination) and
excludes lease, license and other revenues of the Guarantors of $19.6
million and $79.4 million for the years ended December 31, 1995 and 1996,
$39.3 million and $38.0 million for the six months ended June 30, 1996 and
1997, and $78.1 million for the twelve months ended June 30, 1997,
respectively. Food service revenues exclude certain variable rent costs
historically netted against revenues by Caterair but classified as cost of
operations by Sky Chefs of $42.4 million and $28.8 million for the years
ended December 31, 1994 and 1995, respectively.
(3) EBITDA represents earnings before interest expense, provision (benefit) for
income taxes, depreciation and amortization and other (income) expense.
Adjusted EBITDA excludes costs associated with the Combination including
consulting, transfer, severance and relocation costs and other transition
costs including a customer consent fee. EBITDA and Adjusted EBITDA are
presented because management
12
<PAGE> 19
believes they provide useful information regarding SCIS' and the
Guarantors' ability to incur and/or service debt. Neither EBITDA nor
Adjusted EBITDA should be considered in isolation nor as a substitute for
operating income, cash flows from operating activities and other income or
cash flow statement data prepared in accordance with generally accepted
accounting principles or as a measure of SCIS' and the Guarantors'
profitability or liquidity.
Calculation of Adjusted EBITDA for the periods presented is as follows:
<TABLE>
<CAPTION>
SIX MONTHS TWELVE
YEAR ENDED DECEMBER 31, ENDED JUNE 30, MONTHS ENDED
---------------------------------- --------------------- JUNE 30,
1994 1995 1996 1996 1997 1997
-------- -------- -------- -------- -------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
EBITDA................................. $123,151 $76,574 $119,628 $41,120 $67,438 $145,946
Adjustments:
Integration expenses................. -- 8,200 30,361 16,840 8,288 21,809
Idle kitchen accruals................ -- 17,229 -- -- -- --
Write-down of investment in
subsidiary......................... -- 3,215 -- -- -- --
Other transition expenses............ -- 23,200 -- -- -- --
-------- -------- -------- -------- -------- ------------
Adjusted EBITDA........................ $123,151 $128,418 $149,989 $57,960 $75,726 $167,755
======== ======== ======== ======= ======= =============
</TABLE>
(4) EBITDA and Adjusted EBITDA reflect pro forma adjustments for combined
operations which are not reflected in the historical financial information
of SCIS and Caterair included elsewhere in this Prospectus. Net pro forma
adjustments of $0.4 million, $0.4 million and $(3.3) million for the years
ended December 31, 1994, 1995 and 1996, $(1.6) million for each of the six
month periods ended June 30, 1996 and 1997, and $(3.3) million for the
twelve months ended June 30, 1997, respectively, reflect the exclusion of
non-compete payments made by SCIS to Caterair, reductions in rent expense
related to certain facilities which in January 1996 were deemed to be
redundant as a result of the Combination and increases in cost of
operations attributable to the restructuring of a joint venture agreement.
(5) During 1996 the Company determined that, as a result of the Combination,
certain facilities were redundant. Therefore, pro forma combined EBITDA as
reported in SCIS' prospectus for the Existing Notes, dated September 25,
1995, has been increased by $4.7 million for the year ended December 31,
1994 to reflect a reduction in rent expense related to these facilities.
(6) Data set forth under the caption Offering Pro Forma Data has been adjusted
to give effect to the Offering and the application of the proceeds
therefrom, SCIS' Offer to Purchase (pursuant to which all of the $125.0
million in aggregate principal amount of the Existing Notes were tendered
and retired) and the Senior Bank Financing, including the Caterair
Refinancing, as if such transactions had occurred on January 1, 1996. See
"The Refinancing" and "Capitalization."
(7) Excludes amortization of deferred financing fees and other noncash interest
expense of $1.5 million for the year ended December 31, 1996, $0.8 million
and $1.3 million for the six months ended June 30, 1996 and 1997, and $2.0
million for the twelve months ended June 30, 1997, respectively.
(8) For purposes of computing the ratio (deficiency) of earnings to fixed
charges, "earnings" consist of the combined earnings (loss) before income
taxes and fixed charges before capitalized interest of SCIS and Caterair.
"Fixed charges" consist of the combined interest expense and the combined
portion of operating lease rental payments deemed representative of the
interest factor of SCIS and Caterair.
(9) Net combined debt of SCIS and Caterair includes $560.5 million in combined
debt of SCIS and Caterair, $31.8 million in combined capital lease
obligations of SCIS and Caterair less $53.2 million of combined cash of
SCIS and Caterair. Net combined debt excludes a loan from SCIS to Caterair
of $43.3 million at June 30, 1997 and SCIS' and its subsidiaries'
guarantees of Caterair's indebtedness and Caterair's guarantees of SCIS'
indebtedness.
(10) Operating statistics are management estimates for the periods presented and
represent combined pro forma amounts after giving effect to the Combination
as if it had occurred on January 1, 1994.
13
<PAGE> 20
SUMMARY HISTORICAL FINANCIAL DATA
SCIS
The following table presents selected historical financial data of SCIS as
of and for each of the five years ended December 31, 1996, and the six months
ended June 30, 1996 and 1997. For all periods presented prior to the
Combination, the consolidated financial information only reflects the
consolidated financial position, results of operations and cash flows of Sky
Chefs. The information presented for each of the five years ended December 31,
1996, except for the operating statistics, has been derived from the financial
statements of SCIS as audited by Coopers & Lybrand L.L.P., independent
accountants. The information presented for the six months ended June 30, 1996
and 1997 has been derived from unaudited interim financial statements of SCIS
and, in the opinion of management, reflects a fair presentation of SCIS'
financial information. The following information should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Financial Statements of SCIS and notes thereto included
elsewhere in this Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
------------------------------------------------------- --------------------
1992 1993 1994 1995(1) 1996(1) 1996(1) 1997(1)
-------- -------- -------- --------- ---------- -------- ---------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues............................... $465,902 $458,317 $468,608 $ 739,102 $1,529,816 $720,675 $774,244
Cost of operations..................... 411,726 391,669 388,276 634,375 1,352,359 649,781 684,605
-------- -------- -------- --------- ---------- -------- ---------
Gross profit........................... 54,176 66,648 80,332 104,727 177,457 70,894 89,639
Depreciation and amortization........ 14,364 17,144 15,503 21,338 37,928 17,853 19,579
Selling, general and
administrative..................... 18,025 16,085 17,125 28,076 48,854 23,441 25,252
Integration expenses................. -- -- -- 28,644 30,361 16,840 8,288
Other costs and expenses............. 7,642 5,667 4,345 29,882 23,721 12,621 9,287
-------- -------- -------- --------- ---------- -------- ---------
Operating income (loss)................ 14,145 27,752 43,359 (3,213) 36,593 139 27,233
Interest expense, net................ 7,554 6,196 5,544 17,257 42,535 22,616 23,065
Other (income) expense............... 934 948 1,225 2,099 4,679 3,800 5,357
-------- -------- -------- --------- ---------- -------- ---------
Earnings (loss) before income taxes.... 5,657 20,608 36,590 (22,569) (10,621) (26,277) (1,189)
Provision (benefit) for income
taxes.............................. 1,075 7,033 13,385 (6,525) 420 (8,740) (701)
Net income (loss)(2)................... (10,991) 13,575 23,205 (16,044) (11,041) (17,537) (488)
OTHER FINANCIAL DATA:
EBITDA(3).............................. $28,509 $44,896 $58,862 $ 18,125 $ 74,521 $17,992 $ 46,812
EBITDA margin(4)....................... 6.1% 9.8% 12.6% 2.5% 4.9% 2.5% 6.0%
Adjusted EBITDA(3)..................... $28,509 $44,896 $58,862 $ 64,769 $ 104,882 $34,832 $ 55,100
Adjusted EBITDA margin(4).............. 6.1% 9.8% 12.6% 8.8% 6.9% 4.8% 7.1%
Net cash flows from:
Operating activities................. $ 2,600 $31,329 $21,159 $ 60,610 $ 37,573 $38,186 $ 13,591
Investing activities................. (9,298) (8,807) (23,357) (259,145) (31,352) (13,152) (29,049)
Financing activities................. 6,114 (26,585) 9,233 240,909 (5,392) (10,175) (8,428)
Cash interest expense(5)............... 8,223 6,703 5,748 19,190 47,515 24,459 23,982
Capital expenditures................... 10,717 6,032 11,775 9,575 36,900 11,789 13,800
Ratio of Adjusted EBITDA to cash
interest expense(5).................. 3.5 x 6.7 x 10.2 x 3.4x 2.2 x 1.4 x 2.3 x
Ratio (deficiency) of earnings to fixed
charges(6)........................... 1.3 x 2.2 x 3.2 x $ (22,569) $ (10,621) $(26,277) $ (1,189)
Pro forma ratio (deficiency) of
earnings to fixed charges(6)......... -- -- -- -- $ (6,719) $(24,182) 1.0 x
OPERATING STATISTICS(7):
Number of flights serviced (000's)..... 751 720 740 2,572 2,567 1,269 1,256
Number of airports served at end of
period............................... 32 30 32 100 102 102 113
BALANCE SHEET DATA (AT END OF PERIOD):
Total assets........................... $222,046 $211,903 $243,016 $ 828,793 $ 853,456 $849,789 $841,832
Total debt and capital lease
obligations.......................... 52,811 44,582 46,370 392,059 380,229 386,282 374,755
Shareholder's equity................... 31,214 26,255 49,460 54,570 46,731 36,260 44,180
</TABLE>
- ---------------
(1) Results for the years ended December 31, 1995 and 1996 and for the six
months ended June 30, 1996 and 1997 include the results of operations
acquired, licensed, leased and subleased from Caterair in connection with
the Combination consummated on September 29, 1995. See "Certain
Transactions -- The Combination."
(2) Effective January 1, 1992, Sky Chefs adopted the provisions of Statement of
Financial Accounting Standards No. 106, "Accounting for Postretirement
Benefits Other Than Pensions," which required the
14
<PAGE> 21
accrual of postretirement benefits other than pensions during the employees'
service with Sky Chefs. The cumulative effect of this change in accounting
principle was a decrease in net income of $15.6 million in 1992.
(3) EBITDA represents earnings before interest expense, provision (benefit) for
income taxes, depreciation and amortization and other (income) expense.
Adjusted EBITDA excludes costs associated with the Combination including
consulting, transfer, severance and relocation costs and other transition
costs including a customer consent fee. EBITDA and Adjusted EBITDA are
presented because management believes they provide useful information
regarding SCIS' ability to incur and/or service debt. Neither EBITDA nor
Adjusted EBITDA should be considered in isolation nor as a substitute for
operating income, cash flows from operating activities and other income or
cash flow statement data prepared in accordance with generally accepted
accounting principles or as a measure of SCIS' profitability or liquidity.
Calculation of Adjusted EBITDA for the periods presented is as follows:
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
---------------------------------------------------- ------------------
1992 1993 1994 1995 1996 1996 1997
------- ------- ------- ------- -------- ------- -------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
EBITDA..................................... $28,509 $44,896 $58,862 $18,125 $ 74,521 $17,992 $46,812
Adjustments:
Integration expenses..................... -- -- -- 8,200 30,361 16,840 8,288
Idle kitchen accruals.................... -- -- -- 17,229 -- -- --
Write-down of investment in subsidiary... -- -- -- 3,215 -- -- --
Other transition expenses................ -- -- -- 18,000 -- -- --
------- ------- ------- ------- -------- ------- -------
Adjusted EBITDA............................ $28,509 $44,896 $58,862 $64,769 $104,882 $34,832 $55,100
======= ======= ======= ======= ======== ======= =======
</TABLE>
(4) EBITDA margin represents EBITDA as a percentage of revenues. Adjusted EBITDA
margin represents Adjusted EBITDA as a percentage of revenues.
(5) Cash interest expense represents interest expense excluding the amortization
of deferred financing fees and other non-cash interest amounts of $0.5
million and $2.9 million for the years ended December 31, 1995 and 1996, and
$1.5 million and $1.9 million for the six months ended June 30, 1996 and
1997, respectively.
(6) For purposes of computing the ratio (deficiency) of earnings to fixed
charges and pro forma ratio (deficiency) of earnings to fixed charges,
"earnings" consist of earnings (loss) before income taxes and fixed charges
before capitalized interest. "Fixed charges" consist of interest expense and
the portion of operating lease rental payments deemed representative of the
interest factor. The ratio (deficiency) of earnings to fixed charges and pro
forma ratio (deficiency) of earnings to fixed charges exclude the guarantees
by SCIS and certain of its subsidiaries of indebtedness of Caterair. See the
Financial Statements of SCIS and notes thereto included elsewhere in this
Prospectus.
(7) Operating statistics are management estimates for the periods presented.
15
<PAGE> 22
CATERAIR
The following table presents selected historical financial data of Caterair
as of and for each of the five years ended December 31, 1996 and the six months
ended June 30, 1996 and 1997. The information presented for the three years
ended December 31, 1994 has been derived from the financial statements of
Caterair as audited by Arthur Andersen LLP, independent public accountants. The
information presented for the years ended December 31, 1995 and 1996 has been
derived from the financial statements of Caterair as audited by Coopers &
Lybrand L.L.P., independent accountants. The information presented for the six
months ended June 30, 1996 and 1997 has been derived from unaudited interim
financial statements of Caterair and, in the opinion of management, reflects a
fair presentation of Caterair's financial information. The following information
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Financial Statements of
Caterair and notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
------------------------------------------------------------------ ---------------------
1992 1993 1994 1995 1996 1996 1997
-------- ----------- ---------- --------- -------- -------- --------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA(1):
Total revenues............... $ $ $ $ 18,953 $ 77,958 $ 38,206 $ 37,725
Cost of operations........... -- -- -- 7,649 30,416 15,659 14,822
-------- ----------- ---------- --------- -------- -------- --------
Gross profit................. -- -- -- 11,304 47,542 22,547 22,903
Depreciation and
amortization............. -- -- -- 3,400 11,806 5,994 5,569
Selling, general and
administrative........... -- -- -- 125 1,393 250 533
-------- ----------- ---------- --------- -------- -------- --------
Operating income............. -- -- -- 7,779 34,343 16,303 16,801
Interest expense, net...... -- -- -- 4,715 18,242 9,454 8,749
Other (income) expense..... -- -- -- -- -- -- (492)
Income tax provision
(benefit)(2)............. -- -- -- (50,380) 8,044 2,174 2,350
-------- ----------- ---------- --------- -------- -------- --------
Income from continuing
operations................. -- -- -- 53,444 8,057 4,675 6,194
Income (loss) from
discontinued
operations............... (406) (251,745) (23,847) 27,244 1,682 1,393 (329)
Net income (loss)(3)......... (406) (251,745) (23,847) 76,369 9,739 6,068 5,865
OTHER FINANCIAL DATA:
EBITDA(4).................... $ -- $ -- $ -- $ 11,179 $ 46,149 $ 22,297 $ 22,370
EBITDA margin(5)............. -- -- -- 59.0% 59.2% 58.4% 59.3%
Adjusted EBITDA(6)........... $102,095 $ 46,218 $ 63,918 $ 63,235 $ 48,407 $ 24,693 $ 22,192
Adjusted EBITDA margin(5).... 9.2% 4.4% 6.2% 8.0% 44.4% 37.0% 56.0%
Net cash flows from:
Operating activities....... $ 47,905 $ 18,541 $ 29,403 $ (67,591) $ 31,665 $ 9,857 $ 9,081
Investing activities....... (23,037) (17,133) (34,611) 196,755 (7,848) (840) (4,106)
Financing activities....... (24,607) 5,330 8,554 (141,566) (17,601) (7,304) (11,641)
Cash interest expense(7)..... -- -- -- 3,969 14,343 7,501 6,798
Capital expenditures(8)...... -- -- -- 6,128 2,300 2,203 --
Ratio of EBITDA to cash
interest expense(7)........ -- -- -- 2.8x 3.2x 3.0x 3.3x
Ratio of earnings to fixed
charges(9)................. -- -- -- 1.4x 1.6x 1.5x 1.6x
BALANCE SHEET DATA (AT END OF
PERIOD):
Total assets(10)............. $722,197 $ 498,734 $ 498,828 $ 194,277 $173,948 $188,739 $161,518
Total debt and capital lease
obligations(11)............ 432,342 407,968 416,714 225,542 211,031 218,291 201,009
Shareholder's equity
(deficit).................. 124,166 (129,558) (155,908) (111,752) (101,990) (105,684) (96,125)
</TABLE>
- ---------------
(1) In connection with the Combination, Caterair discontinued most of its
airline catering services business and engaged in the business of leasing,
subleasing and licensing domestic property to its affiliates, Sky Chefs and
CII. See "Certain Transactions -- The Combination." Accordingly, all
operations prior to September 30, 1995 have been reflected as discontinued.
Identifiable revenues and expenses from discontinued operations have been
reclassified on the table above presenting summary historical financial
data from their historical classification to separately identify them as
discontinued operations
16
<PAGE> 23
for the five years ended December 31, 1996, and the six months ended June
30, 1996 and 1997, respectively. Discontinued operations include
allocations of general and administrative and interest expenses that were
determined to be directly related to such operations. Summary operating
results for the discontinued operations are as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------------------------------------- -----------------
1992 1993 1994 1995 1996 1996 1997
---------- ---------- ---------- -------- ------- ------- ------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Total revenues............... $1,103,746 $1,056,598 $1,023,143 $773,243 $31,169 $28,793 $1,922
Cost of operations........... 969,259 953,914 916,422 698,689 27,854 26,397 2,100
---------- ---------- ---------- -------- ------- ------- ------
Gross profit................. 134,487 102,684 106,721 74,554 3,315 2,396 (178)
Depreciation and
amortization............. 49,270 49,296 30,890 21,821 -- -- --
Selling, general and
administrative........... 32,392 46,055 42,803 27,698 1,057 -- --
Goodwill write-off and
restructuring charges.... -- 192,311 -- -- -- -- --
---------- ---------- ---------- -------- ------- ------- ------
Operating income............. 52,825 (184,978) 33,028 25,035 2,258 2,396 (178)
Interest expense, net...... 47,055 44,829 50,962 45,626 18 8 8
Other...................... 5,151 5,266 890 (674) 920 1,083 312
---------- ---------- ---------- -------- ------- ------- ------
Income (loss) before income
taxes...................... 619 (235,073) (18,824) (19,917) 1,320 1,305 (498)
Provision (benefit) for
income taxes............. 3,652 16,672 5,023 5,513 416 (88) (169)
Cumulative effect of change
in accounting
principle................ 2,627 -- -- -- -- -- --
---------- ---------- ---------- -------- ------- ------- ------
Income (loss) from
discontinued operations.... (406) (251,745) (23,847) (25,430) 904 1,393 (329)
Gain on disposition of
discontinued operations.... -- -- -- 52,674 778 -- --
---------- ---------- ---------- -------- ------- ------- ------
Income (loss) from
discontinued operations.... $ (406) $ (251,745) $ (23,847) $ 27,244 $ 1,682 $ 1,393 $ (329)
========= ========= ========= ======== ======= ======= ======
</TABLE>
Operating income in 1993 includes the impact of a $181.9 million impairment
of Caterair's goodwill related to United States operations and $10.4
million in charges for restructuring costs from a management reorganization
and kitchen consolidation, consisting primarily of severance and early
retirement expense.
(2) In connection with the Combination, Caterair evaluated the potential for
the realization of its deferred tax assets and subsequently recognized a
deferred income tax benefit of $50.5 million in 1995 for the realization of
a portion of the net deferred tax assets. The deferred benefit was offset
by $0.1 million of current tax expense.
(3) In connection with the Combination, Caterair repaid all of its indebtedness
outstanding prior to the Combination. Caterair recorded an extraordinary
loss of $4.3 million in 1995 consisting of the difference between amounts
paid to lenders for full extinguishment of debt and the carrying amounts of
debt including deferred financing costs and accrued interest.
(4) EBITDA represents earnings from continuing operations before interest
expense, provision (benefit) for income taxes, depreciation and
amortization and other (income) expense. EBITDA is presented because
management believes it provides useful information regarding Caterair's
ability to incur and/or service debt. EBITDA should not be considered in
isolation or as a substitute for operating income, cash flows from
operating activities and other income or cash flow statement data prepared
in accordance with generally accepted accounting principles or as a measure
of Caterair's profitability or liquidity.
(5) EBITDA margin represents EBITDA as a percentage of total revenues from
continuing operations. Adjusted EBITDA margin represents Adjusted EBITDA as
a percentage of total revenues from continuing and discontinued operations.
(6) Adjusted EBITDA includes earnings from continuing and discontinued
operations (as presented in Note 1) before interest expense, provision for
income taxes, depreciation and amortization and other
17
<PAGE> 24
(income) expense, and excludes other transition expenses associated with
the Combination including consulting, severance, and other costs. Adjusted
EBITDA is presented because management believes it provides useful
information regarding Caterair's ability to incur and/or service debt.
Adjusted EBITDA should not be considered in isolation or as a substitute
for operating income, cash flows from operating activities and other income
or cash flow statement data prepared in accordance with generally accepted
accounting principles or as a measure of Caterair's profitability or
liquidity.
Calculation of Adjusted EBITDA for the periods presented is as follows:
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
------------------------------------------------ -----------------
1992 1993 1994 1995 1996 1996 1997
-------- ------- ------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
EBITDA from continuing operations........... $ -- $ -- $ -- $11,179 $46,149 $22,297 $22,370
EBITDA from discontinued operations......... 102,095 46,218 63,918 46,856 2,258 2,396 (178)
Adjustments:
Other transition expenses................. -- -- -- 5,200 -- -- --
-------- ------- ------- ------- ------- ------- -------
Adjusted EBITDA............................. $102,095 $46,218 $63,918 $63,235 $48,407 $24,693 $22,192
======== ======= ======= ======= ======= ======= =======
</TABLE>
(7) Cash interest expense from continuing operations excludes the amortization
of deferred financing fees and interest expense on the note payable to SCIS
of $1.1 million and $4.1 million for the years ended December 31, 1995 and
1996, and $2.0 million and $2.1 million for the six months ended June 30,
1996 and 1997, respectively. Cash interest expense included in income
(loss) from discontinued operations was $42.9 million, $40.8 million, $42.9
million and $39.6 million for the years ended December 31, 1992, 1993, 1994
and 1995, respectively.
(8) Capital expenditures from discontinued operations were $22.4 million, $21.8
million, $34.6 million and $11.1 million for the years ended December 31,
1992, 1993, 1994 and 1995, respectively.
(9) For purposes of computing the ratio of earnings to fixed charges,
"earnings" consist of earnings from continuing operations before income
taxes and fixed charges before capitalized interest. "Fixed charges"
consist of interest expense and the portion of operating lease rental
payments deemed representative of the interest factor. The ratio of
earnings to fixed charges excludes the guarantees by Caterair of
indebtedness of SCIS. See the Financial Statements of Caterair and notes
thereto included elsewhere in this Prospectus.
(10) The decrease of $223.5 million in total assets in 1993 is primarily due to
the $181.9 million impairment of Caterair's goodwill related to United
States operations, a $9.4 million decrease in fixed assets due to the
acceleration of depreciation for six kitchen facilities resulting from a
change in business conditions at these locations, a $6.5 million increase
in the provision for bad debt expense resulting from the deteriorating
financial position of certain customers, as well as a $4.0 million
write-off of development costs for two international locations.
(11) Total debt and capital lease obligations represent current portion of
long-term debt, current portion of obligations under capital leases,
long-term debt, obligations under capital leases and the note payable by
Caterair to SCIS made in connection with the Combination. See "Certain
Transactions -- The Combination."
18
<PAGE> 25
RISK FACTORS
The risk factors set forth below, as well as the other information set
forth in this Prospectus, should be carefully considered before deciding to
surrender the Private Notes in exchange for Exchange Notes pursuant to the
Exchange Offer.
SUBSTANTIAL LEVERAGE
The Company has significant indebtedness. At June 30, 1997, on a pro forma
basis after giving effect to the Offering and the application of the net
proceeds therefrom, SCIS' Offer to Purchase and the Senior Bank Financing,
including the Caterair Refinancing, the Company would have had total combined
indebtedness of approximately $592.3 million (excluding the loan by SCIS to
Caterair, guarantees of indebtedness and $25.0 million of letters of credit). In
addition, the Company may borrow additional amounts under the Senior Bank
Financing or otherwise. See "The Refinancing," "Capitalization," "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Description of Certain Indebtedness -- Senior Bank Financing and the Financial
Statements and notes thereto included elsewhere in this Prospectus.
The degree to which the Company is leveraged could have important
consequences to holders of the Notes including, but not limited to, the
following: (i) the Company's ability to obtain additional financing in the
future for working capital, capital expenditures, acquisitions, general
corporate or other purposes may be limited; (ii) a substantial portion of the
Company's cash flow from operations will be dedicated to the payment of the
principal of, and interest on, its indebtedness; (iii) the agreements governing
the Company's indebtedness will contain certain restrictive financial and
operating covenants that could limit the Company's ability to compete and
expand; and (iv) the Company's substantial leverage may make it more vulnerable
to economic downturns, limit its ability to withstand competitive pressures and
reduce its flexibility in responding to changing business and economic
conditions. The ability of the Company to pay interest and principal on the
Notes, to satisfy its other debt obligations and to make planned expenditures
will be dependent on the future operating performance of the Company, which
could be affected by changes in economic conditions and other factors, including
factors beyond the control of the Company. A failure to comply with the
covenants and other provisions of its debt instruments could result in events of
default under such instruments, which could permit acceleration of the debt
under such instruments and in some cases acceleration of debt under other
instruments that contain cross-default or cross-acceleration provisions. The
Company believes that cash flow from operations will be sufficient to cover its
debt service requirements and other requirements. However, if the Company is at
any time unable to generate sufficient cash flow from operations to service its
indebtedness, it may be required to seek to renegotiate the terms of the
instruments relating to that indebtedness or seek to refinance all or a portion
of that indebtedness or to obtain additional financing. There can be no
assurance that the Company will be able to successfully renegotiate such terms
or that any such refinancing would be possible or that any additional financing
could be obtained, or obtained on terms that are favorable or acceptable to the
Company. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Description of Certain Indebtedness -- Senior Bank
Financing."
SUBORDINATION OF THE NOTES AND GUARANTEES
The payment of principal, premium, if any, and interest on, and any other
amounts owing in respect of, the Notes is subordinated to the prior payment in
full of all existing and future Senior Debt of the Issuer, including the
Issuer's obligations under the Senior Bank Financing. In the event of the
bankruptcy, liquidation, dissolution, reorganization or other winding up of the
Issuer, or the acceleration of indebtedness under the Senior Bank Financing, the
assets of the Issuer will be available to pay obligations on the Notes only
after all Senior Debt of the Issuer has been paid in full, and there may not be
sufficient assets remaining to pay any or all amounts due on the Notes. In
addition, under certain circumstances, the Issuer may not pay principal of,
premium, if any, or interest on, or any other amounts owing in respect of, the
Notes, or purchase, redeem or otherwise retire the Notes, if a payment default
or a non-payment default exists with respect to certain Senior Debt of the
Issuer and, in the case of a non-payment default, a payment blockage notice has
been received by the Trustee. See "Description of Notes -- Subordination." Each
Guarantor's Guarantee will also be subordinated in right of payment to the prior
payment in full of all existing and future Guarantor Senior Debt of such
Guarantors, including guarantees or borrowings under the Senior Bank Financing.
At
19
<PAGE> 26
June 30, 1997, on a pro forma basis after giving effect to the Offering and the
application of the net proceeds therefrom, SCIS' Offer to Purchase and the
Senior Bank Financing, including the Caterair Refinancing, the Issuer would have
had approximately $250.0 million of Senior Debt (including borrowings and
guarantees under the Senior Bank Financing but excluding $25.0 million of
letters of credit) and would have had approximately $65.0 million available to
be borrowed pursuant to the Senior Bank Financing, and the Guarantors would have
had approximately $31.8 million of Guarantor Senior Debt outstanding (excluding
the loan by SCIS to Caterair and the Guarantors' borrowings and guarantees under
the Senior Bank Financing). In addition, the Notes are structurally subordinated
to all liabilities of the subsidiaries of the Issuer which are not Guarantors.
The Indenture will limit, but not prohibit, the incurrence by the Issuer and the
Guarantors of additional indebtedness, including Senior Debt or Guarantor Senior
Debt, as the case may be.
NON-GUARANTOR SUBSIDIARIES' CREDITORS' CLAIMS EFFECTIVELY SENIOR TO THE NOTES
Substantially all operations of the Issuer are conducted through its
subsidiaries and substantially all of its assets are owned or leased by those
subsidiaries. Accordingly, the Issuer's cash flow and consequent ability to meet
its obligations depends to a significant extent upon the earnings of those
subsidiaries and the availability of those earnings to the Issuer by way of
dividends, distributions or repayment of advances. Claims of creditors
(including trade creditors) of those subsidiaries may reduce significantly the
funds otherwise available from the operations of such subsidiaries. Certain
domestic subsidiaries of the Issuer have jointly and severally guaranteed the
Notes on a basis that is subordinated to the guarantees provided under the
Senior Bank Financing. Subject to the considerations described below under "--
Fraudulent Conveyance Considerations; Avoidance of Guarantees," the Guarantees
provide the holders of the Notes with a subordinated direct claim to the assets
of such subsidiaries. Substantially all of the assets of the Issuer and the
Guarantors are subject to security interests in favor of the lenders securing
the indebtedness under the Senior Bank Financing. See "Description of Certain
Indebtedness -- Senior Bank Financing" and "Description of Notes -- Guarantees."
REPATRIATION AND CURRENCY RISKS
A significant portion of the Company's earnings is generated outside the
United States. International operations are subject to a number of special risks
that may increase in significance to the Company in future years if the
Company's international operations expand. These special risks include currency
exchange rate fluctuations, trade barriers, and political and economic risks in
less developed countries such as hyperinflation, governmental expropriation and
exchange controls, and other governmental restrictions that may limit the
ability to repatriate funds, and consequently reduce the cash flow available to
meet debt service requirements and other obligations of the Company, including
payments of principal, premium, if any, and interest on the Notes.
The Company's revenues and expenses for its international operations
generally are denominated in local currency. The Company generally is exposed to
foreign currency exchange rate fluctuations to the extent that such fluctuations
affect the amount that may be repatriated from international subsidiaries and
affiliates to the United States through dividends or management fee
arrangements.
In addition, the earnings of international subsidiaries and affiliates paid
out to the Company through dividends and fee arrangements may be subject to
foreign withholding taxes that reduce the cash flow available to meet debt
service requirements and other obligations of the Company.
OPERATIONS THROUGH FOREIGN SUBSIDIARIES
The Company conducts its foreign operations principally through foreign
subsidiaries and affiliates and substantial assets are owned by those
subsidiaries and affiliates. Many of the foreign operations are conducted
through joint ventures, over which the Company may not have operational or
financial control. Approximately 37% of the Company's food service revenues for
the twelve months ended June 30, 1997 was derived from foreign operations.
Accordingly, the Company's cash flows and consequent ability to meet its
obligations will depend to a significant extent upon the earnings of those
foreign subsidiaries and joint ventures and the availability of those earnings
to the Company by way of dividends, distributions, payment of fees or repayment
20
<PAGE> 27
of advances. In addition, the Indenture permits foreign subsidiaries of the
Issuer to incur certain indebtedness containing provisions restricting such
foreign subsidiaries from making funds available to the Issuer by way of
dividends, distributions, payment of fees or repayment of advances. Repatriation
and currency risks, claims of creditors (including trade creditors) of those
subsidiaries and joint ventures may reduce significantly the funds otherwise
available to the Company from the operations of such subsidiaries and
affiliates. See "-- Repatriation and Currency Risks."
RESTRICTIONS UNDER INDEBTEDNESS AND OTHER AGREEMENTS
The Indenture contains covenants which, among other things, impose certain
limitations on the ability of the Issuer and its Restricted Subsidiaries and
Caterair and its subsidiaries to incur additional indebtedness, incur liens, pay
dividends or make certain other restricted payments, consummate certain asset
sales, enter into certain transactions with affiliates, merge or consolidate
with any other person or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of their respective assets. The Term Loan
Agreement contains restrictions similar to the foregoing. In addition, the
Revolving Credit Agreement contains restrictive covenants which, generally, are
more restrictive than those contained in the Indenture, and prohibits the Issuer
from prepaying its subordinated indebtedness. The Revolving Credit Agreement
also requires the Issuer and Caterair to maintain specified combined financial
ratios and satisfy certain combined financial tests. Certain other agreements of
the Issuer and the Guarantors require the Issuer and/or the Guarantors to
maintain certain financial ratios and satisfy certain financial tests. The
Issuer's and the Guarantors' ability to meet those financial ratios and
financial tests can be affected by events beyond their control, and there can be
no assurance that the Issuer and/or any Guarantor will meet those tests. A
breach of any of these covenants could result in a default under the Senior Bank
Financing, the Indenture and/or other agreements. If an event of default occurs
under the Senior Bank Financing, the lenders could elect to declare all amounts
outstanding thereunder, together with accrued interest, to be immediately due
and payable. If the Issuer and/or Caterair are unable to repay those amounts,
the lenders could proceed against the collateral granted to them to secure the
indebtedness outstanding under the Senior Bank Financing. Substantially all the
assets of the Issuer and Caterair and their respective domestic subsidiaries are
pledged as security under the Senior Bank Financing. See "Description of Certain
Indebtedness -- Senior Bank Financing." A default under certain other agreements
to which the Issuer or a Guarantor is a party could have a material adverse
effect on the Issuer or the Guarantors.
DEPENDENCE ON KEY PERSONNEL
The Company's success depends to a significant extent on the performance
and continued service of Messrs. O'Neill, Kay, Tolbert and Boyd. The loss of the
services of any of such persons could have a material adverse effect on the
business and operations of the Company. Certain of the Company's executive
officers have entered into employment agreements with the Company which expire
on December 31, 2001 (other than with respect to Mr. O'Neill, whose employment
agreement expires on January 31, 1999). See "Management" and "Executive
Compensation."
AIRLINE INDUSTRY TRENDS
The Company's revenues are largely dependent upon the number of passengers
who travel on airlines, the number of airline flights serviced by the Company
and the level of meal service provided to passengers. As a result, a decline in
the number of airline flights or in passenger traffic, or a reduction or
downgrading of airline meal services, as has been the case recently with many
North American carriers, or an increase in the number of no-frills airlines, or
the flights or passengers serviced by such airlines, could have a significant
adverse effect on the Company's revenues and earnings. See "The Airline Catering
Industry" and "Business -- Customers." Problems similar to those facing the
North American airline industry have begun to affect the worldwide airline
industry, which could take similar actions in response. Such actions by the
worldwide airline industry could have a significant adverse effect on the
Company's revenues and earnings for its international operations. Certain
events, including economic slowdowns, increased aviation fuel costs, airline
labor strikes, acts of terrorism against airlines, airline accidents, and war,
historically have had a significant negative impact on
21
<PAGE> 28
airline profitability and, to a lesser extent, traffic. These matters are beyond
the Company's control, and the likelihood that they may occur and their effect
on the Company cannot be predicted.
In the past several years, a number of United States airlines have merged
with other airlines, sought protection under federal bankruptcy laws or ceased
operating altogether. To the extent that the Company has a significant business
relationship with an airline that reduces or ceases operations, and passengers
that frequented that airline elect to fly on another airline with which the
Company does not have a significant business relationship or which provides a
lesser level of meal service, the Company will lose revenues, and that loss may
be significant. In addition, the filing of a bankruptcy petition or the
cessation of operations by an airline may result in the nonpayment of some or
all accounts receivable owed by that airline to the Company. See "The Airline
Catering Industry."
DEPENDENCE ON KEY CUSTOMERS
During 1996, services provided to American accounted for 30% of the
Company's food service revenues. The loss of a significant customer, including
American, or a large portion of the business with a significant customer, could
have a material adverse effect on the Company's financial condition, results of
operations and cash flows.
Although the Company has two long-term contracts with American, these
contracts specify quality performance standards; failure to comply with these
standards may result in financial penalties or termination of such contracts at
the affected airport (or in some cases, at a comparable airport), and, in
certain cases, the purchase of the kitchen at the affected airport by American.
During 1997, American terminated the Company's services at six Caterair Kitchens
due to the Company's failure to comply with those quality standards. Based on
current service levels, the Company estimates that such terminations will result
in a reduction of annual revenues of approximately $34 million. See "Business --
Customers -- Contracts."
A substantial portion of the Company's revenues are derived from customers
with whom the Company does not have long-term contracts. These customers are
thus not restricted by contract from ceasing to do business with the Company on
little or no notice. There can be no assurance that historic levels of business
from any customer of the Company will be maintained in the future. See "Business
- -- Customers."
COMPETITION
The airline catering business is highly competitive. The Company competes
in substantially all of its markets with other airline catering companies and,
at certain airports, with airport terminal concession operations. In addition,
there is unutilized kitchen capacity at many airports which may lead to
increased competition among airline caterers and gives airlines leverage in
negotiating contracts with all caterers located at such airports. Furthermore,
there are few competitive restraints for a new caterer or an airline to begin
catering in any market. The Company competes primarily with other independent
caterers, and to some extent with captive caterers, in the United States market.
Most major airports outside the United States are dominated by the local flag
carriers, which have historically maintained their own catering operations to
serve locations where they have a significant share of air passenger traffic.
See "Business -- Competition." A substantial portion of the Company's revenues
is derived from customers with whom the Company does not have long-term
contracts. See "Business -- Customers."
CONTROL OF THE COMPANY
Onex owns (or has voting control over) approximately 76.2% of the
outstanding OFSI Class A Common Stock. SCIS, Sky Chefs and CII are each direct
or indirect wholly-owned subsidiaries of OFSI. In addition, Onex and its
affiliates own more than 51% of the outstanding voting capital stock, and 25% of
the outstanding non-voting capital stock, of Caterair Holdings. Caterair is a
wholly-owned subsidiary of Caterair Holdings.
As a result of the foregoing relationships, Onex and its affiliates
indirectly effectively control the affairs of SCIS and Caterair. Therefore, Onex
and its affiliates have the ability to determine the outcome of most corporate
actions requiring stockholder approval, including, among other things, the
election of the board of
22
<PAGE> 29
directors of SCIS and Caterair, the adoption of amendments to SCIS' and
Caterair's respective certificates of incorporation and the approval of mergers
and sales of all or substantially all of SCIS' and Caterair's assets. Mr. Gerald
W. Schwartz, the Chairman, President and Chief Executive Officer of Onex, owns
stock with a majority of the voting power of Onex and its affiliates and,
therefore, effectively controls the affairs of SCIS and Caterair.
CHANGE OF CONTROL
Upon a Change of Control, the Issuer will be required to offer to
repurchase all of the outstanding Notes at 101% of the principal amount thereof,
plus accrued interest to the date of repurchase. There can be no assurance that
the Issuer will have sufficient funds available or will be permitted by its
other indebtedness agreements to repurchase the Notes upon the occurrence of a
Change of Control. In particular, a Change of Control constitutes a default
under the Senior Bank Financing and may cause an acceleration under certain
other Senior Debt of the Issuer, if any, in which case the subordination
provisions of the Notes would require payment in full of all such Senior Debt of
the Issuer before repurchase of the Notes. See "Description of Notes -- Change
of Control" and "Description of Notes -- Subordination." The inability to repay
Senior Debt of the Issuer, if accelerated, and to repurchase all of the tendered
Notes, would constitute an event of default under the Indenture.
FRAUDULENT CONVEYANCE CONSIDERATIONS; AVOIDANCE OF GUARANTEES
Various fraudulent conveyance laws have been enacted for the protection of
creditors and may be utilized by a court to subordinate or avoid the Notes or
any Guarantee in favor of other existing or future creditors of the Issuer or a
Guarantor.
The incurrence by the Issuer of the Notes is subject to review under
relevant federal and state fraudulent conveyance laws in a bankruptcy case or a
lawsuit by or on behalf of unpaid creditors of the Issuer or a representative of
such creditors, such as a trustee or the Issuer as debtor-in-possession. Under
such laws, if a court were to find that, at the time the Notes were issued,
either (i) the Issuer issued the Notes with the intent of hindering, delaying or
defrauding creditors, or (ii) the Issuer received less than a reasonably
equivalent value or fair consideration for issuing the Notes and the Issuer (a)
was insolvent or rendered insolvent by reason of the issuance of the Notes, (b)
was engaged in business or a transaction, or was about to engage in business or
a transaction, for which any property remaining with the Issuer after issuance
of the Notes constituted an unreasonably small amount of capital, (c) intended
to incur, or believed that it would incur, debts beyond its ability to pay as
they matured or (d) was a defendant in an action for money damages or had a
judgment for money damages docketed against it (if, in either case, after final
judgment, the judgment is unsatisfied), such court could void the Issuer's
obligations under the Notes and direct the repayment of any amounts paid
thereunder to the Issuer to a fund for the benefit of the Issuer's creditors, or
take other action detrimental to the holders of the Notes. Such other action
could include subordinating the Notes to claims of existing or future creditors
of the Issuer.
Similarly, indebtedness under the Guarantees of the Notes also may be
subject to review under relevant federal and state fraudulent conveyance laws in
a bankruptcy of a Guarantor or in a lawsuit brought by or on behalf of creditors
of a Guarantor under the same standards described above. Pursuant to the terms
of the Guarantees, the liability of each Guarantor is limited to the maximum
amount of indebtedness permitted, at the time of the grant of such Guarantee, to
be incurred in compliance with fraudulent conveyance or similar laws.
To the extent any Guarantee was avoided as a fraudulent conveyance, limited
as described above, or held unenforceable for any other reason, holders of the
Notes would, to such extent, cease to have a claim in respect of such Guarantee
and, to such extent, would be creditors solely of the Issuer and any Guarantor
whose Guarantee was not avoided, limited, or held unenforceable. In such event,
the claims of the holders of the Notes against the issuer of an avoided, limited
or unenforceable Guarantee would be subject to the prior payment of all
liabilities of such Guarantor. There can be no assurance that, after providing
for all prior claims, there would be sufficient assets to satisfy the claims of
the holders of Notes.
23
<PAGE> 30
LACK OF PUBLIC MARKET FOR THE NOTES
The Exchange Notes are a new issue of securities for which there is
currently no market. There can be no assurance regarding the future development
of a market for the Exchange Notes, or the ability of holders of the Exchange
Notes to sell their Exchange Notes or the price at which such holders may be
able to sell their Exchange Notes. If such a market were to develop, the
Exchange Notes could trade at prices that may be higher or lower than their
principal amount depending on many factors, including prevailing interest rates,
the Issuer's and the Guarantors' operating results and the market for similar
securities. Each of the Initial Purchasers has advised the Issuer that it
currently intends to make a market in the Exchange Notes. The Initial Purchasers
are not obligated to do so, however, and any market-making activities with
respect to the Exchange Notes may be discontinued at any time without notice.
Therefore, there is no assurance as to the liquidity of any trading market for
the Exchange Notes or that an active public market for the Exchange Notes will
develop. The Issuer does not intend to apply for listing or quotation of the
Exchange Notes on any securities exchange or stock market.
Historically, the market for noninvestment grade debt has been subject to
disruptions that have caused substantial volatility in the prices of such
securities. There is no assurance that the market for the Exchange Notes will
not be subject to similar disruptions. Any such disruption may have an adverse
effect on holders of the Exchange Notes.
PROCEDURES FOR TENDER OF PRIVATE NOTES
The Exchange Notes will be issued in exchange for the Private Notes only
after timely receipt by the Exchange Agent of such Private Notes, a properly
completed and duly executed Letter of Transmittal and all other required
documentation. Therefore, holders of Private Notes desiring to tender such
Private Notes in exchange for Exchange Notes should allow sufficient time to
ensure timely delivery. Neither the Exchange Agent nor the Issuer is under any
duty to give notification of defects or irregularities with respect to tenders
of Private Notes for exchange. Private Notes that are not tendered or are
tendered but not accepted will, following consummation of the Exchange Offer,
continue to be subject to the existing restrictions upon transfer thereof. In
addition, any holder of Private Notes who tenders in the Exchange Offer for the
purpose of participating in a distribution of the Exchange Notes will be
required to comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction. See "The Exchange
Offer" and "Plan of Distribution."
CONSEQUENCES OF FAILURE TO EXCHANGE PRIVATE NOTES
The Private Notes have not been registered under the Securities Act and are
subject to substantial restrictions on transfer. Private Notes that are not
tendered in exchange for Exchange Notes or are tendered but not accepted will,
following consummation of the Exchange Offer, continue to be subject to the
existing restrictions upon transfer thereof. The Issuer does not currently
anticipate that it will register the Private Notes under the Securities Act. To
the extent that Private Notes are tendered and accepted in the Exchange Offer,
the trading market for untendered and tendered but unaccepted Private Notes
could be adversely affected due to the limited amount, or "float," of the
Private Notes that are expected to remain outstanding following the Exchange
Offer. Generally, a lower "float" of a security could result in less demand to
purchase such security and could, therefore, result in lower prices for such
security. For the same reason, to the extent that a large amount of Private
Notes are not tendered or are tendered and not accepted in the Exchange Offer,
the trading market for the Exchange Notes could be adversely affected. See "Plan
of Distribution" and "The Exchange Offer."
24
<PAGE> 31
USE OF PROCEEDS
This Exchange Offer is intended to satisfy certain obligations of SCIS and
the Guarantors under the Registration Rights Agreement. SCIS will not receive
any cash proceeds from, and has agreed to bear the expenses of, the Exchange
Offer. In consideration for issuing the Exchange Notes as contemplated in this
Prospectus, SCIS will receive, in exchange, Private Notes in like principal
amount. The Private Notes surrendered in exchange for the Exchange Notes will be
retired and cancelled. Accordingly, issuance of the Exchange Notes will not
result in any increase in the outstanding indebtedness of SCIS and the
Guarantors.
THE REFINANCING
On August 28, 1997, the Issuer and the Guarantors consummated the Offering
in a transaction exempt from the registration requirements of the Securities
Act. The price to investors of the Private Notes was $299.6 million in the
aggregate and the principal amount of the Private Notes is $300.0 million in the
aggregate.
The net proceeds to SCIS from the Offering, after deduction of discounts
and offering expenses, were approximately $289.9 million. SCIS used $209.4
million of the net proceeds to repay and retire all of its outstanding term loan
indebtedness under the Old Credit Agreement. The indebtedness of SCIS under the
Old Credit Agreement which was repaid had maturities ranging from September 15,
1997 to September 15, 2003 and accrued interest at fluctuating rates (an average
weighted rate of 8.7% per year at August 21, 1997).
On August 25, 1997, SCIS commenced a tender offer for all of the Existing
Notes. In connection therewith, SCIS offered to purchase all of the Existing
Notes at a price equal to 117% of the principal amount thereof plus accrued and
unpaid interest to the date of purchase and solicited consents to the Existing
Indenture Amendments. Holders of Existing Notes who consented to the Existing
Indenture Amendments received a payment equal to 2% of the principal amount of
the Existing Notes for which a consent was delivered. Holders of the Existing
Notes were not permitted to tender their Existing Notes without consenting to
the Existing Indenture Amendments or to consent to the Existing Indenture
Amendments without tendering their Existing Notes.
The Offer to Purchase expired on September 24, 1997. All of the Existing
Notes were tendered by the holders thereof and accepted for payment by SCIS in
connection with the Offer to Purchase. SCIS paid $148.75 million (excluding
$7.85 million of accrued interest) in the aggregate in consideration of the
repurchase of the Existing Notes and the related consents. SCIS used $80.50
million of the net proceeds from the Offering and $68.25 million of borrowings
under the Term Loan Agreement to fund such payments.
In connection with the Offering, SCIS, certain other parties and certain
lenders entered into the Revolving Credit Agreement, and Caterair, SCIS, certain
other parties and certain lenders entered into the Term Loan Agreement. The
Revolving Credit Agreement, together with the Term Loan Agreement, constitute
the Senior Bank Financing. See "Description of Certain Indebtedness -- Senior
Bank Financing."
Concurrently with the Offering, Caterair, a Guarantor of the Notes, repaid
and retired all of its outstanding indebtedness under the Old Credit Agreement
(approximately $155.9 million) with borrowings under the Term Loan Agreement.
See "Description of Certain Indebtedness -- Senior Bank Financing."
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<PAGE> 32
CAPITALIZATION
The following table sets forth the capitalization of SCIS and Caterair as
of June 30, 1997 and on a pro forma basis after giving effect to the Offering
and the application of the net proceeds therefrom, SCIS' Offer to Purchase and
the Senior Bank Financing, including the Caterair Refinancing. See "The
Refinancing." The following table should be read in conjunction with the
Financial Statements and the notes thereto included elsewhere in this Prospectus
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations."
<TABLE>
<CAPTION>
AS OF JUNE 30, 1997
-----------------------
HISTORICAL PRO FORMA
--------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
SCIS
Total debt and capital lease obligations:
Term loans under the Existing Credit Agreement(1)............... $ 209,351 $ --
Borrowings under the Revolving Credit Agreement(1).............. -- --
Borrowings under the Term Loan Agreement........................ -- 90,000
Foreign loans................................................... 10,532 10,532
13% Senior Subordinated Notes due 2005.......................... 125,000 --
9 1/4% Senior Subordinated Notes due 2007....................... -- 300,000
Capital lease obligations....................................... 29,872 29,872
--------- ---------
Total debt and capital lease obligations(2)................ 374,755 430,404
Shareholder's equity(3).................................... 44,180 23,158
--------- ---------
Total capitalization....................................... $ 418,935 $ 453,562
========= =========
CATERAIR
Total debt and capital lease obligations:
Term loans under the Existing Credit Agreement.................. $ 155,863 $ --
Borrowings under the Term Loan Agreement........................ -- 160,000
Loan from SCIS.................................................. 43,253 43,253
Capital lease obligations....................................... 1,893 1,893
--------- ---------
Total debt and capital lease obligations(4)................ 201,009 205,146
Shareholder's deficit(5)................................... (96,125) (98,745)
--------- ---------
Total capitalization....................................... $ 104,884 $ 106,401
========= =========
</TABLE>
- ---------------
(1) Excludes $25.0 million of letters of credit.
(2) Excludes guarantees of Caterair's indebtedness.
(3) Pro forma shareholder's equity reflects a reduction for the write-off of
$6.8 million (net of tax of $4.5 million) of deferred financing fees and a
reduction of $14.3 million (net of taxes of $9.5 million) for the premium
paid to retire the Existing Notes (and the related consent fee).
(4) Excludes guarantees of SCIS' indebtedness.
(5) Pro forma shareholder's deficit reflects a reduction for the write-off of
$2.6 million (net of tax of $1.8 million) of deferred financing fees.
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<PAGE> 33
SELECTED HISTORICAL FINANCIAL DATA
SCIS
The following table presents selected historical financial data of SCIS as
of and for each of the five years ended December 31, 1996, and the six months
ended June 30, 1996 and 1997. For all periods presented prior to the Combination
the consolidated financial information only reflects consolidated financial
position, results of operations and cash flows of Sky Chefs. The information
presented for each of the five years ended December 31, 1996, except for the
operating statistics, has been derived from the financial statements of SCIS as
audited by Coopers & Lybrand L.L.P., independent accountants. The information
presented for the six months ended June 30, 1996 and 1997 has been derived from
unaudited interim financial statements of SCIS and, in the opinion of
management, reflects a fair presentation of SCIS' financial information. The
following information should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Financial Statements of SCIS and notes thereto included elsewhere in this
Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
----------------------------------------------------------- --------------------
1992 1993 1994 1995(1) 1996(1) 1996(1) 1997(1)
-------- -------- -------- --------- ---------- -------- --------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues.............................. $465,902 $458,317 $468,608 $ 739,102 $1,529,816 $720,675 $774,244
Cost of operations.................... 411,726 391,669 388,276 634,375 1,352,359 649,781 684,605
-------- -------- -------- --------- ---------- -------- --------
Gross profit.......................... 54,176 66,648 80,332 104,727 177,457 70,894 89,639
Depreciation and amortization....... 14,364 17,144 15,503 21,338 37,928 17,853 19,579
Selling, general and
administrative.................... 18,025 16,085 17,125 28,076 48,854 23,441 25,252
Integration expenses................ -- -- -- 28,644 30,361 16,840 8,288
Other costs and expenses............ 7,642 5,667 4,345 29,882 23,721 12,621 9,287
-------- -------- -------- --------- ---------- -------- --------
Operating income (loss)............... 14,145 27,752 43,359 (3,213) 36,593 139 27,233
Interest expense, net............... 7,554 6,196 5,544 17,257 42,535 22,616 23,065
Other (income) expense.............. 934 948 1,225 2,099 4,679 3,800 5,357
-------- -------- -------- --------- ---------- -------- --------
Earnings (loss) before income taxes... 5,657 20,608 36,590 (22,569) (10,621) (26,277) (1,189)
Provision (benefit) for income
taxes............................. 1,075 7,033 13,385 (6,525) 420 (8,740) (701)
Net income (loss)(2).................. (10,991) 13,575 23,205 (16,044) (11,041) (17,537) (488)
OTHER FINANCIAL DATA:
EBITDA(3)............................. $ 28,509 $ 44,896 $ 58,862 $ 18,125 $ 74,521 $ 17,992 $ 46,812
EBITDA margin(4)...................... 6.1% 9.8% 12.6% 2.5% 4.9% 2.5% 6.0%
Adjusted EBITDA(3).................... $ 28,509 $ 44,896 $ 58,862 $ 64,769 $ 104,882 $ 34,832 $ 55,100
Adjusted EBITDA margin(4)............. 6.1% 9.8% 12.6% 8.8% 6.9% 4.8% 7.1%
Net cash flows from:
Operating activities................ $ 2,600 $ 31,329 $ 21,159 $ 60,610 $ 37,573 $ 38,186 $ 13,591
Investing activities................ (9,298) (8,807) (23,357) (259,145) (31,352) (13,152) (29,049)
Financing activities................ 6,114 (26,585) 9,233 240,909 (5,392) (10,175) (8,428)
Cash interest expense(5).............. 8,223 6,703 5,748 19,190 47,515 24,459 23,982
Capital expenditures.................. 10,717 6,032 11,775 9,575 36,900 11,789 13,800
Ratio of Adjusted EBITDA to cash
interest
expense(5).......................... 3.5x 6.7x 10.2x 3.4x 2.2x 1.4x 2.3x
Ratio (deficiency) of earnings to
fixed charges(6).................... 1.3x 2.2x 3.2x $ (22,569) $ (10,621) $(26,277) $ (1,189)
Pro forma ratio (deficiency) of
earnings to fixed charges(6)........ -- -- -- -- $ (6,719) $(24,182) 1.0x
OPERATING STATISTICS(7):
Number of flights serviced (000's).... 751 720 740 2,572 $ 2,567 1,269 1,256
Number of airports served at end of
period.............................. 32 30 32 100 102 102 113
BALANCE SHEET DATA (AT END OF PERIOD):
Total assets.......................... $222,046 $211,903 $243,016 $ 828,793 $ 853,456 $849,789 $841,832
Total debt and capital lease
obligations......................... 52,811 44,582 46,370 392,059 380,229 386,282 374,755
Shareholder's equity.................. 31,214 26,255 49,460 54,570 46,731 36,260 44,180
</TABLE>
- ---------------
(1) Results for the years ended December 31, 1995 and 1996 and for the six
months ended June 30, 1996 and 1997 include the results of operations
acquired, licensed, leased and subleased from Caterair in connection with
the Combination consummated on September 29, 1995. See "Certain
Transactions -- The Combination."
(2) Effective January 1, 1992, Sky Chefs adopted the provisions of Statement of
Financial Accounting Standards No. 106, "Accounting for Postretirement
Benefits Other Than Pensions," which required the
27
<PAGE> 34
accrual of postretirement benefits other than pensions during the employees'
service with Sky Chefs. The cumulative effect of this change in accounting
principle was a decrease in net income of $15.6 million in 1992.
(3) EBITDA represents earnings before interest expense, provision (benefit) for
income taxes, depreciation and amortization and other (income) expense.
Adjusted EBITDA excludes costs associated with the Combination including
consulting, transfer, severance and relocation costs and other transition
costs including a customer consent fee. EBITDA and Adjusted EBITDA are
presented because management believes they provide useful information
regarding SCIS' ability to incur and/or service debt. Neither EBITDA nor
Adjusted EBITDA should be considered in isolation nor as a substitute for
operating income, cash flows from operating activities and other income or
cash flow statement data prepared in accordance with generally accepted
accounting principles or as a measure of SCIS' profitability or liquidity.
Calculation of Adjusted EBITDA for the periods presented is as follows:
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
------------------------------------------------ -----------------
1992 1993 1994 1995 1996 1996 1997
------- ------- ------- ------- -------- ------- -------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
EBITDA............................................ $28,509 $44,896 $58,862 $18,125 $ 74,521 $17,992 $46,812
Adjustments:
Integration expenses............................ -- -- -- 8,200 30,361 16,840 8,288
Idle kitchen accruals........................... -- -- -- 17,229 -- -- --
Writedown of investment in subsidiary........... -- -- -- 3,215 -- -- --
Other transition expenses....................... -- -- -- 18,000 -- -- --
------- ------- ------- ------- ------- ------- -------
Adjusted EBITDA................................... $28,509 $44,896 $58,862 $64,769 $104,882 $34,832 $55,100
======= ======= ======= ======= ======= ======= =======
</TABLE>
(4) EBITDA margin represents EBITDA as a percentage of revenues. Adjusted EBITDA
margin represents Adjusted EBITDA as a percentage of revenues.
(5) Cash interest expense represents interest expense excluding the amortization
of deferred financing fees and other non-cash interest amounts of $0.5
million and $2.9 million for the years ended December 31 1995 and 1996, and
$1.5 million and $1.9 million for the six months ended June 30, 1996 and
1997, respectively.
(6) For purposes of computing the ratio (deficiency) of earnings to fixed
charges and pro forma ratio (deficiency) of earnings to fixed charges,
"earnings" consist of earnings before income taxes and fixed charges before
capitalized interest. "Fixed charges" consist of interest expense and the
portion of operating lease rental payments deemed representative of the
interest factor. The ratio (deficiency) of earnings to fixed charges and pro
forma ratio (deficiency) of earnings to fixed charges exclude the guarantees
by SCIS and certain of its subsidiaries of indebtedness of Caterair. See the
Financial Statements of SCIS and notes thereto included elsewhere in this
Prospectus.
(7) Operating statistics are management estimates for the periods presented.
28
<PAGE> 35
CATERAIR
The following table presents selected historical financial data of Caterair
as of and for each of the five years ended December 31, 1996 and the six months
ended June 30, 1996 and 1997. The information presented for the three years
ended December 31, 1994 has been derived from the financial statements of
Caterair as audited by Arthur Andersen LLP, independent public accountants. The
information presented for the years ended December 31, 1995 and 1996 has been
derived from the financial statements of Caterair as audited by Coopers &
Lybrand L.L.P., independent accountants. The information presented for the six
months ended June 30, 1996 and 1997 has been derived from unaudited interim
financial statements of Caterair and, in the opinion of management, reflects a
fair presentation of Caterair's financial information. The following information
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Financial Statements of
Caterair and notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
------------------------------------------------------------------ ---------------------
1992 1993 1994 1995 1996 1996 1997
-------- ----------- ---------- --------- -------- -------- --------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA(1):
Total revenues............... $ $ $ $ 18,953 $ 77,958 $ 38,206 $ 37,725
Cost of operations........... -- -- -- 7,649 30,416 15,659 14,822
-------- ----------- ---------- --------- -------- -------- --------
Gross profit................. -- -- -- 11,304 47,542 22,547 22,903
Depreciation and
amortization............. -- -- -- 3,400 11,806 5,994 5,569
Selling, general and
administrative........... -- -- -- 125 1,393 250 533
-------- ----------- ---------- --------- -------- -------- --------
Operating income............. -- -- -- 7,779 34,343 16,303 16,801
Interest expenses, net..... -- -- -- 4,715 18,242 9,454 8,749
Other (income) expense..... -- -- -- -- -- -- (492)
Income tax provision
(benefit)(2)............. -- -- -- (50,380) 8,044 2,174 2,350
-------- ----------- ---------- --------- -------- -------- --------
Income from continuing
operations................. -- -- -- 53,444 8,057 4,675 6,194
Income (loss) from
discontinued
operations............... (406) (251,745) (23,847) 27,244 1,682 1,393 (329)
Net income (loss)(3)......... (406) (251,745) (23,847) 76,369 9,739 6,068 5,865
OTHER FINANCIAL DATA:
EBITDA(4).................... $ -- $ -- $ -- $ 11,179 $ 46,149 $ 22,297 $ 22,370
EBITDA margin(5)............. -- -- -- 59.0% 59.2% 58.4% 59.3%
Adjusted EBITDA(6)........... $102,095 $ 46,218 $ 63,918 $ 63,235 $ 48,407 $ 24,693 $ 22,192
Adjusted EBITDA margin(5).... 9.2% 4.4% 6.2% 8.0% 44.4% 37.0% 56.0%
Net cash flows from:
Operating activities....... $ 47,905 $ 18,541 $ 29,403 $ (67,591) $ 31,665 $ 9,857 $ 9,081
Investing activities....... (23,037) (17,133) (34,611) 196,755 (7,848) (840) (4,106)
Financing activities....... (24,607) 5,330 8,554 (141,566) (17,601) (7,304) (11,641)
Cash interest expense(7)..... -- -- -- 3,969 14,343 7,501 6,798
Capital expenditures(8)...... -- -- -- 6,128 2,300 2,203 --
Ratio of EBITDA to cash
interest expense(7)........ -- -- -- 2.8x 3.2x 3.0x 3.3x
Ratio of earnings to fixed
charges(9)................. -- -- -- 1.4x 1.6x 1.5x 1.6x
BALANCE SHEET DATA (AT END OF
PERIOD):
Total assets(10)............. $722,197 $ 498,734 $ 498,828 $ 194,277 $173,948 $188,739 $161,518
Total debt and capital lease
obligations(11)............ 432,342 407,968 416,714 225,542 211,031 218,291 201,009
Shareholder's equity
(deficit).................. 124,166 (129,558) (155,908) (111,752) (101,990) (105,684) (96,125)
</TABLE>
- ---------------
(1) In connection with the Combination, Caterair discontinued most of its
airline catering services business and engaged in the business of leasing,
subleasing and licensing domestic property to its affiliates, Sky Chefs and
CII. See "Certain Transactions -- The Combination." Accordingly, all
operations prior to September 30, 1995 have been reflected as discontinued.
Identifiable revenues and expenses from discontinued operations have been
reclassified on the table above presenting summary historical financial
data from their historical classification to separately identify them as
discontinued operations
29
<PAGE> 36
for the five years ended December 31, 1996, and the six months ended June
30, 1996 and 1997, respectively. Discontinued operations include
allocations of general and administrative and interest expenses that were
determined to be directly related to such operations. Summary operating
results for the discontinued operations are as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------------------------------------- -----------------
1992 1993 1994 1995 1996 1996 1997
---------- ---------- ---------- -------- ------- ------- ------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Total revenues............... $1,103,746 $1,056,598 $1,023,143 $773,243 $31,169 $28,793 $1,922
Cost of operations........... 969,259 953,914 916,422 698,689 27,854 26,397 2,100
---------- ---------- ---------- -------- ------- ------- ------
Gross profit................. 134,487 102,684 106,721 74,554 3,315 2,396 (178)
Depreciation and
amortization............. 49,270 49,296 30,890 21,821 -- -- --
Selling, general and
administrative........... 32,392 46,055 42,803 27,698 1,057 -- --
Goodwill write-off and
restructuring charges.... -- 192,311 -- -- -- -- --
---------- ---------- ---------- -------- ------- ------- ------
Operating income............. 52,825 (184,978) 33,028 25,035 2,258 2,396 (178)
Interest expense, net...... 47,055 44,829 50,962 45,626 18 8 8
Other...................... 5,151 5,266 890 (674) 920 1,083 312
---------- ---------- ---------- -------- ------- ------- ------
Income (loss) before income
taxes...................... 619 (235,073) (18,824) (19,917) 1,320 1,305 (498)
Provision (benefit) for
income taxes............. 3,652 16,672 5,023 5,513 416 (88) (169)
Cumulative effect of change
in accounting
principle................ 2,627 -- -- -- -- -- --
---------- ---------- ---------- -------- ------- ------- ------
Income (loss) from
discontinued operations.... (406) (251,745) (23,847) (25,430) 904 1,393 (329)
Gain on disposition of
discontinued operations.... -- -- -- 52,674 778 -- --
---------- ---------- ---------- -------- ------- ------- ------
Income (loss) from
discontinued operations.... $ (406) $ (251,745) $ (23,847) $ 27,244 $ 1,682 $ 1,393 $ (329)
========= ========= ========= ======== ======= ======= ======
</TABLE>
Operating income in 1993 includes the impact of a $181.9 million impairment
of Caterair's goodwill related to United States operations and $10.4
million in charges for restructuring costs from a management reorganization
and kitchen consolidation, consisting primarily of severance and early
retirement expense.
(2) In connection with the Combination, Caterair evaluated the potential for
the realization of its deferred tax assets and subsequently recognized a
deferred income tax benefit of $50.5 million in 1995 for the realization of
a portion of the net deferred tax assets. The deferred benefit was offset
by $0.1 million of current tax expense.
(3) In connection with the Combination, Caterair repaid all of its indebtedness
outstanding prior to the Combination. Caterair recorded an extraordinary
loss of $4.3 million in 1995 consisting of the difference between amounts
paid to lenders for full extinguishment of debt and the carrying amounts of
debt including deferred financing costs and accrued interest.
(4) EBITDA represents earnings from continuing operations before interest
expense, provision (benefit) for income taxes, depreciation and
amortization and other (income) expense. EBITDA is presented because
management believes it provides useful information regarding Caterair's
ability to incur and/or service debt. EBITDA should not be considered in
isolation or as a substitute for operating income, cash flows from
operating activities and other income or cash flow statement data prepared
in accordance with generally accepted accounting principles or as a measure
of Caterair's profitability or liquidity.
(5) EBITDA margin represents EBITDA as a percentage of total revenues from
continuing operations. Adjusted EBITDA margin represents Adjusted EBITDA as
a percentage of total revenues from continuing operations and discontinued
operations.
(6) Adjusted EBITDA includes earnings from continuing and discontinued
operations (as presented in Note 1) before interest expense, provision for
income taxes, depreciation and amortization and other (income) expense, and
excludes other transition expenses associated with the Combination
including
30
<PAGE> 37
consulting, severance and other costs. Adjusted EBITDA is presented because
management believes it provides useful information regarding Caterair's
ability to incur and/or service debt. Adjusted EBITDA should not be
considered in isolation or as a substitute for operating income, cash flows
from operating activities and other income or cash flow statement data
prepared in accordance with generally accepted accounting principles or as
a measure of Caterair's profitability or liquidity.
Calculation of Adjusted EBITDA for the periods presented is as follows:
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
------------------------------------------------ -----------------
1992 1993 1994 1995 1996 1996 1997
-------- ------- ------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
EBITDA from continuing operations... $ -- $ -- $ -- $11,179 $46,149 $22,297 $22,370
EBITDA from
discontinued operations........... 102,095 46,218 63,918 46,856 2,258 2,396 (178)
Adjustments:
Other transition expenses......... -- -- -- 5,200 -- -- --
-------- ------- ------- ------- ------- ------- -------
Adjusted EBITDA..................... $102,095 $46,218 $63,918 $63,235 $48,407 $24,693 $22,192
======== ======= ======= ======= ======= ======= =======
</TABLE>
(7) Cash interest expense from continuing operations excludes the amortization
of deferred financing fees and interest expense on the note payable to SCIS
of $1.1 million and $4.1 million for the years ended December 31, 1995 and
1996, and $2.0 million and $2.1 million for the six months ended June 30,
1996 and 1997, respectively. Cash interest expense included in income
(loss) from discontinued operations was $42.9 million, $40.8 million, $42.9
million and $39.6 million for the years ended December 31, 1992, 1993, 1994
and 1995, respectively.
(8) Capital expenditures from discontinued operations were $22.4 million, $21.8
million, $34.6 million and $11.1 million for the years ended December 31,
1992, 1993, 1994 and 1995, respectively.
(9) For purposes of computing the ratio of earnings to fixed charges,
"earnings" consist of earnings from continuing operations before income
taxes and fixed charges before capitalized interest. "Fixed charges"
consist of interest expense and the portion of operating lease rental
payments deemed representative of the interest factor. The ratio of
earnings to fixed charges excludes the guarantees by Caterair of
indebtedness of SCIS. See the Financial Statements of Caterair and notes
thereto included elsewhere in this Prospectus.
(10) The decrease of $223.5 million in total assets in 1993 is primarily due to
the $181.9 million goodwill related to United States operations, a $9.4
million decrease in fixed assets due to the acceleration of depreciation
for six kitchen facilities resulting from a change in business conditions
at these locations, a $6.5 million increase in the provision for bad debt
expense resulting from the deteriorating financial position of certain
customers, as well as a $4.0 million write-off of development costs for two
international locations.
(11) Total debt and capital lease obligations represent current portion of
long-term debt, current portion of obligations under capital leases,
long-term debt, obligations under capital leases and the note payable by
Caterair to SCIS made in connection with the Combination. See "Certain
Transactions -- The Combination."
31
<PAGE> 38
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
The discussion and analysis below relates to (i) the historical
consolidated financial statements and results of operations of SCIS, (ii) the
historical consolidated financial statements and results of operations of
Caterair and (iii) the liquidity and capital resources of SCIS and Caterair
after giving effect to the Offering and the application of the net proceeds
therefrom, SCIS' Offer to Purchase and the Senior Bank Financing, including the
Caterair Refinancing. The following discussion should be read in conjunction
with the Financial Statements and the notes thereto contained elsewhere in this
Prospectus.
On September 29, 1995, SCIS and Caterair consummated the Combination
pursuant to which SCIS and its subsidiaries acquired, licensed, leased or
subleased substantially all of the worldwide business and assets of Caterair.
See "Certain Transactions -- The Combination."
In connection with the Combination, pursuant to several leases (the
"Domestic Leases"), Sky Chefs and CII leased and subleased from Caterair
substantially all of its domestic tangible assets for a six-year term (expiring
in 2001). In the event that Caterair's lease of such assets was for less than
six years, the applicable Domestic Lease is for such shorter period. Sky Chefs
and CII have options to purchase all or a portion of the assets of Caterair
covered by the Domestic Leases for amounts determined under formulas in the
Domestic Leases that were intended to result in exercise prices equal to the
estimated fair market value of such assets at the time or times of exercise of
any such options. The options are exercisable until the date which is 30 days
after termination of the applicable Domestic Lease. It is not certain that such
purchase options will be exercised. See "Certain Transactions -- The
Combination" and the Financial Statements and notes thereto included elsewhere
in this Prospectus.
In addition, in connection with the Combination, pursuant to license
agreements (the "License Agreements"), Sky Chefs and CII licensed Caterair's
rights under certain customer contracts for a six-year term (expiring in 2001).
Sky Chefs and CII each have options to purchase all or a portion of the customer
contract rights covered by the License Agreements for amounts determined under
formulas in the License Agreements that were intended to result in exercise
prices equal to the estimated fair market value of such rights at the time or
times of exercise of any such options. The options are exercisable until the
date which is 90 days after termination of the applicable License Agreement. It
is not certain that such purchase options will be exercised. See "Certain
Transactions -- The Combination" and the Financial Statements and notes thereto
included elsewhere in this Prospectus.
In addition, in connection with the Combination, pursuant to a non-compete
agreement, Caterair agreed not to compete with Sky Chefs in the airline catering
business for a six-year term (expiring in 2001) and Sky Chefs is obligated to
pay Caterair $4.0 million per year. See "Certain Transactions -- The
Combination" and the Financial Statements and notes thereto included elsewhere
in this Prospectus.
Over the past several years there has been a significant reduction in food
service levels on domestic flights which has affected all domestic airline
caterers, including the Company. Despite a decline in total airline food
expenditures in the United States since 1992, the Company has been able to
increase its revenues and profitability due to (i) increases in volume
attributable to passenger growth, (ii) new business awards, (iii) price
increases related to inflation and (iv) the implementation of its operating
improvement plan. In 1992, Sky Chefs implemented an extensive operating
improvement plan which reduced annual operating costs by approximately $47
million in 1994 as compared with 1992. Due in large part to its operating
improvement plan, Sky Chefs increased EBITDA from $29 million in 1992 to $59
million in 1994 and improved EBITDA as a percentage of revenues from 6.1% to
12.6% over the same period. As part of the Combination which was consummated on
September 29, 1995, management estimated that approximately $55 million of net
cost savings on an annualized basis were achievable by the end of the third year
of combined operations of Sky Chefs and Caterair. Management believes that as of
June 30, 1997 a significant portion of these net cost savings have been achieved
as evidenced by an increase in the combined companies' Adjusted EBITDA from $123
million for the year ended December 31, 1994 to $168 million for the twelve
months ended June 30, 1997
32
<PAGE> 39
and an improvement in Adjusted EBITDA as a percentage of the combined companies'
revenues from 8.0% for the year ended December 31, 1994 to 10.6% for the twelve
months ended June 30, 1997. See "Summary Unaudited Combined Pro Forma Financial
Data." These net cost savings have been achieved through, among other things,
increasing labor productivity and reducing labor and employee costs at certain
of the Caterair Kitchens; consolidating certain corporate level management and
administrative functions of Sky Chefs and Caterair; reducing food waste spoilage
and shrinkage at certain of the Caterair Kitchens; eliminating redundant
kitchens; and reducing other kitchen operating expenses at certain of the
Caterair Kitchens. In order to achieve these net cost savings, the Company
estimated that it would incur approximately $52 million in non-recurring costs
through September 1997 principally relating to (i) severance payments and other
employee costs, (ii) external consulting services primarily associated with the
implementation of labor savings programs and (iii) other items in connection
with the integration of the business of Sky Chefs and Caterair. Through June 30,
1997, the Company had incurred approximately $47 million of such non-recurring
costs and the Company currently estimates that the remaining $5 million of
non-recurring costs identified to achieve the $55 million of estimated net cost
savings on an annualized basis will be expended during the balance of 1997. See
"Business -- Strengths -- Low Cost Structure," "Selected Historical Financial
Data -- SCIS" and "Certain Transactions -- The Combination."
RESULTS OF OPERATIONS OF SCIS
SCIS and CII, a wholly owned operating subsidiary of SCIS, were formed in
connection with the Combination. Sky Chefs (including its subsidiaries) was the
only direct subsidiary of SCIS which conducted substantial operations prior to
September 29, 1995. Thus, unless otherwise indicated, the discussion of results
of operations relates to the operations of Sky Chefs for periods prior to
September 29, 1995 and operations of SCIS and its subsidiaries thereafter. The
acquisition of substantially all of the foreign operations of Caterair,
Caterair's trade name and domestic working capital and the assumption of certain
Caterair liabilities in the Combination was accounted for using the purchase
method of accounting. Accordingly, the historical consolidated financial
statements for the period ended December 31, 1995 include the acquired assets
and liabilities and three months and one day of airline catering operations of
the business formerly conducted by Caterair. The Combination resulted in a
material change in the financial position of SCIS.
SIX MONTHS ENDED JUNE 30, 1997 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1996
Revenues. Revenues for the first six months of 1997 increased $53.6 million
or by 7.4% to $774.2 million from $720.6 million for the six months ended June
30, 1996. This increase was primarily the result of additional revenues
generated during the first six months of 1997 from new airline catering
contracts, increased levels of food service by certain of SCIS' customers and
from additional non-airline catering business. In addition, revenues from two
kitchens subleased/licensed from Caterair on May 31, 1996 increased $26.4
million in the first six months of 1997 as compared to the first six months of
1996 as only one month of revenues from these kitchens was included in the first
six months of 1996. These increases in revenues were offset in part by declines
in revenues related to American's termination of the Company's services at six
Caterair Kitchens and the loss of a customer in Santiago, Chile.
Cost of Operations. Cost of operations increased $34.8 million or by 5.4%
to $684.6 million in the first six months of 1997 from $649.8 million in the
first six months of 1996. Cost of operations as a percentage of revenues
decreased from 90.2% for the first six months of 1996 to 88.4% for the first six
months of 1997 due to SCIS' ongoing operating improvement plan.
Depreciation and Amortization. Depreciation and amortization expenses
increased $1.7 million or by 9.5% to $19.6 million for the first six months of
1997 from $17.9 million for the first six months of 1996. This increase is a
result of additional capital expenditures made during the first six months of
1997.
Selling, General and Administrative. Selling, general and administrative
expenses increased $1.9 million or 8.1% to $25.3 million for the first six
months of 1997 from $23.4 million for the first six months of 1996 primarily as
a result of the inclusion of six months of expenses in 1997 for two kitchens
subleased/licensed from Caterair on May 31, 1996 compared to only one month in
1996.
33
<PAGE> 40
Integration Expenses. Integration expenses decreased $8.5 million or by
50.6% to $8.3 million for the first six months of 1997 from $16.8 million for
the first six months of 1996. Integration expenses for both periods include
employee relocation and severance costs and the cost of implementing cycle time
improvements at the Caterair Kitchens. The integration expenses incurred were
significantly higher for the 1996 period as SCIS focused on integrating
Caterair's operations immediately following the Combination.
Other Costs and Expenses. Other costs and expenses decreased $3.3 million
or by 26.2% to $9.3 million for the first six months of 1997 from $12.6 million
for the first six months of 1996.
Operating Income. Operating income increased $27.1 million to $27.2 million
for the first six months of 1997 from $0.1 million for the first six months of
1996 primarily due to the integration of the businesses of SCIS and Caterair and
SCIS' operating improvement plan.
Interest Income. Interest and dividend income decreased $0.5 million to
$2.8 million for the first six months of 1997 from $3.3 million for the first
six months of 1996.
Interest Expense. Interest expense remained constant for the first six
months of 1997 and 1996 at $25.9 million.
Other Income (Expense). Other expenses for the first six months of 1997
increased by $1.6 million to $5.4 million from $3.8 million for the first six
months of 1996 primarily due to a $1.5 million increase in minority interest
expense resulting from the recapitalization of a subsidiary.
Earnings (Loss) Before Income Taxes. SCIS' loss before income taxes
decreased $25.1 million to $1.2 million for the first six months of 1997
compared to $26.3 million for the first six months of 1996 primarily as a result
of the factors discussed above.
Provision (Benefit) for Income Taxes. The benefit for income taxes was $0.7
million for the first six months of 1997 compared to $8.7 million for the first
six months of 1996. This fluctuation in income taxes is a result of increased
income from operations and operating losses generated by certain foreign
operations which SCIS has been unable to utilize to offset income taxes relating
to income generated by other operations. Management expects to incur operating
losses in the foreseeable future at certain foreign locations for which it will
not recognize tax benefits.
Net Income (Loss). SCIS' net loss decreased $17.0 million to $0.5 million
for the first six months of 1997 from $17.5 million for the first six months of
1996 primarily as a result of the factors discussed above.
1996 COMPARED WITH 1995
Combined Results. Revenues for the combined food service operations of
SCIS and Caterair, including operations reported on a discontinued basis by
Caterair, for 1996 compared with 1995 increased $18.8 million or by 1.2% to
$1,560.0 million in 1996 from $1,541.2 million in 1995. Cost of operations
decreased $12.3 million or by 0.9% to $1,336.1 million in 1996 from $1,348.4
million in 1995. Cost of operations as a percentage of revenues decreased to
85.6% in 1996 from 87.5% in 1995. Operating income on a combined basis increased
$46.7 million to $73.2 million in 1996 from $26.5 million in 1995. Operating
income as a percentage of revenues increased to 4.7% in 1996 from 1.7% in 1995.
Revenues. Revenues for 1996 increased $790.7 million or by 107.0% to
$1,529.8 million from $739.1 million in 1995. The primary reason for this
increase was the inclusion of revenues from the operations acquired, licensed,
leased and subleased from Caterair for a full year in 1996 versus only three
months in 1995. Also included in the 1996 revenue increase was $38.6 million
derived from two kitchens which were subleased/licensed from Caterair on May 31,
1996. Revenues from three domestic kitchens acquired from a subsidiary of LSG in
August and November 1995 (the "LSG Acquisition") increased $25.9 million in 1996
over 1995 primarily as a result of the inclusion of these operations for a full
year in 1996 versus only a partial year in 1995.
Cost of Operations. Cost of operations increased $718.0 million or by
113.2% to $1,352.4 million in 1996 from $634.4 million in 1995. The primary
reason for this increase was the inclusion of the cost of operations of
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the business acquired, licensed, leased and subleased from Caterair for a full
year in 1996 versus only three months in 1995. In addition, costs of operations
increased $35.4 million in 1996 as compared to 1995 due to the inclusion of
operating costs associated with the two kitchens subleased/licensed from
Caterair on May 31, 1996. Further, operating costs of the three kitchens
acquired from LSG in 1995 increased $25.8 million in 1996 over 1995 primarily as
a result of the inclusion of these operations for a full year in 1996 versus
only a partial year in 1995.
Depreciation and Amortization. Depreciation and amortization expenses
increased $16.6 million or by 77.9% to $37.9 million in 1996 from $21.3 million
in 1995 primarily due to the inclusion for the full year of 1996 of depreciation
and amortization expenses for the assets acquired from Caterair versus only
three months in 1995. SCIS also incurred approximately $7.2 million of capital
expenditures related to the deferred maintenance of the assets acquired from
Caterair of which a portion was depreciated in 1996.
Selling, General and Administrative. Selling, general and administrative
expenses increased $20.9 million or by 74.0% to $49.0 million in 1996 from $28.1
million in 1995 primarily as a result of the inclusion of a full year of
operating expenses associated with the operations acquired, licensed, leased and
subleased from Caterair in 1996 versus only three months of 1995.
Integration Expenses. SCIS incurred $30.4 million of Combination related
expenses in 1996 compared to $28.6 million in 1995. These integration expenses
included employee relocation and severance costs and the cost of implementing
cycle time improvements at certain of the Caterair Kitchens.
Other Costs and Expenses. Other costs and expenses decreased $6.2 million
or by 20.7% to $23.7 million in 1996 from $29.9 million in 1995. Other costs and
expenses for 1995 reflect the inclusion of $18.0 million for a customer consent
fee related to the Combination. Excluding this fee, other costs and expenses
increased in 1996 primarily as a result of the inclusion of a full year of
operating expenses associated with the operations acquired, licensed, leased and
subleased from Caterair versus only three months in 1995.
Operating Income. SCIS' operating income increased $39.8 million to $36.6
million in 1996 from a $3.2 million loss in 1995 primarily as a result of the
factors discussed above.
Interest Income. Interest and dividend income increased $5.4 million to
$7.9 million in 1996 from $2.5 million in 1995 primarily as a result of interest
income on the $37.8 million loan made by SCIS to Caterair in connection with the
Combination and higher average investment balances throughout 1996.
Interest Expense. Interest expense increased $30.7 million to $50.4 million
in 1996 from $19.7 million in 1995 primarily as a result of increased debt
balances related to the Combination being outstanding for the entire year in
1996 versus only three months in 1995.
Other Income (Expense). Other expenses increased $2.6 million to $4.7
million in 1996 from $2.1 million in 1995 primarily as a result of the inclusion
of a full year of other expenses associated with the operations acquired,
licensed, leased and subleased from Caterair versus only three months in 1995.
Earnings (Loss) Before Income Taxes. SCIS' loss before income taxes
decreased $12.0 million to $10.6 million in 1996 as compared to a loss before
income taxes of $22.6 million in 1995 primarily as a result of the factors
discussed above.
Provision (Benefit) for Income Tax. The income tax expense for 1996 was
$0.4 million compared to an income tax benefit of $6.5 million in 1995. The
fluctuation in income taxes is a result of increased income from operations and
operating losses generated by certain foreign operations which SCIS has been
unable to utilize to offset income taxes relating to income generated by other
operations.
Net Income (Loss). SCIS' net loss decreased $5.0 million to $11.0 million
in 1996 as compared to a net loss of $16.0 million in 1995 primarily as a result
of the factors discussed above.
1995 COMPARED WITH 1994
Revenues. Revenues for 1995 increased $270.5 million or by 57.7% to $739.1
million from $468.6 million in 1994. Approximately $243.3 million or 89.9% of
this increase was due to the inclusion of revenues derived from the operations
acquired, licensed, leased or subleased from Caterair in connection with the
Combination for three months in 1995. An additional $29.0 million of this
increase was primarily due to the inclusion of revenues from the Sao Paulo,
Brazil kitchen which was acquired in October 1994 (the "Brazil Acquisition")
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for a full year in 1995 versus only a partial year in 1994 and the inclusion of
revenues for a partial year in 1995 from the three domestic kitchens acquired by
SCIS in connection with the LSG Acquisition. Revenues from facilities operated
by SCIS for the full years of 1994 and 1995 declined slightly by $1.8 million
from $463.1 million in 1994 to $461.3 million in 1995.
Costs of Operations. Costs of operations increased $246.1 million or by
63.4% to $634.4 million in 1995 from $388.3 million in 1994. This increase was
primarily associated with the operations acquired, licensed, leased and
subleased from Caterair in connection with the Combination. Other components of
the increase in costs of operations include a $31.1 million increase in
operating costs and expenses primarily due to increases in food costs, payroll
and other operating and administrative expenses associated with the kitchens
acquired by SCIS in the LSG Acquisition and the Brazil Acquisition. Costs of
operations for facilities owned by SCIS for the full years of 1994 and 1995
decreased by $23.7 million from $382.7 million in 1994 to $359.0 million in
1995, with a relatively flat revenue base, as a result of SCIS' operating
improvement plan.
Depreciation and Amortization. Depreciation and amortization expenses
increased $5.8 million or by 37.4% to $21.3 million in 1995 from $15.5 million
in 1994 primarily due to the amortization of intangible and capital lease assets
acquired in the Combination and the Brazil Acquisition.
Selling, General and Administrative. Selling, general and administrative
expenses increased $11.0 million or by 64.3% to $28.1 million in 1995 from $17.1
million in 1994 primarily due to the inclusion of the operations acquired,
licensed, leased and subleased from Caterair in connection with the Combination.
Integration Expenses. SCIS incurred $28.6 million of Combination related
expenses in 1995. These integration expenses included employee relocation,
severance costs, the cost of implementing cycle time improvements at certain of
the Caterair Kitchens and $17.2 million relating to the acceleration of the
recognition of rent expense relating to idle kitchens and the write-down of
related fixed assets. No integration expenses were incurred in 1994.
Other Costs and Expenses. Other costs and expenses increased $25.6 million
to $29.9 million in 1995 from $4.3 million in 1994. This increase includes costs
associated with the operations acquired, licensed, leased and subleased from
Caterair and an $18.0 million charge for a consent fee payable to a major
customer in connection with the Combination.
Operating Income. SCIS' operating income decreased $46.6 million or by
107.4% to a $3.2 million loss in 1995 from $43.4 million in earnings in 1994
primarily as a result of integration expenses incurred in connection with the
Combination as well as the other factors discussed above.
Interest Income. Interest and dividend income increased $2.3 million to
$2.5 million in 1995 from $0.2 million in 1994.
Interest Expense. Interest expense increased $13.9 million to $19.7 million
in 1995 from $5.8 million in 1994 primarily as a result of higher debt balances
resulting from borrowings related to the Combination.
Other Income (Expense). Other expense increased by $0.9 million to $2.1
million in 1995 from $1.2 million in 1994 primarily as a result of an increase
in foreign exchange losses.
Earnings (Loss) Before Income Taxes. SCIS' loss before income taxes was
$22.6 million in 1995 compared to earnings before income taxes of $36.6 million
in 1994 primarily as a result of the factors discussed above.
Provision (Benefit) for Income Taxes. The income tax benefit for 1995 was
$6.5 million compared to income tax expense of $13.4 million in 1994. This
fluctuation in income taxes is a result of decreased income from operations and
operating losses generated by certain foreign operations which SCIS has been
unable to utilize to offset income taxes relating to income generated by other
operations.
Net Income (Loss). SCIS' net loss was $16.0 million in 1995 compared to net
income of $23.2 million in 1994 primarily as a result of the factors discussed
above.
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RESULTS OF OPERATIONS OF CATERAIR
Caterair's discontinued operations for the reporting periods presented are
not readily comparable to one another. Fiscal year 1995 discontinued operations
reflect the termination of substantially all of Caterair's former domestic
airline catering operations and disposition of substantially all of Caterair's
former international airline catering operations and assets, its tradename and
domestic working capital in connection with the Combination effective September
29, 1995.
In connection with the Combination, Caterair sold, licensed, leased and
subleased substantially all of its worldwide business to SCIS and its
subsidiaries. Consequently, Caterair's principal source of revenues is the
receipt of rents, royalties and non-compete related payments from subsidiaries
of SCIS under the Domestic Leases, the License Agreements and the non-compete
agreement. See "-- General" and "Certain Transactions -- The Combination."
SIX MONTHS ENDED JUNE 30, 1997 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1996
Total Revenues. Total revenues for the six months ended June 30, 1997
decreased $0.5 million to $37.7 million from $38.2 million for the six months
ended June 30, 1996. This decrease in total revenues was primarily due to a
reduction in rental income under the Domestic Leases as certain leases expired
or lease terms changed. The decrease in rental income was partially offset by an
increase in income derived under the License Agreements due to the inclusion of
payments made by SCIS relating to the operations of two kitchens
subleased/licensed to SCIS on May 31, 1996 for six months of 1997 versus only
one month of 1996.
Cost of Operations. Cost of operations for the six months ended June 30,
1997 decreased $0.9 million to $14.8 million from $15.7 million for the six
months ended June 30, 1996 primarily due to a reduction in the rent expense for
leased kitchens as certain leases expired or lease terms changed.
Selling, General and Administrative. Selling, general and administrative
expenses were $0.5 million for the six months ended June 30, 1997 compared to
$0.3 million for the six months ended June 30, 1996. These expenses consist
primarily of fees paid to SCIS for corporate and administrative services.
Depreciation and Amortization. Depreciation and amortization expenses were
$5.6 million for the six months ended June 30, 1997 compared to $6.0 million for
the six months ended June 30, 1996.
Operating Income. Operating income increased to $16.8 million for the six
months ended June 30, 1997 from $16.3 million for the six months ended June 30,
1996 primarily as a result of the factors discussed above.
Interest Expense. Interest expense declined $0.6 million to $8.9 million
for the six months ended June 30, 1997 from $9.5 million for the six months
ended June 30, 1996 primarily as a result of a reduction in outstanding debt due
to repayments made during the six months ended June 30, 1997.
Other (Income) Expense. Other income of $0.5 million for the six months
ended June 30, 1997 was the results of the gain on the disposal of certain fixed
assets. No other income or expenses were realized during the six months ended
June 30, 1996.
Income (Loss) from Discontinued Operations. Caterair incurred a $0.3
million loss on discontinued operations for the six months ended June 30, 1997
compared to $1.4 million of income for the six months ended June 30, 1996.
Caterair realized approximately $1.6 million of income for the six months ended
June 30, 1996 from the assumption by SCIS on May 31, 1996 of liabilities
associated with certain discontinued operations (consisting of the two kitchens
leased/licensed by SCIS). The remaining losses from discontinued operations of
$0.3 million and $0.2 million for the six months ended June 30, 1997 and the six
months ended June 30, 1996, respectively, are related to Caterair's operations
in Portugal which have been discontinued.
Income Tax Provision (Benefit). The income tax provision increased
slightly to $2.4 million for the six months ended June 30, 1997 from $2.2
million for the six months ended June 30, 1996 as a result of increased income
from continuing operations.
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Net Income (Loss). Caterair's net income for the six months ended June 30,
1997 decreased $0.2 million to $5.9 million from $6.1 million for the six months
ended June 30, 1996 primarily as a result of the factors discussed above.
1996 COMPARED WITH 1995
Operating results for 1996 reflect a full year of leasing and licensing
operations. Operating results for 1995 include leasing and licensing operations
for only three months and one day, after the effective date of the Combination
on September 29, 1995. The results for the first nine months of 1995 are
presented as discontinued operations. As such, the operating results for these
two years are not comparable. Therefore, 1996 operating results presented below
are compared to the annualized results for 1995 as if the leasing and licensing
operations were in effect for the full year.
Total Revenues. Actual total revenues were $78.0 million in 1996 versus
actual total revenues of $19.0 million in 1995. Annualized total revenues for
1995 would have been $75.8 million. The increase in 1996 total revenues over
annualized 1995 total revenues was primarily due to payments received by
Caterair from SCIS in 1996 under the License Agreements relating to the
operations of two kitchens subleased/licensed by SCIS from Caterair on May 31,
1996.
Cost of Operations. Actual cost of operations increased to $30.4 million
in 1996 from $7.6 million in 1995. Annualized cost of operations for 1995 would
have been $30.6 million.
Selling, General and Administrative. Actual selling, general and
administrative expenses were $1.4 million in 1996 compared to $0.1 million in
1995. Annualized 1995 selling, general and administrative expenses would have
been $0.5 million. The increase in actual 1996 selling, general and
administrative expenses over the annualized 1995 selling, general and
administrative expenses was due to additional legal and consulting fees incurred
in 1996 related to the Combination.
Depreciation and Amortization. Actual depreciation and amortization
expenses increased to $11.8 million in 1996 from $3.4 million in 1995.
Annualized 1995 depreciation and amortization expenses would have been $13.6
million. The decrease in actual 1996 depreciation and amortization expenses from
annualized 1995 depreciation and amortization expenses is due to certain assets
of Caterair becoming fully depreciated during 1996.
Operating Income. Actual operating income increased to $34.3 million from
$7.8 million in 1995. Annualized operating income for 1995 would have been $31.1
million. The increase in actual 1996 operating income from annualized 1995
operating income is primarily attributable to increased revenues derived under
the License Agreements and lower depreciation and amortization expenses during
1996 than 1995 as certain assets of Caterair became fully depreciated during
1996.
Interest Expense. Actual interest expense increased to $18.5 million in
1996 from $5.0 million in 1995. Annualized 1995 interest expense would have been
$20.0 million. The decrease in actual interest expense in 1996 from annualized
interest expense for 1995 is a result of the reduction of outstanding debt due
to repayments made during 1996.
Income (Loss) from Discontinued Operations. Income from discontinued
operations decreased $25.5 million to $1.7 million in 1996 from $27.2 million in
1995. The decrease in income from discontinued operations is primarily the
result of the gain from the sale during 1995 of most of the net assets and
liabilities of Caterair in connection with the Combination.
Income Tax Provision (Benefit). The income tax provision for 1996 was $8.0
million compared to an income tax benefit of $50.4 million recorded in 1995.
Prior to the Combination, Caterair had a valuation allowance to fully reserve
for its gross deferred tax assets because of the uncertainties surrounding the
losses of operations to be sustained for income tax reporting purposes. In
connection with the Combination, Caterair evaluated the potential for the
realization of a portion or all of the deferred tax assets. Caterair determined,
based upon the weight of evidence, it was more likely than not that a portion of
the deferred tax assets would
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be realized. In the fourth quarter of 1995, Caterair recognized an income tax
benefit of $50.5 million for the realization of a portion of the net deferred
tax assets.
Net Income (Loss). Caterair's net income for 1996 decreased $66.6 million
to $9.7 million from $76.4 million primarily due to the factors discussed above.
1995 COMPARED WITH 1994
Income from Continuing Operations. The results from operations for 1995
include three months of leasing and licensing activity. No leasing and licensing
activity was conducted in 1994, thus the results of operations for 1995 and 1994
are not comparable.
Income (Loss) from Discontinued Operations. In 1995, Caterair recorded a
$27.2 million gain on discontinued operations compared to a $23.8 million loss
in 1994. The gain on discontinued operations in 1995 is a result of the sale of
most of Caterair's assets and liabilities of the discontinued operations
included in the Combination. The loss in 1994 reflects the results of all of
Caterair's operations for a full year.
LIQUIDITY AND CAPITAL RESOURCES
SCIS
After consummation of the Offering, SCIS' Offer to Purchase and the Senior
Bank Financing, including the Caterair Refinancing, SCIS' principal sources of
liquidity are expected to be cash flow from operations and amounts available
under the Revolving Credit Agreement. See "Description of Certain
Indebtedness -- Senior Bank Financing." It is anticipated that SCIS' principal
uses of liquidity will be to provide working capital, to finance capital
expenditures, to meet debt service requirements, to fund non-recurring costs
associated with the Combination and to pay for acquired businesses.
As a result of the Combination, the Offering and the Senior Bank Financing,
including the Caterair Refinancing, SCIS will be highly leveraged. At June 30,
1997, on a pro forma basis after giving effect to the Offering and the
application of the net proceeds therefrom, SCIS' Offer to Purchase and the
Senior Bank Financing, including the Caterair Refinancing, the aggregate amount
of outstanding indebtedness of SCIS (including borrowings and guarantees under
the Senior Bank Financing but excluding $25.0 million of letters of credit)
would have been approximately $590.4 million. The Senior Bank Financing provides
SCIS with up to $180.0 million of senior secured financing, consisting of $90.0
million of term loans under the Term Loan Agreement and up to $90.0 million of
availability under the Revolving Credit Agreement (including up to $50.0 million
of availability for letters of credit) and provides Caterair with $160.0 million
of senior secured term loans under the Term Loan Agreement. SCIS guaranteed
Caterair's obligations under the Term Loan Agreement. As of June 30, 1997,
approximately $25.0 million of letters of credit issued primarily to insurance
carriers providing workers' compensation coverage and related to surety bonds
and leases would have been outstanding under the Revolving Credit Agreement.
During the twelve month period ending June 30, 1998, SCIS expects to make
approximately $55.0 million in capital expenditures, which are more significant
than in prior periods. The increase in capital expenditures will primarily
relate to the expansion, improvement and maintenance of SCIS' kitchens,
particularly those located at international gateway airports, and the upgrade of
SCIS' information systems during 1998.
The Revolving Credit Agreement, which is the most restrictive of SCIS'
indebtedness agreements, the Indenture relating to the Notes as well as the Term
Loan Agreement contain a number of covenants that, among other things, restrict
the ability of SCIS and Caterair to dispose of assets, incur additional
indebtedness, guarantee obligations, repay indebtedness or amend debt
instruments, pay dividends, create liens on assets, make investments, make
acquisitions, engage in mergers or consolidations, make capital expenditures,
and otherwise restrict certain corporate activities. For a more detailed
description of the Senior Bank Financing, see "Description of Certain
Indebtedness -- Senior Bank Financing" and for a more detailed description of
the Indenture relating to the Notes, see "Description of Notes." The Senior Bank
Financing also contains provisions which limit Sky Chefs', CII's and the other
Guarantors' (excluding Caterair) ability to make distributions to SCIS other
than in the form of cash dividends and, under certain circumstances, capital
stock. SCIS does not expect that such provisions will have a material impact on
the ability of SCIS to meet its cash obligations. In addition, the Revolving
Credit Agreement requires compliance with specified
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financial tests based on the combined financial position of SCIS and Caterair.
Certain other agreements of SCIS and the Guarantors require SCIS and/or the
Guarantors to maintain certain financial ratios and satisfy certain financial
tests. Management believes SCIS and the Guarantors are currently in compliance
with all material covenants and restrictions contained in all material
agreements to which SCIS and/or a Guarantor is a party.
Based upon current levels of operations, SCIS believes that cash flow from
operations, together with available borrowings under the Revolving Credit
Agreement, will be adequate to meet anticipated requirements for working
capital, capital expenditures, debt service requirements, Combination-related
costs and to pay for acquired businesses. There can be no assurance, however,
that SCIS will continue to generate cash flow at or above current levels or SCIS
will be able to meet its anticipated needs for working capital, capital
expenditures, debt service, Combination-related costs or funding to pay for
acquired businesses.
Net cash provided by operating activities for the six months ended June 30,
1997 declined to $13.6 million from $38.2 million for the six months ended June
30, 1996 primarily as a result of lower than usual levels of accounts payable
and accrued expenses at December 31, 1995. Net cash used in investing activities
increased to $29.0 million during the six months ended June 30, 1997 from $13.2
million during the six months ended June 30, 1996 primarily as a result of
acquisitions of businesses during the six months ended June 30, 1997. Net cash
provided by (used in) financing activities declined to ($8.4) million during the
six months ended June 30, 1997 from ($10.2) million during the six months ended
June 30, 1996.
CATERAIR
After consummation of the Offering, SCIS' Offer to Purchase and the Senior
Bank Financing, including the Caterair Refinancing, Caterair's principal sources
of liquidity are expected to be cash flows from rents, royalties and non-compete
related payments from Sky Chefs and CII under the Domestic Leases, the License
Agreements and the non-compete agreement described herein. It is anticipated
that Caterair's principal uses of liquidity will be to provide working capital,
to meet debt service requirements and to make lease payments.
As a result of the Combination, the Offering, and the Senior Bank
Financing, including the Caterair Refinancing, Caterair will be highly
leveraged. At June 30, 1997, on a pro forma basis after giving effect to the
Offering and the application of the net proceeds therefrom, SCIS' Offer to
Purchase and the Senior Bank Financing, including the Caterair Refinancing, the
aggregate amount of outstanding indebtedness of Caterair (including borrowings
and guarantees of SCIS' indebtedness but excluding the loan by SCIS to Caterair
and $25.0 million of letters of credit) would have been approximately $551.9
million. In connection with the Combination, SCIS loaned Caterair $37.8 million.
This loan bears interest at the rate of 8.0% per annum (payable-in-kind),
matures in 2001 and is secured by a lien on all of Caterair's assets, which is
subordinated to the lien securing the obligations under the Senior Bank
Financing. As of June 30, 1997, the outstanding principal amount of this loan
was $43.3 million. During the twelve months ending June 30, 1998, Caterair will
be required to make approximately $30.4 million in respect of lease payments.
Caterair anticipates that minimal capital expenditures will be made during the
next twelve months. See "Description of Certain Indebtedness -- Senior Bank
Financing," and the Financial Statements and notes thereto included elsewhere in
this Prospectus.
The continuation of Caterair's operations is substantially dependent upon
Sky Chefs' and CII's ability to make payments under the Domestic Leases, the
License Agreements and the non-compete agreement. The Term Loan Agreement under
the Senior Bank Financing provides Caterair with $160.0 million of senior
secured term loans, and the Senior Bank Financing provides SCIS with up to
$180.0 million of senior secured financing, consisting of $90.0 million of term
loans under the Term Loan Agreement and up to $90.0 million of availability
under the Revolving Credit Agreement (including up to $50.0 million of
availability for letters of credit). As of June 30, 1997, approximately $25.0
million of letters of credit issued primarily to insurance carriers providing
workers' compensation coverage and related surety bonds and leases would have
been outstanding under the Revolving Credit Agreement. Caterair guaranteed SCIS'
obligations under the Senior Bank Financing and the Notes.
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Based upon the current levels of operations after the Combination, the
Offering, SCIS' Offer to Purchase and the Senior Bank Financing, including the
Caterair Refinancing, Caterair believes that cash flows from operations will be
adequate to meet anticipated requirements for working capital, debt service and
lease payments. There can be no assurance, however, that cash flows will be
sufficient to meet such obligations.
SEASONALITY
During 1996, the Company recognized 22.8%, 24.4%, 27.5% and 25.3% of its
food service revenues and (9.5)%, 9.9%, 66.9% and 32.7% of its operating income
during the first, second, third and fourth quarter, respectively.
IMPACT OF INFLATION
The Company's food, labor and other operating costs are affected by a
number of factors beyond the Company's control, including inflation. The Company
generally is able to recover increases in food costs due to inflation from its
customers. However, it may not be able to recover similar increases in labor or
other operating costs from such customers.
The Company operates in a number of countries that experience high rates of
inflation. The Company generally has been successful in mitigating the adverse
effects of such inflation through measures such as indexing contractual price
rates to inflation and providing for payments in local currencies. There can be
no assurance that the Company will always be successful in mitigating the risks
associated with inflation or that the Company may not be adversely affected when
it seeks to exchange funds in local currencies of countries with high rates of
inflation into United States currency.
RECENT ACCOUNTING STANDARDS
During June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130 "Reporting Comprehensive Income" and
Statement of Financial Accounting Standards No. 131 "Disclosures About Segments
of an Enterprise and Related Information." Preliminary analysis of these new
standards by the Company indicates that the standards will not have a material
impact on the Company. The standards are effective for financial statements for
fiscal years beginning after December 15, 1997.
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THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
The Private Notes were sold by the Issuer on August 28, 1997 (the "Issue
Date") to the Initial Purchasers pursuant to the Purchase Agreement. The Initial
Purchasers subsequently sold the Private Notes in the United States to
"qualified institutional buyers" ("QIBs"), as defined in Rule 144A under the
Securities Act ("Rule 144A"), in reliance on Rule 144A, and outside the United
States in compliance with Regulation S under the Securities Act. As a condition
to the sale of the Private Notes, the Issuer, the Guarantors and the Initial
Purchasers entered into the Registration Rights Agreement on the Issue Date.
Pursuant to the Registration Rights Agreement, each of the Issuer and the
Guarantors agreed that they would, at their cost, to the extent not prohibited
by any applicable law or applicable interpretation of the staff of the
Commission, (i) prepare and, on or prior to 45 days after the Issue Date, file
with the Commission a Registration Statement under the Securities Act with
respect to the Exchange Offer, (ii) use their reasonable best efforts to cause
the Registration Statement relating to the Exchange Offer to be declared
effective by the Commission under the Securities Act on or prior to 150 days
after the Issue Date, and (iii) commence the Exchange Offer and use their
reasonable best efforts to issue, on or prior to 195 days after the Issue Date,
the Exchange Notes. A copy of the Registration Rights Agreement has been filed
as an exhibit to the Registration Statement of which this Prospectus is a part.
The Registration Statement is intended to satisfy certain of the Issuer's and
the Guarantors' obligations under the Registration Rights Agreement and the
Purchase Agreement. See "-- Resale of the Exchange Notes."
Pursuant to the Registration Rights Agreement, if, (i) because of any
change in law or in currently prevailing interpretations of the staff of the
Commission, the Issuer and the Guarantors are not permitted to effect the
Exchange Offer, (ii) the Exchange Offer is not consummated within 195 days of
the Issue Date, (iii) in certain circumstances, certain holders of unregistered
Exchange Notes so request, or (iv) in the case of any holder of Private Notes
that participates in the Exchange Offer, such holder does not receive Exchange
Notes on the date of the exchange that may be sold without restriction under
state and federal securities laws (other than due solely to the status of such
holder as an affiliate of the Issuer within the meaning of the Securities Act),
then in each case, the Issuer and the Guarantors will (x) promptly deliver to
the holders of Private Notes and the Trustee under the Indenture written notice
thereof and (y) at their sole expense, (a) file a shelf registration statement
covering resales of the Private Notes (the "Shelf Registration Statement"), (b)
use their reasonable best efforts to cause the Shelf Registration Statement to
be declared effective under the Securities Act and (c) use their reasonable best
efforts to, subject to certain exceptions, keep effective the Shelf Registration
Statement until the earlier of two years after the Issue Date or such time as
all of the applicable Private Notes have been sold thereunder. Pursuant to the
Registration Rights Agreement, the Issuer will, in the event that a Shelf
Registration Statement is filed, provide to each holder of Private Notes copies
of the prospectus that is a part of the Shelf Registration Statement, notify
each such holder when the Shelf Registration Statement for the Private Notes has
become effective and take certain other actions as are required to permit
unrestricted resales of the Private Notes. A holder of Private Notes that sells
Private Notes pursuant to the Shelf Registration Statement will be required to
be named as a selling security holder in the related prospectus and to deliver a
prospectus to purchasers, will be subject to certain of the civil liability
provisions under Securities Act in connection with such sales and will be bound
by the provisions of the Registration Rights Agreement that are applicable to
such a holder (including certain indemnification rights and obligations).
Additional interest (the "Additional Interest") shall become payable by the
Issuer and the Guarantor in respect of the Private Notes:
(i) if (A) neither the Registration Statement relating to the Exchange
Offer (the "Exchange Offer Registration Statement") nor the Shelf
Registration Statement is filed with the Commission on or prior to the date
required by the Registration Rights Agreement or (B) notwithstanding that
the Issuer and the Guarantors have consummated or will consummate an
Exchange Offer, the Issuer and the Guarantors are required to file a Shelf
Registration Statement and such Shelf Registration Statement is not filed
on or prior to the date required by the Registration Rights Agreement, then
commencing on the day after either such required filing date, Additional
Interest shall accrue on the principal amount of the Private
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<PAGE> 49
Notes at a rate of 0.50% per annum for the first 90 days immediately
following each such filing date, such Additional Interest rate increasing
by an additional 0.50% per annum at the beginning of each subsequent 90-day
period; or
(ii) if (A) the Exchange Offer Registration Statement is not declared
effective within 150 days after the Issue Date or a Shelf Registration
Statement is not declared effective by the Commission on or prior to 90
days after the filing thereof or (B) notwithstanding that the Issuer and
the Guarantors have consummated or will consummate an Exchange Offer, the
Issuer and the Guarantors are required to file a Shelf Registration
Statement and such Shelf Registration Statement is not declared effective
by the Commission on or prior to the 90th day following the date such Shelf
Registration Statement was filed, then, commencing on the day after the
date on which the applicable Registration Statement was required to be
declared effective, Additional Interest shall accrue on the principal
amount of the Private Notes at a rate of 0.50% per annum for the first 90
days immediately following such date, such Additional Interest rate
increasing by an additional 0.50% per annum at the beginning of each
subsequent 90-day period; or
(iii) if (A) the Issuer and the Guarantors have not exchanged Exchange
Notes for all Private Notes validly tendered in accordance with the terms
of the Exchange Offer on or prior to the 195th day after the Issue Date or
(B) if applicable, the Shelf Registration Statement has been declared
effective and such Shelf Registration Statement ceases to be effective at
any time prior to the second anniversary of the Issue Date (other than as
permitted by the Registration Rights Agreement or after such time as all
Private Notes have been disposed of thereunder), then Additional Interest
shall accrue on the principal amount of the Private Notes at a rate of
0.50% per annum for the first 90 days commencing on (x) the 195th day after
the Issue Date, in the case of (A) above, or (y) the day such Shelf
Registration Statement ceases to be effective in the case of (B) above
(other than as permitted by the Registration Rights Agreement), such
Additional Interest rate increasing by an additional 0.50% per annum at the
beginning of each subsequent 90-day period;
provided, however, that the Additional Interest rate on the Private Notes may
not exceed at any one time in the aggregate 1.50% per annum; and provided,
further, that (1) upon the filing of the Exchange Offer Registration Statement
or a Shelf Registration Statement (in the case of clause (i) above), (2) upon
the effectiveness of the Exchange Offer Registration Statement or a Shelf
Registration Statement (in the case of clause (ii) above), or (3) upon the
exchange of Exchange Notes for all Private Notes tendered (in the case of clause
(iii)(A) above), or upon the effectiveness of the Shelf Registration Statement
which had ceased to remain effective (in the case of clause (iii)(B) above),
Additional Interest on the Private Notes as a result of such clause (or the
relevant subclause thereof), as the case may be, shall cease to accrue and, in
any case, such Additional Interest shall not be payable in respect of more than
one of the preceding provisions at any one time.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and the Letter of Transmittal, the Issuer will accept any and all Private Notes
validly tendered and not withdrawn prior to the Expiration Date.
The Issuer will issue $1,000 principal amount of Exchange Notes in exchange
for each $1,000 principal amount of outstanding Private Notes validly tendered
pursuant to the Exchange Offer and not withdrawn prior to the Expiration Date.
Holders may tender some or all of their Private Notes pursuant to the Exchange
Offer; provided, however, that Private Notes may be tendered only in integral
multiples of $1,000. The Exchange Offer is not conditioned upon any minimum
aggregate principal amount of Private Notes being tendered for exchange.
The form and terms of the Exchange Notes are identical in all material
respects to the form and terms of the Private Notes except that the Exchange
Notes will have been registered under the Securities Act and, therefore, the
Exchange Notes will not bear legends restricting the transfer thereof and
holders of the Exchange Notes will not be entitled to any of the registration
rights of holders of Private Notes under the Registration Rights Agreement (or
related rights to certain interest payments upon the failure of the Issuer to
fulfill certain conditions set forth in the Registration Rights Agreement),
which rights will terminate upon the consummation of the Exchange Offer. The
Exchange Notes will evidence the same indebtedness as the Private Notes (which
they replace), and will be issued under, and be entitled to the benefits of, the
Indenture,
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<PAGE> 50
which also authorized the issuance of the Private Notes, such that both series
of Notes will be treated as a single class of debt securities under the
Indenture. See "-- Resale of the Exchange Notes."
Interest on each Exchange Note will accrue (A) from the later of (i) the
last interest payment date on which interest was paid on the Private Note
surrendered in exchange therefor or (ii) if the Private Note is surrendered for
exchange on a date in a period on or after the record date for an interest
payment date to occur on or after the date of such exchange and as to which
interest will be paid, the date of such interest payment date or (B) if no
interest has been paid on the Private Notes, from the Issue Date.
As of the date of this Prospectus, $300,000,000 aggregate principal amount
of the Private Notes is outstanding, all of which is registered in the name of
Cede & Co., as nominee of the Depositary. Only a registered holder of the
Private Notes (or such holder's legal representative or attorney-in-fact) as
reflected on the records of DTC or the Trustee under the Indenture may
participate in the Exchange Offer. Solely for reasons of administration, the
Issuer has fixed the close of business on , 1997 as the record date
for the Exchange Offer for purposes of determining the persons to whom this
Prospectus and the Letter of Transmittal will be mailed initially. There will be
no fixed record date for determining registered holders of the Private Notes
entitled to participate in the Exchange Offer.
Holders of the Private Notes do not have any appraisal or dissenters'
rights under the General Corporation Law of the State of Delaware or the
Indenture in connection with the Exchange Offer. The Issuer intends to conduct
the Exchange Offer in accordance with the provisions of the Registration Rights
Agreement and the applicable requirements of the Securities Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations of the Commission thereunder.
The Issuer shall be deemed to have accepted validly tendered Private Notes
when, as and if the Issuer has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering holders
of Private Notes for the purposes of receiving the Exchange Notes from the
Issuer.
Holders who tender Private Notes in the Exchange Offer will not be required
to pay brokerage commissions or fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes with respect to the exchange of Private
Notes pursuant to the Exchange Offer. The Issuer will pay all charges and
expenses, other than certain applicable taxes described below, in connection
with the Exchange Offer. See "-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; TERMINATION
The term "Expiration Date" shall mean 5:00 p.m., New York City time on
, 1997, unless the Issuer, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
In order to extend the Exchange Offer, the Issuer will (i) notify the
Exchange Agent of any extension by oral or written notice and (ii) will make a
public announcement thereof (which shall include disclosure of the approximate
number of Private Notes deposited to date), each prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date.
The Issuer expressly reserves the right, in its sole discretion, (i) to
delay accepting any Private Notes, (ii) to extend the Exchange Offer, (iii) if
any conditions set forth below under "-- Certain Conditions to the Exchange
Offer" shall not have been satisfied (or shall occur), to terminate the Exchange
Offer by giving oral or written notice of such delay, extension or termination
to the Exchange Agent or (iv) to amend the terms of the Exchange Offer in any
manner. Any such delay in acceptance, extension, termination or amendment will
be followed as promptly as practicable by a press release or other public
announcement thereof. If the Exchange Offer is amended in a manner determined by
the Issuer to constitute a material change, the Issuer will promptly disclose
such amendment by means of a prospectus supplement that will be distributed to
the registered holders of Private Notes, and the Issuer will extend the Exchange
Offer for a period of five to ten business days, depending upon the significance
of the amendment and the manner of disclosure to such registered holders, if the
Exchange Offer would otherwise expire during such five to ten business day
period. The rights reserved by the Issuer in this paragraph are in addition to
the Issuer's rights set forth below under the caption "-- Certain Conditions to
the Exchange Offer."
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<PAGE> 51
Without limiting the manner in which the Issuer may choose to make a public
announcement of any delay, extension, amendment or termination of the Exchange
Offer, the Issuer shall have no obligation to publish, advertise or otherwise
communicate any such public announcement, other than by making a timely release
to an appropriate news agency.
If the Issuer extends the period of time during which the Exchange Offer is
open, or if it is delayed in accepting for exchange of, or in issuing and
exchanging the Exchange Notes for, any Private Notes, or is unable to accept for
exchange of, or issue Exchange Notes for, any Private Notes pursuant to the
Exchange Offer for any reason, then, without prejudice to the Issuer's rights
under the Exchange Offer, the Exchange Agent may, on behalf of the Issuer,
retain all Private Notes tendered, and such Private Notes may not be withdrawn
except as otherwise provided below in "-- Withdrawal of Tenders." The adoption
by the Issuer of the right to delay acceptance for exchange of, or the issuance
and the exchange of the Exchange Notes, for any Private Notes is subject to
applicable law, including Rule 14e-1(c) under the Exchange Act, which requires
that the Issuer pay the consideration offered or return the Private Notes
deposited by or on behalf of the holders thereof promptly after the termination
or withdrawal of the Exchange Offer.
RESALE OF THE EXCHANGE NOTES
The Issuer is making the Exchange Offer in reliance on the interpretations
of the staff of the Commission as set forth in no-action letters issued to third
parties unrelated to the Issuer. However, the Issuer has not sought its own
no-action letter and there can be no assurance that the staff of the Commission
would make a similar determination with respect to the Exchange Offer as it has
in such no-action letters issued to such third parties. With respect to the
Exchange Notes, based upon these interpretations by the staff of the Commission,
the Issuer believes that a holder (other than (i) any person who is an
"affiliate" of the Issuer within the meaning of Rule 405 under the Securities
Act or (ii) a broker-dealer that purchases Notes from the Issuer to resell
pursuant to Rule 144A under the Securities Act or any other available exemption
under the Securities Act) who exchanges Private Notes for Exchange Notes in the
ordinary course of its business and is not engaging, and has no intention to
engage, and has no arrangement or understanding with any person to participate,
in the distribution of the Exchange Notes, will be allowed to resell the
Exchange Notes without further registration under the Securities Act and without
delivering to the purchasers of the Exchange Notes a prospectus that satisfies
the requirements of Section 10 of the Securities Act. However, if any holder
acquires Exchange Notes in the Exchange Offer for the purpose of distributing or
participating in the distribution of the Exchange Notes or is a broker-dealer,
such holder cannot rely on the position of the staff of the Commission described
above and must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any resale transaction, unless an
exemption from registration is otherwise available. A broker-dealer that will
receive Exchange Notes for its own account in exchange for Private Notes, where
such Private Notes were acquired by such broker-dealer as a result of
market-making or other trading activities, may be deemed to be an "underwriter"
within the meaning of the Securities Act and must therefore, deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such Exchange Notes. Each such broker-dealer that receives Exchange
Notes for its own account in exchange for Private Notes, where such Private
Notes were acquired by such broker-dealer as a result of market-making or other
trading activities, must acknowledge in the Letter of Transmittal that it will
deliver a prospectus in connection with any resale of such Exchange Notes. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by such a
broker-dealer in connection with resales of any Exchange Notes received in
exchange for Private Notes acquired by such a broker-dealer for its own account,
as a result of market-making or other trading activities. Pursuant to the
Registration Rights Agreement, the Issuer has agreed to make this Prospectus, as
it may be amended or supplemented from time to time, available to any such
broker-dealer that requests copies of such Prospectus in the Letter of
Transmittal for use in connection with any such resale for a period of up to 90
days after the Expiration Date. See "Plan of Distribution."
In addition, to comply with the securities laws of certain jurisdictions,
if applicable, the Exchange Notes may not be offered or sold unless they have
been registered or qualified for sale in such jurisdictions or an exemption from
registration or qualification is available and complied with. The Issuer and the
Guarantors
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<PAGE> 52
have agreed, pursuant to the Registration Rights Agreement (subject to certain
specified limitations set forth therein), to use their reasonable best efforts
to register or qualify the Exchange Notes for offer or sale under the securities
or blue sky laws of such jurisdictions as any holder of the Notes reasonably
requests in writing.
PROCEDURES FOR TENDERING
Subject to the terms and conditions hereof and the Letter of Transmittal,
only a registered holder of Private Notes may tender such Private Notes in the
Exchange Offer. To tender in the Exchange Offer, a holder of Private Notes must
complete, sign and date the Letter of Transmittal, or facsimile thereof, have
the signature thereon guaranteed if required by the Letter of Transmittal, and
mail or otherwise deliver such Letter of Transmittal or such facsimile to the
Exchange Agent at the address set forth below under "-- Exchange Agent" for
receipt prior to the Expiration Date. In addition, either (i) certificates for
such Private Notes must be received by the Exchange Agent along with the Letter
of Transmittal, (ii) a timely confirmation of a book-entry transfer (a
"Book-Entry Confirmation") of such Private Notes into the Exchange Agent's
account at DTC pursuant to the procedure for book-entry transfer described
below, must be received by the Exchange Agent prior to the Expiration Date, or
(iii) the holder must comply with the guaranteed delivery procedures described
below.
THE METHOD OF DELIVERY OF PRIVATE NOTES AND THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTATION TO THE EXCHANGE AGENT IS AT THE ELECTION AND
RISK OF THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS
USE AN OVERNIGHT OR HAND DELIVERY SERVICE, PROPERLY INSURED. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY
TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR
PRIVATE NOTES SHOULD BE SENT TO THE ISSUER. HOLDERS MAY REQUEST THEIR RESPECTIVE
BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE
ABOVE TRANSACTIONS FOR SUCH HOLDERS.
The tender by a holder which is not withdrawn prior to the Expiration Date
will constitute a binding agreement between such holder and the Issuer in
accordance with the terms and subject to the conditions set forth herein and in
the Letter of Transmittal.
Any beneficial owner of the Private Notes whose Private Notes are held
through a broker, dealer, commercial bank, trust company or other nominee and
who wishes to tender should contact such intermediary promptly and instruct such
intermediary to tender on such beneficial owner's behalf.
Signatures on a Letter of Transmittal or a notice of withdrawal described
below (see "-- Withdrawal of Tenders"), as the case may be, must be guaranteed
by an Eligible Institution unless the Private Notes tendered pursuant thereto
are tendered (i) by a registered holder who has not completed the box entitled
"Special Issuance Instructions" or "Special Delivery Instructions" on the Letter
of Transmittal or (ii) for the account of an Eligible Institution. In the event
that signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, are required to be guaranteed, such guarantee must be made by a
member firm of a registered national securities exchange or of the NASD, a
commercial bank or trust company having an office or correspondent in the United
States, or another "eligible guarantor institution" within the meaning of Rule
17Ad-15 under the Exchange Act (any of the foregoing, an "Eligible
Institution").
If the Letter of Transmittal is signed by a person other than the
registered holder of any Private Notes (which term includes any participants in
DTC whose name appears on a security position listing as the owner of Private
Notes) or if delivery of the Notes is to be made to a person other than the
registered holder, such Private Notes must be endorsed or accompanied by a
properly completed bond power, in either case, signed by such registered holder
exactly as the name or names of such registered holder or holders name appear(s)
on such Private Notes with the signature on the Private Notes or the bond power
guaranteed by an Eligible Institution.
If the Letter of Transmittal or any Private Notes or assignments or bond
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
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<PAGE> 53
representative capacity, such persons should so indicate when signing, and
unless waived by the Issuer, evidence satisfactory to the Issuer of their
authority to so act must be submitted with the Letter of Transmittal.
The Exchange Agent and the Depositary have confirmed that any financial
institution that is a participant in the Depositary's system may utilize the
Depositary's Automated Tender Offer Program to tender Private Notes.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Private Notes will be determined
by the Issuer in its sole discretion, which determination will be final and
binding. The Issuer reserves the absolute right to reject any and all Private
Notes not properly tendered or any Private Notes, the Issuer's acceptance of
which would be unlawful. The Issuer also reserves the right to waive any
defects, irregularities or conditions of tender as to particular Private Notes.
The Issuer's interpretation of the terms and conditions of the Exchange Offer
(including the instructions in the Letter of Transmittal) will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Private Notes must be cured within such time as the
Issuer shall determine. Although the Issuer intends to request the Exchange
Agent to notify holders of defects or irregularities with respect to tenders of
Private Notes, neither the Issuer, the Exchange Agent nor any other person shall
incur any liability for failure to give such notification. Tenders of Private
Notes will not be deemed to have been made until such defects or irregularities
have been cured or waived.
While the Issuer has no present plan to acquire any Private Notes which are
not tendered in the Exchange Offer or to file a registration statement to permit
resales of any Private Notes which are not tendered pursuant to the Exchange
Offer, the Issuer reserves the right in its sole discretion to purchase or make
offers for any Private Notes that remain outstanding subsequent to the
Expiration Date or, as set forth herein under "-- Expiration Date; Extensions;
Termination" and "-- Certain Conditions to the Exchange Offer," to terminate the
Exchange Offer and, to the extent permitted by applicable law, purchase Private
Notes in the open market, in privately negotiated transactions or otherwise. The
terms of any such purchases or offers could differ from the terms of the
Exchange Offer.
By tendering Private Notes pursuant to the Exchange Offer and executing a
Letter of Transmittal, each holder of Private Notes will represent to and agree
with the Issuer that, among other things, (i) the Exchange Notes to be acquired
in connection with the Exchange Offer are being acquired in the ordinary course
of business of the person receiving such Exchange Notes, whether or not such
person is the holder, (ii) that neither the holder nor any such other person has
an arrangement or understanding with any person to participate in the
distribution of the Exchange Notes, (iii) such holder acknowledges and agrees
that any person who is a broker-dealer registered under the Exchange Act or is
participating in the Exchange Offer for the purpose of distributing the Exchange
Notes must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale of the Exchange Notes
acquired by such person and cannot rely on the position of the staff of the
Commission set forth in certain no-action letters described herein, (iv) such
holder understands that a secondary resale transaction described in clause (iii)
above and any resales of Exchange Notes obtained by such holder in exchange for
Private Notes acquired by such holder directly from the Issuer should be covered
by an effective registration statement containing the selling securityholder
information required by Item 507 or Item 508, as applicable, of Regulation S-K
of the Commission, and (v) such holder or such other person is not an
"affiliate" of the Issuer within the meaning of Rule 405 under the Securities
Act (or, if it is an affiliate, that such holder or other person will comply
with the registration and prospectus delivery requirements of the Securities Act
to the extent applicable). If the holder is a broker-dealer that will receive
Exchange Notes for such holder's own account in exchange for Private Notes,
where such Private Notes were acquired by such broker-dealer as a result of
market-making or other trading activities, such holder must acknowledge in the
Letter of Transmittal that such holder will deliver a prospectus in connection
with any resale of such Exchange Notes; however, by so acknowledging and by
delivering a prospectus, such holder will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. See "Plan of
Distribution."
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<PAGE> 54
RETURN OF PRIVATE NOTES
If any tendered Private Notes are not accepted for exchange because of an
invalid tender, or due to the occurrence of certain other events set forth
herein or any other reason set forth in the terms and conditions of the Exchange
Offer or if Private Notes are withdrawn or are submitted for a greater principal
amount than the holders desire to exchange, such unaccepted, withdrawn or
nonexchanged Private Notes will be returned without expense to the tendering
holder thereof (or, in the case of Private Notes tendered by book-entry transfer
into the Exchange Agent's account at the Depositary pursuant to the book-entry
transfer procedures described below, such Private Notes will be credited to an
account maintained with the Depositary) as promptly as practicable.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Private Notes at the Depositary for purposes of the Exchange Offer within
two business days after the date of this Prospectus, and any financial
institution that is a participant in the Depositary's system may make book-entry
delivery of Private Notes by causing the Depositary to transfer such Private
Notes into the Exchange Agent's account at the Depositary in accordance with the
Depositary's procedures for transfer. However, although delivery of Private
Notes may be effected through book-entry transfer at the Depositary, the Letter
of Transmittal or facsimile thereof, with any required signature guarantees and
any other required documentation, must, in any case, be transmitted to and
received by the Exchange Agent at the address set forth below under "-- Exchange
Agent" on or prior to the Expiration Date or pursuant to the guaranteed delivery
procedures described below.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Private Notes and (i) whose Private Notes
are not immediately available or (ii) who cannot deliver their Private Notes (or
complete the procedures for book-entry transfer), the Letter of Transmittal or
any other required documentation to the Exchange Agent prior to the Expiration
Date, may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) Prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by the Issuer (by
facsimile transmission (receipt confirmed by telephone and an original
delivered by guaranteed overnight courier), mail or hand delivery) setting
forth the name and address of the holder, the certificate number(s) of such
Private Notes (if applicable) and the principal amount of Private Notes
tendered, stating that the tender is being made thereby and guaranteeing
that, within five New York Stock Exchange trading days after the Expiration
Date, the Letter of Transmittal (or a facsimile thereof), together with the
certificate(s) representing the Private Notes in proper form for transfer
or a Book-Entry Confirmation, as the case may be, and any other
documentation required by the Letter of Transmittal, will be deposited by
the Eligible Institution with the Exchange Agent; and
(c) Such properly executed Letter of Transmittal (or a facsimile
thereof), as well as the certificate(s) representing all tendered Private
Notes in proper form for transfer or a Book-Entry Confirmation, as the case
may be, and all other documentation required by the Letter of Transmittal
are received by the Exchange Agent within five New York Stock Exchange
trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Private Notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Private Notes may be
withdrawn at any time prior to the Expiration Date.
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<PAGE> 55
Any holder who has tendered Private Notes may withdraw the tender by
delivering written notice of withdrawal (which may be sent by facsimile
transmission (receipt confirmed by telephone and an original delivered by
guaranteed overnight courier) or hand delivery) to the Exchange Agent prior to
the Expiration Date. For a withdrawal to be effective, a written notice of
withdrawal must be received by the Exchange Agent at its address set forth
herein prior to the Expiration Date. Any such notice of withdrawal must (i)
specify the name of the person having tendered the Private Notes to be withdrawn
(the "Depositor"), (ii) identify the Private Notes to be withdrawn (including
the certificate number or numbers and principal amount of such Private Notes),
(iii) be timely received and signed by the holder in the same manner as the
original signature on the Letter of Transmittal by which such Private Notes were
tendered or as otherwise set forth in the instructions to the Letter of
Transmittal (including any required signature guarantees), or be accompanied by
documents of transfer sufficient to have the Trustee under the Indenture
register the transfer of such Private Notes pursuant to the terms of the
Indenture into the name of the person withdrawing the tender and (iv) specify
the name in which any such Private Notes are to be registered, if different from
that of the Depositor. If Private Notes have been tendered pursuant to the
procedure for book-entry transfer, any notice of withdrawal must specify the
name and number of the account at the book-entry transfer facility to be
credited with the withdrawn Private Notes or otherwise comply with the
book-entry transfer facility's procedures. All questions as to the validity,
form and eligibility (including time of receipt) of such notices will be
determined by the Issuer, in its sole discretion, whose determination shall be
final and binding on all parties. None of the Issuer, any Guarantor, any
employees, agents, affiliates or assigns of the Issuer, or any Guarantor, the
Exchange Agent or any other person shall be under any duty to give any
notification of any irregularities in any notice of withdrawal or incur any
liability for failure to give such notification. Any Private Notes so withdrawn
will be deemed not to have been validly tendered for purposes of the Exchange
Offer and no Exchange Notes will be issued with respect thereto unless the
Private Notes so withdrawn are validly retendered. Properly withdrawn Private
Notes may be retendered by following one of the procedures described above under
"-- Procedures for Tendering" at any time prior to the Expiration Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other term of the Exchange Offer, the Issuer shall not
be required to accept for exchange, or exchange the Exchange Notes for, any
Private Notes not theretofore accepted for exchange, and may terminate or amend
the Exchange Offer as provided herein before the acceptance of such Private
Notes, if any of the following events shall occur:
(a) any action or proceeding is instituted or threatened in any court
or by or before any governmental agency which would be reasonably likely to
materially impair the ability of the Issuer to proceed with the Exchange
Offer or there shall have occurred any material adverse development in any
existing action or proceeding with respect to the Issuer or any of its
subsidiaries; or
(b) the Exchange Offer shall violate any applicable law, rule,
regulation or interpretation of the staff of the Commission; or
(c) any governmental approval which the Issuer shall deem necessary
for the consummation of the Exchange Offer as contemplated hereby shall
have not been obtained.
If the Issuer determines in its reasonable discretion that any of these
conditions are not satisfied (or any of such events shall have occurred), the
Issuer may (i) refuse to accept any Private Notes and return all tendered
Private Notes to the tendering holders and/or terminate the Exchange Offer, (ii)
extend the Exchange Offer and retain all Private Notes tendered prior to the
expiration of the Exchange Offer, subject, however, to the rights of holders to
withdraw such Private Notes (see "-- Withdrawal of Tenders") or (iii) waive such
unsatisfied conditions with respect to the Exchange Offer and accept all
properly tendered Private Notes which have not been withdrawn. If such waiver
constitutes a material change to the Exchange Offer, the Issuer will promptly
disclose such waiver by means of a prospectus supplement that will be
distributed to the registered holders of the Private Notes, and the Issuer will
extend the Exchange Offer for a period of five to ten business days, depending
upon the significance of the waiver and the manner of disclosure to the
registered holders, if the Exchange Offer would otherwise expire during such
five to ten business day period.
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<PAGE> 56
Holders may have certain rights and remedies against the Issuer under the
Registration Rights Agreement should the Issuer fail to consummate the Exchange
Offer, notwithstanding a failure of the conditions stated above. Such conditions
are not intended to modify those rights or remedies in any respect.
The foregoing conditions are for the sole benefit of the Issuer and may be
asserted by the Issuer regardless of the circumstances giving rise to such
condition or may be waived by the Issuer in whole or in part at any time and
from time to time in the Issuer's reasonable discretion. The failure by the
Issuer at any time to exercise the foregoing rights shall not be deemed a waiver
of any such right and each such right shall be deemed an ongoing right which may
be asserted at any time and from time to time.
TERMINATION OF CERTAIN RIGHTS
All registration rights under the Registration Rights Agreement of holders
of the Private Notes eligible to participate in the Exchange Offer (and all
rights to receive Additional Interest as described under "-- Purpose of the
Exchange Offer") will terminate upon consummation of the Exchange Offer except
with respect to the Issuer's continuing obligations (i) to indemnify the holders
(including any broker-dealers) and certain parties related to the holders
against certain liabilities (including liabilities under the Securities Act),
and (ii) for a period of up to 90 days after the Expiration Date, to use its
reasonable best efforts to keep the Registration Statement effective and to
provide copies of the latest version of the Prospectus to any broker-dealer that
requests copies of such Prospectus in the Letter of Transmittal for use in
connection with any resale by such broker-dealer of Exchange Notes received for
its own account pursuant to the Exchange Offer. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted pursuant to the
foregoing provisions, the Issuer has been informed that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
EXCHANGE AGENT
The Bank of New York has been appointed as Exchange Agent for the Exchange
Offer. Questions and requests for assistance as well as all correspondence in
connection with the Exchange Offer and the Letter of Transmittal should be
addressed to the Exchange Agent, as follows:
<TABLE>
<S> <C> <C>
By Hand Or Overnight Delivery: Facsimile Transmissions: By Registered Or Certified Mail:
The Bank of New York (Eligible Institutions The Bank of New York
101 Barclay Street Only) 101 Barclay Street, 7E
Corporate Trust Services Window (212) 815-6339 New York, New York 10286
Ground Level Attention: Reorganization
Attention: Reorganization To Confirm by Telephone or Section
Section for Information Call: Odell Romeo
Odell Romeo (212) 815-6337
</TABLE>
Requests for additional copies of this Prospectus, the Letter of
Transmittal or the Notice of Guaranteed Delivery should be directed to the
Exchange Agent.
The Bank of New York also serves as Trustee under the Indenture.
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Issuer. The
principal solicitation is being made by mail; however, additional solicitation
may be made by facsimile transmission, telephone or in person by officers and
regular employees of the Issuer, the Guarantors and their affiliates.
The Issuer has not retained any dealer-manager or other soliciting agent in
connection with the Exchange Offer and will not make any payments to brokers,
dealers or others soliciting acceptance of the Exchange Offer. The Issuer,
however, will pay the Exchange Agent reasonable and customary fees for its
services and will reimburse it for its reasonable out-of-pocket expenses in
connection with the Exchange Offer.
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<PAGE> 57
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Issuer and are estimated in the aggregate to be approximately
$550,000. Such expenses include fees and expenses of the Exchange Agent and
Trustee, accounting and legal fees and printing costs, among others.
The Issuer will pay all transfer taxes, if any, applicable to the transfer
of Private Notes to it or its order pursuant to the Exchange Offer. If, however,
a transfer tax is imposed for any reason other than the exchange of Private
Notes pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered holder or any other persons) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering holder of
Private Notes.
CONSEQUENCE OF FAILURE TO EXCHANGE
Participation in the Exchange Offer is voluntary. Holders of the Private
Notes are urged to consult their financial and tax advisors in making their own
decisions on what action to take.
Private Notes that are not exchanged for the Exchange Notes pursuant to the
Exchange Offer will remain "restricted securities" within the meaning of Rule
144(a)(3)(iv) of the Securities Act. Accordingly, such Private Notes will remain
subject to the restrictions on transfer of such Private Notes as set forth in
the legend thereon and may not be offered, sold, pledged or otherwise
transferred except (i) to a person whom the seller reasonably believes is a QIB
purchasing for its own account or for the account of a QIB in a transaction
meeting the requirements of Rule 144A under the Securities Act, (ii) in an
offshore transaction complying with Rule 903 or Rule 904 of Regulation S under
the Securities Act, (iii) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 thereunder (if available), (iv) pursuant to
an effective registration statement under the Securities Act or (v) pursuant to
another available exemption from the registration requirements of the Securities
Act, and, in each case, in accordance with all other applicable securities laws.
See "Risk Factors -- Consequences of Failure to Exchange Private Notes."
ACCOUNTING TREATMENT
The Exchange Notes will be recorded at the same carrying value as the
Private Notes as reflected in the Issuer's accounting records on the date of the
exchange. Accordingly, no gain or loss for accounting purposes will be
recognized. The expenses of the Exchange Offer will be amortized over the term
of the Exchange Notes.
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<PAGE> 58
THE AIRLINE CATERING INDUSTRY
Revenues of airline caterers are dependent primarily upon the number of
airline passengers, the number of airline flights served by caterers and the
level of food service (beverage, snack or meal) provided. Catering profitability
has historically been less volatile than airline profitability, due to the
catering business' highly variable cost structure. The primary operating cost
components of airline caterers are food and labor, both of which are highly
variable and more easily adjusted to business cycles than the airlines'
operating costs.
Since airline deregulation in 1978, the airline catering industry has
benefitted from the increase in total United States airline food expenditures
which have grown at a compound annual rate of approximately 6.9%. Beginning in
1992, airlines accelerated their efforts to reduce costs and improve
productivity as a response to cumulative losses incurred as a result of intense
ticket price competition. Airline cost reductions included downgrading the level
of food services, such as switching from hot meal service to snack service,
eliminating individual tray service in favor of bulk meal service and reducing
or eliminating food service on certain flights. The aggregate level of airline
food expenditures in the United States decreased from $2.7 billion in 1992 to
$2.4 billion in 1995 due primarily to the reduction in food expenditures per
passenger, offset partially by an increase in revenue passenger enplanements. In
1996, airline food expenditures in the United States remained constant at the
1995 level of $2.4 billion as declines in food expenditures per revenue
passenger slowed and increases in revenue passenger enplanements continued.
During the first quarter of 1997, airline food expenditures in the United States
increased 2.8% over the comparable period of 1996 as food expenditures per
revenue passenger declined slightly and revenue passenger enplanements
increased.
The following table sets forth revenue passenger enplanements, total food
expenditures and food expenditure per revenue passenger for the United States
airline industry from 1990 through 1996.
<TABLE>
<CAPTION>
TOTAL FOOD
REVENUE PASSENGER EXPENDITURES
ENPLANEMENTS (IN FOOD EXPENDITURES PER
YEAR ENDED DECEMBER 31, (IN MILLIONS) MILLIONS) REVENUE PASSENGER
- --------------------------------------------- ----------------- ------------ ---------------------
<S> <C> <C> <C>
1990......................................... 465 $2,419 $5.20
1991......................................... 453 2,528 5.58
1992......................................... 473 2,734 5.78
1993......................................... 479 2,528 5.28
1994......................................... 518 2,527 4.88
1995......................................... 545 2,418 4.44
1996......................................... 574 2,419 4.21
</TABLE>
- ---------------
Source: Department of Transportation -- Form 41
The following table sets forth revenue passenger enplanements, total food
expenditures and food expenditure per revenue passenger for the United States
airline industry for the three months ended March 31 for each of the years
presented below.
<TABLE>
<CAPTION>
TOTAL FOOD
REVENUE PASSENGER EXPENDITURES
ENPLANEMENTS (IN FOOD EXPENDITURES PER
THREE MONTHS ENDED MARCH 31, (IN MILLIONS) MILLIONS) REVENUE PASSENGER
- --------------------------------------------- ----------------- ------------ ---------------------
<S> <C> <C> <C>
1990......................................... 112 $550 $4.90
1991......................................... 105 554 5.27
1992......................................... 108 634 5.87
1993......................................... 113 623 5.49
1994......................................... 122 601 4.93
1995......................................... 130 562 4.32
1996......................................... 140 565 4.04
1997......................................... 144 581 4.03
</TABLE>
- ---------------
Source: Department of Transportation -- Form 41
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The sources of potential future growth for the airline catering industry
include: (i) a growing demand for air transportation worldwide; (ii) the
increasing proportion of long-haul flights (greater than two and one-half hours)
in the United States and in international markets, which generally offer a
higher level of food service; and (iii) the worldwide trend towards outsourcing
of food service from captive caterers to independent caterers.
Growing Demand for Air Transportation. In the United States, air traffic,
as measured by revenue passenger enplanements, grew at a compound annual rate of
approximately 4.3%, from 267 million in 1978 to 574 million in 1996. Over the
same period, the number of revenue passenger enplanements increased each year,
with the exception of 1991 during which the Gulf War and the recession in the
United States economy caused the first reduction in airline traffic in the
post-deregulation era. In recent years, traffic has grown at higher rates
outside of North America. From January 1992 to January 1997, traffic at
international gateway airports served by the Company grew at compound annual
rates of 4.7% for North America, 6.1% for Europe, 5.7% for Latin
America/Caribbean and 8.3% for the Far East/Australia. The Boeing Current Market
Outlook, 1997 Edition, projected that worldwide revenue passenger miles will
grow at a compound rate of 5.5% from 1996 to 2006. According to 1997 Federal
Aviation Administration Aviation Forecast data, revenue passenger enplanements
in the United States are projected to grow at a compound annual rate of 4.1%
through the year 2006.
Increasing Long-Haul Flights; Higher Levels of Food Service. From 1986 to
1996, the number of departing seats (as a measure of capacity) offered on
long-haul flights worldwide increased 97%, and expressed as a percentage of
departing seats on all flights, increased from 21% to 27%. Over the same period,
the number of departing seats offered on long-haul flights in the United States
increased 66%, and expressed as a percentage of departing seats on all flights,
increased from 21% to 30%. The growing proportion of long-haul flights benefits
the airline catering industry because food service levels are generally higher
on long-haul flights than on short-haul flights.
Trend Towards Outsourcing. The airline catering industry is comprised of
two distinct groups of caterers: (i) independent caterers, such as the Company,
which are not owned by an airline; and (ii) captive caterers, which are owned by
an airline. Although captive caterers were formerly a significant factor in the
United States airline catering industry, the Company believes that independent
caterers now provide substantially all of the meals served on flights in the
United States. Airline catering at most major airports outside the United States
has been traditionally dominated by the local flag carriers, which have
typically maintained their own catering operations to serve locations where they
have had a significant share of air passenger traffic. In recent years, however,
certain governments have begun to reduce their ownership stakes in local flag
carriers and increase the landing privileges of other airlines. The Company
expects that increasing airline competition in international markets will
precipitate more cost-consciousness among foreign airlines, accelerating the
trend towards catering outsourcing which has come to dominate the United States
market. As further evidence of this trend, the Company has entered into an
agreement with Air New Zealand to acquire its airline catering business at four
locations in New Zealand and to provide airline catering services to Air New
Zealand from these locations.
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<PAGE> 60
BUSINESS
INTRODUCTION
The Company is the world's largest provider of airline catering services,
with food service revenues for the twelve months ended June 30, 1997 of
approximately $1.6 billion. Management believes that these revenues are more
than 50% higher than those of its next largest competitor in the airline
catering industry. The Company had Adjusted EBITDA for the twelve months ended
June 30, 1997 of approximately $168 million. See "Summary Unaudited Combined Pro
Forma Financial Data." The Company currently operates, directly or through joint
ventures, 135 kitchens located at or adjacent to 113 airports in 27 countries.
Approximately 63% of the Company's food service revenues for the twelve months
ended June 30, 1997 were derived from United States operations and 37% from
international operations. On a daily basis, the Company services an average of
over 7,000 domestic and international airline flights and prepares an average of
650,000 meals. SCIS is a Delaware corporation, incorporated in 1995 in
connection with the transactions which effectuated the combination of the
businesses of Sky Chefs and Caterair. See "Certain Transactions -- The
Combination."
STRENGTHS
The Company believes that the following factors contribute to its position
as the world's market leader in the airline catering industry:
WORLDWIDE COVERAGE
The Company is the only airline caterer with a significant operating
presence in both the United States and international markets. Management
believes that the Company's global network of kitchens, strategically located to
service major international airlines, provides significant competitive
advantages. As a result, management believes the Company is well positioned to
take advantage of the anticipated growth in international airline traffic and
the higher and more stable food service levels provided on long-haul flights
(over two and one-half hours), some of which offer up to three meals. Management
also believes that the breadth of the global network operated by the Company and
its strategic marketing partner, LSG, provides a significant opportunity to
attract international airlines with a single supplier approach worldwide. The
Company currently operates kitchens at or adjacent to 25 international gateway
airports, including substantially all of the international gateway airports in
the United States, Latin America and Australia, and the Company or LSG also
operate kitchens at a significant number of international gateway airports in
Europe, including London, Paris, Frankfurt and Rome. See "-- Strategy -- Promote
Single Supplier Approach."
LSG STRATEGIC ALLIANCE
The Company's worldwide coverage is enhanced through a strategic marketing
alliance formed in 1993 with LSG, the airline catering subsidiary of Lufthansa.
The alliance creates an international marketing network with kitchens at or near
153 airports in 39 countries, including 29 international gateway airports. The
Company and LSG, while remaining separate companies, generally conduct
operations under the "LSG Lufthansa Service/SKY Chefs" name and logo and
organize their respective marketing activities with the goal of achieving a
coordinated approach to customers on a worldwide basis. The Company and LSG have
agreed to offer each other the right to participate in the development of
business in new geographic markets and not to compete with each other's catering
operations outside of the United States and the European Community. See "--
Strategy -- Promote Single Supplier Approach" and "Certain Transactions -- LSG
Lufthansa Service GmbH."
DIVERSE AND STABLE CUSTOMER BASE
The Company provides airline catering services to over 250 airlines,
comprising substantially all of the world's major airlines. The Company's five
largest North American customers are American, Delta, Northwest Airlines, United
Airlines and Canadian Airlines and the Company's five largest international
customers are Qantas Airways, British Airways, Japan Air Lines, Lufthansa and
Cathay Pacific Airlines. The
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<PAGE> 61
Company has conducted business with each of these customers for at least ten
years. Since its acquisition from AMR, the parent of American, in 1986, Sky
Chefs has provided services to American under long-term contracts. The current
Sky Chefs contract with American runs through the end of 2003 and, together with
Caterair's contract with American, which runs through the end of 2001, accounted
for approximately 30% of the Company's 1996 food service revenues. No other
customer of the Company accounted for more than six percent of its 1996 food
service revenues. See "Risk Factors -- Dependence on Key Customers" and "--
Customers -- Contracts."
LOW COST STRUCTURE
In 1992, Sky Chefs implemented an extensive operating improvement plan
which reduced annual operating costs by approximately $47 million in 1994 as
compared with 1992. Due in large part to its operating improvement plan, Sky
Chefs increased EBITDA from $29 million in 1992 to $59 million in 1994 and
improved EBITDA as a percentage of revenues from 6.1% to 12.6% over the same
period. As part of the Combination which was consummated on September 29, 1995,
management estimated that approximately $55 million of net cost savings on an
annualized basis were achievable by the end of the third year of combined
operations of Sky Chefs and Caterair. Management believes that as of June 30,
1997 a significant portion of these net cost savings have been achieved as
evidenced by an increase in the combined companies' Adjusted EBITDA from $123
million for the year ended December 31, 1994 to $168 million for the twelve
months ended June 30, 1997 and an improvement in Adjusted EBITDA as a percentage
of the combined companies' revenues from 8.0% for the year ended December 31,
1994 to 10.6% for the twelve months ended June 30, 1997. See "Summary Unaudited
Combined Pro Forma Financial Data." These net cost savings have been achieved
through, among other things, increasing labor productivity and reducing labor
and employee costs at certain of the Caterair Kitchens; consolidating certain
corporate level management and administrative functions of Sky Chefs and
Caterair; reducing food waste spoilage and shrinkage at certain of the Caterair
Kitchens; eliminating redundant kitchens; and reducing other kitchen operating
expenses at certain of the Caterair Kitchens. In order to achieve these net cost
savings, the Company estimated that it would incur approximately $52 million in
non-recurring costs through September 1997 principally relating to (i) severance
payments and other employee costs, (ii) external consulting services primarily
associated with the implementation of labor savings programs and (iii) other
items in connection with the integration of the business of Sky Chefs and
Caterair. Through June 30, 1997, the Company had incurred approximately $47
million of such non-recurring costs and the Company currently estimates that the
remaining $5 million of non-recurring costs identified to achieve the $55
million of estimated net cost savings on an annualized basis will be expended
during the balance of 1997. See "Selected Historical Financial Data -- SCIS" and
"Certain Transactions -- The Combination."
STRATEGY
The Company's business strategy is to: (i) promote a single supplier
approach to the marketing of services through the Company's worldwide network
with LSG; (ii) expand international operations by pursuing new business at
existing locations and by expanding to new locations at international gateway
airports; (iii) develop non-airline catering opportunities; and (iv) achieve
additional net cost savings, while maintaining service quality.
PROMOTE SINGLE SUPPLIER APPROACH
The Company and LSG, through their respective global kitchen networks,
intend to continue to promote the benefits that a global catering network can
offer to worldwide airlines. These benefits include enabling customers to
streamline planning for meals and service scheduling, as well as enhancing
communications with airline caterers and improving their capacity to monitor the
quality of catering services. This approach has enabled the Company and LSG to
obtain long-term contracts with Delta, Northwest Airlines and Canadian Airlines
and the Company and LSG intend to continue to pursue long-term contacts with
other existing and new customers. See "-- Strengths -- LSG Strategic Alliance"
and "Certain Transactions -- LSG Lufthansa Service GmbH."
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<PAGE> 62
EXPAND INTERNATIONAL OPERATIONS
The Company intends to continue to pursue an international market
development program by competing for new business at international gateway
airports where it currently operates, engaging in strategic acquisitions of
international airline caterers and stand-alone kitchens, and entering into joint
venture arrangements with airlines and other parties in markets outside the
United States. In particular, the Company plans to focus on the development of
opportunities at international gateway airports. Such a plan is expected to
provide the Company with the benefit of higher and more stable food service
levels from long-haul flights and greater access to international airline
traffic from such airports. During 1997, the Company acquired a 49% interest in
an airline catering business in Mexico and acquired the airline catering
business of Air New Zealand at Auckland, Wellington, Christchurch and Rarotonga.
Since September 1995, the Company has also acquired airline catering businesses
in Bogota, Colombia, Asuncion, Paraguay and Guayaquil, Ecuador through an
existing joint venture.
DEVELOP NON-AIRLINE CATERING OPPORTUNITIES
The Company is pursuing a strategy to sell food services to non-airline
customers in order to further diversify its revenue base. The Company will focus
on developing the business of preparing and delivering meals from its kitchens
to supermarkets and convenience stores in the United States and employee
cafeterias at industrial plants and office buildings in Latin America. The
Company currently produces fresh food products in two major geographic markets
for The Southland Corporation for sale in 7-Eleven stores and is operating a
pilot program with a subsidiary of The Sara Lee Corporation for the production
of home meal solutions. The United States market for supermarket and convenience
store home meal solutions was approximately $8 billion in 1996 and is expected
to grow rapidly as dual income families seek alternatives to in-home preparation
of meals and restaurant dining. The Company believes that these alternative
markets, particularly the United States home meal solutions market, represent
substantial future opportunities. See "-- Non-Airline Catering Operations."
ACHIEVE ADDITIONAL NET COST SAVINGS
The Company will continue to implement its operating improvement plan in an
effort to achieve additional net cost savings. See "-- Low Cost Structure."
HISTORICAL BACKGROUND
Sky Chefs. Sky Chefs was formed in 1941 as the captive airline catering
subsidiary of American and was acquired in 1986 from AMR, the parent of
American, by Onex Capital and members of Sky Chefs' management. Sky Chefs is a
corporation organized under the laws of the State of Delaware. Onex, based in
Toronto, Canada, is a publicly listed (on the Toronto Stock Exchange and the
Montreal Exchange) diversified holding company that operates through autonomous
subsidiaries and strategic partnerships. The principal executive offices of Sky
Chefs are located at 524 East Lamar Blvd., Arlington, Texas 76011 (telephone
number (817) 792-2123).
Caterair. Marriott founded the airline catering industry in 1937 when it
began providing meals on commercial airline flights in the Washington, D.C.
area. Caterair, a Delaware corporation formed in 1989, acquired Marriott's
airline catering business in December 1989 through a management-led buy-out. The
principal executive offices of Caterair are located at 524 East Lamar Blvd.,
Arlington, Texas 76011 (telephone number (817) 792-2123).
SCIS and CII. SCIS and CII are each Delaware corporations formed in 1989.
SCIS was formed in connection with the Combination to hold the capital stock of
Sky Chefs and CII. CII was formed in connection with the Combination to sublease
certain Caterair Kitchens, and license and purchase certain assets from
Caterair, and conduct operations at such Caterair Kitchens. CII constitutes a
separate operating company from Sky Chefs. The principal executive offices of
SCIS and CII are located at 524 East Lamar, Arlington, Texas 76011 (telephone
number (817) 792-2123) and 6550 Rock Spring Drive, Bethesda, Maryland, 20817
(telephone number (301) 897-7800), respectively.
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On September 29, 1995, the Sky Chefs and Caterair businesses were combined,
creating the world's largest airline catering business. See "Certain
Transactions -- The Combination."
AIRLINE CATERING OPERATIONS
Catering Services. The Company conducts airline catering services out of
kitchens at or near airports for airline customers which include: (i) designing
and planning menus; (ii) purchasing food products, beverages and other items in
accordance with customer specifications; (iii) preparing and assembling
individual meals; (iv) stocking liquor and beverage service carts; (v) loading
meals and service carts onto trucks which transport them from the kitchen to the
airplane; (vi) unloading and cleaning plates, utensils and other accessories
from airplanes on which meals have been served; (vii) providing linens, ice and
duty free items; and (viii) providing inventory management and storing
airline-owned dining equipment, which includes plates, utensils, trays, carts,
glasses and various other items.
In the United States, a substantial portion of the food products,
non-alcoholic beverages and other items used by the Company is purchased under
contracts negotiated and specified by airlines and, generally, the cost of food
products, non-alcoholic beverages and such other items are passed through to
airline customers without profit. However, in its international operations, food
products, beverages and other items are generally purchased locally under
contracts negotiated by the Company.
For information relating to the amounts of revenues, operating profit or
loss and identifiable assets attributable to each of SCIS' and Caterair's
geographic areas, see the Financial Statements and notes thereto included
elsewhere in this Prospectus.
Domestic Operations. The Company is the largest provider of airline
catering services in the United States with 1996 food service revenues in the
United States of approximately $979 million. Management believes that these
revenues are more than 25% higher than those of its next largest competitor in
the United States. The Company conducts operations at 72 kitchens serving 56
airports in the United States, including 21 of the 25 busiest airports, as
measured by passenger enplanements. According to Airports Council International
data, during 1996, these 21 airports accounted for approximately 63% of total
United States air traffic. The 56 United States airports at which the Company
operates account for approximately 84% of total United States air traffic. See
"-- Competition."
International Operations. Outside the United States, the Company currently
operates, directly or through joint ventures, 63 kitchens at or near 57 airports
in 26 countries, including England, France, Spain, Australia, Venezuela, Brazil,
Chile, Portugal, Argentina, Canada, Mexico and Russia and 26 kitchens in Central
America and the Caribbean for which the Company has technical services or
management agreements. The Company generally initiates and conducts its
international operations through acquisitions of existing catering businesses
and joint ventures with airline carriers or other local partners, including
Qantas Airways in Australia, Aeroflot in Russia, Goddard Enterprises, Ltd. in
the Caribbean and parts of Central and South America, TAP in Portugal, a
consortium of Persian Gulf carriers in England and certain individuals in
Mexico.
A typical joint venture arrangement with an airline provides for initial
capital investments by the Company and its joint venture partner for
construction of a kitchen and for a long-term management agreement under which
the Company receives a fee for operating the kitchen as well as a long-term
catering contract with the customer/partner. The joint venture arrangement
permits the Company to service other carriers as well as its joint venture
partner. In most cases, the airline joint venture partner commits to purchase
all of its airline catering requirements from the Company at the airports
covered by the joint venture.
NON-AIRLINE CATERING OPERATIONS
The Company is also involved in non-airline catering operations which have
accounted for a relatively small portion of its food service revenues
historically (approximately 3.4% in 1996). Non-airline catering operations in
the United States involve primarily the preparation and delivery of meals to
convenience stores and supermarkets. These activities are conducted from the
Company's existing kitchens. Outside the United
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<PAGE> 64
States, the Company principally operates employee cafeterias at industrial
plants, office buildings and other facilities. In 1996, food service revenues
from these activities outside the United States totaled approximately $41.8
million, with the Company's activities in South America representing the
majority of such sales.
The Company is pursuing a strategy to sell food services to non-airline
customers in order to further diversify its revenue base. The Company will focus
on developing the business of preparing and delivering meals from its kitchens
to supermarkets and convenience stores in the United States and employee
cafeterias at industrial plants and office buildings in Latin America. The
Company currently produces fresh food products in two major geographic markets
for The Southland Corporation for sale in 7-Eleven stores and is operating a
pilot program with a subsidiary of The Sara Lee Corporation for the production
of home meal solutions. The United States market for supermarket and convenience
store home meal solutions was approximately $8 billion in 1996 and is expected
to grow rapidly as dual income families seek alternatives to in-home preparation
of meals and restaurant dining. The Company believes that these alternative
markets, particularly the United States home meal solutions market, represent
substantial future opportunities.
In connection with the formation of Caterair in 1989, Caterair Holdings and
Marriott International, Inc. entered into a non-competition agreement which
prohibits Caterair, subject to certain limited exceptions, from participating in
the food, beverage, merchandise and duty free shop businesses and similar
businesses operated in airport terminals or related facilities and certain food
and service management businesses conducted by Marriott International, Inc. in
1989, other than the airline catering service business, until December 15, 2001.
The Company does not believe that the non-competition agreement will materially
impair its ability to carry out its strategy of developing non-airline catering
opportunities. See "-- Strategy -- Develop Non-Airline Catering Opportunities,"
"-- Competition" and "Certain Transactions -- Caterair."
CUSTOMERS
The Company is the only airline caterer with a significant operating
presence in both the United States and international markets. The Company
provides airline catering services to over 250 airlines, comprising
substantially all of the world's major airlines. The Company's five largest
North American customers are American, Delta, Northwest Airlines, United
Airlines and Canadian Airlines and the Company's five largest international
customers are Qantas Airways, British Airways, Japan Air Lines, Lufthansa and
Cathay Pacific Airlines. The Company has conducted business with each of these
customers for at least ten years. Since its acquisition from AMR, the parent of
American, in 1986, Sky Chefs has provided services to American under long-term
contracts. The current Sky Chefs' contract with American runs through the end of
2003, subject to adjustment based on performance, and, together with Caterair's
contract with American, which runs through the end of 2001, accounted for
approximately 30% of the Company's 1996 food service revenues. No other customer
of the Company accounted for more than six percent of its 1996 food service
revenues.
The Company believes that its size and diversification, both in terms of
geography and customer base, reduce the impact that the failure of any one
airline or the reduction or elimination in food service by any one airline would
have on its overall profitability.
The Company's mix of customers outside of the United States and Canada is
substantially more diversified than in the United States and Canada. The
Company's five largest North American customers accounted for 72% of 1996 food
services revenues in the United States and Canada while its five largest
international customers accounted for only 33% of 1996 food services revenues
outside the United States and Canada.
Contracts. Sky Chefs has a catering services contract with American which
expires at the end of 2003, subject to adjustment based on performance. In 1992,
Sky Chefs negotiated a ten-year contract with American (which replaced a ten
year contract negotiated in 1986 in connection with the acquisition of Sky Chefs
from AMR) and in 1994, Sky Chefs obtained a two-year extension of this contract.
Caterair has a catering services contract with American which expires at the end
of 2001, subject to adjustment based on performance. In September, 1997, Mr.
Robert Crandall, the Chairman and Chief Executive Officer of AMR, the parent of
American, was reported to have stated to financial analysts that in his opinion
American's contracts with the Company "[produce] a cost disadvantage relative to
other caterers" and that American will seek to eliminate its perceived cost
disadvantage. The Company and American periodically discuss issues
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surrounding the terms of these contracts and such discussions have continued
following Mr. Crandall's remarks. From time to time the contracts with American
have been amended and/or extended, and such contracts may be further amended
and/or extended in the future. The contracts with American specify pricing and
quality performance standards; failure to comply with the quality standards may
result in financial penalties or termination of the contract at the affected
airport (or in some cases, at a comparable airport), and, in certain cases, the
purchase of the kitchen at the affected airport by American.
During 1997, American terminated the Company's services at six of the
Caterair Kitchens due to the Company's failure to comply with these quality
standards. Based on current service levels, the Company estimates that such
terminations will result in reductions of annual revenues of approximately $34
million. Despite the loss of these revenues, management estimates that the
Company continues to provide approximately 86% of American's domestic airline
catering requirements. The loss of the business with American or a significant
portion of such business would have a material adverse effect on the business of
the Company. See "Risk Factors -- Dependence on Key Customers," and "Certain
Transactions -- AMR and American."
In addition to the contracts with American, the Company has entered into
contracts with durations of five years or more with each of Canadian Airlines,
Delta, Northwest Airlines, United Airlines, USAir and Alaska Airlines, which in
the aggregate provided approximately 22% of the Company's 1996 food service
revenues.
COMPETITION
The airline catering industry is highly competitive. Several large United
States and international caterers, as well as a number of small caterers
operating at one or more locations and, at certain locations, airport terminal
concession operations, compete for airline catering business. The Company
competes primarily with other independent caterers, and to some extent with
captive caterers, on the basis of price, service and performance. The Company's
principal competitors in the United States are Dobbs International Services,
Inc., a subsidiary of Viad Inc, and Ogden Allied Aviation Services Division, a
subsidiary of Ogden Corporation. The Company's principal competitors outside the
United States are Alpha Airport Group PLC, Gate Gourmet, the airline catering
subsidiary of Swissair, and other captive caterers.
The busiest airports have numerous kitchens operated by major caterers. At
some of these airports, unutilized capacity exists, which leads to increased
competition among caterers and gives airlines leverage in negotiating contracts
with all caterers with facilities located there. On the other hand, some other
airports are serviced by only one caterer. For example, the Company is the only
airline caterer at Oklahoma City, Tucson, Phoenix, San Diego, Nashville, El Paso
and Milwaukee and various other airports. Competitive factors in the airports
where there is only one caterer include the airlines' ability to cater their
planes at other airports and the possibility that other caterers may be
encouraged to enter that particular airport if the existing caterer is not
competitive.
Airline catering at most major airports outside the United States was
traditionally dominated by the local flag carriers, which typically maintained
their own catering operations to serve locations where they had a significant
share of air passenger traffic. In recent years, however, governments generally
have reduced their control over local flag carriers and increased the landing
privileges of other airlines. The Company expects this trend, which is likely to
be reinforced by deregulation of the European market and the potential
privatization of captive airline catering companies, to continue and to make the
international catering business more accessible to independent caterers such as
the Company. However, there can be no assurance that such a trend will continue
or that the Company will be successful in obtaining additional operations in
international markets.
In connection with the formation of Caterair in 1989, Marriott and Caterair
Holdings entered into a non-competition agreement which prohibits Marriott,
subject to certain exceptions, from participating in the airline catering
business until December 15, 2001.
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EMPLOYEES
At June 30, 1997, Sky Chefs had approximately 11,000 workers at 59 United
States kitchens and its corporate headquarters, of which approximately 10,000
were unionized under the Railway Labor Act ("RLA"), the federal labor law
administered by the National Mediation Board governing labor relations for
employees in the airline and railroad industries. Sky Chefs' foreign operations
include kitchens in Canada, Europe, and Latin America, and employ approximately
12,000 persons.
With respect to its operations in the United States, Sky Chefs has operated
for approximately 28 years under the RLA, which provides for a system-wide
bargaining unit and representation by a single union of covered hourly workers.
The Hotel Employees and Restaurant Employees International Union ("HEREIU")
represents all covered hourly Sky Chefs' employees at all United States kitchen
locations under a Master National Agreement ("MNA") which has been in existence
since 1969. Under the MNA, system-wide bargaining with HEREIU generally occurs
every five years (unless otherwise agreed), with local wage rates at individual
kitchens determined periodically through local wage supplements. In 1995, Sky
Chefs and HEREIU reached a five-year agreement to modify system-wide fringe
benefit provisions of the MNA relating to health and retirement coverage and to
implement cost-containment initiatives that management believes are advantageous
to the operations of Sky Chefs. Sky Chefs believes that its relations with its
employees and HEREIU are good, and that the prohibition on strikes, as well as
the stability and workplace practices provided for under the MNA, have
contributed significantly to the success of Sky Chefs' operations to date. Since
the purchase of Sky Chefs by Onex in 1986, Sky Chefs has not suffered any strike
or work stoppage by its employees. With respect to its foreign operations,
employees are unionized under host country foreign labor laws.
In 1995, SCIS created CII, a separate, wholly owned subsidiary, to operate
certain Caterair Kitchens. While CII and Sky Chefs have a common corporate
parent, each operates as an independent entity, with separate marketing, labor
and personnel functions. Upon the consummation of the Combination, 13 Caterair
Kitchens were acquired by CII. At June 30, 1997, CII had approximately 2,400
full-time domestic workers at 13 United States kitchens, of which 12 United
States kitchens were represented by three different unions under the National
Labor Relations Act, the federal labor law administered by the National Labor
Relations Board governing a broad range of industries.
In July 1997, Sky Chefs acquired the Boston operations of CII and SCIS
anticipates that Sky Chefs will acquire CII operations in Baltimore, Oakland and
Salt Lake City in October 1997. All kitchens acquired by Sky Chefs will be
operated under the RLA and the MNA with HEREIU. CII believes that its relations
with its employees and their unions are good, although there can be no assurance
that objections to the acquisition of CII operations by Sky Chefs, and the
coverage of former CII employees under the MNA and RLA, will not be raised by
affected employees or unions. SCIS is continuing to review other potential
opportunities for consolidation of Sky Chefs and CII operations.
PROPERTIES
United States Properties. At June 1, 1997, the Company operated 72
kitchens, which served 56 airports throughout the United States with
approximately 4.8 million square feet of building area. The Company owns four of
its kitchens; the remaining 68 are leased. The kitchens are located at or near
major airports and range in size from approximately 6,700 square feet to
approximately 209,800 square feet of building area and operate 20 to 24 hours a
day. The size and structure of the Company's kitchens vary depending upon the
number of meals to be produced by each kitchen. Most of the Company's kitchens
are leased on a long-term basis from airport authorities, American and another
third party (generally for initial terms of 15 to 20 years). The Caterair
Kitchens have been subleased by Caterair to Sky Chefs and CII pursuant to the
Domestic Leases. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Certain Transactions -- The
Combination."
The Company's leasehold improvements with respect to these properties
revert to the lessors upon termination of the leases. In the past, the Company
has not has experienced any difficulty in renewing leases for kitchens on
satisfactory terms, and the Company does not anticipate any significant problems
with respect to renewing leases expiring in the near future. However, there can
be no assurance that it will be successful in renewing any such leases.
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Nearly all kitchen leases on airport property in the United States require
the Company to pay ground rent, which ranges from an annual rate of $0.10 to
$15.89 per square foot. Most kitchen leases with airport authorities require the
payment of a percentage concession or royalty fee generally ranging from 2.0% to
13.8% of gross revenues, which is typically passed through to customers.
Approximately one-half of the Company's kitchen leases in the United States
require the payment of the greater of the percentage fee or the ground rent
amount. Most of the other kitchen leases require the payment of ground rent plus
the percentage fee. Many of the fixed rental kitchen leases have escalation
clauses that provide for periodic increases tied to the Consumer Price Index.
The majority of kitchen leases entered into by the Company during the past ten
years provide for periodic adjustment of ground rent which is either fixed or is
based upon an appraisal. The Company also pays building rent in connection with
several of its kitchen leases in the United States and expects that upon renewal
of certain of its kitchen leases, airport authorities will require the payment
of building rent in addition to ground rent. The Company is currently
negotiating or renegotiating certain of its kitchen leases.
The Company leases approximately 65,193 square feet at 524 East Lamar,
Arlington, Texas 76011, which houses SCIS', Sky Chefs' and Caterair's corporate
headquarters. This lease expires in March 2003. In addition, the Company leases
and subleases until 2004 approximately 44,500 square feet at 6550 Rock Spring
Drive, Bethesda, Maryland 20817, which houses CII's corporate headquarters.
The Company owns or leases, and operates, a fleet of approximately 1,250
special-purpose catering vehicles to deliver its catering services to airplanes
in the United States and approximately 475 utility vehicles, vans and cars.
The Company also owns or leases land or facilities at 21 locations that are
not in operation, of which four are currently being subleased.
International Properties. At June 1, 1997, the Company operated, directly
or through joint ventures, 63 kitchens at or near 57 airports in 26 foreign
countries with approximately 2,200,000 square feet of building area. The
kitchens are located at or near airports and range in size from approximately
4,000 square feet to approximately 160,000 square feet of building area. Any
leases in connection with the land on or the buildings in which the kitchens are
located are generally with airport authorities under long-term leases (generally
for initial terms of 10 years or more).
The Company owns or leases, and operates, a fleet of approximately 550
special-purpose catering vehicles to deliver its catering services to airplanes
outside the United States and approximately 400 utility vehicles, vans and cars.
LEGAL PROCEEDINGS
The Company is involved in routine litigation, including a number of
workers' compensation and related claims, that have arisen in the ordinary
course of business. The Company does not believe that this routine litigation is
material to its financial condition or results of operations.
INSURANCE
The Company maintains insurance policies to cover public liabilities and is
effectively self-insured for workers' compensation liabilities. The Company
establishes reserves, which management believes are adequate, for uninsured
liabilities. Due to the unpredictable nature of events in many foreign
countries, the Company has maintained insurance against political risk in
certain countries and has added such other insurance as available and as
reasonably necessary to keep the Company adequately insured against such risk.
GOVERNMENT REGULATION
General. Each of the Company's United States kitchens is subject to
federal, state and local laws and regulations, governing health, sanitation,
safety, customs and security. In addition, the design and construction of new
kitchens are affected by federal, state and local laws and regulations regarding
food and health matters, environmental matters, zoning and land use. Kitchens
outside the United States are subject to various foreign laws and regulations.
None of these domestic and foreign laws and regulations has had a material
adverse
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effect on the Company's operations taken as a whole, and the Company has not
experienced any significant difficulties in obtaining material licenses and
approvals necessary to its operations. More stringent and varied increases in
the cost and time required to open new kitchens, as well as increases in the
cost of operating kitchens. In addition, difficulties in obtaining necessary
licenses or permits could cause delays in the opening of, or limit the Company's
ability to open, new kitchens. There can be no assurance that the Company will
in the future be able to obtain necessary licenses and approvals or that it will
remain in compliance with applicable laws and regulations or that such laws and
regulations will not have a material adverse effect on the Company's operations.
Environmental. Under various federal, state and local laws and
regulations, a current or previous owner or operator, manager or developer of
real estate may be liable for the costs of removing and remediating certain
hazardous or toxic substances on the property. These laws often impose liability
without regard to whether the owner or operator knew of, or was responsible for,
the presence of the hazardous or toxic substances. The costs of removing or
remediating these substances may be substantial and the presence of these
substances, or the failure to remediate conditions affected by the substances
promptly, may adversely affect the owner's or operator's ability to sell or
lease the real estate or to borrow using the real estate as collateral. Persons
who arrange for the disposal or treatment of hazardous or toxic substances may
also be liable for the costs of removing or remediating the substances at the
disposal or treatment facility. Certain laws impose liability for the release of
asbestos into the air and owners or operators of real properties may be sued for
personal injury associated with alleged exposure to asbestos. In connection with
its ownership or leasing and operation of its properties, the Company may be
potentially liable for these costs. In addition, the presence of hazardous or
toxic substances at a site adjacent to or in the vicinity of a property could
require the property owner or user to participate in remediation activities in
certain cases or could have an adverse effect on the value of such property. The
Company believes that it is in substantial compliance in all material respects
with applicable federal, state and local regulations regarding hazardous or
toxic substances and is not subject to liability thereunder which would have a
material adverse effect on its business or financial condition.
The Company maintains underground storage tanks used to store fuel for its
trucks at a number of kitchens located in the United States and other countries.
Under federal and state regulations, the Company is subject to various
requirements applicable to underground fuel storage tanks, including
requirements for upgrading tanks, operating standards, release detection
requirements, and financial responsibility requirements. In the past, a number
of the Company's underground storage tanks have discharged fuel. The Company has
removed all tanks where it was aware of such discharges and remediated, or is in
the process of remediating, any contamination resulting from such discharges and
has removed all but one of its remaining underground storage tanks located in
the United States. The Company is not aware of any liability that it has in
connection with the existing or previous ownership or operation of underground
storage tanks that would have a material adverse effect on the Company's
business or financial condition.
Federal Regulation of Food Services. In addition to applicable state and
local regulations, the Company's domestic kitchens are subject to regulation and
inspection by the United States Food Drug and Administration (the "FDA"). Every
kitchen in the United States must meet the FDA's minimum standards relating to
the handling, preparation and delivery of food, including requirements relating
to the temperature of food and the cleanliness of the kitchen and the hygiene of
its personnel. Leftover and discarded food arriving in the United States on
incoming international flights must be disposed of in accordance with
requirements established by the United States Department of Agriculture
("USDA"), which has the right to inspect the Company's food disposal procedures.
Kitchens are also subject to USDA inspections.
Customs and Security. The Company and its operations are subject to
certain federal laws and regulations which are designed to prevent certain
criminal activities, primarily smuggling and terrorism. In an effort to prevent
such activities, the Federal Aviation Administration requires a five-year
background investigation of all employees of the Company who have access to the
airport ramps and loading docks from which meals are delivered and boarded onto
aircraft. The United States Customs Service, in addition to requiring a similar
background investigation, has the right to inspect all items removed from
incoming international flights, including food trays and related equipment.
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MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the name, age and position(s) of each person
who serves as an executive officer and/or director of SCIS or a Guarantor:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------- --- -------------------------------------------------
<S> <C> <C>
Gerald W. Schwartz................. 55 Director of SCIS and Sky Chefs
Ewout Heersink..................... 47 Director of SCIS and Sky Chefs
Helmut Woelki...................... 47 Director of SCIS and Sky Chefs
Gunter Rothig...................... 61 Director of SCIS and Sky Chefs
Helmut Bleckmann................... 57 Director of SCIS and Sky Chefs
James J. O'Neill................... 63 Director of SCIS and CII, Vice Chairman of the
Board and Chief Executive Officer of SCIS and
Chairman of the Board of CII
Michael Z. Kay..................... 58 Director of SCIS and Sky Chefs and President and
Chief Executive Officer of Sky Chefs
Patrick W. Tolbert................. 51 Director, Executive Vice President and Chief
Financial and Administrative Officer of SCIS and
Sky Chefs
Randall C. Boyd.................... 39 Senior Vice President-Marketing and Customer
Service of Sky Chefs
William S. Woodside................ 75 Director of SCIS and Sky Chefs and Vice Chairman
of Sky Chefs
Daniel J. Altobello................ 56 Director and Chairman of the Board of SCIS and
Chief Executive Officer and President of Caterair
Thomas J. Lee...................... 44 Director-Financial Accounting of SCIS and Sky
Chefs
Eric J. Rosen...................... 36 Director of CII
J. Thomas Markley.................. 64 Director of CII
Aaron Gellman...................... 67 Director of CII
Anthony R. Melman.................. 50 Director of Caterair
Donald F. West..................... 59 Director of certain Guarantors
Norman J. Shuman................... 65 Director of certain Guarantors
</TABLE>
Gerald W. Schwartz has been a director, Chairman of the Board, President
and Chief Executive Officer of Onex and Onex Capital since their formation in
1983. Mr. Schwartz has been a director of OFSI and Sky Chefs since May 1986 and
a director of SCIS since its formation. Mr. Schwartz serves on the board of
directors of ProSource, Inc. and Alliance Communication Corporation.
Ewout Heersink has been Vice President and Chief Financial Officer of Onex
for the past six years and has held various positions at Onex since March 1987.
Mr. Heersink has been a director of OFSI and Sky Chefs since October 1992. Mr.
Heersink has been a director of SCIS since its formation. Mr. Heersink also
serves on the boards of directors of certain Guarantors which are indirectly
wholly-owned subsidiaries of SCIS.
Helmut Woelki has been Chairman of the Executive Board of LSG since April
1989. Mr. Woelki was elected to the boards of directors of OFSI and Sky Chefs in
August 1993. Mr. Woelki has been a director of SCIS since its formation.
Helmut Bleckmann has been Vice President Corporate Strategy/Business
Development of LSG for more than five years. Mr. Bleckmann was elected to the
boards of directors of SCIS, OFSI and Sky Chefs in October 1995.
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Gunter Rothig was appointed Vice Chairman of the Executive Board of LSG in
1989. Mr. Rothig was elected to the boards of directors of OFSI and Sky Chefs in
February 1994. Mr. Rothig has been a director of SCIS since its formation.
James J. O'Neill was named President of Sky Chefs in April 1980. He was
elected to the boards of directors of Sky Chefs and OFSI in May 1986. He was
named Chairman of the Board and Chief Executive Officer of Sky Chefs in March
1994. Prior to joining Sky Chefs, Mr. O'Neill served as Vice President--Data
Processing and Communication Services for American. Mr. O'Neill serves on the
Board of Trustees of the American Management Association, and is a member of the
Executive Committee and Board of Directors of the North Texas Commission. Mr.
O'Neill has been a director and the Chief Executive Officer of SCIS since its
formation. In September 1995, Mr. O'Neill resigned as director, Chief Executive
Officer and Chairman of the Board of Sky Chefs and was elected to the board of
directors and appointed Chairman of the Board of CII. Mr. O'Neill also serves on
the boards of directors of certain Guarantors which are indirectly wholly-owned
subsidiaries of SCIS.
Michael Z. Kay was named President and Chief Operating Officer, and became
a director, of Sky Chefs in September 1991. Mr. Kay was elected to the board of
directors of OFSI in September 1991. From June 1990 until joining Sky Chefs, Mr.
Kay served as Executive Vice President and management consultant for Charter
Medical Corporation. From January 1990 to April 1990, Mr. Kay was President and
Chief Operating Officer of Portman Hotel Company. Mr. Kay has been a director of
SCIS since its formation. Mr. Kay also serves on the board of directors of a
Guarantor which is an indirectly wholly-owned subsidiary of SCIS.
Patrick W. Tolbert was named Executive Vice President and Chief Financial
Officer, and became a director, of Sky Chefs in June 1992. Mr. Tolbert was
elected to the board of directors of OFSI in June 1992. Mr. Tolbert was
appointed Chief Financial and Administrative Officer of Sky Chefs in December
1992. From March 1990 through June 1992, Mr. Tolbert was Senior Vice President
and Chief Financial Officer of Sunbelt Beverage Corporation. Prior thereto, he
served in various executive capacities for The Sara Lee Corporation and several
of its subsidiaries and affiliates, including JP Foodservice, Inc., PYA/Monarch,
Booth Fisheries Corporation and The Electrolux Corporation. Mr. Tolbert has been
a director, and Executive Vice President and Chief Financial and Administrative
Officer, of SCIS since its formation. Mr. Tolbert also serves on the boards of
directors of certain Guarantors which are indirectly wholly-owned subsidiaries
of SCIS.
Randall C. Boyd was named Vice President-Marketing and Customer Service of
Sky Chefs in September 1989 and Mr. Boyd was named Senior Vice
President-Marketing and Customer Service of Sky Chefs in July 1991. Prior to
joining Sky Chefs, Mr. Boyd spent ten years with IBM Corporation in marketing,
strategic planning and sales.
William S. Woodside has been a director of OFSI and Sky Chefs, and Vice
Chairman of Sky Chefs, since May 1987. Mr. Woodside was formerly the Chairman
and Chief Executive Officer of American Can Company. Mr. Woodside serves as a
director of American Capital Mutual Funds. Mr. Woodside has been a director of
SCIS since its formation.
Daniel J. Altobello has been President of Caterair and Caterair Holdings
since December 1989. He has also served as Chief Executive Officer and Chairman
of the Board of Directors of Caterair and Caterair Holdings since December 1989.
Prior thereto, Mr. Altobello worked at Marriott, where he served as Executive
Vice President of Marriott and Chief Operating Officer of Marriott's airline
catering business. Mr. Altobello serves as a director of American Management
Systems, Inc. and as a member of the advisory board of Thayer Capital Partners.
In accordance with the terms of the Employment Agreement, dated as of September
29, 1995, between Mr. Altobello and OFSI, Mr. Altobello was elected Chairman of
the Board of Directors of OFSI. Mr. Altobello also serves on the boards of
directors of certain Guarantors which are indirectly wholly-owned subsidiaries
of SCIS.
Anthony R. Melman became the sole director of Caterair on September 29,
1995. Mr. Melman has been Vice President of Onex for more than five years and
has held various executive offices at Onex since its formation. Mr. Melman
serves on the board of directors of ProSource, Inc. Mr. Melman also serves on
the boards of directors of certain Guarantors which are indirectly wholly-owned
subsidiaries of SCIS.
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Thomas J. Lee has been Director-Financial Accounting of Sky Chefs for more
than five years. Mr. Lee has been Director-Financial Accounting of SCIS since
its formation. Mr. Lee also serves on the boards of directors of certain
Guarantors which are indirectly wholly-owned subsidiaries of SCIS.
Aaron Gellman was named a director of CII on September 29, 1995. Since
January 1992, Mr. Gellman has been the Director of the Transportation Center at
Northwestern University. Since 1995, Mr. Gellman has been a member of the
Federal Aviation Administration Research, Engineering and Development Advisory
Committee. Mr. Gellman is also currently a Professor of Management and Strategy
at the J.L. Kellogg Graduate School of Management and a Professor of Industrial
Engineering at the Robert R. McCormick School of Engineering and Applied
Science. Mr. Gellman also serves on occasion as a consultant to various
companies in the United States and abroad in the areas of transportation and
technological change.
J. Thomas Markley was named a director of CII on September 29, 1995. Mr.
Markley is currently serving as President and Chief Executive Officer of XEL
Communications, Inc. and as Senior Vice President of SALIENT(3) Communications,
Inc., and has served in such capacities since October 1996 and July 1996,
respectively. From 1984 through July 1996, Mr. Markley was President and Chief
Executive Officer of JTM Inc., a consulting firm.
Eric J. Rosen was named a director of CII on September 29, 1995. Mr. Rosen
is currently Managing Director of Onex Investment Corp. and has been employed by
Onex since 1989. Prior thereto, Mr. Rosen worked at Kidder, Peabody & Co. in
both the mergers and acquisitions and merchant banking groups. Mr. Rosen is
currently on the boards of directors of Tower Automotive, Inc., Dura Automotive
Systems, Inc., Ripplewood Holdings L.L.C., Phoenix Pictures Inc. and Worldbridge
Broadland Services Inc.
Donald F. West is currently a tax consultant for Onex Management U.S. Inc.,
an affiliate of Onex, and has been employed in various capacities by Onex since
1989. Mr. West has served on the boards of directors of certain Guarantors which
are indirectly wholly-owned subsidiaries of SCIS since November 24, 1993.
Norman J. Shuman is a certified public accountant and has practiced with
the firm of Belfint, Lyons & Shuman, P.A. since 1958, and is currently a
Director and the President of such firm. Mr. Shuman has served on the boards of
directors of certain Guarantors which are indirectly wholly-owned subsidiaries
of SCIS since December 8, 1992.
Directors of SCIS, Sky Chefs, CII, Caterair and the other Guarantors are
elected at each annual meeting of stockholders of the relevant corporation to
serve for one year or until their successors are elected and qualified.
Executive officers hold their offices for such terms as determined by the board
of directors of the relevant corporation and until their respective successors
are chosen and qualified. Messrs. Woelki, Rothig and Bleckmann were selected to
serve on the board of directors of OFSI, SCIS and Sky Chefs by LSG pursuant to
the LSG Stockholders' Agreement. See "Certain Transactions -- LSG Lufthansa
Service GmbH."
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EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth information concerning
annual and long-term compensation (for 1996, 1995 and 1994) awarded to, earned
by, or paid to each of SCIS', Sky Chefs', CII's and Caterair's chief executive
officer and each of such entities' (and their subsidiaries') four most highly
compensated executive officers (other than the chief executive officer),
including certain former executive officers, whose total annual salary and bonus
for the year ended December 31, 1996 was in excess of $100,000 (the "Named
Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------------- AWARD
OTHER ---------------
ANNUAL SECURITIES ALL OTHER
NAME AND SALARY BONUS COMPENSATION UNDERLYING COMPENSATION
PRINCIPAL POSITION(S) YEAR(1) ($)(2) ($)(3) ($)(4) OPTIONS/SARS(5) ($)
- ---------------------------- ------- -------- -------- ------------ --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
James J. O'Neill 1996 495,000(10) 551,571 308,200(11) -0- 3,750(13)
Chief Executive 1995 495,000(10) 404,809 321,400(11) -0- 3,750(13)
Officer of SCIS and 1994 485,000(10) 391,180 331,000(11) -0- 4,620(13)
Chairman of the Board
of CII(6)
Michael Z. Kay 1996 600,000 670,929 86,000(11) -0- 3,750(13)
President and Chief 1995 395,000 328,309 61,000(11) -0- 3,750(13)
Operating Officer 1994 370,000 300,618 62,000(11) -0- 4,620(13)
of Sky Chefs(6)
Patrick W. Tolbert 1996 400,000(10) 485,929 38,400(11) -0- 3,750(13)
Executive Vice President 1995 245,000(10) 274,094 32,400(11) -0- 3,750(13)
and Chief Financial and 1994 230,000(10) 169,243 34,400(11) -0- 2,390(13)
Administrative Officer of
SCIS and Sky Chefs(6)
Randall C. Boyd 1996 275,000 369,571 20,800(11) -0- 3,750(13)
Senior Vice President- 1995 170,000 141,734 18,600(11) -0- 3,750(13)
Marketing and Customer 1994 160,000 116,243 19,600(11) -0- 2,165(13)
Service of Sky Chefs(6)
Thomas J. Lee 1996 78,269 31,367 -0- -0- 2,640(13)
Director - Financial 1995 75,989 25,836 -0- -0- 2,639(13)
Accounting of 1994 73,066 24,108 -0- -0- 1,827(13)
SCIS and Sky Chefs(6)
Daniel J. Altobello 1996 525,000 -0- 45,000 -0- 982,572(14)
Chief Executive 1995 414,306 -0- 37,130(12) -0- 1,503,822(15)
Officer and 1994 525,000 -0- 46,137(12) -0- -0-
President of Caterair(7)
Angelo D. Bizzarro 1996 295,000 481,732 22,650(12) -0- -0-
Former Executive 1995 295,000 -0- 25,000(12) 36.04 735,000(16)
Vice President and 1994 293,462 -0- 25,777(12) -0- -0-
Chief Operating
Officer of Caterair
and Former Chief Executive
Officer and President of
CII(8)
John C. Carr 1996 79,006 34,200 5,000(12) -0- 193,538(17)
Former Senior Vice 1995 119,404 -0- 16,154 10.81 135,000(18)
President and General 1994 130,688 -0- 18,262(12) -0- -0-
Counsel of Caterair and
Former General Counsel
of SCIS(9)
</TABLE>
- ---------------
(1) Prior to September 30, 1995, the Named Executive Officers other than
Messrs. Altobello, Bizzarro and Carr were employed and compensated by Sky
Chefs and Messrs. Altobello and Bizzarro were compensated by Caterair.
Prior to October 31, 1995, Mr. Carr was employed and compensated by
Caterair. See "Management -- Directors and Executive Officers." From
September 30, 1995, Mr. O'Neill was employed and compensated by SCIS and
CII, and Messrs. Tolbert and Lee were employed and compensated by SCIS and
Sky Chefs. For all periods shown, Messrs. Kay and Boyd were employed and
compensated by Sky Chefs. From October 1, 1995, Mr. Bizzarro was employed
and
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<PAGE> 73
compensated by CII; however, he resigned in March 1997. From November 1,
1995, Mr. Carr was employed by SCIS and Caterair and compensated by SCIS;
however, he resigned in June 1996. From October 1, 1995, Mr. Altobello was
employed and compensated by OFSI. No officer of any Guarantor (other than
Sky Chefs, CII and Caterair) receive compensation for serving in such
capacity.
(2) Amounts shown include the dollar value of base salary (cash and noncash)
earned and received by the Named Executive Officers. Amounts shown for
Messrs. Altobello, Bizzarro and Carr include Caterair's contributions to
Caterair's Retirement Savings and Investment Plan (401(k) Plan) and
Executive Deferred Compensation Plan for periods during which such Named
Executive Officers were compensated by Caterair.
(3) Amounts shown include the dollar value of bonuses earned by the Named
Executive Officers during such year although a portion of such bonuses were
paid in the subsequent year. Such bonuses were determined in accordance
with Sky Chefs' Performance Reward Plan for periods during which the Named
Executive Officers were compensated by SCIS, Sky Chefs or CII.
(4) Amounts shown for the Named Executive Officers (other than for Messrs.
Altobello, Bizzarro and Carr) for all periods, and for Mr. Carr from
November 1, 1995 through June 1996, include reimbursement for automobile
allowance, country club membership fees and mortgage differential.
(5) Amounts shown indicate number of units granted to such individual pursuant
to the Phantom Stock Plan. See "-- Phantom Stock Plan" and "Aggregated
Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End Option/SAR
Values."
(6) Messrs. O'Neill, Kay, Tolbert, Boyd and Lee are parties to the Management
Shareholders' Agreement (the "Management Shareholders' Agreement"), dated
as of May 29, 1986, as amended, among OFSI, an affiliate of Onex and
certain employees, officers and directors of SCIS (the "Management
Shareholders"). See "Certain Transactions -- Management Shareholders'
Agreement."
(7) Includes compensation paid to Mr. Altobello through September 29, 1995 by
Caterair. Excludes $131,250 paid to Mr. Altobello from September 30, 1995
through December 31, 1995 by OFSI for services performed by Mr. Altobello
under his employment contract with OFSI. Subsequent to September 29, 1995,
Mr. Altobello has been compensated by OFSI under his employment agreement.
See "-- Employment Agreements -- Daniel J. Altobello" and "Certain
Transactions -- Transactions with Certain Caterair Persons."
(8) Includes compensation paid to Mr. Bizzarro through September 29, 1995 by
Caterair. Mr. Bizzarro resigned from his positions with Caterair on
September 29, 1995 and entered into an employment agreement with CII which
became effective following the consummation of the Combination. See
"Certain Transactions -- Transactions with Certain Caterair Persons." From
October 1, 1995, Mr. Bizzarro was compensated by CII. Mr. Bizzarro resigned
from his positions with CII effective as of March 1997.
(9) From 1993 through March 1994, Mr. Carr was Vice President and Associate
General Counsel of Caterair. From April 1994 through June 1996, Mr. Carr
served as Senior Vice President and General Counsel of Caterair. From
September 29, 1995 through June 1996, Mr. Carr served as General Counsel of
SCIS. Mr. Carr was compensated by Caterair through October 31, 1995 and
from November 1, 1995 through June 1996 by SCIS. Mr. Carr resigned from his
positions with SCIS and Caterair effective as of June 1996.
(10) Amounts shown include a $60,000 fee for serving on OFSI's board of
directors.
(11) Includes the amounts accrued but not funded or paid with respect to the
Named Executive Officers under Sky Chefs Supplemental Retirement Plan. Such
amounts include $292,000, $307,000 and $306,000 for 1996, 1995 and 1994,
respectively, for Mr. O'Neill; $74,000, $49,000 and $50,000 for 1996, 1995
and 1994, respectively, for Mr. Kay; $27,000, $21,000 and $23,000 for 1996,
1995 and 1994, respectively, for Mr. Tolbert; and $10,000, $6,000 and
$7,000 for 1996, 1995 and 1994, respectively, for Mr. Boyd.
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<PAGE> 74
(12) All or a portion of amounts shown are for payments made under the Caterair
International Flexible Perquisite Plan and if applicable, include
Caterair's contributions to the Retirement Savings and Investment Plan
(401(k) Plan).
(13) Amounts shown include the contributions made to Sky Chefs' Retirement
Savings and Investment Plan (401(k) Plan).
(14) Includes a $978,822 payment made to Mr. Altobello by OFSI on January 1,
1996 in respect of severance payments otherwise due under Mr. Altobello's
former employment agreement with Caterair and $3,750 of contributions made
by SCIS pursuant to Sky Chefs' Retirement Savings and Investment Plan
(401(k) Plan). See "-- Employment Agreements -- Daniel J. Altobello,"
"-- Employee Plans" and "Certain Transactions -- Transactions with Certain
Caterair Persons."
(15) Includes (i) a $525,000 restructuring payment pursuant to the Caterair Key
Employee Retention Plan and (ii) a $978,822 severance payment under Mr.
Altobello's former employment contract with Caterair. See "-- Employment
Agreements -- Daniel J. Altobello," "-- Employee Plans" and "Certain
Transactions -- Transactions with Certain Caterair Persons."
(16) Includes a $440,000 severance payment and a $295,000 retention payment
pursuant to the Caterair Key Employee Retention Plan. See "-- Employee
Plans" and "Certain Transactions -- Transactions with Certain Caterair
Persons." Excludes any payment to be made under the Phantom Stock Plan.
See "-- Phantom Stock Plan" and "Aggregated Option/SAR Exercises in Last
Fiscal Year and Fiscal Year-End Option/SAR Values."
(17) Includes a $160,000 payment pursuant to the Caterair Key Employee
Retention Plan and a $33,538 payment in respect of accrued but unused
vacation time through the date of termination of employment. See
"-- Employee Plans." Excludes any payment to be made under the Phantom
Stock Plan. See "-- Phantom Stock Plan" and "Aggregated Option/SAR
Exercises in Last Fiscal Year and Fiscal Year-End Option/SAR Values."
(18) Includes a $135,000 retention payment pursuant to the Caterair Key
Employee Retention Plan. See " -- Employee Plans."
COMPENSATION OF DIRECTORS
The directors of SCIS and Sky Chefs do not receive any compensation for
serving as directors. However, Messrs. Woelki, Bleckmann and Rothig receive
annual compensation of $30,000, and Messrs. O'Neill and Tolbert receive annual
compensation of $60,000, for serving on OFSI's board of directors. Messrs.
Schwartz, Heersink, Kay, Woodside and Altobello do not receive any compensation
for serving on OFSI's board of directors. Directors of SCIS and Sky Chefs are
reimbursed by SCIS and Sky Chefs, respectively, for expenses incurred by them in
connection with board meetings.
Mr. Melman does not receive any compensation for serving on Caterair's
board of directors.
Mr. O'Neill does not receive any compensation for serving as a director of
CII. Messrs. Rosen, Markley and Gellman receive annual compensation of $50,000,
$15,000 and $15,000, respectively, for serving on CII's board of directors.
Messrs. Markley and Gellman also receive $1,000 for each board meeting they
attend. Directors of CII are reimbursed for expenses incurred by them in
connection with CII board meetings.
Except as described in the preceding paragraphs, the directors of the
Guarantors do not receive compensation for serving in such capacity.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISION
The members of the compensation committee of each of SCIS and Sky Chefs
during the year ended December 31, 1996 were Messrs. Woodside, Heersink and
Rothig. No such person is or was an officer or employee of SCIS or Sky Chefs.
Such compensation committees are responsible for establishing the levels of
compensation and benefits for SCIS' and Sky Chefs' officers and employees.
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<PAGE> 75
No member of Caterair's board of directors during the year ended December
31, 1996 is or was an officer or employee of Caterair. The board of directors of
Caterair is responsible for establishing the levels of compensation and benefits
for Caterair's officers and employees.
No member of CII's board of directors during the year ended December 31,
1996, other than Mr. Bizzarro (who resigned in March 1997), is or was an officer
or employee of CII. The board of directors of CII is responsible for
establishing the levels of compensation and benefits for CII's officers and
employees. Mr. Bizzarro's compensation was determined pursuant to his employment
agreement and he did not participate in deliberations regarding any
discretionary components of his compensation. See "Certain
Transactions -- Transactions with Certain Caterair Persons."
EMPLOYMENT AGREEMENTS
James J. O'Neill. The employment agreement, dated as of January 1, 1997,
between James J. O'Neill and OFSI, provides that Mr. O'Neill shall receive an
annual salary of $250,000, certain benefits and a perquisites allowance of
$30,000. Mr. O'Neill's employment may be terminated by OFSI only for good cause
(as defined in the employment agreement) prior to January 31, 1999. Mr. O'Neill
is entitled to receive his salary through January 31, 1999 in the event that (i)
OFSI terminates Mr. O'Neill's employment other than for good cause or (ii) Mr.
O'Neill terminates his own employment due to a material violation or failure of
OFSI to perform a material provision of his employment agreement prior to
January 31, 1999 (approximately $443,333 if termination of employment had
occurred as of June 30, 1997). Mr. O'Neill also agreed not to compete with SCIS
for two years following termination of his employment.
Michael Z. Kay. The employment agreement, dated as of January 1, 1997,
between Michael Z. Kay and Sky Chefs provides that Mr. Kay, as President and
Chief Executive Officer of Sky Chefs, shall receive an annual salary of $600,000
(subject to increase), a bonus calculated in accordance with Sky Chefs'
incentive bonus plan, certain benefits and a perquisites allowance of $30,000.
The agreement expires on December 31, 2001. Mr. Kay is entitled to receive
during each year following termination, payment of his salary, payment of an
amount equal to the average of the annual incentive bonuses received by Mr. Kay
for the two years preceding the date of termination and certain benefits for a
period beginning on the date of termination and ending on December 31, 2001
(approximately $5,083,286 if termination of employment had occurred as of June
30, 1997) ("Severance Payments") in the event that (i) Sky Chefs terminates Mr.
Kay's employment other than for good cause or (ii) Mr. Kay terminates his own
employment due to a material violation or failure of Sky Chefs to perform a
material provision of his employment agreement. On January 2, 2001, Sky Chefs
and Mr. Kay are obligated to begin good faith negotiations for the renewal or
extension of Mr. Kay's employment. If mutually acceptable renewal terms are not
agreed upon by June 30, 2001, Mr. Kay is entitled to receive for one year
thereafter payments including components substantially the same as those that
would be included in his Severance Payment. The employment agreement contains
non-compete provisions.
Patrick W. Tolbert. The employment agreement, dated as of January 1, 1997,
between Patrick W. Tolbert and Sky Chefs provides that Mr. Tolbert, as Executive
Vice President and Chief Financial and Administrative Officer of Sky Chefs,
shall receive an annual salary of $340,000 (subject to increase), a bonus
calculated in accordance with Sky Chefs' incentive bonus plan, certain benefits
and a perquisites allowance of $30,000. The agreement expires on December 31,
2001. Mr. Tolbert is entitled to receive during each year following termination,
payment of his salary, an amount equal to the average of the annual incentive
bonuses received by Mr. Tolbert for the two years preceding the date of
termination and certain benefits for a period beginning on the date of
termination and ending on December 31, 2001 (approximately $3,645,052 if
termination of employment had occurred as of June 30, 1997) in the event that
(i) Sky Chefs terminates Mr. Tolbert's employment other than for good cause or
(ii) Mr. Tolbert terminates his own employment due to a material violation or
failure of Sky Chefs to perform a material provision of his employment
agreement. The employment agreement contains non-compete provisions.
Randall C. Boyd. The employment agreement, dated as of January 1, 1997,
between Randall C. Boyd and Sky Chefs provides that Mr. Boyd, as Senior Vice
President Marketing and Customer Services of Sky Chefs, shall receive an annual
salary of $275,000 (subject to increase), a bonus calculated in accordance with
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<PAGE> 76
Sky Chefs' incentive bonus plan, certain benefits and a perquisites allowance of
$30,000. The agreement expires on December 31, 2001. Mr. Boyd is entitled to
receive during each year following termination, payment of his salary, an amount
equal to the average of the annual incentive bonuses received by Mr. Boyd for
the two years preceding the date of termination and certain benefits for a
period beginning on the date of termination and ending on December 31, 2001
(approximately $2,522,938 if termination of employment had occurred as of June
30, 1997) in the event that (i) Sky Chefs terminates Mr. Boyd's employment other
than for good cause or (ii) Mr. Boyd terminates his own employment due to a
material violation or failure of Sky Chefs to perform a material provision of
his employment agreement. The employment agreement contains non-compete
provisions.
Daniel J. Altobello. Mr. Altobello had an employment agreement with
Caterair which was terminated on September 29, 1995. Mr. Altobello received a
change of control payment of $525,000 pursuant to the Caterair Key Employee
Retention Plan and a severance payment of $978,822 under his former employment
agreement upon the consummation of the Combination. In addition, on January 1,
1996, Mr. Altobello received an additional $978,822 payment from OFSI in respect
of severance payments otherwise due under his former employment agreement. In
connection with the Combination, Mr. Altobello entered into a new employment
agreement with OFSI. See "-- Employee Plans," "-- Summary Compensation Table"
and "Certain Transactions -- Transactions with Certain Caterair Persons."
EMPLOYEE PLANS
In September 1994, the board of directors of Caterair adopted the Caterair
Key Employee Retention Plan in order to provide an incentive to certain officers
and other key executive and management employees to remain in the employ of
Caterair while Caterair attempted to restructure its debt and equity. Each
eligible participant in the Caterair Key Employee Retention Plan was entitled to
receive certain severance benefits if (i) a change of control occurred, and (ii)
during the three years following such change of control, the participant was
terminated other than for cause or resigned with good reason. Severance benefits
for eligible persons ranged from six months to two years of the participant's
salary and benefits. Payments relating to severance under the Caterair Key
Employee Retention Plan, to the extent they exceeded amounts payable under any
participant's employment agreement, were in lieu of any payments due under such
employment agreement. The consummation of the Combination constituted a change
of control under the Caterair Key Employee Retention Plan. In connection with
the Combination, severance benefits in the aggregate amount of approximately
$2.7 million were paid by Caterair. As of June 30, 1997, the maximum additional
amount payable under the Caterair Key Employee Retention Plan was $0.5 million
(assuming all remaining eligible participants terminated their employment prior
to September 29, 1998 in a manner which would entitle them to payments
thereunder).
In connection with the Combination, retention payments to certain Caterair
employees in the aggregate amount of $2.8 million were paid by Caterair under
the Caterair Key Employee Retention Plan.
In July 1995, Caterair adopted the Caterair International Transition
Severance Plan in order to provide an incentive to key personnel to remain in
the employ of Caterair through the consummation of the Combination. Each
eligible participant in the Caterair International Transition Severance Plan who
remained an employee of Caterair until at least September 30, 1995 and whose
employment with Caterair was terminated before September 30, 1996 was entitled
to receive certain severance benefits. Caterair paid $0.9 million pursuant to
the Caterair International Transition Severance Plan.
PHANTOM STOCK PLAN
In 1995, certain officers, and other employees of Caterair received awards
under OFSI's Phantom Stock Plan for Management Employees (the "Phantom Stock
Plan") of a number of units equal to the quotient obtained by dividing (i) the
cost basis of the Caterair Holdings stock held by such participant by (ii) the
quotient obtained by dividing $425,000,000 by the number of shares of OFSI Class
A Common Stock outstanding immediately prior to the Combination. The Phantom
Stock Plan provides that upon termination of employment of a participant, such
participant will be entitled to receive an amount per unit equal to the
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<PAGE> 77
sum of (i) the dividends paid on a share of OFSI Class A Common Stock during the
period from the date of the award of such unit through the end of the fiscal
quarter immediately prior to termination of employment, (ii) the net increase in
stockholders' equity (which shall be negative if stockholders' equity decreases)
attributable to a share of OFSI Class A Common Stock from the date of the award
of such unit through the end of the fiscal quarter immediately prior to
termination of employment and (iii) 100% of the initial value of the unit;
provided, that if before September 29, 1997, (x) the participant voluntarily
terminates his or her employment with OFSI or (y) the participant's employment
with OFSI is terminated "for cause" (as defined in the Phantom Stock Plan) such
participant will forfeit 50% of the initial value of such participant's units
and receive payments as if the references to "100%" in clause (iii) were "50%."
If a participant's employment is terminated at any time prior to September 29,
1997, payment for such participant's units shall not be made until November 29,
1997. In the event of a sale by Onex or certain affiliates thereof to a third
party purchaser of shares of OFSI Class A Common Stock, participants in the
Phantom Stock Plan are entitled to "tag-along" and subject to "drag-along"
rights.
Upon an initial public offering of OFSI, each participant would receive a
distribution in respect of each unit held thereby (in cash, OFSI stock or a
combination of both) having a value equal to the closing price of a share of
OFSI Class A Common Stock on the first day of trading following the
effectiveness of the registration statement relating to such initial public
offering, plus an amount equal to the dividends that were paid on a share of
OFSI Class A Common Stock during the period from the date of the award of such
unit to immediately prior to the initial public offering. Upon the dissolution
or liquidation of OFSI or certain business combinations involving OFSI, each
participant would receive in respect of each unit an amount equal to the sum of
(i) the dividends paid on a share of OFSI Class A Common Stock during the period
from the date of the award of such unit through the end of the fiscal quarter
immediately prior to such dissolution or liquidation or business combination
transaction, (ii) the net increase in stockholders' equity (which shall be
negative if stockholders' equity decreases) attributable to a share of OFSI
Class A Common Stock from the date of the award of such unit through the end of
the fiscal quarter immediately prior to such dissolution or liquidation or
business combination transaction and (iii) 100% of the initial value of such
unit.
The Phantom Stock Plan became effective as of September 29, 1995 and will
continue in effect until terminated or suspended by OFSI's board of directors.
However, no termination, modification or amendment of the Phantom Stock Plan by
OFSI's board of directors may adversely affect the accrued rights of a
participant thereunder. If not previously terminated, the Phantom Stock Plan
shall terminate ten business days following the closing of an initial public
offering of OFSI or 60 days after the closing of certain business combinations
and other events enumerated in the Phantom Stock Plan, all of which trigger
redemption of the units issued thereunder.
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<PAGE> 78
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FISCAL YEAR-END AT FISCAL YEAR-
SHARES VALUE (#) END($)
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME(1) EXERCISE(#) ($) UNEXERCISABLE(2)(3) UNEXERCISABLE
- --------------------------------------------- ----------- -------- ------------------- ---------------
<S> <C> <C> <C> <C>
Angelo D. Bizzaro
Former Executive Vice President and Chief
Operating Officer of Caterair and Chief
Executive Officer of CII................... -- -- 36.04(4) --
John C. Carr
Former Senior Vice President and General
Counsel of Caterair and Former General
Counsel of SCIS............................ -- -- 10.81(5) --
</TABLE>
- ---------------
(1) No Named Executive Officer other than Messrs. Bizzarro and Carr have been
granted any stock options (or tandem SARs) or freestanding SARs by SCIS, Sky
Chefs, CII or Caterair.
(2) Amounts shown indicate number of units granted to such individual pursuant
to the Phantom Stock Plan. See "-- Phantom Stock Plan."
(3) None of the SARs were exercisable as of December 31, 1996.
(4) Mr. Bizzarro voluntarily terminated his employment with CII in March 1997.
Accordingly, Mr. Bizzarro is entitled to receive a cash payment of $38,105
on November 29, 1997 in respect of the units held by him under the Phantom
Stock Plan. See "-- Phantom Stock Plan."
(5) Mr. Carr's employment with SCIS was terminated in June 1996. Accordingly,
Mr. Carr is entitled to receive a cash payment of $26,273 on November 29,
1997 in respect of the units held by him under the Phantom Stock Plan. See
" -- Phantom Stock Plan."
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<PAGE> 79
SECURITY OWNERSHIP
The following table sets forth certain information regarding OFSI's
outstanding shares of Class A and Class B Common Stock which is beneficially
owned, as of June 30, 1997, by (i) each person who owns 5% or more of the
outstanding shares of OFSI Class A Common Stock or OFSI Class B Common Stock,
(ii) each current, and each nominee to become a, director of SCIS and each
Guarantor, (iii) each of the Named Executive Officers and (iv) all directors and
executive officers of SCIS and each Guarantor as a group.
<TABLE>
<CAPTION>
OFSI CLASS A COMMON OFSI CLASS B COMMON
STOCK(1) STOCK(1)
------------------------ ------------------------
NUMBER OF PERCENTAGE NUMBER OF PERCENTAGE
BENEFICIAL OWNER(2) SHARES OF CLASS SHARES OF CLASS
- ------------------------------------------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Onex (3)(4)(5)............................. 103,442.71 63.90% 12,256.20 94.50%
161 Bay Street
Toronto, Ontario
Canada
OnCap Holdings Corp.(5).................... 103,442.71 63.90% 12,256.20 94.50%
161 Bay Street
Toronto, Ontario
Canada
LSG(4)(6)(7)............................... 38,326.36 23.70% -- --
Am Holzweg 26
65830 Kriftel
Federal Republic of Germany
Gerald W. Schwartz(5)(8)................... 103,442.71 63.90% 12,256.20 94.50%
161 Bay Street
Toronto, Ontario
Canada
Helmut Woelki(9)(10)....................... 1,611.90 * -- --
Helmut Bleckmann(9)(11).................... 135.00 * -- --
Gunter Rothig.............................. -- -- -- --
Ewout Heersink(12)......................... -- -- -- --
James J. O'Neill(9)(13).................... 3,442.62 2.11% 438.60 3.38%
Michael Z. Kay(9)(14)...................... 1,147.54 * 150.00 1.16%
Patrick W. Tolbert(9)(15).................. 918.03 * 120.00 *
Randall C. Boyd(9)(16)..................... 573.77 * -- --
William S. Woodside(9)(17)................. 2,295.08 1.42% -- --
Daniel J. Altobello(18).................... 14.81 * -- --
Thomas J. Lee(9)(19)....................... 160.66 * -- --
Angelo D. Bizzarro......................... -- -- -- --
Eric J. Rosen(12).......................... -- -- -- --
J. Thomas Markley.......................... -- -- -- --
Aaron Gellman.............................. -- -- -- --
Anthony R. Melman(12)...................... -- -- -- --
Donald F. West............................. -- -- -- --
Norman J. Shuman........................... -- -- -- --
All directors and executive
officers of SCIS and each
Guarantor as a group..................... -- -- -- --
(18 persons as a group)(20).............. 113,722.0 70.26% 12,964.80 99.85%
</TABLE>
- ---------------
* Less than 1%
(1) Each holder of OFSI Class A Common Stock is entitled to one vote for each
share of OFSI Class A Common Stock held by such holder and each holder of
OFSI Class B Common Stock is entitled to one vote for every two shares of
OFSI Class B Common Stock held by such holder. The holders of all classes
of OFSI Common Stock (including OFSI Class AA Common Stock) vote together,
as one
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class, on all matters submitted to a vote of the stockholders of OFSI,
except as otherwise required by the General Corporation Law of the State
of Delaware.
(2) Except as otherwise indicated, each beneficial owner has the sole power to
vote, and dispose of all shares of OFSI Class A Common Stock or OFSI Class
B Common Stock owned by such beneficial owner.
(3) Includes 103,442.71 shares of OFSI Class A Common Stock and 12,256.20
shares of OFSI Class B Common Stock which may be acquired from OnCap
Holdings Corp.
(4) LSG and Onex, among others, are parties to the LSG Stockholders'
Agreement. See "Certain Transactions -- LSG Lufthansa Service GmbH."
(5) Excludes 19,745.45 shares of OFSI Class A Common Stock (including 476.36
shares of OFSI Class A Common Stock which Management Shareholders are
entitled to sell to LSG) and 719.00 shares of OFSI Class B Common Stock
owned by Management Shareholders and over which Onex, OnCap Holdings Corp.
and Gerald W. Schwartz share voting control pursuant to the Management
Shareholders' Agreement. Includes up to 476.36 shares of OFSI Class A
Common Stock which may be sold by an affiliate of Onex to LSG in the event
Management Shareholders do not exercise their right to sell a like number
of shares to LSG. See "Certain Transactions -- LSG Lufthansa Service
GmbH."
(6) Excludes 4,474.22 additional shares of OFSI Class A Common Stock which LSG
has the right to acquire at an exercise price of $2,175.93 per share in
the event that the warrants to acquire shares of OFSI Class A Common Stock
issued by OFSI to certain stockholders of Caterair Holdings in connection
with the Combination are exercised.
(7) LSG beneficially owns 38,326.36 shares of OFSI Class AA Common Stock which
represents 100% of the issued and outstanding OFSI Class AA Common Stock
and are presently convertible at the option of the holder into 38,326.36
shares of OFSI Class A Common Stock. Each share of OFSI Class AA Common
Stock is entitled to one vote for each share, and with the exception of
dividend rights, the designations, powers, preferences and relative rights
of shares of OFSI Class AA Common Stock are substantially the same as
those associated with the shares of OFSI Class A Common Stock.
(8) Includes shares beneficially owned by Onex and OnCap Holdings Corp., with
respect to which Mr. Schwartz may be deemed to be the beneficial owner.
(9) Certain Management Shareholders, including Messrs. Woelki, Bleckmann,
O'Neill, Kay, Tolbert, Boyd, Woodside and Lee, who own an aggregate of
19,745.45 shares of OFSI Class A Common Stock (including 476.36 shares of
OFSI Class A Common Stock which such Management Shareholders are entitled
to sell to LSG) and 719.00 shares of OFSI Class B Common Stock have
entered into the Management Shareholders' Agreement pursuant to which they
have agreed to vote their shares in the same manner as the shares of OFSI
Class A Common Stock and OFSI Class B Common Stock owned by Onex and its
affiliates are voted.
(10) Excludes 38,326.36 shares of OFSI Class A Common Stock (and 38,326.36
shares of OFSI Class AA Common Stock and the shares referred to in note 6)
beneficially owned by LSG as to which Mr. Woelki disclaims beneficial
ownership. Includes 36.04 shares of OFSI Class A Common Stock which Mr.
Woelki has the right to sell to LSG.
(11) Excludes 38,326.36 shares of OFSI Class A Common Stock (and 38,326.36
shares of OFSI Class AA Common Stock and the shares referred to in note 6)
beneficially owned by LSG as to which Mr. Bleckmann disclaims beneficial
ownership. Includes 3.01 shares of OFSI Class A Common Stock which Mr.
Bleckmann has the right to sell to LSG.
(12) Excludes shares in which Messrs. Heersink, Melman and Rosen have an
indirect interest, with respect to which Mr. Schwartz, Onex and Onex U.S.
LLC share beneficial ownership.
(13) Includes 76.97 shares of OFSI Class A Common Stock which Mr. O'Neill has
the right to sell to LSG.
(14) Includes 25.86 shares of OFSI Class A Common Stock which Mr. Kay has the
right to sell to LSG.
(15) Includes 20.53 shares of OFSI Class A Common Stock which Mr. Tolbert has
the right to sell to LSG.
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(16) Includes 12.83 shares of OFSI Class A Common Stock which Mr. Boyd has a
right to sell to LSG.
(17) Includes 51.31 shares of OFSI Class A Common Stock which Mr. Woodside has
the right to sell to LSG.
(18) Shares of OFSI Class A Common Stock held by Mr. Altobello (and certain of
his affiliates) are subject to the transfer restrictions set forth in the
Management Shareholders' Agreement. See "Certain
Transactions -- Management Shareholders' Agreement."
(19) Includes 3.59 shares of OFSI Class A Common Stock which Mr. Lee has the
right to sell to LSG.
(20) Includes 217.31 shares of OFSI Class A Common Stock which the directors
and executive officers of SCIS and each Guarantor as a group have the
right to sell to LSG.
OFSI is the sole stockholder of SCIS. OFSI has pledged all of the issued
and outstanding shares of SCIS to secure certain obligations under the Senior
Bank Financing. SCIS directly or indirectly owns all of the shares of capital
stock of each Guarantor other than Caterair. SCIS (or a subsidiary thereof) has
pledged all of the issued and outstanding shares of each such Guarantor to
secure certain obligations under the Senior Bank Financing. Caterair Holdings
owns 100% of the issued and outstanding shares of Caterair. Caterair Holdings
has pledged all of the issued and outstanding shares of Caterair to secure
certain obligations under the Senior Bank Financing.
All information with respect to beneficial ownership of OFSI's capital
stock has been furnished by the respective stockholders of OFSI.
In addition, as of June 30, 1997, Messrs. Schwartz, Melman, Rosen and
Heersink beneficially owned 14,128,832, 62,000, 42,000 and 62,000 subordinate
voting shares of Onex ("Subordinate Voting Shares"), respectively, representing
approximately 29.7% of the outstanding Subordinate Voting Shares in the case of
Mr. Schwartz, and less than 1% of the outstanding Subordinate Voting Shares in
the case of Messrs. Melman, Rosen and Heersink. All directors and executive
officers of SCIS, Sky Chefs, CII and Caterair as a group owned 14,294,832
Subordinate Voting Shares, representing approximately 29.7% of the outstanding
Subordinate Voting Shares. Subordinate Voting Shares beneficially owned includes
shares which Messrs. Schwartz (400,000), Melman (62,000), Rosen (42,000) and
Heersink (62,000) may have the right to acquire through the exercise of options
within 60 days (the options become exercisable in the event that the average
market price of the Subordinate Voting Shares exceeds the exercise price of the
options (Cdn. $13.25) by at least 25%). Mr. Schwartz also beneficially owns
100,000 multiple voting shares of Onex ("Multiple Voting Shares"), representing
all of the outstanding Multiple Voting Shares. Subordinate Voting Shares carry
one vote per share and as a class are entitled to 40% of the aggregate votes
attached to all voting shares of Onex, to elect 40% of Onex's Board of
Directors, and to appoint auditors. Multiple Voting Shares are entitled to elect
60% of Onex's Board of Directors and carry such number of votes in the aggregate
as represents 60% of the aggregate votes attached to all voting shares of Onex.
All information with respect to the beneficial ownership of Onex capital stock
has been furnished by the respective stockholders of Onex.
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CERTAIN TRANSACTIONS
ONEX ADVISORY AND TRANSACTION FEES
In 1986, in connection with the acquisition of Sky Chefs by Onex and
certain members of management, Sky Chefs and Onex entered into an agreement
pursuant to which Sky Chefs is required to pay an annual management fee to Onex.
The management fees paid by Sky Chefs to Onex during 1994, 1995 and 1996 were
approximately $671,000, $694,000 and $1,500,000, respectively. The management
fee payable by Sky Chefs to Onex for 1997 will be $1.5 million. In connection
with rendering certain advisory services relating to the Combination, Sky Chefs
paid Onex a $4.0 million fee during 1995. Sky Chefs also repaid an $11.0 million
loan from OFSI during 1995. Sky Chefs paid interest on such loan at the rate of
LIBOR plus 1% per annum. In addition, certain officers of Onex and its
affiliates participate in Sky Chefs' employee benefit plans. During 1994, 1995
and 1996, Sky Chefs received reimbursements from Onex and its affiliates for the
cost of benefits provided aggregating approximately $14,000, $72,000 and
$61,000, respectively. The reimbursements received exceeded the costs of
benefits provided in each year.
THE COMBINATION
On September 29, 1995, OFSI, SCIS, Caterair and Caterair Holdings
consummated the Combination whereby (i) SCIS, through Sky Chefs and CII,
acquired, licensed, leased and subleased substantially all of the worldwide
business and assets of Caterair, (ii) OFSI and an affiliate thereof exchanged
common stock and warrants to acquire common stock of OFSI for certain stock and
debt held by Caterair Holdings' shareholders and creditor, as a result of which
OFSI and its affiliate acquired more than 50% of the total outstanding voting
shares, and 25% of the total outstanding nonvoting shares, of Caterair Holdings,
(iii) SCIS and Caterair repaid approximately $392.3 million of Caterair's
outstanding indebtedness (excluding accrued interest) and SCIS and its
subsidiaries assumed certain other liabilities of Caterair, (iv) SCIS extended a
$37.8 million loan to Caterair (which will mature in 2001, bears interest at 8%
per annum (payable in kind) and is secured by a second priority lien), (v)
Caterair Holdings' indebtedness was restructured and (vi) Caterair agreed not to
compete with Sky Chefs in the airline catering business for a six-year term
(expiring in 2001) and Sky Chefs agreed to pay Caterair $4.0 million per year in
respect of such agreement. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Financial Statements and
notes thereto included elsewhere in this Prospectus.
In connection with the Combination, pursuant to the Domestic Leases, Sky
Chefs and CII leased and subleased from Caterair substantially all of its
domestic tangible assets for a six-year term (expiring in 2001). In the event
that Caterair's lease of such assets was for less than six years, the applicable
Domestic Lease is for such shorter period. Sky Chefs and CII each have options
to purchase all or a portion of the assets of Caterair covered by the Domestic
Leases for amounts determined under formulas in the Domestic Leases that were
intended to result in exercise prices equal to the estimated fair market value
of such assets at the time or times of exercise of any such options. The options
are exercisable until the date which is 30 days after termination of the
applicable Domestic Lease. It is not certain that such purchase options will be
exercised. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the Financial Statements and notes thereto included
elsewhere in this Prospectus.
In connection with the Combination, pursuant to the License Agreements, Sky
Chefs and CII licensed Caterair's rights under certain customer contracts for a
six-year term (expiring in 2001). Sky Chefs and CII each have options to
purchase all or a portion of the customer contract rights covered by the License
Agreements for amounts determined under formulas in the License Agreements that
were intended to result in exercise prices equal to the estimated fair market
value of such rights at the time or times of exercise of any such options. The
options are exercisable at any time until the date which is 90 days after
termination of the applicable License Agreement. It is not certain that such
purchase options will be exercised. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Financial Statements and
notes thereto included elsewhere in this Prospectus.
In connection with the Combination, Caterair paid Marriott International,
Inc. $4.2 million to satisfy Caterair Holdings' obligations relating to accrued
payments under a non-competition agreement entered into in connection with the
acquisition of Caterair in 1989. In addition, Caterair and OFSI agreed to pay
approximately
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$4.8 million (plus interest thereon) to Marriott International, Inc. over a
six-year period, which is the balance of amounts payable under such
non-competition agreement. During 1995 and 1996, payments to Marriott
International, Inc. relating to the non-competition agreement were $4.2 million
and $1.0 million, respectively.
As part of the Combination, SCIS, Caterair, OFSI and Caterair Holdings
entered into the Old Credit Agreement with certain lenders. Caterair, Caterair
Holdings, OFSI (on a limited basis), an affiliate of OFSI (on a limited basis)
and certain subsidiaries of SCIS guaranteed SCIS' obligations under the Old
Credit Agreement and SCIS, Caterair Holdings, OFSI (on limited basis), an
affiliate of OFSI (on a limited basis) and certain of subsidiaries of SCIS
guaranteed Caterair's obligations thereunder. Additionally, Caterair (and Sky
Chefs and CII) guaranteed SCIS' obligations under the Existing Notes. Effective
as of December 29, 1995, SCIS entered into an interest rate swap agreement to
reduce interest rate exposure on long-term debt. The agreement covered a
notional amount of $351 million at December 31, 1996, and has a stated maturity
in 2001. Caterair assumed a ratable participating interest (based upon the
respective principal amounts of term loans outstanding under the Old Credit
Agreement) in SCIS' rights and obligations under the interest swap. This
agreement was terminated as of September 10, 1997.
Subsequent to the consummation of the Combination, Caterair continued to
provide airline catering services at certain kitchens where consents to the
Combination had not been obtained. Sky Chefs and Caterair entered into a
management services agreement with respect to the operations conducted at these
kitchens whereby Caterair continued to operate such kitchens using its own
employees with Sky Chefs providing management and administrative services in
exchange for a management fee equal to 4.0% of the net sales from such kitchens
and the reimbursement of expenses incurred in connection with the performance of
such services. However, during the second quarter of 1996, Caterair obtained the
necessary consents and on May 31, 1996 Sky Chefs leased/licensed such kitchens
from Caterair pursuant to the Domestic Leases and the License Agreements. During
1995 and 1996, Caterair paid Sky Chefs $0.6 million and $1.0 million,
respectively, under such agreement.
Subsequent to the consummation of the Combination, SCIS rendered certain
corporate and administrative services for Caterair. During 1995 and 1996,
Caterair paid SCIS $0.1 million and $0.5 million, respectively, for such
services.
LSG LUFTHANSA SERVICE GMBH
The following paragraphs summarize certain provisions of (i) the
Stockholders' Agreement, dated as of December 6, 1993, among Onex, OFSI, OnCap
Holdings U.S., Inc., OMI Quebec Inc., LSG and LSG Lufthansa Service USA
Corporation (the "LSG Stockholders' Agreement"), as amended, (ii) the Agreement,
dated as of October 5, 1993, among Onex, Lufthansa and LSG, (iii) the Agreement,
dated as of October 5, 1993, between LSG and Sky Chefs and (iv) the Arbitration
Agreement, dated as of October 5, 1993, among Onex, OFSI, OnCap Holdings U.S.,
Inc., OMI Quebec Inc., Sky Chefs, Lufthansa and LSG.
In late 1993, OFSI, Sky Chefs and affiliated companies entered into a
series of transactions with LSG. Pursuant to a cooperation agreement, Sky Chefs
and LSG generally conduct operations under the "LSG Lufthansa Service/SKY Chefs"
name and logo and Sky Chefs and LSG agreed to cooperate in the marketing of
their services on a coordinated basis and to offer each other the right to
participate equally in the development of business in new geographic markets.
The parties also agreed to not compete with each others' existing catering
operations outside of the United States and the European Community. At the same
time in 1993, LSG purchased approximately 23.3% of the OFSI Class A Common Stock
from existing shareholders for a cash price of $75.0 million; of which $10.0
million was paid during 1996. LSG, OFSI and the principal stockholders of OFSI
entered into the LSG Stockholders' Agreement pursuant to which LSG and such
stockholders agreed to certain restrictions on the transfer of their shares of
OFSI common stock and LSG was provided representation on the board of directors
of OFSI. The LSG Stockholders Agreement requires that certain actions by OFSI
and its subsidiaries (including SCIS and Sky Chefs) be approved by at least one
of the LSG representatives on the OFSI board of directors and, subject to
certain limitations, that dividends be paid to LSG in stipulated amounts. OFSI
is also entitled to representation on the Supervisory Board of LSG. The parties
also agreed to negotiate a merger of Sky Chefs and LSG if Lufthansa is
privatized on a basis satisfactory to Onex. Any such merger would be subject to
an initial public offering of the merged company
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upon consummation of the merger on terms satisfactory to both Onex and
Lufthansa. The German Federal government has been proceeding with the
privatization of Lufthansa. The agreement terminates on December 31, 1997 and no
negotiations with respect to a merger of Sky Chefs and LSG are occurring.
In connection with the Combination, LSG was granted the option to acquire a
50% interest in the catering business acquired by SCIS from Caterair in Europe
for a price to be negotiated on a basis consistent with the valuation of the
entire Caterair business implicit in the Combination. This option has expired.
However, LSG and the Company are engaged in discussions with a view to reaching
agreement for sale by the Company to LSG of 50% of the Company's European
catering business. There can be no assurance that such sale will occur or if it
does occur as to the timing, price or other terms thereof.
Certain OFSI stockholders granted LSG the option to acquire 2,595.20 shares
of OFSI Class A Common Stock at an exercise price of $2,431.21 per share (the
"OFSI Stockholder Option"). OFSI also granted LSG the option to acquire 4,474.22
additional shares of OFSI Class A Common Stock, subject to adjustment, at an
exercise price of $2,175.93 per share in the event the warrants to acquire
shares of OFSI Class A Common Stock issued by OFSI to certain stockholders of
Caterair Holdings in connection with the Combination are exercised.
On March 29, 1996, LSG purchased the 2,595.20 shares of OFSI Class A Common
Stock subject to the OFSI Stockholder Option for an aggregate purchase price of
$6,441,354.59 (including certain interest payments). Pursuant to the Management
Shareholders' Agreement, Management Shareholders, including Messrs. Kay,
O'Neill, Woodside and Woelki, will be entitled to participate in such sale to
LSG by transferring a proportionate number of the shares of OFSI Class A Common
Stock owned thereby in exchange for a proportionate amount of the total
consideration received in connection with the exercise of the OFSI Stockholder
Option. Messrs. Kay, O'Neill, Woodside and Woelki may transfer 25.86, 76.97,
51.31 and 36.04 shares of OFSI Class A Common Stock, respectively, in exchange
for consideration of $64,185, $191,042, $127,353 and $89,452, respectively.
As of December 28, 1996, pursuant to an agreement with OFSI, LSG exchanged
its shares of OFSI Class A Common Stock for a like number of shares of OFSI
Class AA Common Stock. During 1997, OFSI paid a $1.8 million dividend to LSG in
respect of the OFSI Class AA Common Stock.
During 1994, 1995 and 1996, catering sales by Sky Chefs to Lufthansa were
approximately $10.3 million, $12.9 million and $22.3 million, respectively.
Accounts receivable due to Sky Chefs from Lufthansa were approximately $2.6
million at December 31, 1996.
In 1995, Sky Chefs purchased from LSG, for an aggregate purchase price of
approximately $5.1 million, assets associated with catering kitchens at San
Francisco International Airport, Miami International Airport and John F. Kennedy
International Airport.
AMR AND AMERICAN
During 1994, OFSI paid $19.0 million to AMR, the parent company of
American, to acquire for cancellation a warrant to purchase up to approximately
20% of the outstanding capital stock of OFSI, which was issued in connection
with the acquisition of Sky Chefs in 1986 and $1.0 million for a two-year
extension of Sky Chefs' catering agreement with American. During 1994, Sky Chefs
repaid $16.2 million in indebtedness owing to AMR under a promissory note by Sky
Chefs. Such note accrued interest at the rate of 9.5% per year. During 1994,
catering sales by Sky Chefs to American were approximately $347.9 million. See
"Business--Customers--Contracts." During 1994, Sky Chefs also paid $17.6 million
to American for the subleasing of certain flight kitchens and other properties
at Chicago-O'Hare, Raleigh-Durham, Nashville, Tulsa, Dallas/Fort Worth, Los
Angeles, and New York-John F. Kennedy.
OFSI SECURITYHOLDERS' AGREEMENT
In connection with the Combination, OFSI, an affiliate of OFSI and certain
Caterair Holdings' stockholders (the "Securityholders") who received OFSI Class
A Common Stock and warrants to acquire OFSI Class A Common Stock (including Host
Marriott Corporation) entered into a securityholders agreement (the "OFSI
Securityholders' Agreement") which provided limitations on transferability,
co-sale rights, "drag-along" obligations, registration rights and put/call
arrangements with respect to such OFSI Class A Common
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Stock and warrants. Prior to June 30, 1996, an affiliate of OFSI purchased
substantially all of the OFSI Class A Common Stock and warrants to acquire OFSI
Class A Common Stock from such Securityholders and the OFSI Securityholders'
Agreement was terminated with respect to each Securityholder.
OFSI LOANS
OFSI has provided financing to members of management and certain directors
of Sky Chefs, including Messrs. O'Neill, Kay, Tolbert, Boyd, Woodside, Woelki,
Bleckmann and Lee, for all or a portion of the purchase price for the
acquisition of shares of common stock from OFSI. Such loans are fully recourse
to the borrower, secured by the shares purchased and bear interest at the
prevailing federal funds rate.
MANAGEMENT SHAREHOLDERS' AGREEMENT
The following summarizes certain provisions of the Management Shareholders'
Agreement, dated as of May 29, 1986, as amended, among OFSI, an affiliate of
Onex and certain employees and directors of SCIS and Sky Chefs.
The Management Shareholders' Agreement governs the manner and means by
which the OFSI common stock held by the Management Shareholders may be
transferred, voted and otherwise dealt with. Pursuant to such Agreement, at any
time after OFSI's capital stock is registered under the Exchange Act, a
Management Shareholder will be permitted, subject to specified time and volume
limitations, to sell shares of OFSI Class A Common Stock held by him through the
public market but such Management Shareholder must first offer OFSI the
opportunity to purchase such OFSI Common Stock. In the event a Management
Shareholder ceases to be a full-time employee of Sky Chefs or a subsidiary
thereof, Onex or an affiliate thereof shall purchase such Management
Shareholder's OFSI Class A Common Stock. In connection with such purchase, Onex
or its affiliates shall also have the option to purchase the OFSI Class B Common
Stock of such holder. Pursuant to the Management Shareholders' Agreement, each
Management Shareholder is required to vote his OFSI Common Stock in the same
manner as the shares of OFSI Common Stock owned by Onex and its affiliates are
voted on the election of directors and on all other matters which are submitted
to a vote (or consent in lieu of voting) of OFSI's stockholders.
The Management Shareholders' Agreement also provides the Management
Shareholders with the option to participate on a pro rata basis with Onex and
its affiliates in sales to third parties of shares of OFSI Common Stock. The
Management Shareholders' Agreement provides Onex and its affiliates the right to
compel the participation of the Management Shareholders in sales of OFSI Common
Stock.
In addition to the above-described provisions, the Management Shareholders'
Agreement contains provisions which provide the Management Shareholders with
registration rights in certain circumstances as well as provisions which prevent
the dilution of the Management Shareholders' respective holdings of the OFSI
Common Stock in the event OFSI intends to sell additional equity securities to
Onex or its affiliates. Under the Management Shareholders' Agreement, OFSI may
not engage in certain business combination transactions unless certain
conditions are fulfilled.
The Management Shareholders' Agreement will terminate if Onex and its
affiliates cease to hold, in the aggregate, 30% of the outstanding capital stock
of OFSI and the provisions governing the voting of the Management Shareholders'
OFSI Common Stock terminate on December 3, 2003.
REPURCHASE OF OFSI CLASS B COMMON STOCK
During December 1995 and January 1996, OFSI repurchased shares of OFSI
Class B Common Stock from officers and employees of OFSI and it subsidiaries at
a price of $2,757 per share. Messrs. Woodside and Boyd sold 300.00 and 75.00
shares of OFSI Class B Common Stock in connection with such repurchase,
respectively, and received $827,100 and $206,775, respectively.
TRANSACTIONS WITH CERTAIN CATERAIR PERSONS
Daniel J. Altobello. Concurrently with the consummation of the
Combination, Daniel J. Altobello entered into an employment contract with OFSI.
Such employment agreement expires on September 29, 1997 and provides that Mr.
Altobello, as Chairman of the Board of OFSI and SCIS, shall receive an annual
salary of $525,000 and perquisites with an annual cost of $45,000. Mr. Altobello
is entitled to receive his base salary
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and benefits through the remaining term of the employment agreement in the event
he is terminated by OFSI without cause or Mr. Altobello terminates the agreement
for good cause (approximately $94,000 if termination of employment had occurred
as of June 30, 1997). In connection with the consummation of the Combination,
Mr. Altobello received (i) from Caterair, on September 29, 1995, a $525,000
restructuring payment under Caterair's Key Employee Retention Plan, (ii) from
Caterair, on September 29, 1995, a $978,822 severance payment pursuant to the
change-of-control provision of his former employment agreement with Caterair and
(iii) from OFSI, on January 1, 1996, $978,822 in respect of severance payments
otherwise due under Mr. Altobello's former employment agreement with Caterair.
In connection with the Combination, Mr. Altobello and the Altobello Family
Limited Partnership exchanged all of the shares of common and preferred stock of
Caterair Holdings held by them for 435.71 shares of OFSI Class A Common Stock.
Mr. Altobello's employment contract provides that Mr. Altobello shall hold such
shares subject to certain restrictions on transfer contained in the Management
Shareholders Agreement. On February 27, 1997, the Altobello Family Limited
Partnership (of which Mr. Altobello is the general partner) sold 420.90 shares
of OFSI Class A Common Stock to Onex U.S. LLC for $877,997.40.
Angelo D. Bizzarro. Prior to the consummation of the Combination, Angelo
D. Bizzarro was a director of each of Caterair and Caterair Holdings; in
connection with the Combination, he resigned from such positions and entered
into a three-year employment contract with CII to serve as President and Chief
Executive Officer of CII. Under such agreement, Mr. Bizzarro received an annual
salary of $295,000, an annual cash benefit allowance of $25,000, a bonus ranging
between 45% and 90% of his salary and certain benefits. Mr. Bizzarro resigned
during March 1997.
Frederic V. Malek. Prior to the consummation of the Combination, Frederic
V. Malek was a director of each Caterair and Caterair Holdings; in connection
with the Combination, he resigned from such positions and entered into a
consulting agreement with SCIS. Such consulting agreement has a five-year term
and entitles Mr. Malek to an annual consulting fee of $100,000.
CATERAIR
Caterair entered into various agreements with Marriott International, Inc.
in connection with the acquisition of its airline catering business in 1989,
including certain non-competition agreements and various service agreements. See
"Business -- Non-Airline Catering Operations" and "Business -- Competition."
Under a distribution agreement, Marriott International, Inc. purchased,
warehoused, distributed and sold to Caterair certain food, beverage and supply
products. The agreement required Caterair to make payments to Marriott
International, Inc. based on the cost incurred by Marriott International, Inc.
with respect to the goods and services provided, plus a percentage markup which
varied based on the type of product. Subsequent to the consummation of the
Combination, Marriott International, Inc. has provided these services under such
agreement to CII. The agreement will continue until terminated by either party.
Purchases by Caterair under this agreement in 1994 and 1995 totaled
approximately $13.4 million and $8.5 million, respectively, and purchases by CII
under this agreement in 1995 and 1996 totaled approximately $1.4 million and
$5.7 million, respectively. Amounts payable by CII to Marriott International,
Inc. thereunder through June 30, 1997 totaled $2.3 million. At the end of 1991,
Caterair entered into a payroll services agreement with Marriott International,
Inc. Under this agreement, Marriott International, Inc. provided payroll payment
and information reporting services, beginning with the first pay cycle of the
1992 tax calendar year. The agreement required Caterair to make service fee
payments based on the number of employees of Caterair and the amount of service
time. This agreement expired on December 31, 1996. Subsequent to the
consummation of the Combination, Marriott International, Inc. had been providing
services under such agreement to CII. Payments under such agreement by Caterair
to Marriott International, Inc. for 1994 and 1995 totaled $1.1 million and $1.0
million, respectively. CII made no payments to Marriott International, Inc.
thereunder for 1995, however, CII made payments under such agreement to Marriott
International, Inc. totaling $0.2 million for 1996. CII terminated such
agreement in October 1996.
Frederic V. Malek, a director of Caterair and Caterair Holdings until
September 29, 1995, is a director of Northwest Airlines and served as President
and Vice Chairman of Northwest Airlines from September 1989 until December 1991.
Sales to Northwest Airlines by Caterair were approximately $83.9 million, and
$76.1 million in 1994 and 1995, respectively.
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In May 1993, Caterair retained American Management Systems, Inc. ("AMS"), a
software development and management consulting firm, to provide Caterair with
consulting services related to the implementation of a corporate information
technology strategy. Total services rendered by AMS to Caterair during 1994
amounted to approximately $0.6 million. Charles O. Rossotti, a director of
Caterair and Caterair Holdings until September 29, 1995 serves as Chairman of
the board of directors of AMS. In addition, Messrs. Altobello and Malek (a
director of Caterair and Caterair Holdings until September 29, 1995) are both
members of the board of directors of AMS and have been granted stock options in
AMS, some of which are vested and exercisable. Mr. Malek also owns less than 5%
of the common stock of AMS. Caterair believes that its agreement with AMS was on
terms that were no less favorable to Caterair than were obtainable from an
unaffiliated party in an arm's-length transaction.
The information set forth in this Certain Transaction section sets forth
information with regard to relationships of, and certain transactions between,
(A)(i) any director (or nominee for director) or executive officer of SCIS, Sky
Chefs, CII or Caterair, (ii) any securityholder who held beneficially or of
record more than five percent of any of SCIS', Sky Chefs', CII's or Caterair's
voting securities and (iii) any member of the immediate family of any of the
foregoing persons, on the one hand (each as "Interested Party"), and (B) SCIS,
Sky Chefs, CII or Caterair, on the other, only for those portions of the period
since January 1, 1994 that any such Interested Party was a director (or nominee
for director) or executive officer of SCIS, Sky Chefs, CII or Caterair, a
securityholder who held beneficially or of record more than five percent of
SCIS', Sky Chefs', CII's or Caterair's voting securities or was a member of the
immediate family of such a person, and only with respect to relationships of,
and certain transactions between, an Interested Party and the entity of which
such Interested Party was a director, executive officer or securityholder during
the relevant period.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
TAX CONSEQUENCES OF THE EXCHANGE OFFER
The following summary of the material anticipated federal income tax
consequences of the Exchange Offer is based upon the provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), the final, temporary and proposed
regulations promulgated thereunder, and administrative rulings and judicial
decisions now in effect, all of which are subject to change (possibly with
retroactive effect) or different interpretations. Holders of Notes should note
the following summary is not binding on the Internal Revenue Service (the
"Service") and there can be no assurance that the Service will take a similar
view with respect to the tax consequences described below. No ruling has been or
will be requested by the Issuer from the Service on any tax matters relating to
the Private Notes or the Exchange Notes. This summary is not intended to be
applicable to all categories of investors, some of which, such as dealers in
securities, financial institutions, insurance companies and tax-exempt
organizations, may be subject to special rules. ALL HOLDERS OF NOTES ARE ADVISED
TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE FEDERAL, STATE, LOCAL AND
FOREIGN TAX CONSEQUENCES OF EXCHANGING PRIVATE NOTES FOR EXCHANGE NOTES.
The exchange of the Exchange Notes for the Private Notes pursuant to the
Exchange Offer should not be treated as an "exchange" for federal income tax
purposes because Exchange Notes should not be considered to differ materially in
kind or extent from Private Notes. Rather, Exchange Notes received by a holder
should be treated as a continuation of Private Notes in the hands of such
holder. As a result, there should be no federal income tax consequences to
holders exchanging Private Notes for the Exchange Notes pursuant to the Exchange
Offer. If, however, the exchange of the Private Notes for the Exchange Notes
were treated as an "exchange" for federal income tax purposes, such exchange
should constitute a recapitalization for federal income tax purposes. Holders
exchanging the Private Notes pursuant to such recapitalization should not
recognize any gain or loss upon the exchange.
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TAX CONSIDERATIONS RELATING TO THE COMBINATION
THE FOLLOWING DISCUSSION IS A SUMMARY OF CERTAIN OF THE MORE SIGNIFICANT
FEDERAL INCOME TAX CONSEQUENCES OF THE COMBINATION TO SCIS AND ITS AFFILIATES
AND TO CATERAIR BASED ON THE TAX LAWS IN EFFECT AS OF THE DATE OF THIS
PROSPECTUS. THERE CAN BE NO ASSURANCE THAT THE SERVICE WILL NOT DISAGREE WITH
ANY OR ALL OF THE DESCRIPTIONS OF TAX CONSEQUENCES OF THE COMBINATION CONTAINED
HEREIN, OR THAT A CHALLENGE BASED ON SUCH A DISAGREEMENT, IF ASSERTED, WILL NOT
BE SUSTAINED. IF SUCH A CHALLENGE IS ASSERTED AND IS SUCCESSFUL, THE TAX
LIABILITY OF SCIS AND CATERAIR AND THEIR RESPECTIVE CONSOLIDATED GROUPS MAY BE
SIGNIFICANTLY GREATER THAN EXPECTED AND MAY REDUCE FUNDS AVAILABLE TO SCIS AND
TO CATERAIR FOR PAYMENT OF THEIR DEBT SERVICE OBLIGATIONS, INCLUDING PAYMENTS OF
PRINCIPAL, INTEREST AND PREMIUM, IF ANY, ON THE NOTES OR PAYMENTS OF THE
GUARANTORS UNDER THEIR RESPECTIVE GUARANTEES. MOREOVER, THE TAX CONSEQUENCES OF
CERTAIN ASPECTS OF THE COMBINATION ARE UNCERTAIN DUE TO THE LACK OF APPLICABLE
LEGAL PRECEDENT AND THE POSSIBILITY OF CHANGES IN LAW OR REGULATORY
INTERPRETATION. THE DISCUSSION AND CONCLUSIONS PRESENTED BELOW MAY BE AFFECTED
BY MATTERS NOT DISCUSSED THEREIN.
Characterization of the Combination. The Combination was structured so
that it would be treated, for federal income tax purposes, as a combination of
(i) a purchase by Sky Chefs and CII of certain assets of Caterair, (ii) a lease
by Sky Chefs and CII of Caterair's tangible property (both real and personal)
for a six-year term, together with an option to purchase those assets from
Caterair, and (iii) a license by Sky Chefs and CII of Caterair's customer
relationships and contracts with an option to purchase those intangible assets
from Caterair. Whether the characterization of components of the Combination as
a lease and a license will be respected for federal income tax purposes depends
on whether the purported lessor or licensor retained significant benefits and
burdens of ownership. If significant benefits and burdens of ownership were not
retained, the Combination will be treated as a current sale. In determining
whether such benefits and burdens were retained, a significant factor is whether
the lease and license arrangements created an economic compulsion, on Sky Chefs'
and CII's part, to exercise the purchase options. Whether a compulsion to
exercise the purchase options existed depends in large part on the relationships
between the payments called for by the Domestic Leases and the License
Agreements to fair market rents and royalties, respectively, and the
relationships between the purchase option exercise prices called for under the
Domestic Leases and License Agreements and the expected fair market value of the
assets subject to those purchase options at the time of exercise. If the rent
and royalty payments were at present fair market value levels and the purchase
option exercise prices were at expected fair market levels, then the treatment
of the Combination as a true purchase, lease and license (rather than solely as
a purchase of Caterair's assets) is more assured. Further, in this case, despite
the existence of the 1995 loan by SCIS to Caterair and the guarantee by SCIS,
Sky Chefs and CII of Caterair's debt, projections indicated that, at the end of
the six-year lease term and license term, Sky Chefs and CII would still have to
make an investment decision as to whether to exercise the purchase options and
there is a significant possibility that such options might not be exercised.
SCIS received opinions from Price Waterhouse LLP and Kaye, Scholer, Fierman,
Hays & Handler, LLP to the effect that, based on the assumptions and subject to
the qualifications set forth in such opinions, the Combination will more likely
than not be treated as a combination of purchase, license and lease rather than
as a purchase of all of Caterair's assets. If, notwithstanding such opinions,
the Service successfully challenges such treatment (whether premised on a
challenge of the values upon which the lease, license and purchase option
payments were structured or on any theory of law that conflicts with the
theories relied on by SCIS and Caterair and their advisors), SCIS and Caterair
could be liable for significant federal income taxes with respect to the
Combination at an earlier time than projected and may have substantially greater
tax liability than projected which would reduce funds available to SCIS and
Caterair for payment of their debt service obligations, including payments of
principal, interest and premium, if any, on the Notes or payment by the
Guarantors under their respective Guarantees.
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Section 382. Section 382 of the Internal Revenue Code of 1986, as amended,
limits a corporate taxpayer's use of its net operating loss carryovers ("NOLs")
in years following the occurrence of an "ownership change" with respect to that
corporation. An ownership change occurs when, over a three-year period, the
percentage interests in the value of the corporation held by shareholders each
of whom owns at least 5 percent of the value of the outstanding stock of the
corporation increases by more than 50 percentage points over the lowest
percentage interests for such shareholders during such period. In the case of an
ownership change, an annual limitation, calculated by multiplying the equity
value of the corporation immediately before the ownership change occurred by a
"long-term tax exempt rate" determined and published by the Internal Revenue
Service (which at the time of the Combination was 5.75 percent), is imposed on
the use of NOLs carried over from periods preceding the ownership change.
Caterair believes that the Combination did not result in the occurrence of
an ownership change because, although OFSI and an affiliate acquired 51 percent
of the voting common stock of Caterair Holdings, it and its affiliate acquired
significantly less than 50 percent of the value of the stock of Caterair
Holdings or of Caterair and the test for an ownership change is based solely on
value.
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DESCRIPTION OF CERTAIN INDEBTEDNESS
SENIOR BANK FINANCING
Concurrently with the Offering, SCIS and Caterair consummated the Senior
Bank Financing. Set forth below is a summary description of the terms of the
Senior Bank Financing. The summary contained herein of certain provisions of the
Senior Bank Financing does not purport to be complete, is subject to, and is
qualified in its entirety by, all of the provisions of the documents governing
the Senior Bank Financing, copies of which have been filed as exhibits to the
Registration Statement of which this Prospectus is a part. Whenever particular
provisions of the documents relating to the Senior Bank Financing are referred
to herein, such provisions are incorporated herein by reference, and the
statements are qualified in their entirety by such reference.
Pursuant to the Senior Bank Financing, Bankers Trust Company, Morgan
Guaranty Trust Company of New York and certain other lenders provided (i) SCIS
with loans under the Revolving Credit Agreement in an amount up to $90.0 million
(including a sub-limit of $50.0 million for letters of credit) on a revolving
credit basis for working capital and general corporate purposes of SCIS,
Caterair and their respective subsidiaries, (ii) Caterair with a nine and
one-half year term loan under the Term Loan Agreement in an aggregate principal
amount of $160.0 million for purposes of refinancing Caterair's indebtedness
under the Old Credit Agreement and funding payment of related transaction costs
and (iii) SCIS with a nine and one-half year term loan under the Term Loan
Agreement in an aggregate principal amount of $90.0 million for purposes of
financing, in part, SCIS' Offer to Purchase, funding payment of related
transaction costs and general corporate purposes.
All of the indebtedness under the Revolving Credit Agreement and the Term
Loan Agreement is senior secured indebtedness. The Revolving Credit Agreement
does not require scheduled amortization or scheduled commitment reductions. The
Term Loan Agreement requires scheduled amortization payments. Each of the
Revolving Credit Agreement and the Term Loan Agreement, under certain
circumstances, require SCIS or Caterair, as the case may be, to make mandatory
prepayments and commitment reductions. In addition, each of SCIS and Caterair
may make optional prepayments and commitment reductions pursuant to the terms of
the Revolving Credit Agreement or the Term Loan Agreement, as the case may be.
Obligations under the Senior Bank Financing are jointly and severally
guaranteed by OFSI (on a limited basis), an affiliate of OFSI (on a limited
basis), SCIS, Caterair, Sky Chefs, CII and certain other domestic subsidiaries
of SCIS (including the Guarantors). In addition, obligations under the Senior
Bank Financing are secured by (i) first priority security interests in virtually
all tangible and intangible assets of SCIS, Caterair, and their respective
wholly-owned domestic subsidiaries (including the Guarantors) and (ii) pledges
of all capital stock of SCIS and Caterair and all capital stock and notes owned
by SCIS, Caterair and their respective domestic subsidiaries (limited in the
case of capital stock of foreign subsidiaries to 65% of such capital stock).
Each of the loans under the Senior Bank Financing bear interest at
specified margins over the applicable eurodollar rate or base rate.
The documents governing the Senior Bank Financing contain a number of
covenants that, among other things, restrict the ability of SCIS, Caterair and
their respective subsidiaries to dispose of assets, incur additional
indebtedness, incur guarantee obligations, repay indebtedness or amend debt
instruments, pay dividends, create liens on assets, make investments, make
acquisitions, engage in mergers or consolidations, make capital expenditures, or
engage in certain transactions with subsidiaries and affiliates and otherwise
restrict corporate activities. In addition, the documents governing the Senior
Bank Financing require compliance with financial tests based on combined results
for SCIS and Caterair.
Effective as of September 12, 1997, SCIS entered into an interest rate swap
agreement to reduce interest rate exposure on its long-term debt. The agreement
covers a notional amount of $90.0 million at September 12, 1997, and has a
stated maturity of September 15, 2002. Effective as of September 12, 1997,
Caterair entered into an interest swap agreement to reduce interest rate
exposure on its long-term debt. The agreement covers a notional amount of $160.0
million at September 12, 1997 and has a stated maturity of September 15, 2002.
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DESCRIPTION OF NOTES
The Private Notes were, and the Exchange Notes will be, issued under the
Indenture, dated as of August 15, 1997, by and among the Issuer, the Guarantors
and The Bank of New York, as Trustee (the "Trustee"). A copy of which has been
filed as an exhibit to the Registration Statement of which this Prospectus is a
part. The following summary of the material provisions of the Indenture does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, the Trust Indenture Act of 1939, as amended (the "TIA"), and to
all of the provisions of the Indenture, which are hereby incorporated herein by
reference, including the definitions of certain terms therein and those terms
made a part of the Indenture by reference to the TIA as in effect on the date of
the Indenture. The definitions of certain capitalized terms used in the
following summary are set forth below under "Certain Definitions." For purposes
of this section and the Indenture, references to the "Issuer" include only the
Issuer and not its subsidiaries.
The Notes are unsecured obligations of the Issuer, ranking subordinate in
right of payment to all Senior Debt of the Issuer and pari passu in right of
payment to existing and future senior subordinated indebtedness. The Notes are
guaranteed on a senior subordinated basis by the Guarantors.
The Notes will be issued in fully registered form only, without coupons, in
denominations of $1,000 and integral multiples thereof. Initially, the Trustee
will act as Paying Agent and Registrar for the Notes. The Notes may be presented
for registration or transfer and exchange at the offices of the Registrar, which
initially will be the Trustee's corporate trust office. The Issuer may change
any Paying Agent and Registrar without notice to holders of the Notes (the
"Holders"). The Issuer will pay principal (and premium, if any) on the Notes at
the Trustee's corporate trust office in New York, New York. At the Issuer's
option, interest may be paid at the Trustee's corporate trust office or by check
mailed to the registered address of Holders.
The form and terms of the Exchange Notes are identical in all material
respects to the form and terms of the Private Notes except that the Exchange
Notes will have been registered under the Securities Act and, therefore, the
Exchange Notes will not bear legends restricting the transfer thereof and
holders of the Exchange Notes will not be entitled to any of the registration
rights of holders of the Private Notes under the Registration Rights Agreement
(or related rights to certain interest payments upon the failure of the Issuer
to fulfill certain conditions set forth in the Registration Rights Agreement),
which rights will terminate upon consummation of the Exchange Offer. The
Exchange Notes will evidence the same indebtedness as the Private Notes (which
they replace), and will be issued under, and be entitled to the benefits of, the
Indenture. The Private Notes and the Exchange Notes will be considered
collectively to be a single class for all purposes under the Indenture,
including, without limitation, waivers, amendments, redemptions and offers to
purchase.
PRINCIPAL, MATURITY AND INTEREST
The Notes are limited in aggregate principal amount to $300,000,000 and
will mature on September 1, 2007. Interest on the Notes accrues at the rate of
9 1/4% per annum and is payable semiannually in cash on each March 1 and
September 1, commencing on March 1, 1998, to the Persons who are registered
Holders at the close of business on the February 15 and August 15 immediately
preceding the applicable interest payment date. Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance. Interest will be computed on
the basis of a 360-day year comprised of twelve 30-day months.
REDEMPTION
Optional Redemption. The Notes will be redeemable, at the Issuer's option,
in whole at any time or in part from time to time, on and after September 1,
2002, upon not less than 30 nor more than 60 days' notice, at the following
redemption prices (expressed as percentages of the principal amount thereof)
(payable in
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cash) if redeemed during the twelve-month period commencing on September 1 of
the year set forth below, plus, in each case, accrued and unpaid interest to the
date of redemption:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
-------------------------------------------------------- ----------
<S> <C>
2002.................................................... 104.635%
2003.................................................... 103.476%
2004.................................................... 102.318%
2005.................................................... 101.159%
2006 and thereafter..................................... 100.000%
</TABLE>
Optional Redemption Upon Public Equity Offerings. At any time or from time
to time, on or prior to September 1, 2000, the Issuer may, at its option, use
the net cash proceeds of one or more Public Equity Offerings to redeem in the
aggregate up to $105 million in principal amount of the Notes at a redemption
price of 109.25% of the principal amount thereof (payable in cash) plus accrued
interest to the date of redemption; provided that (i) at least $195 million in
principal amount of the Notes remains outstanding immediately after any such
redemption and (ii) such redemption is effected not more than 60 days after the
consummation of such Public Equity Offering.
SELECTION AND NOTICE
In case of a partial redemption, selection of the Notes or portions thereof
for redemption shall be made by the Trustee by lot, pro rata or in such manner
as it shall deem appropriate and fair and in such manner as complies with any
applicable legal requirements; provided, however, that if a partial redemption
is made with the proceeds of a Public Equity Offering, selection of the Notes or
portion thereof for redemption shall be made by the Trustee only on a pro rata
basis, unless such method is otherwise prohibited. Notes may be redeemed in part
in multiples of $1,000 principal amount only. Notice of redemption will be sent,
by first class mail, postage prepaid, at least 30 days and not more than 60 days
prior to the date fixed for redemption to each Holder whose Notes are to be
redeemed at the last address for such Holder then shown on the registry books.
In order to effect a redemption with the proceeds of a Public Equity Offering,
the Issuer shall make such redemption not more than 60 days after the
consummation of any such Public Equity Offering. If any Note is to be redeemed
in part only, the notice of redemption that relates to such Note shall state the
portion of the principal amount thereof to be redeemed. A new Note in principal
amount equal to the unredeemed portion thereof will be issued in the name of the
Holder thereof upon cancellation of the original Note. On and after any
redemption date, interest will cease to accrue on the Notes or parts thereof
called for redemption as long as the Issuer has deposited with the Paying Agent
funds in satisfaction of the redemption price pursuant to the Indenture.
SUBORDINATION
The payment of all Obligations on the Notes is subordinated in right of
payment to the prior payment in full in cash or Cash Equivalents (or such
payment shall be duly provided for to the satisfaction of the holders of the
Senior Debt) of all Obligations on the Senior Debt. Upon any payment or
distribution of assets of the Issuer of any kind or character, whether in cash,
property or securities, to creditors upon any total or partial liquidation,
dissolution, winding up, reorganization, assignment for the benefit of creditors
or marshaling of assets of the Issuer or in a bankruptcy, reorganization,
insolvency, receivership or other similar proceeding relating to the Issuer or
its property, whether voluntary or involuntary, all Obligations due or to become
due upon all Senior Debt shall first be paid in full in cash or Cash Equivalents
(or such payment duly provided for to the satisfaction of the holders of the
Senior Debt) before any payment or distribution of any kind or character is made
on account of any Obligations on the Notes, or for the acquisition of any of the
Notes for cash or property or otherwise. If any default occurs and is continuing
in the payment when due, whether at maturity, upon any redemption, by
declaration or otherwise, of any principal of, interest on, unpaid drawings for
letters of credit issued in respect of, or regularly accruing fees with respect
to, any Senior Debt (including for this purpose any such default in payment by
Caterair or any other borrower under the Senior Bank Financing which is a
Subsidiary of the Issuer with respect to its Obligations under the Senior Bank
Financing
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or any Interest Swap Obligations related thereto), no payment of any kind or
character shall be made by or on behalf of the Issuer or any other Person on its
or their behalf with respect to any Obligations on the Notes or to acquire any
of the Notes for cash or property or otherwise.
In addition, if any other event of default occurs and is continuing with
respect to any Designated Senior Debt, as such event of default is defined in
the instrument creating or evidencing such Designated Senior Debt, permitting
the holders of such Designated Senior Debt then outstanding to accelerate the
maturity thereof and if the Representative for the respective issue of
Designated Senior Debt gives written notice of the event of default to the
Trustee (a "Default Notice"), then, unless and until all events of default have
been cured or waived or have ceased to exist or the Trustee receives notice from
the Representative for the respective issue of Designated Senior Debt
terminating the Blockage Period (as defined below), during the 180 days after
the delivery of such Default Notice (the "Blockage Period"), neither the Issuer
nor any other Person on its behalf shall (x) make any payment of any kind or
character with respect to any Obligations on the Notes or (y) acquire any of the
Notes for cash or property or otherwise. Notwithstanding anything herein to the
contrary, in no event will a Blockage Period extend beyond 180 days from the
date such Blockage Period was commenced and only one such Blockage Period may be
commenced within any 360 consecutive days. No event of default which existed or
was continuing on the date of the commencement of any Blockage Period with
respect to the Designated Senior Debt shall be, or be made, the basis for
commencement of a second Blockage Period by the Representative of such
Designated Senior Debt whether or not within a period of 360 consecutive days,
unless such event of default shall have been cured or waived for a period of not
less than 90 consecutive days (it being acknowledged that any subsequent action,
or any breach of any financial covenants for a period commencing after the date
of commencement of such Blockage Period that, in either case, would give rise to
an event of default pursuant to any provision under which an event of default
previously existed or was continuing shall constitute a new event of default for
this purpose).
By reason of such subordination, in the event of the liquidation or
insolvency of the Issuer, creditors of the Issuer who are not holders of Senior
Debt, including the Holders of the Notes, may recover less, ratably, than
holders of Senior Debt.
The Company has significant indebtedness. At June 30, 1997, on a pro forma
basis after giving effect to the Offering and the application of the net
proceeds therefrom, SCIS' Offer to Purchase and the Senior Bank Financing,
including the Caterair Refinancing, the Company would have had total combined
indebtedness of approximately $592.3 million (excluding the loan by SCIS to
Caterair, guarantees of indebtedness and $25.0 million of letters of credit). In
addition, the Company may borrow additional amounts under the Revolving Credit
Agreement or otherwise. See "The Refinancing," "Capitalization," "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Description of Certain Indebtedness -- Senior Bank Financing" and the Financial
Statements and notes thereto included elsewhere in this Prospectus. At June 30,
1997, on a pro forma basis after giving effect to the Offering and the
application of the net proceeds therefrom, SCIS' Offer to Purchase and the
Senior Bank Financing, including the Caterair Refinancing, the Issuer would have
had approximately $250.0 million of Senior Debt (including borrowings and
guarantees under the Senior Bank Financing but excluding $25.0 million of
letters of credit) and would have had approximately $65.0 million available to
be borrowed pursuant to the Senior Bank Financing, and the Guarantors would have
had approximately $31.8 million of Guarantor Senior Debt outstanding (excluding
the loan by SCIS to Caterair and the Guarantors' borrowings and guarantees under
the Senior Bank Financing). In addition, the Notes are structurally subordinated
to all liabilities of the subsidiaries of the Issuer which are not Guarantors.
GUARANTEES
Each Guarantor unconditionally guaranteed, jointly and severally, the
Issuer's obligations under the Notes on a senior subordinated unsecured basis
(the "Guarantees"). The Indebtedness represented by each Guarantee (including
the payment of Obligations on the Notes) is subordinated on the same basis to
Guarantor Senior Debt (defined with respect to the Indebtedness of a Guarantor
in the same manner as Senior Debt is defined with respect to the Issuer) as the
Notes are subordinated to Senior Debt. See "-- Subordination."
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Upon (i) the release by the lenders under the Senior Bank Financing,
related documents and future refinancings thereof of all guarantees of a
Guarantor (other than Caterair) and all Liens on the property and assets of such
Guarantor relating to such Indebtedness, or (ii) the sale or disposition
(whether by merger, stock purchase, asset sale or otherwise) of a Guarantor (or
substantially all of its assets) to an entity which is not a Subsidiary of the
Issuer or Caterair (which sale or disposition is otherwise in compliance with
the Indenture), such Guarantor shall be deemed released from all of its
obligations under its Guarantee; provided, however, that any such termination
shall occur only to the extent that all obligations of such Guarantor under the
Senior Bank Financing and all of its guarantees of, and under all of its pledges
of assets or other security interests which secure, such Indebtedness of the
Issuer shall also terminate upon such release, sale or transfer.
Each Guarantor may consolidate with or merge into or sell all or
substantially all of its assets to the Issuer or another Guarantor (other than
Caterair) without limitation. The Indenture further provides that a Guarantor
may consolidate with or merge into or sell all or substantially all of its
assets to a corporation other than the Issuer or another Guarantor (whether or
not affiliated with such Guarantor, but subject to the provisions described in
the immediately preceding paragraph); provided that (a)(i) such transaction is
treated as an Asset Sale or Caterair Asset Sale, as the case may be, for
purposes of the "Limitation on Asset Sales" covenant or (ii) if the surviving
corporation is not such Guarantor, the surviving corporation agrees to assume
such Guarantor's obligations under its Guarantee and all of its obligations
under the Indenture and (b) such transaction does not (i) violate any covenants
set forth in the Indenture or (ii) result in a Default or Event of Default under
the Indenture immediately thereafter that is continuing.
The obligations of each Guarantor under its Guarantee are limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Guarantor (other than liabilities of such Guarantor under
Indebtedness which constitutes Subordinated Indebtedness with respect to its
Guarantee) and after giving effect to any collections from or payments made by
or on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guarantee or pursuant to its contribution obligations under
the Indenture, result in the obligations of such Guarantor under such Guarantee
not constituting a fraudulent conveyance or fraudulent transfer under federal or
state law. Each Guarantor that makes a payment or distribution under a Guarantee
shall be entitled to a contribution from each other Guarantor in a pro rata
amount based on the Adjusted Net Assets of each Guarantor.
In addition to Sky Chefs, CII and Caterair, the following indirectly
wholly-owned domestic subsidiaries of SCIS are Guarantors: Sky Chefs
International Corp., Arlington Services, Inc., Arlington Services Holding
Corporation, Bethesda Services, Inc., Caterair New Zealand Limited, Caterair
Consulting Services Corporation, JFK Caterers, Inc., Caterair St. Thomas
Holdings Corporation, Western Aire Chef, Inc., Caterair Airport Properties,
Inc., Sky Chefs Argentine, Inc., Onex Ohio Acceptance Corporation, Onex Ohio
Credit Corp., Onex Ohio Equity Corp., Onex Ohio Finance Corp., Onex Ohio Finance
Corp. II, Onex Ohio Capital Corp., Onex Ohio Fiscal Corp., Onex Ohio Funds
Corp., Onex Ohio Credit Corp. II, Onex Ohio Funds Corp. II, Onex Ohio Fiscal
Corp. II, Onex Ohio Equity Corp. II, Onex Ohio Capital Corp. II and Caterair
International Transition Corporation.
CHANGE OF CONTROL
The Indenture provides that upon the occurrence of a Change of Control,
each Holder will have the right to require that the Issuer repurchase all or a
portion of such Holder's Notes pursuant to the offer described below (the
"Change of Control Offer"), at a purchase price equal to 101% of the principal
amount thereof, plus accrued interest to the date of repurchase.
The Indenture provides that, prior to the mailing of the notice referred to
below, but in any event within 30 days following any Change of Control, the
Issuer covenants to (i) repay in full all Indebtedness under the Senior Bank
Financing (and terminate all commitments thereunder) and all other Senior Debt
the terms of which require repayment upon a Change of Control or offer to repay
in full all Indebtedness under the Senior Bank Financing (and terminate all
commitments thereunder) and all such other Senior Debt and to repay the
Indebtedness owed to (and terminate the commitments of) each lender which has
accepted such offer or (ii) obtain the requisite consents under the Senior Bank
Financing and all such other Senior Debt to permit
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the repurchase of the Notes as provided below. The Issuer shall first comply
with the covenant in the immediately preceding sentence before it shall be
required to repurchase Notes pursuant to the provisions described below. The
Issuer's failure to comply with the covenant described in the immediately
preceding sentence resulting in a failure to mail the notice referred to below
shall constitute an Event of Default described in clause (iii) and not in clause
(ii) under "Events of Default" below.
The Indenture provides that within 30 days following the date upon which
the Change of Control occurred, the Issuer must send, by first class mail, a
notice to each holder, with a copy to the Trustee, which notice shall govern the
terms of the Change of Control Offer. Such notice shall state, among other
things, the repurchase date, which must be no earlier than 30 days nor later
than 45 days from the date such notice is mailed, other than as may be required
by law (the "Change of Control Payment Date"). Holders electing to have a Note
repurchased pursuant to a Change of Control Offer will be required to surrender
the Note, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed, to the Paying Agent at the address specified in
the notice prior to the close of business on the third business day prior to the
Change of Control Payment Date.
If a Change of Control Offer is made, there can be no assurance that the
Issuer will have available funds sufficient to pay the Change of Control
purchase price for all the Notes that might be delivered by Holders seeking to
accept the Change of Control Offer together with any other notes which the
Issuer may be obligated to purchase pursuant to change of control provisions in
agreements governing other senior subordinated Indebtedness of the Issuer. In
the event the Issuer is required to repurchase outstanding Notes pursuant to a
Change of Control Offer, the Issuer expects that it would seek third party
financing to the extent it does not have available funds to meet its repurchase
obligations. However, there can be no assurance that the Issuer would be able to
obtain such financing.
Neither the Board of Directors of the Issuer nor the Trustee may waive the
covenant relating to a Holder's right to require the Issuer to repurchase such
Holder's Notes upon a Change of Control. Restrictions in the Indenture described
herein on the ability of the Issuer and its Restricted Subsidiaries to incur
additional Indebtedness, to grant Liens on their respective properties, to make
Restricted Payments and to make Asset Sales may also make more difficult or
discourage a takeover of the Issuer, whether favored or opposed by the
management of the Issuer. Such restrictions and the restrictions on transactions
with Affiliates may, in certain circumstances, make more difficult or discourage
any leveraged buyout of the Issuer or any of its Subsidiaries by the management
of the Issuer. While such restrictions cover a wide variety of arrangements
which have traditionally been used to effect highly leveraged transactions, the
Indenture may not afford the Holders of Notes protection in all circumstances
from the adverse aspects of a highly leveraged transaction, reorganization,
restructuring, merger or similar transaction.
With respect to the sale of assets, the phrase "all or substantially all"
as used in the Indenture varies according to the facts and circumstances of the
subject transaction, has no clearly established meaning under relevant law and
is subject to judicial interpretation. Accordingly, in certain circumstances,
there may be a degree of uncertainty in ascertaining whether a particular
transaction would involve a disposition of "all or substantially all" of the
assets of a Person and therefore it may be unclear whether a Change of Control
has occurred and whether Notes are subject to a Change of Control Offer.
The Issuer will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent that
the provisions of any securities laws or regulations conflict with the "Change
of Control" provisions of the Indenture, the Issuer shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under the "Change of Control" provisions of the
Indenture by virtue thereof.
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CERTAIN COVENANTS
The Indenture contains, among others, the following covenants:
Limitation on Restricted Payments. The Issuer will not, and will not cause
or permit any of its Restricted Subsidiaries to, directly or indirectly, (a)
declare or pay any dividend or make any distribution (other than dividends or
distributions payable in Qualified Capital Stock of the Issuer) on or in respect
of shares of the Issuer's Capital Stock to holders of such Capital Stock, (b)
purchase, redeem or otherwise acquire or retire for value any Capital Stock of
the Issuer or any warrants, rights or options to purchase or acquire shares of
any class of such Capital Stock, other than the exchange of such Capital Stock
or any warrants, rights or options to acquire shares of any class of such
Capital Stock for Qualified Capital Stock of the Issuer or warrants, rights or
options to acquire such Qualified Capital Stock, (c) make any principal payment
on, purchase, defease, redeem, prepay, decrease or otherwise acquire or retire
for value, prior to any scheduled final maturity, scheduled repayment or
scheduled sinking fund payment, any Indebtedness of the Issuer or its Restricted
Subsidiaries that is subordinate or junior in right of payment to the Notes, or
(d) make any Investment (other than Permitted Investments) (each of the
foregoing actions set forth in clauses (a), (b), (c) and (d) being referred to
as a "Restricted Payment"), if at the time of such Restricted Payment or
immediately after giving effect thereto, (i) a Default or an Event of Default
shall have occurred and be continuing, (ii) the Issuer is not able to incur at
least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with the "Limitation on Incurrence of Additional Indebtedness"
covenant, or (iii) the aggregate amount of Restricted Payments made subsequent
to the Issue Date (the amount expended for such purposes, if other than in cash,
being the fair market value of such property as determined by the Board of
Directors of the Issuer in good faith) shall exceed the sum of: (x) 50% of the
cumulative Consolidated Net Income (or if cumulative Consolidated Net Income
shall be a loss, minus 100% of such loss) of the Issuer earned subsequent to the
Issue Date and on or prior to the date the Restricted Payment occurs (the
"Reference Date") (treating such period as a single accounting period); plus (y)
100% of the aggregate Net Cash Proceeds received by the Issuer from any Person
(other than a Subsidiary of the Issuer) from the issuance and sale subsequent to
the Issue Date and on or prior to the Reference Date of Qualified Capital Stock
of the Issuer (including proceeds from the issuance and sale of any securities
of the Issuer convertible into or exchangeable for Qualified Capital Stock of
the Issuer to the extent such securities are so converted or exchanged and
including any additional proceeds received by the Issuer upon such conversion or
exchange); plus (z) without duplication of any amounts included in clause
(iii)(y) above, 100% of the aggregate Net Cash Proceeds received by the Issuer
as capital contributions subsequent to the Issue Date and on or prior to the
Reference Date.
Notwithstanding the foregoing, the provisions set forth in the immediately
preceding paragraph do not prohibit: (1) the payment of any dividend or the
consummation of any irrevocable redemption within 60 days after the date of
declaration of such dividend or notice of such redemption if the dividend or
payment of the redemption price, as the case may be, would have been permitted
on the date of declaration or notice; (2) the acquisition of any shares of
Capital Stock of the Issuer or warrants, options or other rights to acquire
Capital Stock of the Issuer, either (i) solely in exchange for shares of
Qualified Capital Stock of the Issuer or warrants, options or other rights to
acquire such Qualified Capital Stock, or (ii) through the application of the net
proceeds of a substantially concurrent sale for cash (other than to a Subsidiary
of the Issuer) of shares of Qualified Capital Stock of the Issuer or warrants,
options or other rights to acquire such Qualified Capital Stock; (3) the
acquisition of Indebtedness of the Issuer that is subordinate or junior in right
of payment to the Notes, either (i) solely in exchange for shares of Qualified
Capital Stock of the Issuer or warrants, options or other rights to acquire such
Qualified Capital Stock or for Indebtedness of the Issuer which is subordinate
or junior in right of payment to the Notes, at least to the extent that the
Indebtedness being acquired is subordinated to the Notes, and has a Weighted
Average Life to Maturity no less than that of the Indebtedness being acquired or
(ii) through the application of the net proceeds of a substantially concurrent
sale for cash (other than to a Subsidiary of the Issuer) of shares of Qualified
Capital Stock of the Issuer or warrants, options or other rights to acquire such
Qualified Capital Stock or Indebtedness of the Issuer which is subordinate or
junior in right of payment to the Notes, at least to the extent that the
Indebtedness being acquired is subordinated to the Notes, and has a Weighted
Average Life to Maturity no less than that of the
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Indebtedness being refinanced; (4) payments by the Issuer to OFSI to enable OFSI
to pay a dividend to LSG (or a Subsidiary thereof), in an aggregate amount not
to exceed $2.5 million in any 12-month period; provided that any unused portion
of such amount may be carried over to any subsequent 12-month period; (5)
payments by the Issuer to OFSI on or after January 1, 1997 to enable OFSI to pay
dividends to stockholders of OFSI other than LSG (or a Subsidiary thereof), in
an amount not to exceed $6 million in any 12-month period; provided that any
unused portion of such amount may be carried over to any subsequent 12-month
period; (6) payments by the Issuer or any of its Subsidiaries to OFSI pursuant
to the OFSI Tax Sharing Agreement; (7) payments by the Issuer to OFSI sufficient
to enable OFSI to (i) pay franchise taxes and other fees and expenses necessary
to maintain its corporate existence, (ii) pay reasonable fees to its directors
and (iii) perform accounting, legal, corporate reporting and administrative
functions in the ordinary course of business, other than those functions which
are related exclusively to OFSI's investments in Persons other than the Issuer
and Subsidiaries of the Issuer; (8) payments by the Issuer or any of its
Subsidiaries to OFSI in an aggregate amount not to exceed $6 million in any
12-month period, the proceeds of which are used by OFSI to repurchase
outstanding shares of OFSI's common stock from current or former employees or
directors of the Issuer or any of its Subsidiaries (A) following the death,
disability or termination of any such person or (B) pursuant to one or more
written plans approved by the Board of Directors of OFSI; and (9) payments by
the Issuer or any of its Subsidiaries to OFSI, the proceeds of which are used by
OFSI to fund payments under a plan implemented to compensate management of the
Issuer and its Subsidiaries based on the value of OFSI's common stock; provided,
however, that in the case of clauses (4), (5) and (8)(B), no Default or Event of
Default shall have occurred or be continuing at the time of such payment or as a
result thereof. In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date in accordance with clause (iii) of the immediately
preceding paragraph, (x) 100% of each of the payments described in clauses (1),
(4) and (5) above (to the extent such expenditure is in the form of cash) and
(y) 50% of the payments described in clauses (8)(A) and (8)(B) above (to the
extent such expenditure is in the form of cash), other than amounts paid to the
Issuer or a Subsidiary of the Issuer by OFSI or such employee in satisfaction of
loans or advances made by the Issuer or such Subsidiary pursuant to clause (v)
(A) of the definition of "Permitted Investments" (which shall not be included in
such calculation or in the calculation of payments made pursuant to clause (8)),
shall be included in such calculation.
Caterair will not, and will not cause or permit any of its Subsidiaries to,
directly or indirectly, (a) declare or pay any dividend or make any distribution
on or in respect of shares of Caterair's Capital Stock to holders of such
Capital Stock, (b) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of Caterair or any warrants, rights or options to purchase or
acquire shares of any class of such Capital Stock, (c) make any principal
payment on, purchase, defease, redeem, prepay, decrease or otherwise acquire or
retire for value, prior to any scheduled final maturity, scheduled repayment or
scheduling sinking fund payment, any Indebtedness of Caterair or its
Subsidiaries that is subordinate or junior in right of payment to the Notes, or
(d) make any Investment (other than Permitted Investments) (each of the
foregoing actions set forth in clauses (a), (b), (c) and (d) being referred to
as a "Caterair Restricted Payment").
Notwithstanding the foregoing, the provisions set forth in the immediately
preceding paragraph do not prohibit: (1) the payment of any dividend within 30
days after the date of declaration of such dividend if the dividend would have
been permitted on the date of declaration; (2) payments by Caterair to Caterair
Holdings sufficient to enable Caterair Holdings to (i) pay franchise taxes and
other fees and expenses necessary to maintain its corporate existence, (ii) pay
reasonable fees to its directors and (iii) perform accounting, legal, corporate
reporting and administrative functions in the ordinary course of business; (3)
payments by Caterair or any of its Subsidiaries to Caterair Holdings pursuant to
the Caterair Tax Sharing Agreement; and (4) payments by Caterair or any
Subsidiary of Caterair to the Issuer or any Restricted Subsidiary of the Issuer.
Limitation on Incurrence of Additional Indebtedness. The Issuer will not,
and will not permit any of its Restricted Subsidiaries to, and Caterair will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
create, incur, assume, guarantee, acquire, become liable, contingently or
otherwise, with respect to, or otherwise become responsible for payment of
(collectively, "incur") any Indebtedness (other than Permitted Indebtedness);
provided, however, that if no Default or Event of Default shall have occurred
and be continuing at the time or as a consequence of the incurrence of any such
Indebtedness, the Issuer, Caterair or
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any Restricted Subsidiary of the Issuer may incur Indebtedness if on the date of
the incurrence of such Indebtedness, after giving effect to the incurrence
thereof, the Consolidated Fixed Charge Coverage Ratio of the Issuer is greater
than 2.00 to 1.0.
Limitations on Transactions with Affiliates. The Issuer will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly, enter
into or permit to exist any transaction or series of related transactions
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with, or for the benefit of, any of
its Affiliates (an "Affiliate Transaction"), other than (x) Affiliate
Transactions permitted under the paragraph below and (y) Affiliate Transactions
on terms that are no less favorable than those that might reasonably have been
obtained in a comparable transaction at such time on an arm's-length basis from
a Person that is not an Affiliate; provided, however, that for a transaction or
series of related transactions with an aggregate value of $5 million or more (i)
such determination shall be made in good faith by a majority of the
disinterested members of the Board of the Directors of the Issuer or (ii) the
Board of Directors of the Issuer shall have received an opinion from a
nationally recognized investment banking firm that such Affiliate Transaction is
on terms no less favorable than those that might reasonably have been obtained
in a comparable transaction at such time on an arm's-length basis from a Person
that is not an Affiliate; and provided, further, that for a transaction or
series of related transactions with an aggregate value of $10 million or more,
the Board of Directors of the Issuer shall have received an opinion from a
nationally recognized investment banking firm that such Affiliate Transaction is
on terms no less favorable than those that might reasonably have been obtained
in a comparable transaction at such time on an arm's-length basis from a Person
that is not an Affiliate.
The restrictions set forth in the preceding paragraph shall not apply to
(1) reasonable fees and compensation paid to and indemnity provided on behalf
of, officers, directors, employees or consultants of the Issuer or any
Subsidiary of the Issuer as determined in good faith by the Issuer's Board of
Directors or senior management; (2) transactions between or among the Issuer or
any Restricted Subsidiary of the Issuer, on the one hand, and any Subsidiary of
the Issuer or other Person controlled (as such term is defined in the definition
of "Affiliate") by the Issuer, on the other hand, so long as no portion of the
remaining interest in such Subsidiary or other Person is owned by a Person who
controls (as such term is defined in the definition of "Affiliate") the Issuer,
or between or among such Subsidiaries and Persons, provided such transactions
are not otherwise prohibited by the Indenture; (3) any agreement as in effect as
of the Issue Date or any amendment thereto or any transaction contemplated
thereby (including pursuant to any amendment thereto) in any replacement
agreement thereto so long as any such amendment or replacement agreement is not
more disadvantageous to the Holders in any material respect than the original
agreement as in effect on the Issue Date; (4) transactions between the Issuer or
any Restricted Subsidiary of the Issuer, on the one hand, and Caterair or any
Subsidiary of Caterair, on the other hand; and (5) Restricted Payments permitted
by the Indenture.
Caterair will not, and will not permit any of its Subsidiaries to, directly
or indirectly, enter into or permit to exist any transaction or series of
related transactions (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with, or for the
benefit of, any of its Affiliates.
The restrictions set forth in the preceding paragraph shall not apply to
(1) transactions between Caterair or any Subsidiary of Caterair, on the one
hand, and the Issuer or any Restricted Subsidiary of the Issuer, on the other
hand; (2) transactions between or among Caterair or any Subsidiary of Caterair,
on the one hand, and any Subsidiary of Caterair or other Person controlled (as
such term is defined in the definition of "Affiliate") by Caterair, on the other
hand, so long as no portion of the remaining interest in such Subsidiary or
other Person is owned by a Person who controls (as such term is defined in the
definition of "Affiliate") Caterair, or between or among such Subsidiaries and
Persons, provided such transactions are not otherwise prohibited by the
Indenture; (3) reasonable fees and compensation paid to and indemnity provided
on behalf of, officers, directors, employees or consultants of Caterair or any
Subsidiary of Caterair as determined in good faith by Caterair's Board of
Directors or senior management; (4) any agreement as in effect as of the Issue
Date or any amendment thereto or any transaction contemplated thereby (including
pursuant to any amendment thereto) in any replacement agreement thereto so long
as any such amendment or replacement
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agreement is not more disadvantageous to the Holders in any material respect
than the original agreement as in effect on the Issue Date; and (5) Caterair
Restricted Payments permitted by the Indenture.
Limitation on Liens. The Issuer will not, and will not permit any of its
Restricted Subsidiaries to, create, incur, assume or suffer to exist any Liens
of any kind against or upon any of its property or assets, or any proceeds
therefrom, except for (A) Liens securing Senior Debt and/or Guarantor Senior
Debt and (B) Permitted Liens, unless (i) in the case of Liens securing
Indebtedness that is expressly subordinate or junior in right of payment to the
Notes, the Notes are secured by a Lien on such property, assets or proceeds that
is senior in priority to such Liens and (ii) in all other cases, the Notes are
equally and ratably secured.
Caterair will not, and will not permit any of its Subsidiaries to create,
incur, assume or suffer to exist any Liens of any kind against or upon any of
its property or assets, or any proceeds therefrom, except for (i) Permitted
Liens, (ii) Liens securing Senior Debt and/or Guarantor Senior Debt and (iii)
Liens in favor of the Issuer or any Restricted Subsidiary of the Issuer.
Prohibition on Incurrence of Senior Subordinated Debt. Neither the Issuer
nor any Guarantor will, directly or indirectly, incur any Indebtedness
(including Acquired Indebtedness) that is senior in right of payment to the
Notes or its Guarantee, as the case may be, and expressly subordinate in right
of payment to any other Indebtedness of the Issuer or such Guarantor, as the
case may be.
Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries. The Issuer will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary of the Issuer to (a) pay dividends or make any other
distributions on or in respect of its Capital Stock; (b) make loans or advances
to or pay any Indebtedness or other obligation owed to the Issuer or any other
Restricted Subsidiary of the Issuer; or (c) transfer any of its property or
assets to the Issuer or any other Restricted Subsidiary of the Issuer, except
for such encumbrances or restrictions existing under or by reason of: (1)
applicable law; (2) the Indenture; (3) customary non-assignment provisions of
any contract or any lease entered into in the ordinary course of business; (4)
any agreement or instrument governing Acquired Indebtedness, which encumbrance
or restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person or the properties or assets of the Person so
acquired; (5) any agreement existing on the Issue Date (including, without
limitation, the Senior Bank Financing); (6) in the case of clause (c) above, (A)
restrictions on the transfer of assets subject to any Lien permitted under the
Indenture imposed by the holder of such Lien and (B) restrictions on the
transfer of assets imposed by any agreement, lease or permit entered into or
obtained in the ordinary course of business in connection with the operation of
flight kitchens; (7) (A) restrictions imposed by any agreement to sell assets
permitted under the Indenture to any Person pending the closing of such sale,
(B) any agreement or instrument governing Capital Stock of any Person that is
acquired or (C) any joint venture, stockholder or similar agreements; (8)
encumbrances and restrictions imposed by any agreement or instrument governing
Indebtedness (including any collateral or related documents) of any Restricted
Subsidiary of the Issuer conducting substantially all of its business outside
the United States; provided, however, that such Restricted Subsidiaries of the
Issuer, in the aggregate, did not account for more than 10% of Consolidated
EBITDA of the Issuer (after giving pro forma effect to inclusion of any
additional Restricted Subsidiary proposing to enter into such an agreement or
instrument) during the four full fiscal quarter period ending immediately prior
to the date of determination thereof; or (9) an agreement effecting an
amendment, refinancing, replacement or substitution of Indebtedness issued,
assumed or incurred pursuant to an agreement referred to in clause (2), (4) or
(5) above or any other agreement evidencing Indebtedness permitted under the
Indenture; provided, however, that the provisions relating to such encumbrance
or restriction contained in any such amendment, refinancing, replacement or
substitution agreement or any such other agreement are not less favorable to the
Issuer in any material respect as determined by the Board of Directors of the
Issuer than the provisions relating to such encumbrance or restriction contained
in agreements referred to in such clause (2), (4) or (5).
Caterair will not, and will not permit any of its Subsidiaries to, directly
or indirectly, create or otherwise cause or permit to exist or become effective
any encumbrance or restriction on the ability of any Subsidiary of Caterair to
(a) pay dividends or make any other distributions on or in respect of its
Capital Stock; (b) make
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loans or advances or to pay any Indebtedness or other obligation owed to
Caterair or any other Subsidiary of Caterair; or (c) transfer any of its
property or assets to Caterair or any other Subsidiary of Caterair, except for
such encumbrances or restrictions existing under or by reason of: (1) applicable
law; (2) the Indenture; (3) customary non-assignment provisions of any contract
or any lease entered into in the ordinary course of business; (4) any agreement
or instrument governing Acquired Indebtedness, which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any Person,
other than the Person or the properties or assets of the Person so acquired; (5)
any agreement existing on the Issue Date (including, without limitation, the
Senior Bank Financing); (6) in the case of clause (c) above, (A) restrictions on
the transfer of assets subject to any Lien permitted under the Indenture imposed
by the holder of such Lien and (B) restrictions on the transfer of assets
imposed by any agreement, lease or permit entered into or obtained in the
ordinary course of business in connection with the operation of flight kitchens;
(7) restrictions imposed by any agreement to sell assets permitted under the
Indenture to any Person pending the closing of such sale; or (8) an agreement
effecting an amendment, a refinancing, replacement or substitution of
Indebtedness issued, assumed or incurred pursuant to an agreement referred to in
clause (2), (4) or (5) above; provided, however, that the provisions relating to
such encumbrance or restriction contained in any such amendment, refinancing,
replacement or substitution agreement are not less favorable to Caterair in any
material respect as determined by the Board of Directors of Caterair than the
provisions relating to such encumbrance or restriction contained in agreements
referred to in such clause (2), (4) or (5).
Limitation on Preferred Stock of Subsidiaries. The Issuer will not permit
any of its Restricted Subsidiaries to issue any Preferred Stock to any Person or
permit any Person to own any Preferred Stock of a Restricted Subsidiary of the
Issuer, unless the Issuer's percentage interest in the Preferred Stock of such
Restricted Subsidiary is equal to or greater than the Issuer's percentage
interest in the common equity of such Restricted Subsidiary.
Caterair will not permit any of its Subsidiaries to issue any Preferred
Stock (other than to the Issuer, a Wholly Owned Restricted Subsidiary of the
Issuer, Caterair or a Wholly Owned Subsidiary of Caterair) or permit any Person
(other than the Issuer, a Wholly Owned Restricted Subsidiary of the Issuer,
Caterair or a Wholly Owned Subsidiary of Caterair) to own any Preferred Stock of
any Subsidiary of Caterair.
Merger, Consolidation and Sale of Assets. The Issuer will not, in a single
transaction or a series of related transactions, consolidate with or merge with
or into, or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets to, another Person or Persons or adopt a Plan of
Liquidation unless (i) either (A) the Issuer shall be the survivor of such
merger or consolidation or (B) the surviving or transferee Person is a
corporation, partnership or trust organized and existing under the laws of the
United States, any state thereof or the District of Columbia and such surviving
or transferee Person shall expressly assume all the obligations of the Issuer
under the Notes and the Indenture pursuant to a supplemental indenture; (ii)
except in the case of a transaction between the Issuer and a Guarantor,
immediately after giving effect to such transaction (on a pro forma basis,
including any Indebtedness incurred or anticipated to be incurred in connection
with such transaction), the Issuer or the surviving Person is able to incur at
least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with the "Limitation on Incurrence of Additional Indebtedness"
covenant; (iii) immediately before and immediately after giving effect to such
transaction (including any Indebtedness incurred or anticipated to be incurred
in connection with the transaction), no Default or Event of Default shall have
occurred and be continuing; and (iv) the Issuer has delivered to the Trustee an
Officers' Certificate and Opinion of Counsel, each stating that such
consolidation, merger or transfer complies with the Indenture, that the
surviving or transferee Person agrees pursuant to a supplemental indenture to be
bound thereby, and that all conditions precedent in the Indenture relating to
such transaction have been satisfied. For purposes of the foregoing, the
transfer (by lease, assignment, sale or otherwise, in a single transaction or
series of related transactions) of all or substantially all of the properties
and assets of one or more Subsidiaries of the Issuer, the Capital Stock of which
constitutes all or substantially all of the properties and assets of the Issuer,
shall be deemed to be the transfer of all or substantially all of the properties
and assets of the Issuer.
Upon any consolidation or merger or any transfer of all or substantially
all of the assets of the Issuer or any adoption of a Plan of Liquidation by the
Issuer in accordance with the preceding paragraph, the surviving
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or transferee Person shall succeed to, and be substituted for, and may exercise
every right and power of, the Issuer under the Indenture with the same effect as
if such surviving or transferee Person had been named as the Issuer therein;
provided, however, that solely for purposes of computing amounts described in
clause (iii) of the first paragraph of the "Limitation on Restricted Payments"
covenant, any such surviving or transferee Person shall only be deemed to have
succeeded to and be substituted for the Issuer with respect to periods
subsequent to the effective time of such merger, consolidation or transfer of
assets.
Limitation on Asset Sales. The Issuer will not, and will not permit any of
its Restricted Subsidiaries to, consummate an Asset Sale unless (i) other than
with respect to the Australian Assets, the Issuer or the applicable Restricted
Subsidiary, as the case may be, receives consideration at the time of such Asset
Sale at least equal to the fair market value of the assets sold or otherwise
disposed of (as determined in good faith by the Issuer's Board of Directors);
(ii) at least 75% of the consideration received by the Issuer or such Restricted
Subsidiary, as the case may be, from such Asset Sale shall be cash or Cash
Equivalents and is received at the time of such disposition; and (iii) upon the
consummation of an Asset Sale, the Issuer shall apply, or cause such Restricted
Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within
365 days of receipt thereof either (A) to prepay (or, in the case of letters of
credit or Eurodollar loans under the Senior Bank Financing, cash collateralize)
any Senior Debt or Guarantor Senior Debt or, in the case of any Senior Debt or
Guarantor Senior Debt under any revolving credit facility, effect a permanent
reduction in the availability under such revolving credit facility, (B) to
reinvest in Productive Assets, or (C) a combination of prepayment, reduction and
investment permitted by the foregoing clauses (iii)(A) and (iii)(B). On the
366th day after an Asset Sale or such earlier date, if any, as the Board of
Directors of the Issuer or of such Restricted Subsidiary determines not to apply
the Net Cash Proceeds relating to such Asset Sale as set forth in clauses
(iii)(A), (iii)(B) and/or (iii)(C) of the next preceding sentence (each, a "Net
Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which
have not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in clauses (iii)(A), (iii)(B) and/or (iii)(C) of the next preceding
sentence (each a "Net Proceeds Offer Amount") shall be applied by the Issuer or
such Restricted Subsidiary to make an offer to repurchase (the "Net Proceeds
Offer") on a date not less than 30 nor more than 45 days following the
applicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis
that amount of Notes equal to the excess, if any, of (x) the Net Proceeds Offer
Amount over (y) the amount of any such Net Cash Proceeds required to be used by
the Issuer or such Restricted Subsidiary to repurchase any senior subordinated
Indebtedness of the Issuer outstanding on the Issue Date (other than
Indebtedness evidenced by the Notes) at a price equal to 100% of the principal
amount of the Notes to be repurchased, plus accrued interest to the date of
repurchase; provided, however, that if at any time any non-cash consideration
received by the Issuer or any Restricted Subsidiary of the Issuer, as the case
may be, in connection with any Asset Sale is converted into or sold or otherwise
disposed of for cash, then such conversion or disposition shall be deemed to
constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be
applied in accordance with this covenant.
Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less than
$10 million, the application of the Net Cash Proceeds constituting such Net
Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such time as
such Net Proceeds Offer Amount plus the aggregate amount of all Net Proceeds
Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date relating
to such initial Net Proceeds Offer Amount from all Asset Sales by the Issuer and
its Restricted Subsidiaries aggregates at least $10 million, at which time the
Issuer or such Restricted Subsidiary shall apply all Net Cash Proceeds
constituting all Net Proceeds Offer Amounts that have been so deferred to make a
Net Proceeds Offer (the first date the aggregate of all such deferred Net
Proceeds Offer Amounts is equal to $10 million or more shall be deemed to be a
"Net Proceeds Offer Trigger Date").
Notwithstanding the two immediately preceding paragraphs, the Issuer and
its Restricted Subsidiaries will be permitted to consummate an Asset Sale
without complying with such paragraphs to the extent (i) at least 75% of the
consideration for such Asset Sale constitutes Productive Assets and (ii) such
Asset Sale is for fair market value (as determined in good faith by the Board of
Directors of the Issuer); provided that the Net Cash Proceeds, if any, received
by the Issuer or any of its Restricted Subsidiaries in connection with any Asset
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Sale permitted to be consummated under this paragraph shall constitute Net Cash
Proceeds subject to the provisions of the two preceding paragraphs.
Caterair will not, and will not permit any of its Subsidiaries to,
consummate a Caterair Asset Sale unless (i) Caterair or the applicable
Subsidiary, as the case may be, receives consideration at the time of such
Caterair Asset Sale at least equal to the fair market value of the assets sold
or otherwise disposed of (as determined in good faith by Caterair's Board of
Directors); (ii) at least 75% of the consideration received by Caterair or such
Subsidiary, as the case may be, from such Caterair Asset Sale shall be cash or
Cash Equivalents and is received at the time of such disposition; and (iii) upon
the consummation of a Caterair Asset Sale, Caterair shall apply, or cause such
Subsidiary to apply, the Net Cash Proceeds relating to such Caterair Asset Sale
within 365 days of receipt thereof either (A) to prepay any Guarantor Senior
Debt or, in the case of any Guarantor Senior Debt under any revolving credit
facility, effect a permanent reduction in the availability under such revolving
credit facility, or, if there is no Guarantor Senior Debt outstanding, to prepay
Senior Debt or, in the case of any Senior Debt under any revolving credit
facility, effect a permanent reduction in the availability under such revolving
credit facility, (B) to repay the Caterair Promissory Note; provided that the
Issuer treats the proceeds received from such repayment as proceeds of an Asset
Sale by the Issuer in compliance with the first paragraph of this covenant, (C)
to reinvest in Productive Assets, or (D) a combination of prepayment, repayment,
reduction and investment permitted by the foregoing clauses (iii)(A), (iii)(B)
and (iii)(C). On the 366th day after a Caterair Asset Sale or such earlier date,
if any, as the Board of Directors of Caterair or of such Subsidiary determines
not to apply the Net Cash Proceeds relating to such Caterair Asset Sale as set
forth in clause (iii) of the next preceding sentence (each, a "Caterair Net
Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which
have not been applied on or before such Caterair Net Proceeds Offer Trigger Date
as permitted in clauses (iii)(A), (iii)(B), (iii)(C) and/or (iii)(D) of the next
preceding sentence (each, a "Caterair Net Proceeds Offer Amount") shall be
applied by Caterair or such Subsidiary to make an offer to repurchase (the
"Caterair Net Proceeds Offer") on a date not less than 30 nor more than 45 days
following the applicable Caterair Net Proceeds Offer Trigger Date, from all
Holders on a pro rata basis that amount of Notes equal to the excess, if any, of
(x) the Caterair Net Proceeds Offer Amount over (y) the amount of any such Net
Cash Proceeds required to be used by Caterair to repurchase any senior
subordinated Indebtedness of the Issuer outstanding on the Issue Date (other
than Indebtedness evidenced by the Notes) at a price equal to 100% of the
principal amount of the Notes to be repurchased, plus accrued interest to the
date of repurchase; provided, however, that if at any time any non-cash
consideration received by Caterair or any Subsidiary of Caterair, as the case
may be, in connection with any Caterair Asset Sale is converted into or sold or
otherwise disposed of for cash, then such conversion or disposition shall be
deemed to constitute a Caterair Asset Sale hereunder and the Net Cash Proceeds
thereof shall be applied in accordance with this covenant. Caterair shall not
resell or otherwise dispose of any Notes repurchased pursuant to a Caterair Net
Proceeds Offer, other than to the Issuer for cancellation.
Each Net Proceeds Offer or Caterair Net Proceeds Offer, as the case may be,
will be mailed to the record Holders as shown on the register of Holders within
25 days following the Net Proceeds Offer Trigger Date or Caterair Net Proceeds
Offer Trigger Date, as the case may be, with a copy to the Trustee, and shall
comply with the procedures set forth in the Indenture. Upon receiving notice of
the Net Proceeds Offer or Caterair Net Proceeds Offer, as the case may be,
Holders may elect to tender their Notes in whole or in part in integral
multiples of $1,000 in exchange for cash. To the extent Holders properly tender
Notes in an amount exceeding the Net Proceeds Offer Amount or Caterair Net
Proceeds Offer Amount, as the case may be, Notes of tendering Holders will be
repurchased on a pro rata basis (based on amounts tendered). A Net Proceeds
Offer or Caterair Net Proceeds Offer, as the case may be, shall remain open for
a period of 20 business days or such longer period as may be required by law.
The Issuer or Caterair, as the case may be, will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of Notes pursuant to a Net Proceeds
Offer or Caterair Net Proceeds Offer, as the case may be. To the extent that the
provisions of any securities laws or regulations conflict with the "Asset Sale"
provisions of the Indenture, the Issuer or Caterair, as the case may be, shall
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comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under the "Asset Sale" provisions of the
Indenture by virtue thereof.
Guarantees of Certain Indebtedness. The Issuer will not permit any of its
domestic Restricted Subsidiaries, directly or indirectly, to incur, guarantee or
secure through the granting of Liens the payment of any Indebtedness under the
Senior Bank Financing or any refunding or refinancing thereof, in each case
unless such Restricted Subsidiary, the Issuer and the Trustee execute and
deliver a supplemental indenture evidencing such Restricted Subsidiary's
Guarantee, such Guarantee to be a senior subordinated unsecured obligation of
such Restricted Subsidiary. Neither the Issuer nor any such Guarantor shall be
required to make a notation on the Notes or the Guarantees to reflect any such
subsequent Guarantee. Nothing in this covenant shall be construed to permit any
Restricted Subsidiary of the Issuer to incur Indebtedness otherwise prohibited
by the "Limitation on Incurrence of Additional Indebtedness" covenant.
Caterair will not permit any of its domestic Subsidiaries, directly or
indirectly, to incur, guarantee or secure through the granting of Liens the
payment of any Indebtedness under the Senior Bank Financing or any refunding or
refinancing thereof, in each case unless such Subsidiary, the Issuer and the
Trustee execute and deliver a supplemental indenture evidencing such
Subsidiary's Guarantee, such Guarantee to be a senior subordinated unsecured
obligation of such Subsidiary. Neither the Issuer nor any such Guarantor shall
be required to make a notation on the Notes or the Guarantees to reflect any
such subsequent Guarantee. Nothing in this covenant shall be construed to permit
any Subsidiary of Caterair to incur Indebtedness otherwise prohibited by the
"Limitation on Incurrence of Additional Indebtedness" covenant.
Conduct of Business of the Issuer and Its Restricted Subsidiaries. The
Issuer will not, and will not permit any of its Restricted Subsidiaries to,
engage in any business other than (i) the businesses in which the Issuer,
Caterair and their respective Subsidiaries and joint ventures are engaged on the
Issue Date; (ii) the businesses of (A) producing, distributing, selling or
delivering, or providing management or other services with respect to, meals or
other food products, (B) providing catering services, (C) providing goods or
services to Persons
engaged in providing transportation services, including, but not limited to,
Persons engaged in the airline or other passenger transportation business, or
(D) providing goods or services to or at, transportation terminals and other
facilities, including, but not limited to, airports, train stations, bus
stations or roadside service facilities (including, but not limited to,
providing goods or services to any Person who conducts operations at any such
facility); or (iii) any business which is determined in good faith by the
Issuer's board of directors to be similar, ancillary, complimentary or related
to, or an extension of, any business described in clause (i) or (ii) above.
Conduct of Business of Caterair. So long as any Caterair Lease or Caterair
License that is in effect on the Issue Date remains in effect, Caterair will
not, and will not permit any of its Subsidiaries to, engage in any business
other than the leasing of the Caterair Leased Property pursuant to the Caterair
Lease and the licensing of the Caterair Licensed Property pursuant to the
Caterair License; provided, however, that Caterair may continue to operate
certain of its flight kitchens if Caterair has not received as of the Issue Date
the requisite consents to lease such flight kitchens to the Issuer or a
Subsidiary of the Issuer.
Guarantor Capital Stock. The Issuer or a Subsidiary Guarantor will own all
of the Capital Stock of each Guarantor (other than Caterair).
EVENTS OF DEFAULT
The following events are defined in the Indenture as "Events of Default":
(i) the failure to pay interest on any Notes when the same becomes due and
payable and the default continues for a period of 30 days (whether or not such
payment shall be prohibited by the subordination provisions of the Indenture);
(ii) the failure to pay the principal on any Notes, when such principal becomes
due and payable, at maturity, upon redemption or otherwise (including the
failure to make a payment to repurchase Notes tendered pursuant to a Change of
Control Offer or a Net Proceeds Offer or a Caterair Net Proceeds Offer) (whether
or not such payment shall be prohibited by the subordination provisions of the
Indenture); (iii) a default in the observance or performance of any other
covenant or agreement contained in the Indenture which default continues for a
period of 45 days after the Issuer receives written notice specifying the
default (and demanding that such
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default be remedied) from the Trustee or the Holders of at least 25% of the
outstanding principal amount of the Notes; (iv) the failure to pay at final
stated maturity (giving effect to any extensions thereof) the principal amount
of any Indebtedness of (A) the Issuer, (B) Caterair, (C) any Significant
Subsidiary of the Issuer or Caterair or (D) any combination of two or more
Non-Significant Subsidiaries of the Issuer which at the time of determination
own on a combined basis more than 10% of the consolidated assets of the Issuer
(determined on a basis consistent with the definition of "Significant
Subsidiary") and such failure continues for a period of 20 days or more, or the
acceleration of the final stated maturity of any such Indebtedness (which
acceleration is not rescinded, annulled or otherwise cured within 20 days of
receipt by the Issuer, Caterair, such Significant Subsidiary or such
Non-Significant Subsidiaries, as the case may be, of notice of any such
acceleration) if, in either case, the aggregate principal amount of such
Indebtedness, together with the principal amount of any other such Indebtedness
in default for failure to pay principal at final stated maturity or which has
been accelerated, in each case with respect to which the 20-day period described
above has passed, aggregates $15 million or more at any time; (v) one or more
judgments in an aggregate amount in excess of $15 million (which are not paid or
covered by third-party insurance by financially sound insurers that have not
disclaimed coverage) shall have been rendered against the Issuer, Caterair or
any Significant Subsidiary of the Issuer or Caterair and such judgments remain
undischarged, unpaid or unstayed for a period of 60 days after such judgment or
judgments become final and non-appealable; (vi) except as permitted by the
Indenture, the Guarantee of Caterair or of a Significant Subsidiary of the
Issuer or Caterair shall be held in any judicial proceeding to be unenforceable
or invalid and such holding has become final and non-appealable or the Guarantee
of Caterair or of a Significant Subsidiary of the Issuer or Caterair shall cease
for any other reason to be in full force and effect; and (vii) certain events of
bankruptcy affecting the Issuer, Caterair or any Significant Subsidiary of the
Issuer or Caterair.
Upon the happening and during the continuance of any Event of Default
specified in the Indenture, the Trustee or the Holders of at least 25% in
principal amount of outstanding Notes may declare the principal of and accrued
interest on all the Notes to be due and payable by notice in writing to the
Issuer and the Trustee specifying the respective Event of Default and that it is
a "notice of acceleration" (the "Acceleration Notice"), and the same (i) shall
become immediately due and payable or (ii) if there are any amounts outstanding
under the Senior Bank Financing, shall become immediately due and payable upon
the first to occur of an acceleration under the Senior Bank Financing or 5
business days after receipt by the Issuer and the Representative under the
Senior Bank Financing of such Acceleration Notice but only if such Event of
Default is then continuing. If an Event of Default with respect to bankruptcy
proceedings of the Issuer occurs and is continuing, then such amount shall ipso
facto become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any holder of Notes.
The Indenture provides that, at any time after a declaration of
acceleration with respect to the Notes as described in the preceding paragraph,
the Holders of a majority in principal amount of the Notes may rescind and
cancel such declaration and its consequences (i) if the rescission would not
conflict with any judgment or decree, (ii) if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of the acceleration, (iii) to the extent the payment
of such interest is lawful, interest on overdue installments of interest and
overdue principal, which has become due otherwise than by such declaration of
acceleration, has been paid, (iv) if the Issuer has paid the Trustee its
reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances and (v) in the event of the cure or waiver of an
Event of Default of the type described in clause (vi) of the description above
of Events of Default, the Trustee shall have received an Officers' Certificate
and an Opinion of Counsel that such Event of Default has been cured or waived.
The holders of a majority in principal amount of the Notes may waive any
existing Default or Event of Default under the Indenture, and its consequences,
except a default in the payment of the principal of or interest on any Notes.
The Indenture provides that if a Default or Event of Default occurs and is
continuing and is known to the Trustee, the Trustee shall mail to each Holder of
the Notes notice of the uncured Default or Event of Default within 90 days after
it occurs. In certain circumstances, the Trustee may withhold notice if and so
long as its Board of Directors or a committee of its trust officers in good
faith determines that withholding notice is in the interest of the Holders of
the Notes. In addition, the Issuer and Caterair are each required to deliver to
the
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Trustee, within 120 days after the end of their respective fiscal year, a
certificate indicating whether the signers thereof know of any Default or Event
of Default that occurred during the previous year.
DEFEASANCE
The Indenture will cease to be of further effect as to all outstanding
Notes (except as to (i) rights of registration of transfer, substitution and
exchange of Notes, (ii) rights of Holders to receive payments of principal of,
premium, if any, and interest on the Notes and any other rights of the Holders
with respect to such amounts, (iii) the rights, obligations and immunities of
the Trustee under the Indenture and (iv) certain other specified provisions in
the Indenture (the foregoing exceptions (i) through (iv) are collectively
referred to as the "Reserved Rights")) if: (a) the Issuer irrevocably deposits,
or causes to be deposited, with the Trustee, in trust for the benefit of the
Holders pursuant to an irrevocable trust and security agreement in form and
substance reasonably satisfactory to the Trustee (i) U.S. Legal Tender, (ii)
U.S. Government Obligations or (iii) a combination thereof, in an amount
sufficient after payment of all federal, state and local taxes or other charges
or assessments in respect thereof payable by the Trustee, which through the
payment of interest and principal will provide, not later than one day before
the due date of payment in respect of the Notes, U.S. Legal Tender in an amount
which, in the opinion of a nationally recognized firm of independent certified
public accountants expressed in a written certification thereof (in form and
substance reasonably satisfactory to the Trustee) delivered to the Trustee, is
sufficient to pay the principal of, premium, if any, and interest on the Notes
then outstanding on the dates on which any such payments are due and payable in
accordance with the terms of the Indenture and of the Notes; provided that (i)
the trustee of the irrevocable trust shall have been irrevocably instructed to
pay such money or the proceeds of such U.S. Government Obligations to the
Trustee and (ii) the Trustee shall have been irrevocably instructed to apply
such money or the proceeds of such U.S. Government Obligations to the payment of
said principal and interest with respect to the Notes; (b) no Default or Event
of Default shall have occurred or be continuing on the date of such deposit and
such deposit will not result in a Default or Event of Default under the
Indenture or a breach or violation of, or constitute a default under, any other
instrument to which the Issuer or any Subsidiary of the Issuer is a party or by
which it or its property is bound; (c) the Issuer shall have delivered to the
Trustee an Opinion of Counsel from independent counsel reasonably satisfactory
to the Trustee or a tax ruling from the Internal Revenue Service to the effect
that the holders will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and defeasance and will be subject to
federal income tax in the same amounts and in the same manner and at the same
times as would have been the case if such deposit and defeasance had not
occurred; (d) the Issuer shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit, such money
or the proceeds of such U.S. Government Obligations will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally; and (e) the Issuer has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel each in form and
substance reasonably satisfactory to the Trustee, each stating that all
conditions precedent relating to the satisfaction and discharge of the Indenture
have been complied with. In addition, the Issuer may terminate all of its
obligations and the Guarantors' obligations under the Indenture (except as to
certain of the Reserved Rights) when (i) all outstanding Notes theretofore
authenticated have been delivered to the Trustee for cancellation and the Issuer
has paid or caused to be paid all sums payable under the Indenture by the Issuer
or (ii) the Issuer has called for redemption pursuant to the Indenture all of
the Notes under arrangements satisfactory to the Trustee, the amounts described
in clause (a) above have been deposited as described therein, the conditions in
clauses (i) and (ii) of the proviso to such clause (a) have been satisfied and
the certificate and opinion described in clause (e) above have been delivered.
MODIFICATION OF THE INDENTURE
From time to time, the Issuer, the Guarantors and the Trustee, without the
consent of the Holders of the Notes, may amend the Indenture for certain
specified purposes, including curing ambiguities, defects or inconsistencies, so
long as such change does not, in the opinion of the Trustee, adversely affect
the rights of any of the Holders in any material respect. In formulating its
opinion on such matters, the Trustee will be entitled to rely on such evidence
as it deems appropriate, including, without limitation, solely on an Opinion of
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Counsel. Other modifications and amendments of the Indenture may be made with
the consent of the Holders of a majority in principal amount of the then
outstanding Notes issued under the Indenture, except that (i) without the
consent of each holder of the Notes affected thereby, no amendment may: (1)
reduce the amount of Notes whose holders must consent to an amendment; (2)
reduce the rate of or change or have the effect of changing the time for payment
of interest, including defaulted interest, on any Notes; (3) reduce the
principal of or change or have the effect of changing the fixed maturity of any
Notes, or, except with respect to the matters described in clause (ii)(1) below,
change the date on which any Notes may be subject to redemption or repurchase,
or reduce the redemption or repurchase price therefor; (4) make any Notes
payable in money other than that stated in the Notes; (5) make any change in
provisions of the Indenture protecting the right of each holder of a Note to
receive payment of principal of and interest on such Note on or after the due
date thereof or to bring suit to enforce such payment, or permitting holders of
a majority in principal amount of a class of Notes to waive Defaults or Events
of Default (other than Defaults or Events of Default with respect to the payment
of principal of or interest on the Notes); or (6) modify the subordination
provisions of the Indenture to adversely affect the Holders of Notes, and (ii)
without the consent of the Holders of at least 75% in aggregate principal amount
of the then outstanding Notes issued under the Indenture, no amendment may: (1)
amend, change or modify the obligation of (A) the Issuer to make and consummate
a Change of Control Offer in the event of a Change of Control that has been
consummated or make and consummate a Net Proceeds Offer with respect to any
Asset Sale that has been consummated or modify any of the provisions or
definitions with respect thereto or (B) Caterair to make and consummate a
Caterair Net Proceeds Offer with respect to any Caterair Asset Sale that has
been consummated or modify any of the provisions or definitions with respect
thereto; or (2) release Caterair or any other Guarantor which is a Significant
Subsidiary of the Issuer or Caterair from any of its obligations under its
Guarantee or the Indenture other than in accordance with the terms of such
Guarantee and the Indenture.
ADDITIONAL INFORMATION
The Indenture provides that the Issuer will deliver to the Trustee within
15 days after the filing of the same with the Commission, copies of the
quarterly and annual reports and of the information, documents and other
reports, if any, which the Issuer is required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act. The Indenture further
provides that, notwithstanding that the Issuer may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Issuer
will provide the Trustee, Holders and qualified institutional buyers (as defined
in Rule 144A under the Securities Act) which request such information from the
Issuer and indicate a bona fide interest in purchasing Notes with consolidated
financial statements of the Issuer and a related "Management's Discussion and
Analysis of Financial Condition and Results of Operations" comparable to those
which would have been required to appear in quarterly or annual reports of the
Issuer and, to holders of Private Notes, any other information set forth in Rule
144A(d)(4) or any successor provision under the Securities Act. In addition, the
Issuer will provide the Trustee and Holders with unaudited combined financial
data of the Issuer and the Guarantors, substantially in the form provided under
the caption "Summary -- Summary Unaudited Pro Forma Financial Data" (excluding
the information under the caption "Operating Statistics") in this Prospectus,
for each fiscal year of the Issuer and for the first three fiscal quarters of
each fiscal year of the Issuer. The Issuer will also comply with the other
provisions of TIA sec. 314(a).
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
such terms, as well as any other terms used herein for which no definition is
provided.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of
the Issuer or a Subsidiary of Caterair, as the case may be, or at the time it
merges or consolidates with the Issuer or any Subsidiary of the Issuer or
Caterair or any Subsidiary of Caterair, as the case may be, or assumed in
connection with the acquisition of assets from such Person and not incurred by
such Person in connection with, or in anticipation or contemplation of, such
Person
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becoming a Restricted Subsidiary of the Issuer or a Subsidiary of Caterair, as
the case may be, or such acquisition, merger or consolidation.
"Adjusted Net Assets" of a Guarantor at any date means the lesser of the
amount by which (x) the fair value of the property of such Guarantor exceeds the
total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date), but excluding liabilities under its
Guarantee, of such Guarantor at such date and (y) the present fair salable value
of the assets of such Guarantor at such date exceeds the amount that will be
required to pay the probable liability of such Guarantor on its debts (after
giving effect to all other fixed and contingent liabilities incurred or assumed
on such date and after giving effect to any collection from any Subsidiary of
such Guarantor in respect of the obligations of such Subsidiary under the
Guarantee of such Guarantor), excluding Subordinated Indebtedness and debt in
respect of its Guarantee as they become absolute and matured.
"Affiliate" means a Person who directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with,
another Person. The term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise.
"Airline Catering Joint Venture" means any joint venture, partnership,
limited liability company or other Person engaged in the business of providing
airline catering services.
"Asset Acquisition" means (a) an Investment by the Issuer or any Restricted
Subsidiary of the Issuer in any other Person pursuant to which such Person shall
become a Restricted Subsidiary of the Issuer or a Subsidiary of any Restricted
Subsidiary of the Issuer, or shall be merged with or into the Issuer or any
Restricted Subsidiary of the Issuer, or (b) the acquisition by the Issuer or any
Restricted Subsidiary of the Issuer of the assets of any Person which constitute
all or substantially all of the assets of such Person, any division or line of
business of such Person or any other properties or assets of such Person other
than in the ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than pursuant to operating leases of real or personal
property entered into in the ordinary course of business), assignment or other
transfer for value by the Issuer or any Restricted Subsidiary of the Issuer
(including any Sale and Leaseback Transaction) to any Person other than the
Issuer or a Restricted Subsidiary of the Issuer of (a) any Capital Stock of any
Restricted Subsidiary of the Issuer or (b) any other property or assets of the
Issuer or any Restricted Subsidiary of the Issuer other than in the ordinary
course of business; provided, however, that an Asset Sale shall not include (i)
a transaction or series of related transactions for which the Issuer or its
Restricted Subsidiaries receive aggregate consideration of less than $1 million,
(ii) the sale or discount, in each case without recourse (other than recourse
for breach of a representation or warranty), of accounts receivable arising in
the ordinary course of business, but only in connection with the compromise or
collection thereof, (iii) the factoring or securitization of accounts receivable
arising in the ordinary course of business, (iv) the sale, lease, conveyance,
disposition or other transfer of all or substantially all of the assets of the
Issuer as permitted under the "Merger, Consolidation and Sale of Assets"
covenant and (v) the sale or other disposition in the ordinary course of
business of equipment or materials which, in the reasonable judgment of such
Person, are obsolete, worn out or otherwise no longer useful in the conduct of
such Person's business.
"Australian Assets" means any of the shares of Caterair Airport Services
Pty Limited owned by Caterair Australia Pty Limited which Qantas Flight Catering
Holdings Limited has the option to acquire pursuant to the exercise of the call
options respectively described in clauses 19A, 19B and 19C of the Restated
Shareholders Deed made on December 18, 1996 among Caterair Airport Services Pty
Limited, Caterair Australia Pty Limited, CII, OFSI, Qantas Airways Limited and
Qantas Flight Catering Holdings Limited.
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"Capitalized Lease Obligation" means, as to any Person, the obligations of
such Person under a lease that are required for financial reporting purposes to
be classified and accounted for as capital lease obligations
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under GAAP and, for purposes of this definition, the amount of such obligations
at any date shall be the capitalized amount of such obligations at such date,
determined in accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated) of corporate stock, including each class of common stock
and preferred stock of such Person and (ii) with respect to any Person that is
not a corporation, any and all partnership or other equity interests of such
Person.
"Cash Equivalents" means (i) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation or Moody's Investors
Service, Inc.; (iii) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from Standard & Poor's Corporation or at least P-1 from Moody's
Investors Service, Inc.; (iv) time deposits, certificates of deposit or bankers'
acceptances (or, with respect to foreign banks, similar instruments) maturing
within one year from the date of acquisition thereof issued by any bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia or any U.S. branch of a foreign bank having at the date
of acquisition thereof combined capital and surplus of not less than $200
million; provided that instruments issued by banks not having one of the two
highest ratings obtainable from either Standard & Poor's Corporation or Moody's
Investors Services, Inc. shall not constitute "Cash Equivalents" for purposes of
the subordination provisions of the Indenture; (v) repurchase obligations with a
term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; (vi) except for purposes of the
subordination provisions of the Indenture, investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (v) above; and (vii) overnight deposits and
demand deposits maintained in the ordinary course of business.
"Caterair Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than pursuant to operating leases of real or
personal property entered into in the ordinary course of business), assignment
or other transfer for value by Caterair or any Subsidiary of Caterair (including
any Sale and Leaseback Transaction) to any Person other than Caterair or a
Wholly Owned Subsidiary of Caterair of (a) any Capital Stock of any Subsidiary
of Caterair or (b) any other property or assets of Caterair or any Subsidiary of
Caterair other than in the ordinary course of business; provided, however, that
Caterair Asset Sale shall not include (i) a transaction or series of related
transactions for which Caterair or its Subsidiaries receive aggregate
consideration of less than $1 million, (ii) the sale or discount, in each case
without recourse (other than recourse for breach of a representation or
warranty), of accounts receivable arising in the ordinary course of business,
but only in connection with the compromise or collection thereof, (iii) the
factoring or securitization of accounts receivable arising in the ordinary
course of business, (iv) the sale or other disposition in the ordinary course of
business of equipment or materials which, in the reasonable judgment of such
Person, are obsolete, worn out or otherwise no longer useful in the conduct of
such Person's business and (v) the sale of assets to the Issuer or any
Restricted Subsidiary of the Issuer in connection with the exercise of the
purchase options for the Caterair Leased Property pursuant to the Caterair Lease
and the Caterair Licensed Property pursuant to the Caterair License.
"Caterair Lease" means collectively the lease and sublease agreements
pursuant to which the Caterair Leased Property is leased to the Issuer or
Subsidiaries of the Issuer.
"Caterair Leased Property" means (i) the property and assets listed on
Schedule 2.2(k) to the Master Agreement and (ii) all other property and assets
acquired by Caterair and substantially contemporaneously with such acquisition
leased by Caterair to the Issuer or Subsidiaries of the Issuer.
"Caterair License" means collectively the license agreements pursuant to
which the Caterair Licensed Property is licensed to the Issuer or Subsidiaries
of the Issuer.
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"Caterair Licensed Property" means (i) the property and assets listed on
Schedule 2.2(o) to the Master Agreement and (ii) all other property and assets
acquired by Caterair and substantially contemporaneously with such acquisition
licensed by Caterair to the Issuer or Subsidiaries of the Issuer.
"Caterair Promissory Note" means the 8% Pay-in-Kind Promissory Note due
2001 of Caterair.
"Caterair Tax Sharing Agreement" means the Income Tax Sharing Agreement
dated December 15, 1989, among Marriott Corporation, Caterair Holdings and
Caterair.
"Change of Control" means the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Issuer or OFSI, as the case may be, to any Person or group of related Persons
for purposes of Section 13(d) of the Exchange Act (a "Group") (whether or not
otherwise in compliance with the provisions of the Indenture), other than a
Permitted Holder or Holders; or (ii) if the Permitted Holders do not own,
directly or indirectly, beneficially (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act) or of record, shares representing more than 50% of the
aggregate ordinary voting power represented by the issued and outstanding
Capital Stock of the Issuer or OFSI, as the case may be, (A) any Person or
Group, other than a Permitted Holder or Holders, shall become the owner,
directly or indirectly, beneficially (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act) or of record, of shares representing more than 50% of the
aggregate ordinary voting power represented by the issued and outstanding
Capital Stock of the Issuer or OFSI, as the case may be, or (B) the replacement
of a majority of the Board of Directors of either the Issuer or OFSI, as the
case may be, over a two-year period from the directors who constituted the Board
of Directors of such Person at the beginning of such period, and such
replacement shall not have been approved by a vote of at least a majority of the
Board of Directors of such Person then still in office who either were members
of the Board of Directors of such Person at the beginning of such period or
whose election as a member of the Board of Directors of such Person was
previously so approved.
"Consolidated Amortization Expense" means, with respect to any Person for
any period, the consolidated amortization expense of such Person for such
period, determined on a consolidated basis for such Person and its Restricted
Subsidiaries (and, in the case of the Issuer, Caterair and its Subsidiaries) in
conformity with GAAP.
"Consolidated Depreciation Expense" means, with respect to any Person for
any period, the consolidated depreciation expense of such Person for such
period, determined on a consolidated basis for such Person and its Restricted
Subsidiaries (and, in the case of the Issuer, Caterair and its Subsidiaries) in
conformity with GAAP.
"Consolidated EBITDA" means, with respect to any Person for any period,
the sum, without duplication, of (i) Consolidated Net Income, (ii) to the extent
Consolidated Net Income has been reduced thereby, all income taxes of such
Person and its Restricted Subsidiaries (and, in the case of the Issuer, Caterair
and its Subsidiaries) paid or accrued in conformity with GAAP for such period
(other than income taxes attributable to extraordinary or nonrecurring gains or
losses), (iii) Consolidated Interest Expense, (iv) Consolidated Amortization
Expense, (v) Consolidated Depreciation Expense and (vi) Consolidated Non-cash
Charges.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of
such Person for the Four Quarter Period. In addition to and without limitation
of the foregoing, for purposes of this definition, "Consolidated EBITDA" and
"Consolidated Fixed Charges" shall be calculated after giving effect on a pro
forma basis for the period of such calculation to (i) the incurrence or
repayment of any Indebtedness (excluding the incurrence of Indebtedness under
any revolving credit facility and including repayment of Indebtedness under any
revolving credit facility only to the extent that such repayment effects a
permanent reduction in the availability thereunder) of such Person or any of its
Restricted Subsidiaries (and, in the case of the Issuer, Caterair and its
Subsidiaries, other than Indebtedness between the Issuer or any Subsidiary of
the Issuer and Caterair or any Subsidiary of Caterair) (and the application of
the proceeds thereof) giving rise to the need to
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make such calculation and any incurrence or repayment of other Indebtedness (and
the application of the proceeds thereof) at any time subsequent to the first day
of the Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the proceeds
thereof), occurred on the first day of the Four Quarter Period and (ii) any
Asset Sales or Asset Acquisitions (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of such
Person or one of its Restricted Subsidiaries (including any Person who becomes a
Restricted Subsidiary as a result of the Asset Acquisition) incurring, assuming
or otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA (including any pro forma expense and cost reductions
calculated on a basis consistent with Regulation S-X under the Securities Act)
attributable to the assets which are the subject of the Asset Acquisition or
Asset Sale during the Four Quarter Period) occurring during the Four Quarter
Period or at any time subsequent to the last day of the Four Quarter Period and
on or prior to the Transaction Date, as if such Asset Sale or Asset Acquisition
(including the incurrence, assumption or liability for any such Indebtedness or
Acquired Indebtedness) occurred on the first day of the Four Quarter Period. If
such Person or any of its Restricted Subsidiaries directly or indirectly
guarantees Indebtedness of a third Person, the preceding sentence shall give
effect to the incurrence of such guaranteed Indebtedness as if such Person or
any Restricted Subsidiary of such Person had directly incurred or otherwise
assumed such guaranteed Indebtedness. Furthermore, in calculating "Consolidated
Fixed Charges" for purposes of determining the denominator (but not the
numerator) of this "Consolidated Fixed Charge Coverage Ratio," (1) interest on
outstanding Indebtedness determined on a fluctuating basis as of the Transaction
Date and which will continue to be so determined thereafter shall be deemed to
have accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Transaction Date; (2) if interest on any
Indebtedness actually incurred on the Transaction Date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate in
effect on the Transaction Date will be deemed to have been in effect during the
Four Quarter Period; (3) notwithstanding clause (1) above, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest is
covered by agreements relating to Interest Swap Obligations, shall be deemed to
accrue at the rate per annum (not in excess of the maximum possible rate if such
agreement is an interest rate cap, interest rate collar or similar agreement)
resulting after giving effect to the operation of such agreements; and (4) the
permanent retirement of any Indebtedness during the Four Quarter Period or at
any time subsequent to the last day of the Four Quarter Period and on or prior
to the Transaction Date shall be given effect as if it occurred at the beginning
of such Four Quarter Period.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense
(including amortization or write-off of debt issuance costs), plus (ii) the
product of (x) the amount of all dividend payments on any series of Preferred
Stock of such Person (other than dividends paid in common stock) paid, accrued
or scheduled to be paid or accrued during such period and (y) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current effective consolidated federal, state and local tax rate of such Person
expressed as a decimal.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum, without duplication, of (i) the aggregate of all cash and
non-cash interest expense with respect to all outstanding Indebtedness of such
Person and its Restricted Subsidiaries (and, in the case of the Issuer, Caterair
and its Subsidiaries), including the net costs associated with Interest Swap
Obligations and capitalized interest, for such period determined on a
consolidated basis in conformity with GAAP; and (ii) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by such Person and its Restricted Subsidiaries (and, in the case of the
Issuer, Caterair and its Subsidiaries) during such period as determined on a
consolidated basis in accordance with GAAP. In addition, in calculating the
Consolidated Interest Expense of the Issuer, interest expense with respect to
Indebtedness between the Issuer or any Subsidiary of the Issuer and Caterair or
any Subsidiary of Caterair shall be excluded therefrom.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate net income (or loss) of such Person and its Subsidiaries (and, in
the case of the Issuer, Caterair) for such period on a consolidated basis,
determined in accordance with GAAP; provided that there shall be excluded
therefrom (a) gains and losses from Asset Sales (without regard to the $1
million limitation set forth in the definition
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thereof) and Caterair Asset Sales (without regard to the $1 million limitation
set forth in the definition thereof) or abandonments or reserves relating
thereto and the related tax effects, (b) items classified as extraordinary or
nonrecurring gains and losses, and the related tax effects according to GAAP,
(c) the net income (or loss) of any Person acquired in a pooling of interests
transaction accrued prior to the date it becomes a Subsidiary of such first
Person or is merged or consolidated with such first Person or any Subsidiary of
such first Person, (d) the net income of any Subsidiary of such Person to the
extent that the declaration of dividends or similar distributions by that
Subsidiary of that income is restricted by contract, operation of law or
otherwise, (e) the net loss of any Person, other than a Restricted Subsidiary of
such first Person and (f) the net income of any Person, other than a Restricted
Subsidiary of such first Person, in which such first Person has an equity
interest, except to the extent of cash dividends or distributions paid to such
first Person or a Restricted Subsidiary of such first Person. Notwithstanding
the foregoing, in calculating the Consolidated Net Income of the Issuer, (i)
charges incurred by the Issuer in connection with the consummation of the
transactions contemplated by the Master Agreement (including, without
limitation, (A) severance payments and other employee costs and (B) external
consulting services primarily associated with the implementation of labor
savings programs) shall not be deducted therefrom, (ii) the goodwill and the
increases in amortization and depreciation resulting from the consummation of
the transactions contemplated by the Master Agreement shall not be deducted
therefrom and (iii) interest payments or accruals on the Caterair Promissory
Note shall not be taken into account.
"Consolidated Non-cash Charges" means, with respect to any Person for any
period, the aggregate depreciation, amortization and other non-cash expenses of
such Person and its Restricted Subsidiaries (and, in the case of the Issuer,
Caterair and its Subsidiaries) reducing Consolidated Net Income of such Person
and its Restricted Subsidiaries (and, in the case of the Issuer, Caterair and
its Subsidiaries) for such period, determined on a consolidated basis in
conformity with GAAP (excluding any such charges constituting an extraordinary
item or loss or any such charge which requires an accrual of or a reserve for
cash charges for any future period).
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement to which the Issuer or any
Restricted Subsidiary of the Issuer or Caterair or any Subsidiary of Caterair,
as the case may be, is a party designed to protect the Issuer or any Restricted
Subsidiary of the Issuer or Caterair or any Subsidiary of Caterair, as the case
may be, against fluctuations in currency values.
"Default" means an event or condition the occurrence of which is, or with
the lapse of time or the giving of notice or both would be, an Event of Default.
"Designated Senior Debt" means (i) Indebtedness under or in respect of the
Senior Bank Financing and (ii) any other Indebtedness constituting Senior Debt
which, at the time of determination, has an aggregate principal amount of at
least $10 million and is specifically designated in the instrument evidencing
such Senior Debt as "Designated Senior Debt" by the Issuer.
"Disqualified Capital Stock" means any Capital Stock which, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event (other than an event which
would constitute a Change of Control), matures (excluding any maturity as the
result of an optional redemption by the issuer thereof) or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the sole option of the holder thereof (except, in each case, upon the
occurrence of a Change of Control), in whole or in part, on or prior to the
final maturity date of the Notes.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the date of the Indenture, including, without
limitation, those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession.
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"Guarantors" means (i) each of Sky Chefs, CII and Caterair, (ii) each
Restricted Subsidiary of the Issuer or Subsidiary of Caterair which becomes a
guarantor of the Notes in compliance with the provisions set forth under
"-- Certain Covenants -- Guarantees of Certain Indebtedness" and each Subsidiary
of the Issuer identified in the last paragraph under the caption "-- Guarantees"
and (iii) each Restricted Subsidiary of the Issuer or Subsidiary of Caterair
executing a supplemental indenture in which such Restricted Subsidiary or
Subsidiary, as the case may be, agrees to be bound by the terms of the Notes and
the Indenture.
"Indebtedness" means with respect to any Person, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all Capitalized Lease Obligations of such Person, (iv) all obligations of such
Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all obligations under any title retention
agreement (but excluding trade accounts payable and accrued expenses arising in
the ordinary course of business), (v) all obligations for the reimbursement of
any obligor on any letter of credit, banker's acceptance or similar credit
transaction, (vi) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (i) through (v) above and clause (viii)
below, (vii) all obligations of any other Person of the type referred to in
clauses (i) through (vi) which are secured by any lien on any property or asset
of such Person, the amount of such obligation being deemed to be the amount of
the obligation so secured, (viii) all obligations under currency agreements and
interest swap agreements of such Person, and (ix) all Disqualified Capital Stock
issued by such Person with the amount of Indebtedness represented by such
Disqualified Capital Stock being equal to the greater of its voluntary or
involuntary liquidation preference and its maximum fixed repurchase price, but
excluding accrued dividends, if any. For purposes hereof, the "maximum fixed
repurchase price" of any Disqualified Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant to
the Indenture, and if such price is based upon, or measured by, the fair market
value of such Disqualified Capital Stock, such fair market value shall be
determined reasonably and in good faith by the Board of Directors of the issuer
of such Disqualified Capital Stock. The amount of Indebtedness of any Person at
any date shall be the outstanding principal amount of all unconditional
obligations described above, as such amount would be reflected on a balance
sheet prepared in conformity with GAAP, and the maximum liability at such date
of such Person for any contingent obligations described above.
"Interest Swap Obligations" means the obligations of any Person, pursuant
to any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Person calculated by
applying a fixed or a floating rate of interest on the same notional amount.
"Investment" means, with respect to any Person any direct or indirect loan
or other extension of credit (including, without limitation, a guarantee) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness issued
by, any Person. "Investment" shall exclude extensions of trade credit by the
Issuer and its Restricted Subsidiaries and Caterair and its Subsidiaries on
commercially reasonable terms in accordance with normal trade practices of the
Issuer and its Restricted Subsidiaries or Caterair and its Subsidiaries, as the
case may be. In no event shall this definition of "Investment" include payments
by the Issuer to a trust established in connection with a Voluntary Employees'
Beneficiary Association (as referred to in Section 501(c)(9) of the Internal
Revenue Code of 1986). For the purposes of the "Limitation on Restricted
Payments" covenant, (i) an "Investment" shall include and be valued at the fair
market value of the net assets of any Restricted Subsidiary of the Issuer at the
time that such Restricted Subsidiary is designated an Unrestricted Subsidiary of
the Issuer and shall exclude the fair market value of the net assets of any
Unrestricted Subsidiary of the Issuer at the time that such Unrestricted
Subsidiary is designated a Restricted Subsidiary of the Issuer and (ii) the
amount of any Investment shall be the original cost of such Investment plus the
cost of all additional Investments by the Issuer or any Restricted Subsidiary of
the Issuer or Caterair or any Subsidiary of Caterair, as the case may be,
without any adjustments for increases or
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decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment, reduced by the payment of dividends or distributions (including tax
sharing payments) in connection with such Investment or any other amounts
received in respect of such Investment, to the extent constituting a return on
capital in conformity with GAAP.
"Issue Date" means the date of first issuance of the Private Notes under
the Indenture.
"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof and any agreement to give
any security interest, but excluding operating leases of real or personal
property).
"Net Cash Proceeds" means, (i) with respect to any Asset Sale or Caterair
Asset Sale, as the case may be, the proceeds in the form of cash or Cash
Equivalents including payments in respect of deferred payment obligations when
received in the form of cash or Cash Equivalents (other than the portion of any
such deferred payment constituting interest) received by the Issuer or any
Restricted Subsidiary of the Issuer or Caterair or any Subsidiary of Caterair,
as the case may be, from such Asset Sale or Caterair Asset Sale, as the case may
be, net of (a) out-of-pocket expenses and fees relating to such Asset Sale or
Caterair Asset Sale, as the case may be (including, without limitation, legal,
accounting and investment banking fees and sales commissions), (b) any and all
taxes paid or payable after taking into account any reduction in consolidated
tax liability due to available tax credits or deductions and any tax sharing
arrangements, (c) repayment of Indebtedness that is required to be repaid in
connection with such Asset Sale or Caterair Asset Sale, as the case may be, (d)
any portion of cash proceeds which the Issuer or Caterair, as the case may be,
determines in good faith should be reserved for post-closing adjustments or
indemnities, it being understood and agreed that on the day that all such
post-closing adjustments or indemnities have been determined, the amount (if
any) by which the reserved amount in respect of such Asset Sale or Caterair
Asset Sale, as the case may be, exceeds the actual post-closing adjustments or
indemnities payable by the Issuer or any Restricted Subsidiary of the Issuer or
Caterair or any Subsidiary of Caterair, as the case may be, shall constitute Net
Cash Proceeds on such date or (ii) with respect to the sale of Capital Stock by
any Person not constituting an Asset Sale or Caterair Asset Sale, as the case
may be, the aggregate net cash proceeds received by such Person after payment of
expenses, commissions and other similar charges incurred in connection
therewith.
"Non-Significant Subsidiary" of any Person means any Restricted Subsidiary
of such Person which at the time of determination is not a Significant
Subsidiary of such Person.
"Obligations" means all obligations for, or guaranteeing the payment of,
principal, premium, interest, penalties, fees, indemnifications, reimbursements,
damages and other liabilities payable under the documentation governing any
Indebtedness, without duplication.
"OFSI Tax Sharing Agreement" means the Tax Sharing Agreement, dated the
Issue Date, among OFSI, the Issuer, Sky Chefs and CII.
"Permitted Holder" means (i) Lufthansa, (ii) LSG/Lufthansa, (iii) Gerald W.
Schwartz, (iv) Onex and/or (v) Oncap Holdings Corp.
"Permitted Indebtedness" means, without duplication, (i) the Notes, (ii)
the Guarantees, (iii) Indebtedness incurred pursuant to the Senior Bank
Financing, the aggregate outstanding principal amount of which shall not at any
time exceed the sum of the aggregate commitments pursuant to the Senior Bank
Financing as in effect on the Issue Date (A) less the amount of all mandatory
principal payments actually made in respect of the term loan thereunder and (B)
reduced by any required repayments (which are accompanied by a corresponding
permanent commitment reduction) thereunder actually effected in satisfaction of
the application of the Net Cash Proceeds requirement described under the
"Limitation on Asset Sales" covenant, (iv) other Indebtedness of the Issuer,
Caterair and their respective Subsidiaries outstanding on the Issue Date, (v)
Interest Swap Obligations covering Indebtedness of the Issuer, Caterair or any
of their respective Subsidiaries; provided that any Indebtedness to which any
such Interest Swap Obligations correspond is otherwise permitted to be incurred
under the Indenture; provided, further, that such Interest Swap Obligations are
entered into, in the judgment of the Issuer or Caterair, as the case may be, to
protect the Issuer or any Subsidiary of the Issuer or Caterair or any Subsidiary
of Caterair, as the case may be, from fluctuations in interest rates on their
respective outstanding Indebtedness, (vi) Indebtedness under Currency
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Agreements, (vii) (A) intercompany Indebtedness owed by the Issuer to any Wholly
Owned Restricted Subsidiary of the Issuer or by any Restricted Subsidiary of the
Issuer to the Issuer or any Wholly Owned Restricted Subsidiary of the Issuer,
(B) intercompany Indebtedness owed by Caterair to any Wholly Owned Subsidiary of
Caterair or by any Subsidiary of Caterair to Caterair or any Wholly Owned
Subsidiary of Caterair and (C) Indebtedness between the Issuer or any Wholly
Owned Restricted Subsidiary of the Issuer, on the one hand, and Caterair or any
Wholly Owned Subsidiary of Caterair, on the other hand, (viii) Acquired
Indebtedness to the extent the Issuer could have incurred such Indebtedness in
accordance with the "Limitation on Incurrence of Additional Indebtedness"
covenant, (ix) (A) performance bonds, completion guarantees and similar
obligations (exclusive of obligations for the payment of borrowed money), (B)
guarantees pursuant to the "Guarantees of Certain Indebtedness" covenant and
(C)(1) guarantees by the Issuer or any Wholly Owned Restricted Subsidiary of the
Issuer of Indebtedness of Caterair or any Wholly Owned Subsidiary of Caterair,
(2) guarantees by Caterair or any Wholly Owned Subsidiary of Caterair of
Indebtedness of the Issuer or any Wholly Owned Restricted Subsidiary of the
Issuer, (3) guarantees by the Issuer and its Wholly Owned Restricted
Subsidiaries of each other's Indebtedness and (4) guarantees by Caterair and its
Wholly Owned Subsidiaries of each other's Indebtedness; provided that in the
case of each guarantee of Indebtedness pursuant to clauses(C)(1), (C)(2), (C)(3)
or (C)(4), such Indebtedness is incurred in accordance with the provisions of
the Indenture, (x) in addition to Capitalized Lease Obligations permitted under
any other clause of this definition, purchase money Indebtedness and
Indebtedness evidenced by Capitalized Lease Obligations not to exceed an
aggregate of $10 million at any one time outstanding, (xi) any refinancing,
modification, replacement, renewal, restatement, refunding, deferral, extension,
substitution, supplement, reissuance or resale of existing or future
Indebtedness, including Capitalized Lease Obligations incurred after the
repayment of all or a portion of the Capitalized Lease Obligations outstanding
as of the Issue Date so long as the aggregate amount of Capitalized Lease
Obligations incurred and outstanding at any time pursuant to clause (iv) above
and this clause (xi) does not exceed the amount of Capitalized Lease Obligations
outstanding on the Issue Date, and any additional Indebtedness incurred to pay
premiums required by the instruments governing such existing or future
Indebtedness as in effect at the time of issuance thereof ("Required Premiums")
and fees in connection therewith; provided that any such event shall not (1)
result in an increase in the aggregate principal amount of Permitted
Indebtedness (except to the extent such increase is a result of a simultaneous
incurrence of additional Indebtedness (A) to pay Required Premiums and related
fees or (B) otherwise permitted to be incurred under the Indenture) of the
Issuer, Caterair and their respective Subsidiaries and (2) create Indebtedness
with a Weighted Average Life to Maturity at the time such Indebtedness is
incurred that is less than the Weighted Average Life to Maturity at such time of
the Indebtedness being refinanced, modified, replaced, renewed, restated,
refunded, deferred, extended, substituted, supplemented, reissued or resold
(except that this subclause (2) will not apply in the event the Indebtedness
being refinanced, modified, replaced, renewed, restated, refunded, deferred,
extended, substituted, supplemented, reissued or resold was originally incurred
in reliance upon clause (iii), (xi) or (xiii) of this definition), (xii)
Indebtedness incurred in connection with the exercise of the purchase options
for the Caterair Leased Property pursuant to the Caterair Lease and the Caterair
Licensed Property pursuant to the Caterair License; provided that any payment
made to Caterair in connection with the exercise of such options is used by
Caterair to prepay Guarantor Senior Debt or, if there is no Guarantor Senior
Debt outstanding, to prepay Senior Debt and/or to repay the Caterair Promissory
Note; provided that if Caterair elects to repay the Caterair Promissory Note,
the Issuer immediately uses the proceeds received from such repayment to prepay
Senior Debt, and (xiii) additional Indebtedness of the Issuer, Caterair and
Restricted Subsidiaries of the Issuer in an aggregate principal amount not to
exceed $75 million at any one time outstanding (which amount may, but need not,
be incurred in whole or in part under the Senior Bank Financing).
"Permitted Investments" means (i)(A) Investments by the Issuer or any
Restricted Subsidiary of the Issuer in, or for the benefit of, any Restricted
Subsidiary of the Issuer (whether existing on the Issue Date or created
thereafter and including Investments in any Person, if after giving effect to
such Investment, such Person would be a Restricted Subsidiary of the Issuer) and
Investments in, or for the benefit of, the Issuer by any Restricted Subsidiary
of the Issuer and (B) Investments by Caterair in, or for the benefit of, any
Wholly Owned Subsidiary of Caterair and Investments in, or for the benefit of,
Caterair by any Subsidiary of Caterair,
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(ii) cash and Cash Equivalents, (iii) Investments existing on the Issue Date,
except for Investments in Restricted Subsidiaries of the Issuer which shall be
governed by clause (i)(A) above, (iv) Investments in securities of trade
creditors or customers received pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of such trade creditors or
customers, (v) loans and advances by the Issuer and its Subsidiaries to their
respective employees (A) the proceeds of which are used to purchase common stock
of OFSI and which proceeds are contributed by OFSI to the Issuer (which
contribution shall not be included as a capital contribution for purposes of
clause (iii)(z) of the first paragraph of the "Limitation on Restricted
Payments" covenant) or (B) in the ordinary course of business, which loans or
advances do not exceed $3 million at any one time outstanding, (vi) the
Guarantees, (vii) any Investment that qualifies as Permitted Indebtedness,
(viii) Investments by the Issuer or any Restricted Subsidiary of the Issuer in
Unrestricted Subsidiaries of the Issuer or in other Persons in an amount not to
exceed $30 million at any one time outstanding, (ix)(A) Investments by the
Issuer or any Restricted Subsidiary of the Issuer in Caterair or any Wholly
Owned Subsidiary of Caterair and (B) Investments by Caterair or any Subsidiary
of Caterair in the Issuer or any Restricted Subsidiary of the Issuer, (x)
Investments received by the Issuer or any Restricted Subsidiary of the Issuer or
Caterair or any Subsidiary of Caterair, as the case may be, as consideration for
asset sales, including Asset Sales or Caterair Asset Sales; provided that in the
case of an Asset Sale or Caterair Asset Sale, such Asset Sale or Caterair Asset
Sale is effected in compliance with the "Limitation on Asset Sales" covenant and
(xi) in addition to Investments permitted under clause (viii) above, Investments
in Unrestricted Subsidiaries that are engaged in the business of providing
airline catering services and Airline Catering Joint Ventures in an aggregate
amount not to exceed $50 million at any one time outstanding.
"Permitted Liens" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Issuer or its Restricted Subsidiaries or
Caterair or its Subsidiaries, as the case may be, shall have set aside on
its books such reserves as may be required in conformity with GAAP;
(ii) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business, as well as deposits to secure
each of the foregoing, for sums not yet delinquent more than 60 days or
being contested in good faith, if such reserve or other appropriate
provision, if any, as shall be required by GAAP for financial reporting
purposes shall have been made in respect thereof;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, including any Lien securing letters of
credit issued in the ordinary course of business consistent with past
practice in connection therewith, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(iv) judgment Liens not giving rise to an Event of Default;
(v) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Issuer
and its Restricted Subsidiaries, taken as a whole, or of Caterair and its
Subsidiaries, taken as a whole, as the case may be;
(vi) any interest or title of a lessor under any Capitalized Lease
Obligation and precautionary filings made for informational purposes in
connection with true leases, consignments and similar arrangements;
(vii) purchase money Liens to finance property or assets of the Issuer
or any Restricted Subsidiary of the Issuer or Caterair or any Subsidiary of
Caterair, as the case may be, acquired in the ordinary course of business;
provided, however, that (A) the related purchase money Indebtedness shall
not exceed the cost of such property or assets and shall not be secured by
any property or assets of the Issuer or any Restricted Subsidiary of the
Issuer or Caterair or any Subsidiary of Caterair, as the case may be, other
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than the property and assets so acquired and (B) the Lien securing such
Indebtedness shall be created within 90 days of such acquisition;
(viii) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment, or storage of such inventory or other
goods;
(ix) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(x) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual, or warranty requirements of the Issuer
or any Restricted Subsidiary of the Issuer or Caterair or any Subsidiary of
Caterair, as the case may be, including rights of offset and set-off;
(xi) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under the
Indenture;
(xii) Liens securing Indebtedness under Currency Agreements;
(xiii) Liens existing on the Issue Date, together with any Liens
securing Indebtedness incurred in reliance on clause (xi) of the definition
of Permitted Indebtedness; provided that the Liens securing the refinancing
Indebtedness shall not extend to property other than that pledged under the
Liens securing the Indebtedness being refinanced;
(xiv) Liens securing Indebtedness incurred in reliance on clause
(xiii) of the definition of Permitted Indebtedness;
(xv) Liens in favor of the Trustee to secure the Issuer's payment
obligations to the Trustee; and
(xvi) non-consensual Liens which do not individually or in the
aggregate materially detract from the value or transferability of the
property or assets of the Issuer, any Restricted Subsidiary of the Issuer,
Caterair or any Subsidiary of Caterair, or materially impair the use of any
such property or assets in the operation of the respective businesses of
the Issuer, any Restricted Subsidiary of the Issuer, Caterair or any
Subsidiary of Caterair.
"Person" means an individual, partnership, corporation, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.
"Plan of Liquidation" means, with respect to any Person, a plan that
provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously, in phases or
otherwise) (i) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of such Person otherwise than as an entirety or
substantially as an entirety and (ii) the distribution of all or substantially
all of the proceeds of such sale, lease, conveyance or other disposition and all
or substantially all of the remaining assets of such person to holders of
Capital Stock of such Person.
"Preferred Stock" of any Person means any Capital Stock of such Person that
has preferential rights to any other Capital Stock of such Person with respect
to dividends or redemptions or upon liquidation.
"Productive Assets" means assets of a kind used or usable in the businesses
of the Issuer and its Restricted Subsidiaries or Caterair and its Subsidiaries,
as the case may be, or similar, ancillary, complementary or related to such
businesses, as conducted on the date of the relevant Asset Sale or Caterair
Asset Sale, as the case may be including, without limitation, equity interests
and other assets the acquisition of which would constitute a "Permitted
Investment" under clause (i)(A) of the definition thereof.
"pro forma" means, with respect to any calculation made or required to be
made pursuant to the terms of the Indenture, a calculation in accordance with
Article 11 of Regulation S-X under the Securities Act.
"Public Equity Offering" means an underwritten public offering of Qualified
Capital Stock of OFSI or the Issuer pursuant to a registration statement filed
with the Commission in accordance with the Securities
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Act; provided that in the event of a Public Equity Offering by OFSI, OFSI
contributes to the capital of the Issuer net cash proceeds of such Public Equity
Offering in an amount sufficient to redeem the Notes called for redemption in
accordance with the terms thereof.
"Qualified Capital Stock" means any stock that is not Disqualified Capital
Stock.
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Debt; provided that if, and
for so long as, any Designated Senior Debt lacks such a representative, then the
Representative for such Designated Senior Debt shall at all times constitute the
holders of a majority in outstanding principal amount of such Designated Senior
Debt in respect of any Designated Senior Debt.
"Restricted Subsidiary" of any Person means any Subsidiary of such Person
which at the time of determination is not an Unrestricted Subsidiary of such
Person.
"Sale and Leaseback Transaction" means any direct or indirect arrangement
with any Person or to which any such Person is a party, providing for the
leasing to the Issuer or a Restricted Subsidiary of the Issuer or Caterair or a
Subsidiary of Caterair, as the case may be, of any property, whether owned by
the Issuer or a Restricted Subsidiary of the Issuer or Caterair or a Subsidiary
of Caterair, as the case may be, at the Issue Date or later acquired, which has
been or is to be sold or transferred by the Issuer or a Restricted Subsidiary of
the Issuer or Caterair or a Subsidiary of Caterair, as the case may be, to such
Person or to any other Person from whom funds have been or are to be advanced by
such Person on the security of such Property.
"Senior Bank Financing" means the Term Loan Agreement, dated as of the
Issue Date, among each of SCIS and Caterair as borrowers, the guarantors
thereunder, the lenders party thereto from time to time in their capacities as
lenders thereunder and Morgan Guaranty Trust Company of New York, as
administrative agent, J.P. Morgan Securities Inc. and Bankers Trust Company, as
co-arrangers, and Bankers Trust Company, as syndication agent, and the Revolving
Credit Facility, dated as of the Issue Date, among the Issuer, as borrower, the
guarantors thereunder, the lenders party thereto from time to time in their
capacities as lenders thereunder, and Morgan Guaranty Trust Company of New York,
as administrative agent, J.P. Morgan Securities Inc. and Bankers Trust Company,
as co-arrangers, and Bankers Trust Company, as syndication agent, together, in
each case, with the related documents thereto (including, without limitation,
any guarantee agreements and security documents), in each case as such
agreements may be amended (including any amendment and restatement thereof),
supplemented or otherwise modified from time to time, including any agreement
extending the maturity of, increasing the total commitment under, refinancing,
replacing or otherwise restructuring (including adding Restricted Subsidiaries
of the Issuer and Subsidiaries of Caterair as additional borrowers or guarantors
thereunder) all or any portion of the Indebtedness under any such agreement or
any successor or replacement agreement to any thereof and whether by the same or
any other syndication agent, documentation agent, administrative agent, lender
or group of lenders.
"Senior Debt" means the principal of, premium, if any, and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on, and
all other obligations with respect to, any Indebtedness of the Issuer, whether
outstanding on the Issue Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Notes. Without limiting the generality of the foregoing, "Senior Debt" shall
also include the principal of, premium, if any, interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on, and all other amounts
owing in respect of, (x) all monetary obligations of every nature of the Issuer
under the Senior Bank Financing, including, without limitation, (a) obligations
to pay principal and interest, reimbursement obligations under letters of
credit, fees, expenses and indemnities and (b) guarantees by the Issuer of
Obligations under the Senior Bank Financing where the direct borrower is
Caterair or a Subsidiary of the Issuer, (y) all Interest Swap Obligations and
(z) all obligations under Currency Agreements, in each case whether outstanding
on the Issue Date or
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thereafter incurred. Notwithstanding the foregoing, Senior Debt shall not
include (i) any Indebtedness, if the instrument creating or evidencing the same
or the assumption or guarantee thereof expressly provides that such Indebtedness
shall not be senior in right of payment to the Notes, (ii) any Indebtedness of
the Issuer to a Subsidiary of the Issuer, (iii) Indebtedness to, or guaranteed
on behalf of, any director, officer or employee of the Issuer or any Subsidiary
of the Issuer (including, without limitation, amounts owed for compensation),
(iv) Indebtedness to trade creditors and other amounts incurred in connection
with obtaining goods, materials or services, (v) Indebtedness represented by
Disqualified Capital Stock, (vi) any liability for federal, state, local or
other taxes owed or owing by the Issuer, (vii) that portion of any Indebtedness
incurred in violation of the Indenture provisions set forth under the
"Limitation on Incurrence of Additional Indebtedness" covenant (but, as to any
such obligation, no such violation shall be deemed to exist for purposes of this
clause (vii) if the holder(s) of such obligation or their representative and the
Trustee shall have received an Officers' Certificate of the Issuer to the effect
that the incurrence of such Indebtedness does not (or, in the case of revolving
credit Indebtedness, that the incurrence of the entire committed amount thereof
at the date on which the initial borrowing thereunder is made) would not violate
such provisions of the Indenture); and (viii) any Indebtedness which is, by its
express terms, subordinated in right of payment to any other Indebtedness of the
Issuer.
"Significant Subsidiary" means, as of any date of determination, for any
Person, each Subsidiary of such Person (or, in the case of the Issuer, each
Restricted Subsidiary of the Issuer) which (i) for the most recent fiscal year
of such Person accounted for more than 10% of consolidated revenues or 10% of
Consolidated EBITDA of such Person or (ii) as at the end of such fiscal year,
was the owner of more than 10% of the consolidated assets of such Person.
"Subordinated Indebtedness" means, with respect to any Guarantor,
Indebtedness of such Guarantor which is subordinated in right of payment to the
Guarantee of such Guarantor.
"Subsidiary", with respect to any Person, means (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
"Subsidiary Guarantors" means Sky Chefs, CII and any other Restricted
Subsidiary of the Issuer which was a Guarantor as of the Issue Date or becomes a
Guarantor of the Notes.
"Unrestricted Subsidiary" of any Person means (i) any Subsidiary of such
Person that at the time of determination shall be or continue to be designated
an Unrestricted Subsidiary by the Board of Directors of such Person in the
manner provided below and (ii) any Subsidiary of an Unrestricted Subsidiary. The
Board of Directors of the Issuer may designate any Subsidiary of the Issuer
(including any newly acquired or newly formed Subsidiary), other than a
Subsidiary Guarantor, to be an Unrestricted Subsidiary of the Issuer unless such
Subsidiary of the Issuer owns any Capital Stock of, or owns or holds any Lien on
any property of, the Issuer or any other Subsidiary of the Issuer that is not a
Subsidiary of the Subsidiary to be so designated; provided that (x) the Issuer
certifies to the Trustee that such designation complies with the "Limitation on
Restricted Payments" covenant and (y) each Subsidiary of the Issuer to be so
designated and each of its Subsidiaries has not at the time of designation, and
does not thereafter, create, incur, issue, assume, guarantee or otherwise become
directly or indirectly liable with respect to any Indebtedness pursuant to which
the lender has recourse to any of the assets of the Issuer or any of its
Restricted Subsidiaries. Notwithstanding the foregoing, the Issuer or a
Restricted Subsidiary of the Issuer may guarantee Indebtedness of an
Unrestricted Subsidiary of the Issuer if such guarantee is made in accordance
with the "Limitation on Restricted Payments" covenant. The Board of Directors of
the Issuer may designate any Unrestricted Subsidiary of the Issuer to be a
Restricted Subsidiary of the Issuer only if (x) immediately after giving effect
to such designation, the Issuer is able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with the
"Limitation on Incurrence of Additional Indebtedness" covenant and (y)
immediately before and immediately after giving effect to such designation, no
Default or Event of Default shall have occurred and be continuing. Any such
designation by the Board of Directors of the Issuer
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shall be evidenced to the Trustee by promptly filing with the Trustee a copy of
the resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the then outstanding
aggregate principal amount of such Indebtedness into (b) the sum of the total of
the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person means any Restricted
Subsidiary of such Person of which all the outstanding voting securities (other
than directors' qualifying shares) are owned by such Person or any Wholly Owned
Restricted Subsidiary of such Person.
"Wholly Owned Subsidiary" of any Person means any Subsidiary of such Person
of which all the outstanding voting securities (other than directors' qualifying
shares) are owned by such Person or any Wholly Owned Subsidiary of such Person.
BOOK-ENTRY; DELIVERY AND FORM
Except as described in the next paragraph, the Exchange Notes initially
will be represented by one or more permanent global certificates in definitive,
fully registered form (each a "Global Note"). Each Global Note will be deposited
upon issuance with, or on behalf of, DTC and registered in the name of a nominee
of DTC. Except as set forth below, each Global Note may be transferred, in whole
and not in part, only to another nominee of the Depositary or to a successor of
the Depositary or its nominee.
The Global Notes. The Issuer expects that pursuant to procedures
established by DTC (i) upon the issuance of a Global Note, DTC or its custodian
will credit, on its internal system, the principal amount of Exchange Notes of
the individual beneficial interests represented by such Global Note to the
respective accounts of persons who have accounts with such depositary and (ii)
ownership of beneficial interests in a Global Note will be shown on, and the
transfer of such ownership will be effected only through, records maintained by
DTC or its nominee (with respect to interests of Participants (as defined
herein)) and the records of Participants (with respect to interests of persons
other than Participants). Ownership of beneficial interests in a Global Note
will be limited to persons who have accounts with DTC ("Participants") or
persons who hold interests through Participants.
So long as DTC, or its nominee, is the registered owner or holder of
Exchange Notes, DTC or such nominee, as the case may be, will be considered the
sole owner or holder of the Exchange Notes represented by such Global Note for
all purposes under the Indenture. No beneficial owner of an interest in a Global
Note will be able to transfer that interest except in accordance with DTC's
procedures, in addition to those provided for under the Indenture with respect
to the Exchange Notes.
Payments of the principal of, premium (if any), and interest on, a Global
Note will be made to DTC or its nominee, as the case may be, as the registered
owner thereof. None of the Issuer, the Trustee or any Paying Agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Note or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interest.
The Issuer expects that DTC or its nominee, upon receipt of any payment of
principal, premium, if any, or interest on a Global Note, will credit
Participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of a Global Note as
shown on the records of DTC or its nominee. The Issuer also expects that
payments by Participants to owners of beneficial interests in a Global Note held
through such Participants will be governed by standing instructions and
customary practice, as is now the case with securities held for the accounts of
customers registered in the names of nominees for such customers. Such payments
will be the responsibility of such Participants.
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Transfers between Participants in DTC will be effected in the ordinary way
through DTC's same-day funds system in accordance with DTC rules and will be
settled in same-day funds. If a holder requires physical delivery of
certificates for its Exchange Notes for any reason, including to sell Exchange
Notes to persons in states which require physical delivery of the Exchange
Notes, or to pledge such securities, such holder must transfer its interest in a
Global Note, in accordance with the normal procedures of DTC and with the
procedures set forth in the Indenture.
DTC has advised the Issuer that it will take any action permitted to be
taken by a holder of Exchange Notes only at the direction of one or more
Participants to whose account the DTC interests in a Global Note are credited
and only in respect of such portion of the aggregate principal amount of
Exchange Notes as to which such Participant or Participants has or have given
such direction. However, if there is an Event of Default under the Indenture,
DTC will exchange Global Notes for certificated securities, which it will
distribute to its Participants.
DTC has advised the Issuer as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its Participants and facilitate the clearance and settlement of
securities transactions between Participants through electronic book-entry
changes in accounts of its Participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and certain other
organizations. Indirect access to the DTC system is available to others such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly
("Indirect Participants").
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Note among Participants of DTC, it is under
no obligation to perform such procedures, and such procedures may be
discontinued at any time. Neither the Issuer nor the Trustee will have any
responsibility for the performance by DTC or its Participants or Indirect
Participants of their respective obligations under the rules and procedures
governing their operations.
Certificated Securities. If DTC is at any time unwilling or unable to
continue as a depositary for any Global Note and a successor depositary is not
appointed by the Issuer within 90 days, certificated securities will be issued
in exchange for such Global Note.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Private Notes must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of Exchange Notes received in exchange for Private
Notes, where such Private Notes were acquired by such broker-dealer as a result
of market-making or other trading activities. The Issuer has agreed to make this
Prospectus, as it may be amended or supplemented from time to time, available to
any such broker-dealer that requests copies of this Prospectus in the Letter of
Transmittal for use in connection with any such resale for a period of up to 90
days after the Expiration Date. In addition, until , 1997, all
dealers effecting transactions in the Exchange Notes may be required to deliver
a prospectus.
The Issuer will not receive any proceeds from any sale of Exchange Notes by
broker-dealers or any other persons. Exchange Notes received by broker-dealers
for their own account pursuant to the Exchange Offer may be sold from time to
time in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Notes, or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or at negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such
Exchange Notes. Any broker-dealer that resells Exchange Notes that were received
by it for its own account pursuant to the Exchange Offer and any broker-dealer
that participates in a distribution of such Exchange Notes may be deemed to be
an "underwriter" within the meaning of the Securities Act and any profit on any
such resale of Exchange Notes and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that by acknowledging that it will deliver
and by delivering a prospectus a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.
For a period of 90 days after the Expiration Date, the Issuer will promptly
send additional copies of this Prospectus or any amendment or supplement to this
Prospectus to any broker-dealer that requests such documents in the Letter of
Transmittal. The Issuer and the Guarantors have agreed to pay all expenses
incident to the Issuer's and the Guarantors' performance of, or compliance with,
the Registration Rights Agreement and will indemnify the holders of Private
Notes (including any broker-dealers), and certain parties related to such
holders, against certain liabilities, including liabilities under the Securities
Act.
See "The Exchange Offer" for additional information concerning the Exchange
Offer and interpretations of the staff of the Commission with respect to
prospectus delivery obligations of broker-dealers.
LEGAL MATTERS
The validity of the Exchange Notes and the Guarantees offered hereby will
be passed upon for the Issuer and the Guarantors by Kaye, Scholer, Fierman, Hays
& Handler, LLP.
EXPERTS
The consolidated financial statements of SCIS and its subsidiaries as of
December 31, 1996 and 1995 and for each of the three fiscal years in the period
ended December 31, 1996 included in this Prospectus have been included herein in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of that firm as experts in accounting and auditing.
The consolidated financial statements of Caterair and its subsidiaries as
of December 31, 1996 and 1995 and for each of the two fiscal years in the period
ended December 31, 1996 included in this Prospectus have been included herein in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of that firm as experts in accounting and auditing.
The consolidated financial statements of Caterair and its subsidiaries for
the year ended December 31, 1994 included in this Prospectus have been included
herein in reliance on the report of Arthur Andersen LLP, independent public
accountants, given on the authority of that firm as experts in accounting and
auditing.
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ADDITIONAL INFORMATION
The Issuer and the Guarantors have filed with the Commission a Registration
Statement on Form S-4 (which together with any amendments thereto is referred to
as the "Registration Statement") under the Securities Act with respect to the
Exchange Notes and Guarantees offered hereby. As permitted by the rules and
regulations of the Commission, this Prospectus, which is part of the
Registration Statement, omits certain information, exhibits and undertakings
contained in the Registration Statement. For further information with respect to
the Issuer, the Guarantors and the Exchange Notes and Guarantees offered hereby,
reference is made to the Registration Statement, including the exhibits thereto
and the financial statements, notes and schedules filed as a part thereof.
Statements made in this Prospectus as to the contents of any contract, agreement
or other document referred to herein are not necessarily complete. With respect
to each such contract, agreement or other document filed as an exhibit to the
Registration Statement, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed
qualified in its entirety by such reference.
The Issuer will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the documents incorporated by reference herein (not including
the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such documents). Requests for such copies should be
directed to the Issuer at 524 E. Lamar Blvd., Arlington, Texas 76011, telephone
number (817) 792-2281, attention: Thomas Lee.
The Registration Statement (and the exhibits and schedules thereto) may be
inspected and copied at the public reference section of the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
regional offices of the Commission located at 7 World Trade Center, Suite 1300,
New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Registration Statement (and the exhibits and
schedules thereto) can also be reviewed through the Commission's Electronic Data
Gathering, Analysis and Retrieval System, which is publicly available through
the Commission's Web Site (http://www.sec.gov).
The Indenture provides that the Issuer will deliver to the Trustee under
the Indenture within 15 days after the filing of the same with the Commission,
copies of the quarterly and annual reports and of the information, documents and
other reports, if any, which the Issuer is required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act. The Indenture further
provides that, notwithstanding that the Issuer may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Issuer
will provide the Trustee under the Indenture, holders of Notes and QIBs which
request such information from the Issuer and indicate a bona fide interest in
purchasing Notes with consolidated financial statements of the Issuer and a
related "Management's Discussion and Analysis of Financial Condition and Results
of Operations" comparable to those which would have been required to appear in
quarterly or annual reports of the Issuer and, to holders of Private Notes, any
other information set forth in Rule 144A(d)(4) or any successor provision under
the Securities Act. In addition, the Issuer will provide the Trustee under the
Indenture and holders of Notes with unaudited combined financial data of the
Issuer and the Guarantors, substantially in the form provided under the caption
"Summary -- Summary Unaudited Pro Forma Financial Data" (excluding the
information under the caption "Operating Statistics") in this Prospectus, for
each fiscal year of the Issuer and for the first three fiscal quarters of each
fiscal year of the Issuer. The Issuer will also comply with the other provisions
of TIA sec. 314(a).
116
<PAGE> 123
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
SC INTERNATIONAL SERVICES, INC. PAGE
----
<S> <C>
Report of Independent Accountants (Coopers & Lybrand L.L.P.)......................... F-2
Consolidated Balance Sheets as of December 31, 1995 and 1996 and June 30, 1997
(unaudited)........................................................................ F-3
Consolidated Statements of Operations for each of the three years in the period ended
December 31, 1996 and the six months ended June 30, 1996 and 1997 (unaudited)...... F-4
Consolidated Statements of Shareholder's Equity for each of the three years in the
period ended December 31, 1996 and the six months ended June 30, 1997
(unaudited)........................................................................ F-5
Consolidated Statements of Cash Flows for each of the three years in the period ended
December 31, 1996 and the six months ended June 30, 1996 and 1997 (unaudited)...... F-6
Notes to Consolidated Financial Statements........................................... F-7
CATERAIR INTERNATIONAL CORPORATION
Report of Independent Accountants (Coopers & Lybrand L.L.P.)......................... F-36
Report of Independent Public Accountants (Arthur Andersen LLP)....................... F-37
Consolidated Balance Sheets as of December 31, 1995 and 1996 and June 30, 1997
(unaudited)........................................................................ F-38
Consolidated Statements of Operations for each of the three years in the period ended
December 31, 1996 and the six months ended June 30, 1996 and 1997 (unaudited)...... F-39
Consolidated Statements of Shareholder's Deficit for each of the three years in the
period ended December 31, 1996 and the six months ended June 30, 1997
(unaudited)........................................................................ F-40
Consolidated Statements of Cash Flows for each of the three years in the period ended
December 31, 1996 and the six months ended June 30, 1996 and 1997 (unaudited)...... F-41
Notes to Consolidated Financial Statements........................................... F-42
</TABLE>
F-1
<PAGE> 124
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
SC International Services, Inc.:
We have audited the accompanying consolidated balance sheets of SC
International Services, Inc. and Subsidiaries as of December 31, 1996 and 1995
and the related consolidated statements of operations, shareholder's equity and
cash flows for each of the three years in the period then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of SC
International Services, Inc. and Subsidiaries as of December 31, 1996 and 1995
and the consolidated results of their operations and their cash flows for each
of the three years in the period ended December 31, 1996 in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
February 28, 1997
F-2
<PAGE> 125
SC INTERNATIONAL SERVICES, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------- JUNE 30,
1995 1996 1997
-------- -------- ---------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents................................ $ 54,829 $ 55,658 $ 31,772
Accounts and notes receivable (net of allowance for
doubtful accounts of $12,708 in 1995, $14,314 in 1996
and $13,924 at June 30, 1997)......................... 136,519 148,409 160,478
Advances to affiliate.................................... 1,043 -- --
Tax refunds receivable from parent....................... 8,331 1,893 4,847
Inventories.............................................. 16,985 18,150 18,325
Deferred income taxes.................................... 4,341 7,105 7,051
Prepaid expenses......................................... 14,526 17,104 15,781
-------- -------- ---------
Total current assets............................. 236,574 248,319 238,254
Property and equipment, net................................ 175,847 190,606 189,041
Deferred income taxes...................................... 42,600 45,806 46,788
Goodwill and intangible assets, net........................ 256,110 245,224 244,554
Loan to affiliate.......................................... 38,544 41,634 43,253
Other assets............................................... 79,118 81,867 79,942
-------- -------- ---------
Total assets..................................... $828,793 $853,456 $ 841,832
======== ======== ========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable......................................... $ 79,806 $ 81,253 $ 77,045
Accrued expenses......................................... 138,720 174,723 177,211
Payable to affiliate..................................... -- 4,505 9,256
Current portion of long-term debt........................ 14,416 15,682 21,184
Current portion of obligations under capital leases...... 650 634 384
-------- -------- ---------
Total current liabilities........................ 233,592 276,797 285,080
Obligations under capital leases........................... 30,150 29,757 29,488
Long-term debt............................................. 346,843 334,156 323,699
Other long-term liabilities................................ 154,160 156,397 151,167
-------- -------- ---------
Total liabilities................................ 764,745 797,107 789,434
-------- -------- ---------
Minority interest.......................................... 9,478 9,618 8,218
-------- -------- ---------
Commitments and contingencies.............................. -- -- --
Shareholder's equity:
Common stock, $.01 par value; 3,000 shares authorized,
100 shares issued and outstanding at December 31,
1995, 1996, and June 30, 1997......................... -- -- --
Additional paid-in capital............................... 59,579 59,579 59,579
Cumulative translation adjustment........................ (1,764) (3,797) (5,860)
Minimum pension liability adjustment..................... (5,565) (330) (330)
Retained earnings (deficit).............................. 2,320 (8,721) (9,209)
-------- -------- ---------
Total shareholder's equity....................... 54,570 46,731 44,180
-------- -------- ---------
Total liabilities and shareholder's equity....... $828,793 $853,456 $ 841,832
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-3
<PAGE> 126
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
-------------------------------- -------------------
1994 1995 1996 1996 1997
-------- -------- ---------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues................................... $468,608 $739,102 $1,529,816 $720,675 $774,244
-------- -------- ---------- -------- --------
Costs and expenses:
Cost of operations....................... 388,276 634,375 1,352,359 649,781 684,605
Depreciation and amortization............ 15,503 21,338 37,928 17,853 19,579
Selling, general and administrative...... 17,125 28,076 48,854 23,441 25,252
Integration expenses..................... -- 28,644 30,361 16,840 8,288
Other.................................... 4,345 29,882 23,721 12,621 9,287
-------- -------- ---------- -------- --------
Total costs and expenses......... 425,249 742,315 1,493,223 720,536 747,011
-------- -------- ---------- -------- --------
Operating income (loss).................... 43,359 (3,213) 36,593 139 27,233
-------- -------- ---------- -------- --------
Other income (expense):
Interest income.......................... 204 2,458 7,896 3,301 2,803
Interest expense......................... (5,748) (19,715) (50,431) (25,917) (25,868)
Other.................................... (1,225) (2,099) (4,679) (3,800) (5,357)
-------- -------- ---------- -------- --------
Total other expense.............. (6,769) (19,356) (47,214) (26,416) (28,422)
-------- -------- ---------- -------- --------
Earnings (loss) before income taxes........ 36,590 (22,569) (10,621) (26,277) (1,189)
Provision (benefit) for income taxes....... 13,385 (6,525) 420 (8,740) (701)
-------- -------- ---------- -------- --------
Net Income (loss).......................... $ 23,205 $(16,044) $ (11,041) $(17,537) $ (488)
======== ======== ========= ======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-4
<PAGE> 127
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MINIMUM
COMMON STOCK ADDITIONAL CUMULATIVE PENSION RETAINED
---------------- PAID-IN TRANSLATION LIABILITY EARNINGS
SHARES AMOUNT CAPITAL ADJUSTMENT ADJUSTMENT (DEFICIT) TOTAL
------ ------ ---------- ---------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1993............ 100 $ 10 $ 20,621 $ -- $ -- $ 5,624 $ 26,255
Net income............................ -- -- -- -- -- 23,205 23,205
------ ------ ---------- ---------- ---------- --------- --------
Balance, December 31, 1994............ 100 10 20,621 -- -- 28,829 49,460
Reorganization (Note 1)............... -- (10) 11 -- -- -- 1
Cash dividend to parent............... -- -- -- -- -- (10,465) (10,465)
Noncash capital contribution from
parent.............................. -- -- 38,947 -- -- -- 38,947
Net loss.............................. -- -- -- -- -- (16,044) (16,044)
Cumulative translation adjustment..... -- -- -- (1,764) -- -- (1,764)
Minimum pension liability
adjustment.......................... -- -- -- -- (5,565) -- (5,565)
------ ------ ---------- ---------- ---------- --------- --------
Balance, December 31, 1995............ 100 -- 59,579 (1,764) (5,565) 2,320 54,570
Cumulative translation adjustment..... -- -- -- (2,033) -- -- (2,033)
Minimum pension liability
adjustment.......................... -- -- -- -- 5,235 -- 5,235
Net loss.............................. -- -- -- -- -- (11,041) (11,041)
------ ------ ---------- ---------- ---------- --------- --------
Balance, December 31, 1996............ 100 -- 59,579 (3,797) (330) (8,721) 46,731
Cumulative translation adjustment
(unaudited)......................... -- -- -- (2,063) -- -- (2,063)
Net loss (unaudited).................. -- -- -- -- -- (488) (488)
------ ------ ---------- ---------- ---------- --------- --------
Balance, June 30, 1997 (unaudited).... 100 $ -- $ 59,579 $ (5,860) $ (330) $ (9,209) $ 44,180
====== ======= ========= ========== ========== ======== ========
</TABLE>
F-5
<PAGE> 128
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
------------------------------ -------------------
1994 1995 1996 1996 1997
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss).......................... $ 23,205 $(16,044) $(11,041) $(17,537) $ (488)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and amortization........... 15,503 21,338 37,928 17,853 19,579
Deferred income taxes................... (889) (8,610) (5,970) (7,910) (928)
Noncash integration and other
expenses.............................. -- 41,064 -- -- --
Bad debt expense........................ -- 931 1,765 -- --
Postretirement benefits in excess of
cash paid............................. 2,000 1,400 2,000 1,000 1,000
Interest payable in-kind from
affiliate............................. -- -- (3,090) (1,553) (1,619)
Changes in assets and liabilities:
Decrease (increase) in working capital
items (Note 19).................... (20,825) 25,246 20,052 41,541 (12,641)
Decrease (increase) in other assets... (5,482) 8,550 (9,683) 10,471 16,318
Increase (decrease) in other
noncurrent liabilities............. 7,647 (13,265) 5,612 (5,679) (7,630)
-------- -------- -------- -------- --------
Net cash provided by operating
activities....................... 21,159 60,610 37,573 38,186 13,591
-------- -------- -------- -------- --------
Cash flows from investing activities:
Acquisition of businesses.................. (10,582) (211,151) -- -- (20,000)
Purchase of property and equipment......... (11,775) (9,575) (36,900) (11,789) (13,800)
Advances from (repayments to) affiliate.... -- (38,831) 5,548 (1,363) 4,751
Other...................................... (1,000) 412 -- --
-------- -------- -------- -------- --------
Net cash used in investing
activities....................... (23,357) (259,145) (31,352) (13,152) (29,049)
-------- -------- -------- -------- --------
Cash flows from financing activities:
Proceeds from issuance of long-term debt... -- 225,000 -- -- --
Proceeds from issuance of Notes............ -- 125,000 -- -- --
Deferred financing costs................... -- (17,337) -- -- --
Payment of long-term debt and obligations
under capital leases.................... (16,495) (38,190) (409) (42) (519)
Borrowing (repayments) under credit
agreement............................... 17,500 (17,500) (11,421) (5,735) (4,955)
Purchase of employee stock loans from an
affiliate............................... -- (6,661) -- -- --
Dividend payment to parent................. -- (10,465) -- -- --
Net change in (payable to) and receivable
from parent............................. 8,228 (18,938) 6,438 (4,398) (2,954)
-------- -------- -------- -------- --------
Net cash provided by (used in)
financing activities............. 9,233 240,909 (5,392) (10,175) (8,428)
-------- -------- -------- -------- --------
Increase in cash and cash equivalents........ 7,035 42,374 829 14,859 (23,886)
Cash and cash equivalents, beginning of
period..................................... 5,420 12,455 54,829 54,829 55,658
-------- -------- -------- -------- --------
Cash and cash equivalents, end of period..... $ 12,455 $ 54,829 $ 55,658 $ 69,688 $ 31,772
======== ======== ======== ======== ========
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest................................ $ 12,584 $ 16,093 $ 45,053 $ 22,715 $ 23,921
Income taxes............................ 5,747 5,124 3,300 (3,502) 4,940
Supplemental disclosure of noncash financing
and investing activities:
Noncash capital contribution from parent... -- 38,947 -- -- --
Business combination liabilities assumed... -- 44,048 4,464 4,464 --
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-6
<PAGE> 129
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business and Basis of Consolidation and Presentation
SC International Services, Inc. ("SCIS" or the "Company") is a wholly-owned
subsidiary of Onex Food Services, Inc. ("OFSI" or the "Parent") and is engaged
primarily in providing airline catering services. SCIS owns 100% of two
operating subsidiaries, Sky Chefs, Inc. ("Sky Chefs") and Caterair
International, Inc. (II) ("CII"). SCIS and CII were formed to effect the
September 29, 1995 business combination of Sky Chefs and Caterair International
Corporation ("Caterair"). In conjunction with this transaction, OFSI contributed
all of the common shares of Sky Chefs to SCIS. Prior to the business
combination, Sky Chefs was primarily engaged in providing airline catering
services to airlines with flights originating in the United States. The business
combination between Sky Chefs and Caterair substantially expanded the Company's
operations, which are now conducted worldwide principally under the tradenames
of LSG Lufthansa Service/SKY Chefs and Caterair.
The accompanying consolidated financial statements include the accounts of
the Company and all wholly-owned and majority-owned subsidiaries. For all
periods presented prior to the incorporation of SCIS and the contribution of all
the common stock of Sky Chefs to SCIS, the consolidated financial statements
only reflect the consolidated financial position, results of operations and cash
flows of Sky Chefs. The equity method of accounting is used when the Company has
20% to 50% interest in other companies. Under the equity method, original
investments are recorded at cost and adjusted for the Company's share of
undistributed earnings or losses of these companies. All significant
intercompany transactions have been eliminated.
Management Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amount of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Interim Financial Information
The consolidated balance sheet as of June 30, 1997, the consolidated
statement of shareholder's equity for the six months then ended, and the
consolidated statements of operations and cash flows for the six months ended
June 30, 1996 and 1997, have been prepared by the Company without audit. In the
opinion of management, all adjustments (which included only normal, recurring
adjustments) necessary to present fairly the financial position at June 30,
1997, and the results of operations and cash flows for all periods presented
have been made. The results of operations for the interim periods are not
necessarily indicative of the operating results for the full year.
Cash and Cash Equivalents
For purposes of the statements of cash flows, all highly liquid debt
instruments purchased with an original maturity of three months or less are
considered to be cash equivalents. Cash flows from futures and swap transactions
are classified in the same category as the items being hedged.
Interest Rate Swap Agreements
The differential to be paid or received on interest rate swap agreements is
accrued as interest rates change and is recognized over the life of the
agreement.
F-7
<PAGE> 130
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
Inventories
Inventories are valued at the lower of cost (first-in, first-out basis) or
market and consist primarily of raw materials.
Property and Equipment
The provision for depreciation and amortization of property and equipment
is computed using the straight-line method. The estimated useful lives are as
follows:
<TABLE>
<S> <C>
Buildings............................... 20 years
Leasehold improvements.................. Term of the lease or estimated
useful life, whichever is less
Furniture and equipment................. 5 to 10 years
Vehicles................................ 5 to 10 years
</TABLE>
Gains and losses from disposals of property and equipment are reflected in
other income (expense) in the period of disposal.
Property and Equipment Under Capital Leases
Buildings under capital leases are amortized over the lives of the leases
which vary from 11 to 31 years. Equipment under capital leases is amortized over
the lives of the leases or the estimated useful lives of the equipment,
whichever is less.
Goodwill and Intangible Assets
Intangible assets are recorded at cost. Amortization is determined by the
straight-lined method. The estimated useful lives of the assets are as follows:
<TABLE>
<S> <C>
Goodwill................................ 25 to 28 years
Trademark and tradenames................ 25 years
Beneficial lease and license rights..... Term of the lease or license or
estimated useful life whichever
is less, ranging from 6 to 32
years
Noncompete agreement.................... Term of the agreement, 6 years
</TABLE>
Goodwill represents the excess of cost over fair value of net assets
acquired. The Company periodically evaluates whether events and circumstances
have occurred that indicate the remaining estimated useful life of goodwill may
warrant revision or that the remaining balance of goodwill may not be
recoverable. An impairment of goodwill is recognized when estimated undiscounted
future cash flows generated by acquired businesses are determined to not be
sufficient to recover goodwill. The amount of goodwill impairment, if any, is
measured based on projected discounted cash flows using a discount rate
reflecting the Company's average cost of funds.
On March 31, 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
The Company adopted this standard effective January 1, 1996, which did not have
a material impact on the Company's financial position or results of operations.
F-8
<PAGE> 131
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
Deferred Financing Costs
Costs incurred related to the issuance of debt are deferred and amortized
over the life of the related debt using the effective interest rate method.
Amortization of deferred financing costs amounted to $525 and $2,916 for the
years ended December 31, 1995 and 1996, respectively. There were no deferred
financing costs or amortization thereof in 1994.
Income Taxes
The accounts of the Company are included in the consolidated federal income
tax return of OFSI. Current and deferred income taxes are allocated to the
Company as if it were a separate taxpayer.
Deferred income tax assets and liabilities are recognized for the expected
future tax consequences of temporary differences between the income tax and
financial reporting carrying amounts of assets and liabilities.
Management does not believe that it has significant tax liability related
to undistributed earnings, of approximately $33,230 of foreign subsidiaries at
December 31, 1996 as it believes the U.S. income tax effect on any repatriated
amounts would be minimal, and management considers the remainder to be
permanently invested.
Foreign Currency Translation
Assets and liabilities of most foreign operations are translated into U.S.
dollars using current exchange rates and the effect of translation reduces or
increases equity directly. For operations in countries with highly inflationary
economies (principally Venezuela in 1996 and principally Argentina, Brazil, and
Venezuela in 1995 and 1994), nonmonetary items are translated using historical
rates, while monetary items are translated at current rates, and the effects of
translation are included in operations. The U.S. dollar effects of exchange rate
changes included in other income and net assets determined in highly
inflationary currencies were as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
1994 1995 1996
------ ------ ------
<S> <C> <C> <C>
Net foreign exchange..................................... $ -- $ 748 $1,525
====== ====== =====
Net assets denominated in highly inflationary
currencies............................................. $ (500) $2,890 $ 315
====== ====== =====
</TABLE>
Preopening Costs
Preopening costs, which consist primarily of payroll expenses, are expensed
as incurred.
Reclassification of Prior Period Amounts
Certain prior period amounts have been reclassified to conform to the
current year presentation.
Recent Accounting Standards
During June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130 "Reporting Comprehensive Income" and
Statement of Financial Accounting Standards No. 131 "Disclosures About Segments
of an Enterprise and Related Information." Preliminary analysis of these new
standards by the Company indicates that the standards will not have a material
impact on the Company. The standards are effective for financial statements for
fiscal years beginning after December 15, 1997.
2. BUSINESS COMBINATIONS
On September 29, 1995, the Company, OFSI, Caterair and its parent, Caterair
Holdings Corporation ("Holdings"), consummated transactions with the
shareholders and creditor of Holdings (the "Transactions") whereby OFSI and an
affiliate of OFSI exchanged common stock and warrants of OFSI for certain
F-9
<PAGE> 132
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
stock and debt held by Holdings' shareholders and creditor, as a result of which
OFSI and its affiliate acquired more than 50% of the total outstanding voting
shares of Holdings and more than 25% of the total outstanding nonvoting shares
of Holdings. In addition, the Company and its subsidiaries acquired, licensed,
leased and subleased substantially all of the worldwide business and assets of
Caterair. However, after the consummation of the Transactions Caterair retained
certain operations relating to customer contracts for which consents to
assignment were not obtained. Such consents with respect to these operations
were obtained during the second quarter of 1996 and such operations were leased,
subleased and licensed to SCIS and its subsidiaries.
The aggregate purchase price for substantially all of the foreign
operations of Caterair, Caterair's tradename and working capital and the
assumption of certain Caterair liabilities was approximately $247,247 (not
including $15,054 of fees relating to the Transactions) which consisted of
$208,300 in cash and approximately $38,947 in common stock and warrants of OFSI.
In connection with the Transactions, OFSI contributed capital to SCIS in an
amount equal to the consideration paid to Holdings' shareholders and creditor.
The purchase price was allocated based on the estimated fair values of the
assets acquired at the date of acquisition. The Transactions resulted in
goodwill of approximately $131,680 which is being amortized over 25 years.
The Company accounted for this acquisition described in the preceding
paragraph using the purchase method of accounting. The results of operations and
cash flows are included in the consolidated statements of operations and cash
flows from the date of acquisition.
Prior to the Transactions, the Company and Caterair had idle kitchens at
airports which were expected to be utilized in operations in the future. The
Company expensed costs associated with these facilities as incurred. Subsequent
to the Transactions, the Company reviewed its inventory of idle kitchens and
reevaluated its plans to operate these kitchens in the future. The Company
determined that certain of these idle facilities will not be utilized in
operations in the future. Therefore, the Company accrued costs representing the
net present value of future minimum rentals less expected sublease income of
$32,832 at the date of the acquisition. The accrued costs relating to former
Caterair facilities of $13,342 (net of taxes of $8,352) are reflected as an
increase in goodwill. The accrued costs relating to former Sky Chefs' facilities
of $11,138 were charged to income and are included in integration expenses. In
addition, the carrying value of $6,091 at December 31, 1995, for Sky Chefs'
property and equipment (principally leasehold improvements) was charged against
income and included in integration expenses. In the opinion of management, the
remaining carrying values of idle facilities are not in excess of net realizable
value. As of December 31, 1996, accrued costs of $6,000 were included in accrued
expenses and $23,470 were included in other long-term liabilities. At December
31, 1995 accrued costs of $6,000 were included in accrued expenses and $25,672
were included in other long-term liabilities.
The Company is currently in the process of consolidating kitchen operations
at airports where excess kitchen capacity exists. This consolidation process has
resulted in the closing of certain kitchen facilities and a reduction in the
number of personnel. Additional liabilities for kitchen closings and severance
resulting from additional consolidations will be recognized as expense in the
period incurred.
A pre-tax charge of $18,000 was recorded in other costs and expenses during
1995 for a fee payable to a major customer in connection with obtaining its
consent to the Transactions and its revocation of a notice of nonperformance of
contract previously issued by the customer to Caterair.
Shown below are unaudited pro forma results of operations for the years
ended December 31, 1995 and 1994, respectively, as though the Transactions
occurred at the beginning of each period presented. The pro forma information
set forth below does not purport to be indicative of the results which would
actually have
F-10
<PAGE> 133
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
been attained had the Transactions been consummated as of the dates set forth
below or indicative of results which may be achieved in the future.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1994 1995
----------- -----------
(UNAUDITED)
<S> <C> <C>
Revenues.................................................... $ 1,529,185 $ 1,520,987
========= =========
Net loss.................................................... $ (5,720) $ (7,782)
========= =========
</TABLE>
In August and November 1995, Sky Chefs acquired three domestic kitchen
operations from an affiliate of LSG Lufthansa Service USA Corp., a minority
shareholder, for a cash purchase price of $5,146 and recorded goodwill of $3,151
which is being amortized over 25 years.
After the Transactions, the Company evaluated its investment in ServCater,
a Brazilian in-flight food service company. The Company determined the
investment acquired in October 1994 was partially impaired since the projected
undiscounted cash flows would be insufficient to recover goodwill and other
advances. Accordingly, the Company recognized a charge of $3,215 in 1995 which
is included in integration expenses.
3. PREPAID EXPENSES
<TABLE>
<CAPTION>
DECEMBER 31,
------------------- JUNE 30,
1995 1996 1997
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Prepaid employee healthcare......................... $ 7,141 $ 7,141 $ 7,141
Other............................................... 7,385 9,963 8,640
------- ------- -----------
$14,526 $17,104 $15,781
======= ======= =========
</TABLE>
4. PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------- JUNE 30,
1995 1996 1997
-------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Property and equipment, at cost:
Land............................................ $ 9,110 $ 9,339 $ 9,044
Buildings and leasehold improvements............ 137,962 143,245 144,936
Machinery and equipment......................... 92,250 99,887 104,697
Construction in progress........................ 8,234 26,327 27,965
-------- -------- -----------
247,556 278,798 286,642
Less accumulated depreciation and
amortization................................. 78,916 98,747 107,340
-------- -------- -----------
168,640 180,051 179,302
-------- -------- -----------
Property and equipment under capital leases:
Buildings and improvements...................... 8,228 8,228 8,228
Machinery and equipment......................... 14,946 20,212 19,924
-------- -------- -----------
23,174 28,440 28,152
Less accumulated amortization................... 15,967 17,885 18,413
-------- -------- -----------
7,207 10,555 9,739
-------- -------- -----------
$175,847 $190,606 $ 189,041
======== ======== =========
</TABLE>
F-11
<PAGE> 134
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
5. GOODWILL AND INTANGIBLE ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------- JUNE 30,
1995 1996 1997
-------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Goodwill.......................................... $156,574 $158,067 $ 154,654
Trademarks and tradenames......................... 75,000 75,000 75,000
Noncompete agreements............................. 18,781 18,781 28,781
Beneficial lease and license rights............... 29,624 31,444 31,524
-------- -------- -----------
279,979 283,292 289,959
Less accumulated amortization................... 23,869 38,068 45,405
-------- -------- -----------
$256,110 $245,224 $ 244,554
======== ======== =========
</TABLE>
6. OTHER ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
------------------- JUNE 30,
1995 1996 1997
-------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Prepaid employee healthcare............................ $ 33,333 $ 29,645 $21,072
Deferred financing costs, net of accumulated
amortization of $525, $3,441, and $4,822 at December
31, 1995, 1996, and June 30, 1997, respectively...... 16,812 13,993 11,286
Investments in joint ventures and unconsolidated
affiliates........................................... 11,513 12,800 23,578
Other.................................................. 17,460 25,429 24,006
-------- -------- -----------
$ 79,118 $ 81,867 $79,942
======= ======= =========
</TABLE>
7. ACCOUNTS PAYABLE
Accounts payable includes $11,461, $17,659, and $15,894 at December 31,
1995 and 1996, and June 30, 1997, respectively, representing checks outstanding
in excess of bank deposits. Accounts payable at December 31, 1995 and 1996, and
June 30, 1997 includes $4,525, $2,916, and $5,765 respectively, of short-term
foreign bank loans used primarily for overdraft and working capital purposes.
8. ACCRUED EXPENSES
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------- JUNE 30,
1995 1996 1997
--------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Payroll........................................... $ 59,037 $ 72,409 $ 77,660
Insurance......................................... 10,932 4,218 1,326
Employee benefits................................. 9,349 13,148 13,491
Provisions relating to idle facilities and other
acquisition related costs....................... 17,039 18,262 15,868
Other............................................. 42,363 66,686 68,866
--------- --------- -----------
$ 138,720 $ 174,723 $ 177,211
======== ======== =========
</TABLE>
F-12
<PAGE> 135
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
9. LONG-TERM DEBT
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------- JUNE 30,
1995 1996 1997
--------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Credit Agreement:
A-1 Term Loan, bearing interest at 2.50% above the
Eurodollar borrowing rate or 1.50% above the
lender's prime rate, due in quarterly
installments of $750 beginning in December 1997
through September 2000......................... $ 8,989 $ 8,989 $ 8,989
A-2 Term Loan, bearing interest at 2.50% above the
Eurodollar borrowing rate or 1.50% above the
lender's prime rate, due in various quarterly
amounts beginning in March 1996 through
September 2000................................. 49,941 41,201 37,705
B Term Loan, bearing interest at 3.00% above the
Eurodollar borrowing rate or 2.00% above the
lender's prime rate, due in various quarterly
amounts beginning in March 1996 through
September 2002................................. 135,839 134,091 133,392
C Term Loan, bearing interest at 3.25% above the
Eurodollar borrowing rate or 2.25% above the
lender's prime rate, due in various quarterly
amounts beginning in March 1996 through
September 2003................................. 29,964 29,465 29,265
13% Senior Subordinated Notes due 2005 with interest
payable semi-annually beginning April 1996........ 125,000 125,000 125,000
Australian $8,175 credit facility, bearing interest
at 9.85% through October 1998 and lender's prime
rate plus 1.87% thereafter, with scheduled
repayment commencing in 1998 through 2001......... 5,017 4,855 3,105
French Term Loans, bearing interest at three month
LIBOR plus 0.85% to 1.32%, principal and interest
payable quarterly through October 1998............ 4,266 2,718 2,410
Other foreign debt.................................. 2,243 3,519 5,017
--------- --------- -----------
Total debt................................ 361,259 349,838 344,883
Less current portion of long-term debt.... 14,416 15,682 21,184
--------- --------- -----------
Long-term debt............................ $ 346,843 $ 334,156 $ 323,699
======== ======== =========
</TABLE>
In connection with the Transactions, SCIS, Caterair and Holdings entered
into a $500,000 Senior Secured Credit Agreement with a consortium of lenders
(the "Credit Agreement"). The Credit Agreement provides SCIS with up to $315,000
of financing consisting of $225,000 of term loans and up to $90,000 of revolving
loans (including up to $50,000 available for letters of credit). The Company had
$224,773, and $213,746 of term loan borrowings outstanding at December 31, 1995
and 1996, respectively. No revolving loan borrowings were outstanding at
December 31, 1995 and 1996. The Credit Agreement also provided Caterair with
$185,000 of term loans. Caterair had $185,000 and $167,500 borrowings
outstanding under the Credit Agreement at December 31, 1995 and 1996,
respectively. A portion of the initial borrowings of SCIS and Caterair under the
Credit Agreement was used to repay certain indebtedness of Caterair.
F-13
<PAGE> 136
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
The term loans and revolving credit facility under the Credit Agreement
bear interest at rates ranging between 2.50% to 3.25% above the Eurodollar
borrowing rate ("Eurodollar Base Borrowing Rate") or between 1.50% to 2.25%
above the lender's prime rate (8.25% at December 31, 1996). The actual rate
charged on each credit instrument is dependent on the selection of either the
30, 60, 90 or 180 day Eurodollar borrowing rate or the prime rate. Interest is
payable quarterly for all loans and also at the end of each interest period for
Eurodollar borrowings. The average interest in effect at December 31, 1996, for
loans outstanding under the Credit Agreement was 8.46%.
Effective December 29, 1995, SCIS entered into an interest rate swap
agreement to reduce interest rate exposure on long-term debt. The agreement
covers a notional amount of $350,000 at December 31, 1996, and matures in 2001.
Pursuant to a written agreement, Caterair assumed a ratable participating
interest (based on the respective principal amounts of term loans outstanding
under the Credit Agreement) in SCIS's rights and obligations under the interest
rate swap. When combined with the terms of SCIS's senior term loans, under the
Credit Agreement the Eurodollar Base Borrowing Rate was effectively fixed at
5.6875% on approximately $192,000 in borrowings through June 19, 2000.
The Credit Agreement calls for mandatory prepayments and commitment
reductions under certain circumstances from the proceeds from equity issuances
or capital contributions, issuances of additional debt, asset disposals,
insurance proceeds from recoverable events and certain excess cash flows of SCIS
and Caterair, as more particularly described in the Credit Agreement.
All obligations of SCIS under the Credit Agreement are jointly and
severally guaranteed by Caterair, certain subsidiaries of SCIS, Holdings, OFSI
(on a limited basis) and an affiliate of OFSI (on a limited basis). All
obligations of Caterair under the Credit Agreement are jointly and severally
guaranteed by SCIS, certain subsidiaries of SCIS, Holdings OFSI (on a limited
basis) and an affiliate of OFSI (on a limited basis). In addition, the Credit
Agreement is collateralized by (i) a first priority lien on virtually all
tangible and intangible assets of SCIS and Caterair and all of their respective
wholly-owned domestic subsidiaries and (ii) pledges of all capital stock of
Caterair and SCIS and their respective domestic subsidiaries and 65% of the
capital stock of their respective direct foreign subsidiaries.
The Credit Agreement contains covenants that, among other things, place
certain restrictions on the ability of OFSI, SCIS, Holdings, Caterair and their
respective subsidiaries to dispose of assets, incur additional indebtedness,
incur guarantor obligations, repay other indebtedness, pay dividends, make
investments and acquisitions, engage in mergers or consolidations, make capital
expenditures and otherwise engage in certain corporate activities. In addition,
the Credit Agreement requires compliance with financial tests based on combined
results of SCIS and Caterair. SCIS and Caterair were in compliance with these
financial covenant requirements at December 31, 1996.
At December 31, 1996 approximately $25,755 of bank letters of credit were
issued and outstanding under the Credit Agreement (approximately $25,680 issued
on behalf of SCIS and approximately $75 for the benefit of Caterair) primarily
to collateralize insurance carriers providing workers' compensation coverage as
well as for surety bonds, leases and requirements of Caterair for environmental
remediation of certain assets previously sold.
The Credit Agreement requires the payment of 1/2 of 1% on the unused
portion of the revolving credit facility as well as various fees for the
issuance and maintenance of letters of credit.
In connection with the Transactions, SCIS issued $125,000 of 13% Senior
Subordinated Notes due October 1, 2005 (the "Notes"). The Notes are guaranteed
on a joint and several senior subordinated basis by Sky Chefs, CII (Sky Chefs
and CII are collectively referred to herein as the "Subsidiary Guarantors") and
Caterair. The Notes (and related guarantees) are subordinate to payment of all
senior debt (as described in the Indenture relating thereto) of SCIS, the
Subsidiary Guarantors and Caterair. The Notes may be
F-14
<PAGE> 137
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
redeemed at the option of SCIS starting October 1, 2000 at various premiums
above face value. Up to $43,800 of the Notes may also be redeemed with proceeds
obtained through certain public equity offerings of capital stock of OFSI or
SCIS. The Indenture for the Notes contains covenants which, among other things,
limit SCIS's, the Subsidiary Guarantors' and Caterair's ability to pay
dividends, make stock repurchases, incur additional indebtedness, engage in or
use the proceeds of asset sales, create liens or engage in certain other
transactions.
The combined aggregate amount of maturities for all long-term borrowings of
the Company for each of the next five years and thereafter is as follows:
<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
- ------------
<S> <C> <C>
1997............................................................... $ 15,682
1998............................................................... 18,345
1999............................................................... 17,598
2000............................................................... 16,654
2001............................................................... 41,895
Thereafter......................................................... 239,664
--------
$349,838
========
</TABLE>
10. OTHER LONG-TERM LIABILITIES
<TABLE>
<CAPTION>
DECEMBER 31,
------------------- JUNE 30,
1995 1996 1997
-------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Accrued postretirement benefit liability.............. $ 31,251 $ 33,361 $ 34,361
Accrued rent.......................................... 15,769 19,066 19,709
Accrued pension obligation............................ 7,287 -- --
Accrued insurance..................................... 9,111 18,253 18,254
Provisions relating to idle facilities and other
acquisition related costs........................... 61,967 56,447 51,215
Other................................................. 28,775 29,270 27,628
-------- -------- -----------
$154,160 $156,397 $ 151,167
======== ======== =========
</TABLE>
11. INCOME TAXES
The components of earnings (loss) before income taxes are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
1994 1995 1996
------- -------- --------
<S> <C> <C> <C>
Domestic............................................ $37,090 $(19,763) $(27,699)
Foreign............................................. (500) (2,806) 17,078
------- -------- --------
$36,590 $(22,569) $(10,621)
======= ======== ========
</TABLE>
F-15
<PAGE> 138
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
Income tax provision (benefit) reflected in the consolidated statements of
operations consists of the following:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
------- ------- -------
<S> <C> <C> <C>
Federal:
Current expense (benefit)........................... $12,162 $(1,870) $ 2,571
Deferred benefit.................................... (242) (5,190) (9,230)
------- ------- -------
Total federal............................... 11,920 (7,060) (6,659)
------- ------- -------
Foreign:
Current expense..................................... -- 4,199 6,696
Deferred expense (benefit).......................... -- (2,614) 989
------- ------- -------
Total foreign............................... -- 1,585 7,685
------- ------- -------
State and local:
Current expense (benefit)........................... 2,112 (245) 374
Deferred benefit.................................... (647) (805) (980)
------- ------- -------
Total state and local....................... 1,465 (1,050) (606)
------- ------- -------
Total provision (benefit) for income
taxes..................................... $13,385 $(6,525) $ 420
======= ======= =======
</TABLE>
The effective income tax rate varies from the blended federal, state and
local statutory rate as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1994 1995 1996
---- ----- -----
<S> <C> <C> <C>
Blended statutory rate....................................... 38.3% (38.5)% (38.5)%
Amortization of nondeductible goodwill....................... 0.5 2.7 20.0
Tax credits.................................................. 0.1 0.3 --
Effect of foreign taxes...................................... -- 7.0 4.0
Corporate-owned life insurance investments................... (1.8) (2.1) (3.7)
Foreign losses not benefited................................. -- 4.8 21.7
Other items.................................................. (0.5) (3.1) 0.4
---- ----- -----
Effective income tax rate.......................... 36.6% (28.9)% 3.9%
==== ===== =====
</TABLE>
F-16
<PAGE> 139
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
The components of deferred tax assets and deferred tax liabilities are as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1996
-------- --------
<S> <C> <C>
Net current deferred tax asset (liability):
Bad debt expense.............................................. $ 1,223 $ 2,436
Restructuring charge.......................................... (322) (329)
Vacation and other employee benefits.......................... 3,174 3,082
Other......................................................... 266 1,916
-------- --------
$ 4,341 $ 7,105
======== ========
Net noncurrent deferred tax asset (liability):
Depreciation and amortization................................. $ 613 $ 7,303
Capital leases................................................ 3,658 3,962
Workers' compensation benefits................................ 8,288 10,112
Prepaid healthcare benefits................................... (13,032) (13,497)
Postretirement benefits....................................... 13,144 13,344
Pension....................................................... 2,784 (1,744)
Purchase deferred tax assets.................................. 26,045 21,200
Other......................................................... (231) 662
Credit and net operating carryforwards........................ 5,126 8,685
-------- --------
46,395 50,027
Less valuation allowance........................................ 3,795 4,221
-------- --------
$ 42,600 $ 45,806
======== ========
</TABLE>
The Company has recorded a total net deferred tax asset of $52,911 as of
December 31, 1996. Realization is dependent on generating sufficient taxable
income. Although realization is not assured, management believes it is more
likely than not the net deferred tax asset will be realized. The amount of the
deferred asset considered realizable, however, could be reduced in the near term
if estimates of future taxable income are reduced.
The Company had income tax refunds of $10,156 and $1,893 included in
advances to parent at December 31, 1995 and 1996, respectively.
At December 31, 1996, the Company had foreign tax credit carryforwards in
the amount of $2,455, which expire in 2011. The Company had U.S. operating loss
carryforwards of $2,828 which expire in 2001 and foreign operating losses of
$17,119 which expire as follows:
<TABLE>
<CAPTION>
YEAR OF AMOUNT OF
EXPIRATION LOSS
- ---------- ---------
<S> <C> <C>
1997........................................................ $ 3,092
1998........................................................ 3,143
1999........................................................ 3,482
2000........................................................ 3,752
2001........................................................ 2,924
Indefinite.................................................. 726
---------
$17,119
========
</TABLE>
F-17
<PAGE> 140
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
12. LEASES
The Company leases various types of property, including airline catering
kitchens and equipment, vehicles and office facilities. Rent expense for all
operating leases was as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1994 1995 1996
------- ------- -------
<S> <C> <C> <C>
Minimum rent............................................ $16,177 $31,131 $58,688
Contingent rent......................................... 16,956 26,934 38,872
Less sublease rent...................................... (1,201) (1,489) (542)
------ ------ ------
Total rent expense............................ $31,932 $56,576 $97,018
====== ====== ======
</TABLE>
Contingent rent represents percentage rent based on gross revenues in
excess of minimum levels.
The future minimum lease payments required under capital leases (together
with the present value of minimum lease payments) and future minimum lease
payments required under operating leases that have an initial or remaining lease
term in excess of one year as of December 31, 1996 are as follows:
<TABLE>
<CAPTION>
YEAR ENDING CAPITAL OPERATING
DECEMBER 31, LEASES LEASES
- ------------ ------- ---------
<S> <C> <C> <C>
1997............................................................ $ 2,936 $ 50,104
1998............................................................ 2,629 47,863
1999............................................................ 2,566 46,083
2000............................................................ 2,521 44,378
2001............................................................ 2,813 48,508
Thereafter...................................................... 46,954 128,729
------- ---------
Total minimum lease payments.......................... 60,419 $ 365,665
========
Less imputed interest........................................... 30,028
-------
Present value of minimum lease payments......................... 30,391
Less current portion............................................ 634
-------
Long-term portion of minimum lease payments..................... $29,757
=======
</TABLE>
Other than the Caterair leases described below, most leases have initial
terms of from 10 to 20 years and contain one or more renewal options.
Leases for idle kitchens are included in the preceding table of operating
leases. Future minimum lease payments associated with these facilities of
$29,470 at December 31, 1996 do not represent future operating expenses as they
have been accrued as part of the Transactions (see Note 2).
In accordance with Statement of Financial Accounting Standards No. 13,
"Accounting for Leases," certain leases for kitchen facilities at airports owned
by government unit or authority are being accounted for as operating leases
because special provisions in the lease agreements make the economic life of
such facilities essentially indeterminate.
In connection with the Transactions, pursuant to several leases (the
"Domestic Leases"), Sky Chefs and CII leased and subleased from Caterair
substantially all of its domestic tangible assets for a six-year term. In the
event that Caterair's lease of such assets was for less than six years, the
applicable Domestic Lease is for such shorter period. Sky Chefs and CII have the
option to purchase the assets of Caterair covered by the Domestic Leases for an
amount determined under formulas in the Domestic Leases that were intended to
F-18
<PAGE> 141
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
result in an exercise price equal to the estimated fair market value of such
assets at the time of exercise of such option. The option is exercisable until
the date which is 30 days after termination of the applicable Domestic Lease.
The Company is not certain whether such options will be exercised. Total amounts
payable to Caterair at December 31, 1995 and 1996, which are included in the
above schedule of future minimum operating lease payments, are approximately
$171,185, and $135,117 respectively, of which approximately $57,498 and $47,500,
respectively, relates to lease payments for leasehold improvements and
equipment.
13. RELATED PARTY TRANSACTIONS
In connection with the Transactions, SCIS and its subsidiaries licensed
Caterair's rights under certain customer contracts for a six-year period (the
"License Agreements"). However, after the consummation of such Transactions,
Caterair retained certain operations relating to customer contracts for which
consents to assignment were not obtained. Such consents with respect to these
operations were obtained during the second quarter of 1996 and such operations
were leased, subleased and licensed to SCIS and its subsidiaries. Sky Chefs and
CII each have the option to purchase the customer contract rights covered by the
License Agreements for an amount determined under formulas in the License
Agreements that were intended to result in an exercise price equal to the
estimated fair market value of such rights at the time of the exercise of such
option. The option is exercisable at any time until the date which is 90 days
after the termination of the applicable License Agreement. The Company is not
certain whether such options will be exercised. Caterair agreed, subject to
certain exceptions, not to compete with Sky Chefs in the airline catering
business for a six-year term and Sky Chefs is obligated to pay Caterair $4,000
per year. Lease, license and noncompete related expense for these arrangements
with Caterair for the periods ended December 31, 1995 and 1996 included in cost
of operations amounted to $18,953 and $77,816, respectively.
The Company loaned Caterair approximately $37,788 in connection with the
Transactions. The loan matures in 2001, bears interest at 8% per annum (payable
in-kind) and is collateralized by a subordinated lien on the assets of Caterair
representing collateral under the Credit Agreement. The cumulative amounts due
under this loan were $38,544 and $41,634 at December 31, 1995 and 1996,
respectively. Interest income related to this loan of $756 and $3,090 is
included in interest income for the years ended December 31, 1995 and 1996,
respectively. In 1995, the Company also paid $7,147 of fees related to the
Transactions on behalf of Caterair, which were included in advances to
affiliates at December 31, 1995. Caterair repaid these fees to the Company in
1996.
The Company was unable to obtain certain consents to the Transactions with
respect to certain of Caterair's kitchens at which one airline is the major
customer. Such consents with respect to these operations were obtained during
the second quarter of 1996 and such operations were leased, subleased and
licensed to SCIS and its subsidiaries. Prior to acquiring this consent, the
Company and Caterair entered into a management agreement for the operations at
these kitchens whereby Caterair operated them with Caterair employees with the
Company providing management and administration support services in exchange for
a management fee equivalent to 4% of the kitchen's net sales. Management fees
earned under this arrangement amounted to $604 and $1,057 for the periods ended
December 31, 1995 and 1996, respectively, and are included in revenues.
In 1993, LSG Lufthansa Service GmbH ("LSG"), a subsidiary of Lufthansa
German Airlines, acquired a minority interest in OFSI from existing shareholders
through the purchase of OFSI Class A common stock by LSG's U.S. subsidiary. The
parties also entered into other agreements including joint marketing and
international development agreements. The Company had accounts receivable from
Lufthansa German Airlines of $1,541 and $2,597 at December 31, 1995 and 1996,
respectively. Sales to Lufthansa German Airlines in 1995 and 1996 were $12,881
and $22,289, respectively.
F-19
<PAGE> 142
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
The Company and LSG had agreed that LSG would have the opportunity until
June 30, 1997, to acquire from Sky Chefs 50% of the interest acquired by Sky
Chefs from Caterair in Europe for a price to be negotiated on a basis consistent
with the valuation of the entire Caterair business implicit in the Transactions.
LSG declined to act on this agreement.
The Company paid management fees to OFSI in 1994, 1995 and 1996 of $671,
$694, and $1,500, respectively. During 1995 the Company repaid a $10,607 loan
from OFSI with interest at LIBOR plus 1%, and also paid to the parent of OFSI
advisory service fees relating to the Transactions of $4,000.
14. GEOGRAPHIC AND CUSTOMER INFORMATION
Information concerning operations by geographic area is presented below:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------
1994 1995 1996
-------- -------- ----------
<S> <C> <C> <C>
Net sales:
United States..................................... $463,059 $572,566 $ 952,009
Europe............................................ -- 65,729 243,895
Other............................................. 5,549 100,807 333,912
-------- -------- ----------
$468,608 $739,102 $1,529,816
======== ======== =========
Operating income (loss):
United States..................................... $ 43,778 $ (4,803) $ 11,699
Europe............................................ -- 1,208 (5,282)
Other............................................. (419) 382 30,176
-------- -------- ----------
$ 43,359 $ (3,213) $ 36,593
======== ======== =========
Identifiable assets:
United States..................................... $224,098 $648,174 $ 674,076
Europe............................................ -- 74,754 67,692
Other............................................. 18,918 105,865 106,187
-------- -------- ----------
$243,016 $828,793 $ 847,955
======== ======== =========
</TABLE>
American Airlines is the only customer that accounted for 10% or more of
the Company's total revenue in any of the last three years. Sales to, and
accounts receivable from, American Airlines for the last three years ended
December 31 were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
1994 1995 1996
--------- --------- ---------
<S> <C> <C> <C>
Net sales to American Airlines:
United States...................................... $ 347,948 $ 380,825 $ 412,147
Europe............................................. -- 8,288 31,200
Other.............................................. -- 4,934 26,663
--------- --------- ---------
$ 347,948 $ 394,047 $ 470,010
======== ======== ========
Accounts Receivable from American Airlines......... $ 18,000 $ 34,787 $ 18,142
======== ======== ========
</TABLE>
Although the Company's exposure to credit risk associated with nonpayment
by American Airlines is affected by conditions or occurrences within the airline
industry, trade receivables from American Airlines are considered fully
collectible as of December 31, 1996.
F-20
<PAGE> 143
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
15. EMPLOYEE BENEFITS
In connection with the Transactions, Sky Chefs and CII, respectively, hired
approximately 6,000 and 3,000 domestic employees of Caterair on October 1, 1995.
Prior to the Transactions, Sky Chefs employed approximately 6,000 full-time
domestic employees. The employee participants' share of plan assets in the
Caterair Retirement Savings and Investment Plan as of September 29, 1995, was
transferred to the Sky Chefs and CII plans.
Retirement Benefit Plans
Sky Chefs sponsors two noncontributory pension plans, one for union and one
for non-union employees having at least one year of service and who are eligible
to participate. Effective June 30, 1995, for the union employee plan and
September 30, 1995, for the non-union employee plan, Sky Chefs amended the plans
to exclude from participation in these plans any new employees hired by Sky
Chefs subsequent to the dates of amendment. The plans provide defined benefits
based upon wages or a fixed amount multiplied by years of service. The plans
provide for disability and death benefits after meeting specified age and
service requirements.
Sky Chefs has elected to contribute to these plans an amount which is
within the range of the Employee Retirement Income Security Act ("ERISA")
minimum and maximum contributions deductible for federal income tax purposes.
The components of pension expense related to these qualified pension plans
are reflected below:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1994 1995 1996
-------- -------- -------
<S> <C> <C> <C>
Service cost.......................................... $ 3,589 $ 3,392 $ 4,853
Interest cost......................................... 5,835 6,175 7,628
Actual return on plan assets.......................... 1,807 (20,066) (9,466)
Net amortization and deferral......................... (10,871) 11,147 165
-------- -------- -------
Net pension expense......................... $ 360 $ 648 $ 3,180
======== ======== =======
</TABLE>
F-21
<PAGE> 144
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
The following table sets forth the funding status of the plans and amounts
recognized in the consolidated financial statements:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1995 1996
--------- ---------
<S> <C> <C>
Actuarial present value of benefit obligation:
Vested benefit obligation.................................. $ 89,679 $ 93,397
========= =========
Accumulated benefit obligation............................... $ 93,605 $ 96,951
========= =========
Projected benefit obligation................................. $(107,315) $(107,024)
Plan assets at fair value.................................... 88,839 101,151
--------- ---------
Plan assets less projected benefit obligation................ (18,476) (5,873)
Actuarial gains and losses and effects of assumption
changes.................................................... 24,801 13,973
Unrecognized net transition asset established January 1,
1987, to be recognized over 11 years....................... (2,594) (1,263)
Unrecognized prior service cost.............................. (45) 477
Additional minimum liability................................. (8,453) --
--------- ---------
Prepaid pension cost (liability)................... $ (4,767) $ 7,314
========= =========
</TABLE>
The discount rates and rates of increase in future compensation levels used
in determining the actuarial present value of the projected benefit obligation
were and 7.25% and 4.25%, respectively, at December 31, 1995 and 7.75% and 4.5%,
respectively, at December 31, 1996. The expected long-term rate of return on
assets was 10.6% for the years ended December 31, 1995 and 1996, respectively.
Plan assets at December 31, 1995 and 1996 consisted primarily of cash and
marketable securities.
In addition, Sky Chefs sponsors a Supplemental Executive Retirement Plan
("SERP") for certain key executive officers. This plan has not been funded by
Sky Chefs. Amounts charged to expense for this plan are $424, $418, and $431,
for 1994, 1995 and 1996, respectively. The projected unfunded liability is
approximately $2,845 and $3,032 at December 31, 1995 and 1996, respectively.
In accordance with Statement of Financial Accounting Standards No. 87, Sky
Chefs has recorded an additional minimum pension liability for underfunded plans
of $7,287 and $707 at December 31, 1995 and 1996, respectively, representing the
excess of unfunded accumulated benefit obligations over previously recorded
pension cost liabilities. A corresponding amount is recognized as an intangible
asset except to the extent that these additional liabilities exceed related
unrecognized prior service cost and net transition obligation, in which case the
increase in liabilities is charged directly to shareholders' equity. For 1995
and 1996, respectively, $5,565 and $330 of the excess minimum pension liability
resulted in a charge to equity, net of income taxes of $3,484 and $255.
Prepaid Employee Healthcare
The Company maintains two Voluntary Employee Benefit Association ("VEBA")
trusts, one for union and one for non-union domestic employees. Amounts held in
the trust, consisting primarily of money market funds, were $40,474 and $36,786
at December 31, 1995 and 1996, respectively, and are included in prepaid
expenses and other assets.
Postretirement Healthcare and Life Insurance Benefits
In addition to pension benefits, Sky Chefs provides certain healthcare and
life insurance benefits for retired domestic employees. Effective, June 30,
1995, for union employees and September 30, 1995, for non-
F-22
<PAGE> 145
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
union employees, Sky Chefs amended the plans to exclude from participation new
union employees hired by Sky Chefs subsequent to the date of amendment and
reduced substantially the postretirement healthcare and life insurance benefits
for non-union employees hired by Sky Chefs subsequent to the date of amendment.
Qualified domestic employees become eligible for benefits upon attainment of age
55 and completion of 10 years service. Such healthcare and life insurance
benefits are provided through VEBA trusts and by insurance companies, with
insurance premiums based on the benefits paid. The cash payments for providing
benefits were $1,539, $1,634, and $1,885, for the years ended December 31, 1994,
1995 and 1996, respectively.
Net postretirement benefit cost included in cost of operations for the
years ended December 31, 1994, 1995 and 1996 consists of the following
components:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
1994 1995 1996
------ ------ ------
<S> <C> <C> <C>
Service cost............................................. $1,015 $ 838 $ 861
Interest cost............................................ 2,524 2,196 2,174
Amortization of prior service cost....................... -- -- (59)
------ ------ ------
Net pension expense............................ $3,539 $3,034 $2,976
====== ====== ======
</TABLE>
The following sets forth the postretirement benefit plan's funded status
reconciled with amounts reported in the consolidated balance sheets as of
December 31, 1995 and 1996:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1995 1996
------- -------
<S> <C> <C>
Accumulated postretirement benefit obligation ("APBO")
Retirees....................................................... $21,279 $23,313
Fully eligible active plan participants........................ 4,511 4,417
Other active plan participants................................. 5,078 5,043
------- -------
Total APBO....................................................... 30,868 32,773
Plan assets at fair value........................................ -- --
------- -------
Accumulated postretirement benefit obligation in excess of plan
assets......................................................... 30,868 32,773
Unrecognized net actuarial gains................................. 1,883 2,088
------- -------
Accrued postretirement benefit liability......................... 32,751 34,861
Less amount classified as current (included in accrued
expenses)...................................................... 1,500 1,500
------- -------
Noncurrent liability (included in other long-term liabilities)... $31,251 $33,361
======= =======
</TABLE>
An 8% and 7% annual rate of increase in the per capita costs of covered
healthcare benefits was assumed for 1995 and 1996, respectively, gradually
decreasing to 5% by the year 1999. Increasing the assumed healthcare cost trend
rates by one percentage point in each year would increase the accumulated
postretirement benefit obligation by $1,303 and $1,657 as of December 31, 1995
and 1996, respectively, and increase the aggregate of the service cost and
interest cost components of net periodic postretirement benefit cost for 1994,
1995 and 1996 by $151, $183 and, $208, respectively. A discount rate of 7.25%
and 7.75% was used to determine the APBO at December 31, 1995 and 1996,
respectively.
Retirement Savings Plans
Sky Chefs has established a retirement savings plan for its domestic
employees which allows participants to make contributions through salary
reduction pursuant to Section 401(k) of the Internal Revenue Code. In 1995, Sky
Chefs amended its retirement savings plan to provide a minimum 1% of eligible
employee
F-23
<PAGE> 146
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
compensation contribution to the plan for those participants not eligible for
participation in Sky Chefs' defined benefit plans. In addition, Sky Chefs may
elect to match certain portions of employee contributions. The employer matching
contribution was $655 and $1,210 for 1994 and 1995, respectively.
CII established a retirement savings plan for its domestic employees hired
from Caterair on September 29, 1995, which allows participants to make
contributions from 1% to 10% of their compensation or select a fixed dollar
amount to be deducted during each pay period. CII makes a matching contribution
on the first 6% of each employee's pre-tax or after tax contributions, the
amount of which will be determined before the start of each year. The employer
matching contributions for the periods ended December 31, 1995 and 1996 were
$576 and $472, respectively.
Employee Stock Options
Options to purchase 62.74 and 46.24 of Class A shares of OFSI capital stock
were held by management employees of the Company at December 31, 1995 and 1996,
respectively. The option price for the Class A shares is equal to the book value
(adjusted for changes in generally accepted accounting principles subsequent to
May 29, 1986) at the end of the fiscal quarter immediately preceding the
exercise date. These options only become exercisable upon the occurrence of
certain future events, as defined in the employee stock purchase agreement.
Periodically, management employees have been given the opportunity to purchase
OFSI shares in exchange for the cancellation of their outstanding OFSI options.
Stock-Based Compensation Plan
SCIS sponsors a book value stock purchase plan for selected management
employees (the "Book Value Plan") and applies Accounting Principles Board
Opinion No. 25 ("APB 25") and related interpretations in accounting for this
Plan. In 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123 "Accounting for Stock-Based Compensation"
("SFAS 123") which, if fully adopted, would change the methods the Company
applies in recognizing the cost of this Plan. Adoption of the cost recognition
provisions of SFAS 123 is optional and the Company has decided not to elect
these provisions. However, pro forma disclosures as if the Company adopted the
cost recognition provisions of SFAS 123 in 1995 are required by SFAS 123 and are
discussed below.
SCIS adopted the Book Value Plan in 1986. Under the Book Value Plan, SCIS
is authorized to issue Class A shares of common stock to its full-time
management employees, nearly all of whom are eligible to participate. The
purchase price of the shares is equal to the book value (adjusted for changes in
accounting principles employed by the Company subsequent to May 29, 1986) at the
end of the fiscal quarter immediately preceding the purchase date. The number of
shares outstanding under the Plan at December 31, 1995 and 1996, respectively,
are described in Note 20 to these financial statements. Shares are purchased at
100% of the book value of the shares on the date of the purchase. Accordingly,
the accounting charge for these shares purchased determined under APB 25 and
SFAS 123 is zero.
The effects of applying SFAS 123 in this pro forma disclosure are not
indicative of future amounts. SFAS 123 does not apply to awards prior to 1995.
Deferred Compensation Plan
The Company provides its key employees with the opportunity to participate
in an unfunded deferred compensation program. There were 15 and 19 participants
in the program at December 31, 1995 and 1996, respectively. Under the program,
participants may defer up to 75% of their annual base salary and up to 100% of
their annual bonuses otherwise payable in cash. The amounts deferred are
contributed by the Company together with additional corporate funds into a
trust. The amounts deferred by participants are used to
F-24
<PAGE> 147
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
purchase investments at the direction of the Plan Administration Committee. The
amounts contributed to the trust by OFSI are utilized to purchase life insurance
policies on qualifying participants and to fund administrative expenses. Upon
the death of an insured participant, the proceeds of such a policy are payable
to OFSI. Account balances, which are equal to compensation deferred and related
earnings, are payable to participants or their beneficiaries upon the earlier of
termination of employment, retirement, death, permanent disability or a lump sum
on a specific date selected in the future. The Company has guaranteed the
participants a fixed rate of return of 8% through December 31, 1999 at which
time the rate will be reset but will never be less than 5%. Any differences
between the fixed rate and the rate of return earned by the trust will affect
the amount of corporate funds necessary to administer the plan.
The program is not qualified under Section 401 of the Internal Revenue
Code. Amounts contributed to the plan through December 31, 1995 and 1996
amounted to $1,650 and $2,103, respectively.
16. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The following estimated fair value amounts have been determined the by
Company using available market information and appropriate valuation
methodologies. However, considerable judgment is required in interpreting market
data to develop the estimates of fair value. Accordingly, the estimates
presented herein are not necessarily indicative of the amounts that the Company
could realize in a current market exchange.
The carrying amounts of cash and cash equivalents, accounts and notes
receivable, accounts payable and accrued expenses and other liabilities are
reasonable estimates of their fair values. Letters of credit are included in the
estimated fair value of accrued expenses and other liabilities. The estimated
fair values and carrying amounts of other financial instruments at December 31,
1995 and 1996, are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------------------
1995 1996
--------------------- ---------------------
ESTIMATED CARRYING ESTIMATED CARRYING
FAIR VALUE AMOUNT FAIR VALUE AMOUNT
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
Assets:
Senior subordinated note due from
affiliate(a)............................. $ 39,073 $ 38,544 $ 41,634 $ 41,634
Interest rate swap agreement(c)............. -- -- 2,119 --
Liabilities:
Term loans(b)............................... 224,773 224,733 213,746 213,746
13% senior subordinated notes(b)............ 131,562 125,000 140,938 125,000
Other long-term debt(b)..................... 11,526 11,526 11,092 11,092
Interest rate swap agreement(c)............. 2,778 -- -- --
</TABLE>
The following methods and assumptions were used to estimate the fair value
of each class of financial instrument.
(A) SENIOR SUBORDINATED NOTE DUE FROM AFFILIATE
The Company's Senior Subordinated Note due from Caterair in 2001 bears a
fixed rate of interest of 8% (payable in-kind) and was executed September 29,
1995 in connection with the Transactions. This note is with a related party and
as such there is no market activity. Accordingly, the carrying values
approximate estimated fair value.
F-25
<PAGE> 148
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
(B) LONG-TERM DEBT
The Company's long-term debt securities can be segregated into three
categories: (i) term loans and the revolving credit facility: (ii) 13% senior
subordinated notes, and (iii) other long-term debt. There is no active market
for the Company's other long-term debt and, consequently, no quoted prices are
available.
(i) Term Loans and the Revolving Credit Facility
The fair value of the term loans and revolving credit facility
approximates the carrying value since interest rates are variable.
(ii) 13% Senior Subordinated Notes
The fair value of the Notes is based upon quoted market prices for
the Company's and other financial instruments of similar rating and
risk.
(iii) Other Long-Term Debt
The Company's other long-term debt is comprised principally of
foreign subsidiary bank borrowings with interest and repayment terms
that are not significantly different from current market rates.
Accordingly, the carrying values approximate estimated fair value.
(C) INTEREST RATE SWAP AGREEMENTS
At December 31, 1995 and 1996, the Company had interest rate swap
instruments (used for hedging purposes) which were not included in the Company's
consolidated balance sheet. The estimated fair value of this swap agreement was
negative (representing a liability) to the Company at December 31, 1995 and
positive (representing an asset) at December 31, 1996, as a result of
fluctuations in projected futures interest rate swap transaction values
subsequent to the trade date of December 27, 1995.
These disclosures relate to financial instruments only. The fair value
assumptions were based upon estimates of market conditions and perceived risks
of the financial instruments at December 31, 1995 and 1996.
17. DISCLOSURES OF SIGNIFICANT RISKS AND UNCERTAINTIES
The Company's financial instruments expose the Company to market and credit
risks and may at times be concentrated with certain counterparties or groups of
counterparties. The credit worthiness of counterparties is subject to continuing
review and full performance is anticipated unless otherwise specifically
disclosed.
Concentration of Cash Equivalents
Cash and cash equivalents of $20,581 and $19,898 at December 31, 1995 and
1996, respectively, were in foreign locations; a portion of which is restricted
from repatriation under various foreign tax laws and regulations.
The Company follows the policy of investing all idle domestic cash balances
in a money market fund with one money market fund manager. The invested balances
amounted to $16,740 and $20,499 at December 31, 1995 and 1996, respectively.
Dependence on Key Customers
As described in Note 1 and Note 2, the Company is engaged in providing
catering services to airlines in the U.S. and internationally (see Note 14 for
geographic and customer concentration information). The Company provides these
services to its airline customers on an open account unsecured basis. Prior to
the
F-26
<PAGE> 149
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
Transactions described in Note 2, approximately 76% of the Company's revenue was
derived from business with American Airlines under a long-term catering
agreement that expires at the end of 2003. In 1996, business with American
Airlines accounted for approximately 31% of the Company's business with no other
customer providing more than 10% of total annual revenues. The business
combination with Caterair substantially expanded the Company's base of
operations and reduced substantially its concentration of customer risk.
Dependence on Airline Industry Trends
The Company's revenues are largely dependent upon the number of passengers
who travel on airlines, the number of airline flights serviced by the Company
and the level of meal service provided to passengers. As a result, a decline in
the number of airline flights or in passenger traffic, or a reduction or
downgrading of airline meal services, as has been the case in recent years in
North America, could have a severe financial impact on the Company.
In the past several years, a number of United States airlines have merged
with other airlines, sought protection under federal bankruptcy laws or ceased
operating altogether. To the extent the Company has a significant business
relationship with an airline that reduces or ceases operations or seeks
protection under federal bankruptcy laws, the Company's revenues may be
materially adversely affected and the Company's realization of its investments
in kitchen facilities, accounts receivable and other assets related to such
customers may be negatively impacted.
Repatriation and Currency Risks
A significant portion of the Company's operations are outside the United
States. International operations are subject to a number of special risks. These
special risks include currency exchange rate fluctuations, trade barriers, and
political and economic risks in less developed countries such as hyperinflation
governmental expropriation and exchange controls, and other governmental
restrictions that may limit the ability to repatriate earnings of foreign
subsidiaries.
Caterair Operations Restructuring
In 1993 and 1994, the business formerly operated by Caterair lost over
$42,000 (excluding one-time charges for asset write-downs, provisions for
kitchen closures and other nonrecurring charges). The Company is currently in
the process of consolidating kitchen operations at airports where excess kitchen
capacity exists. This consolidation process has resulted in the closing of
certain kitchen facilities and a reduction in the number of personnel. In
addition to $8,200 which was charged to income and included in integration
expenses in 1995, the Company incurred approximately $30,361 of costs in 1996
associated with integration, restructuring and improving its combined
operations. Additional liabilities for kitchen closings and severance resulting
from additional consolidations will be recognized as expense in the period
incurred.
18. COMMITMENTS AND CONTINGENCIES
On June 23, 1995, the Company settled, for a payment of $3,700, a claim
asserted by American Airlines, Inc. (American), for rent payable by the Company
under facility subleases with American and occupancy costs reimbursed by
American under its catering agreements with the Company. The settlement resulted
in a pre-tax charge to 1995 income of $100.
In the normal course of business, the Company is from time to time named a
defendant in litigation and is currently a defendant in several actions.
However, in the opinion of management, the outcome of such
F-27
<PAGE> 150
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
litigation will not result in a material adverse effect on the consolidated
financial position or results of operations of the Company.
The Company is continually upgrading its equipment and facilities in order
to provide the most efficient service to its customers. As such, management
estimates that approximately $32,000 of capital expenditures will be incurred in
1997.
19. CHANGES IN WORKING CAPITAL ITEMS
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
----------------------------- ----------------------
1994 1995 1996 1996 1997
-------- ------- -------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
(Increase) decrease in accounts
and notes receivable............ $ (1,015) $ 5,606 $(13,655) $ (2,695) $ (12,069)
(Increase) decrease in
inventories..................... 20 1,234 (1,165) (344) (175)
Increase in prepaid expenses...... (1,134) (1,819) (2,578) (564) 1,323
Increase in accounts payable and
accrued expenses................ (18,696) 20,225 37,450 45,144 (1,720)
-------- ------- -------- -------- -----------
Decrease in working capital
items........................ $(20,825) $25,246 $ 20,052 $ 41,541 $ (12,641)
======== ======= ======== ======== =========
</TABLE>
20. GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS
The separate financial statements of Sky Chefs, CII and certain other
indirectly wholly-owned domestic subsidiaries of SCIS (the "Subsidiary
Guarantors") are not included herein because the Subsidiary Guarantors are
wholly-owned consolidated subsidiaries of the Company and are jointly, severally
and unconditionally liable for the obligations represented by the Notes. The
Company believes that the condensed consolidating financial information for the
Company, the combined Subsidiary Guarantors and the subsidiaries of SCIS which
are not guarantors of SCIS' 13% Senior Subordinated Notes (the "Non-Guarantor
Subsidiaries") provide Noteholders with information that is more meaningful to
them in understanding the financial position of the Subsidiary Guarantors than
separate financial statements of the Subsidiary Guarantors. Therefore, the
separate financial statements of the Subsidiary Guarantors are not deemed
material to investors.
Investments in subsidiaries are accounted for by the parent on the equity
method for purposes of the presentation set forth below. Earnings of
subsidiaries are therefore reflected in the parent's investment accounts and
earnings. The principal elimination entries set forth below eliminate
investments in subsidiaries and intercompany balances and transactions.
Set forth below is consolidating financial information for (i) the combined
Subsidiary Guarantors, (ii) the combined Non-Guarantor Subsidiaries, (iii) the
Company (on a parent only basis), (iv) an elimination column for adjustments to
arrive at the information for the Company and its subsidiaries on a consolidated
basis and (v) the Company and its subsidiaries on a consolidated basis as of
December 31, 1996 and 1995 and for each of the three years in the period ended
December 31, 1996.
F-28
<PAGE> 151
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
20. GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS -- (CONTINUED)
CONSOLIDATING BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, 1996
--------------------------------------------------------------------------------
COMBINED COMBINED SC INTERNATIONAL TOTAL
GUARANTOR NON-GUARANTOR SERVICES, INC. ELIMINATION SCIS
SUBSIDIARIES SUBSIDIARIES (PARENT ONLY) ENTRIES CONSOLIDATED
------------ ------------- ---------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents......... $ 1,399 $ 21,517 $ 32,742 $ -- $ 55,658
Accounts and notes receivable,
net............................. 87,807 57,837 4,525 (1,760) 148,409
Advance to affiliate.............. -- -- 237,527 (237,527) --
Tax refund receivable from
parent.......................... 1,893 -- -- -- 1,893
Inventories....................... 10,204 7,008 938 -- 18,150
Deferred income taxes............. 6,167 938 -- -- 7,105
Prepaid expenses.................. 10,698 6,406 -- -- 17,104
-------- -------- -------- --------- --------
Total current assets....... 118,168 93,706 275,732 (239,287) 248,319
Property and equipment, net......... 103,839 86,673 94 -- 190,606
Deferred income taxes............... 39,816 -- 9,343 (3,353) 45,806
Goodwill and intangible assets,
net............................... 282,379 498 -- (37,653) 245,224
Investment in affiliates............ 197,376 1,144 45,558 (231,278) 12,800
Loan to affiliate................... -- -- 41,634 -- 41,634
Other assets........................ 43,125 2,906 19,440 3,596 69,067
-------- -------- -------- --------- --------
Total assets............... $784,703 $ 184,927 $391,801 $(507,975) $853,456
======== ======== ======== ========= ========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable.................. $ 46,607 $ 27,403 $ 1,048 $ 6,195 $ 81,253
Accrued expenses.................. 121,504 53,219 -- -- 174,723
Payable to affiliate.............. 208,761 24,371 -- (228,627) 4,505
Current portion of long-term
debt............................ -- 15,836 10,787 (10,941) 15,682
Current portion of obligations
under capital leases............ 387 247 -- -- 634
-------- -------- -------- --------- --------
Total current
liabilities.............. 377,259 121,076 11,835 (233,373) 276,797
Obligations under capital leases.... 26,950 2,807 -- -- 29,757
Long-term debt...................... 18,697 6,197 327,959 (18,697) 334,156
Deferred income taxes............... -- 3,353 -- (3,353) --
Other long-term liabilities......... 157,104 8,631 5,276 (14,614) 156,397
-------- -------- -------- --------- --------
Total liabilities.......... 580,010 142,064 345,070 (270,037) 797,107
-------- -------- -------- --------- --------
Minority interest................... 9,618 (365) -- -- 9,618
-------- -------- -------- --------- --------
Commitments and contingencies....... -- -- -- -- --
Shareholder's equity:
Common stock...................... 10 -- -- (10) --
Additional paid-in capital........ 175,023 11,187 59,579 (186,210) 59,579
Cumulative translation
adjustment...................... (807) (2,990) (3,797) 3,797 (3,797)
Minimum pension liability
adjustment...................... (330) -- (330) 330 (330)
Retained earnings (deficit)....... 21,179 34,666 (8,721) (55,845) (8,721)
-------- -------- -------- --------- --------
Total shareholder's
equity................... 195,075 42,863 46,731 (237,938) 46,731
-------- -------- -------- --------- --------
Total liabilities and
shareholder's equity..... $784,703 $ 184,927 $391,801 $(507,975) $853,456
======== ======== ======== ========= ========
</TABLE>
F-29
<PAGE> 152
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
20. GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS -- (CONTINUED)
CONSOLIDATING BALANCE SHEETS -- (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31, 1995
----------------------------------------------------------------------------
COMBINED COMBINED SC INTERNATIONAL TOTAL
GUARANTOR NON-GUARANTOR SERVICES, INC. ELIMINATION SCIS
SUBSIDIARIES SUBSIDIARIES (PARENT ONLY) ENTRIES CONSOLIDATED
------------ ------------- ---------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents....... $ 24,820 $ 17,135 $ 12,874 $ -- $ 54,829
Accounts and notes receivable,
net.......................... 90,769 51,827 3,465 (9,542) 136,519
Advances to affiliates.......... 1,043 -- 291,179 (291,179) 1,043
Tax refund receivable from
parent....................... 8,331 -- -- -- 8,331
Inventories..................... 10,477 6,508 -- -- 16,985
Deferred income taxes........... 7,830 -- 18 (3,507) 4,341
Prepaid expenses................ 10,436 3,566 -- 524 14,526
------------ ------------- ---------------- ----------- ------------
Total current assets.... 153,706 79,036 307,536 (303,704) 236,574
Property and equipment, net....... 86,648 89,199 -- -- 175,847
Deferred income taxes............. 30,336 3,825 8,439 -- 42,600
Goodwill and intangible assets,
net............................. 304,311 -- -- (48,201) 256,110
Investment in affiliates.......... 199,815 -- 42,276 (230,578) 11,513
Loan to affiliate................. -- -- 38,544 -- 38,544
Other assets...................... 39,179 2,875 16,645 8,906 67,605
------------ ------------- ---------------- ----------- ------------
Total assets............ $813,995 $ 174,935 $ 413,440 $ (573,577) $828,793
========= =========== ============ ========= =========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable................ $ 60,993 $ 30,549 $ 317 $ (12,053) $ 79,806
Accrued expenses................ 85,725 47,439 5,556 -- 138,720
Payable to affiliates........... 254,552 12,160 -- (266,712) --
Deferred income taxes........... -- 3,507 -- (3,507) --
Current portion of long-term
debt......................... -- 16,824 8,533 (10,941) 14,416
Current portion of obligations
under capital leases......... 425 225 -- -- 650
------------ ------------- ---------------- ----------- ------------
Total current
liabilities........... 401,695 110,704 14,406 (293,213) 233,592
Obligations under capital
leases.......................... 27,370 2,780 -- -- 30,150
Long-term debt.................... 18,884 5,643 341,200 (18,884) 346,843
Other long-term liabilities....... 161,599 11,006 3,264 (21,709) 154,160
------------ ------------- ---------------- ----------- ------------
Total liabilities....... 609,548 130,133 358,870 (333,806) 764,745
------------ ------------- ---------------- ----------- ------------
Minority interest................. 9,307 171 -- -- 9,478
------------ ------------- ---------------- ----------- ------------
Commitments and contingencies
Shareholder's equity:
Common stock.................... 10 -- -- (10) --
Additional paid-in capital...... 175,015 14,662 59,579 (189,677) 59,579
Cumulative translation
adjustment................... 112 (3,590) (1,764) 3,478 (1,764)
Minimum pension liability
adjustment................... (5,565) -- (5,565) 5,565 (5,565)
Retained earnings............... 25,568 33,559 2,320 (59,127) 2,320
------------ ------------- ---------------- ----------- ------------
Total shareholder's
equity................ 195,140 44,631 54,570 (239,771) 54,570
------------ ------------- ---------------- ----------- ------------
Total liabilities and
shareholder's
equity................ $813,995 $ 174,935 $ 413,440 $ (573,577) $828,793
========= =========== ============ ========= =========
</TABLE>
F-30
<PAGE> 153
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
20. GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS -- (CONTINUED)
CONSOLIDATING STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
---------------------------------------------------------------------------------
COMBINED COMBINED SC INTERNATIONAL
GUARANTOR NON-GUARANTOR SERVICES, INC. ELIMINATION TOTAL SCIS
SUBSIDIARIES SUBSIDIARIES (PARENT ONLY) ENTRIES CONSOLIDATED
------------ -------------- ---------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Revenues.................... $ 1,007,155 $ 563,678 $ -- $ (41,017) $ 1,529,816
-------- -------- --------- -------- ----------
Costs and expenses:
Cost of operations........ 851,877 500,283 199 -- 1,352,359
Depreciation and
amortization........... 23,638 14,289 1 -- 37,928
Selling, general and
administrative......... 32,984 11,209 4,661 -- 48,854
Integration expenses...... 25,095 5,266 -- -- 30,361
Other..................... 53,893 10,638 207 (41,017) 23,721
-------- -------- --------- -------- ----------
Total costs and
expenses........ 987,487 541,685 5,068 (41,017) 1,493,223
-------- -------- --------- -------- ----------
Operating income (loss)..... 19,668 21,993 (5,068) -- 36,593
-------- -------- --------- -------- ----------
Other income (expense):
Interest income........... 2,249 11,257 4,173 (9,783) 7,896
Interest expense.......... (24,681) (14,371) (21,162) 9,783 (50,431)
Equity in earnings
(loss)................. 1,313 (8,453) 3,282 3,282 (576)
Other..................... (139) (3,964) -- -- (4,103)
-------- -------- --------- -------- ----------
Total other
expense......... (21,258) (15,531) (13,707) 3,282 (47,214)
-------- -------- --------- -------- ----------
Income (loss) before income
taxes..................... (1,590) 6,462 (18,775) 3,282 (10,621)
Provision (benefit) for
income taxes.............. 2,799 5,355 (7,734) -- 420
-------- -------- --------- -------- ----------
Net income (loss)........... $ (4,389) $ 1,107 $(11,041) $ 3,282 $ (11,041)
======== ======== ========= ======== ==========
</TABLE>
F-31
<PAGE> 154
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
20. GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS -- (CONTINUED)
CONSOLIDATING STATEMENTS OF OPERATIONS -- (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
----------------------------------------------------------------------------
COMBINED COMBINED SC INTERNATIONAL TOTAL
GUARANTOR NON-GUARANTOR SERVICES, INC. ELIMINATION SCIS
SUBSIDIARIES SUBSIDIARIES (PARENT ONLY) ENTRIES CONSOLIDATED
------------ ------------- ---------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Revenues.......................... $596,253 $ 161,522 $ -- $ (18,673) $739,102
------------ ------------- ---------------- ----------- ------------
Costs and expenses:
Cost of operations.............. 487,881 146,494 -- -- 634,375
Depreciation and amortization... 17,682 3,656 -- -- 21,338
Selling, general and
administrative............... 18,612 9,233 231 -- 28,076
Integration expenses............ 28,644 -- -- -- 28,644
Other........................... 48,342 213 -- (18,673) 29,882
------------ ------------- ---------------- ----------- ------------
Total costs and
expenses.............. 601,161 159,596 231 (18,673) 742,315
------------ ------------- ---------------- ----------- ------------
Operating income (loss)........... (4,908) 1,926 (231) -- (3,213)
------------ ------------- ---------------- ----------- ------------
Other income (expense):
Interest income................. 6,243 325 6,213 (10,323) 2,458
Interest expense................ (14,075) (5,916) (10,047) 10,323 (19,715)
Equity in earnings (loss)....... 4,515 (921) (13,551) 9,180 (777)
Other........................... (6,402) 5,080 -- -- (1,322)
------------ ------------- ---------------- ----------- ------------
Total other income
(expense)............. (9,719) (1,432) (17,385) 9,180 (19,356)
------------ ------------- ---------------- ----------- ------------
Income (loss) before income
taxes........................... (14,627) 494 (17,616) 9,180 (22,569)
Provision (benefit) for income
taxes........................... (5,739) 786 (1,572) -- (6,525)
------------ ------------- ---------------- ----------- ------------
Net income (loss)................. $ (8,888) $ (292) $(16,044) $ 9,180 $(16,044)
========= =========== ============ ======== =========
</TABLE>
F-32
<PAGE> 155
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
20. GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS -- (CONTINUED)
CONSOLIDATING STATEMENTS OF OPERATIONS -- (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1994
----------------------------------------------------------------------------
COMBINED COMBINED SC INTERNATIONAL TOTAL
GUARANTOR NON-GUARANTOR SERVICES, INC. ELIMINATION SCIS
SUBSIDIARIES SUBSIDIARIES (PARENT ONLY) ENTRIES CONSOLIDATED
------------ ------------- ---------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Revenues.......................... $463,059 $ 24,228 $ -- $ (18,679) $468,608
------------ ------------- ---------------- ----------- ------------
Costs and expenses:
Cost of operations.............. 382,637 5,639 -- -- 388,276
Depreciation and amortization... 15,312 191 -- -- 15,503
Selling, general and
administrative............... 17,103 22 -- -- 17,125
Other........................... 22,871 153 -- (18,679) 4,345
------------ ------------- ---------------- ----------- ------------
Total costs and
expenses.............. 437,923 6,005 -- (18,679) 425,249
------------ ------------- ---------------- ----------- ------------
Operating income (loss)........... 25,136 18,223 -- -- 43,359
------------ ------------- ---------------- ----------- ------------
Other income (expense):
Interest income................. 177 829 -- (802) 204
Interest expense................ (6,367) (183) -- 802 (5,748)
Equity in earnings (loss)....... 11,999 -- -- (11,999) --
Other........................... (1,147) (78) -- -- (1,225)
------------ ------------- ---------------- ----------- ------------
Total other income
(expense)............. 4,662 568 -- (11,999) (6,769)
------------ ------------- ---------------- ----------- ------------
Income (loss) before income
taxes........................... 29,798 18,791 -- (11,999) 36,590
Provision for income taxes........ 6,593 6,792 -- -- 13,385
------------ ------------- ---------------- ----------- ------------
Net income (loss)................. $ 23,205 $ 11,999 $ -- $ (11,999) $ 23,205
========= =========== ============ ======== =========
</TABLE>
F-33
<PAGE> 156
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
20. GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS -- (CONTINUED)
CONSOLIDATING STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
----------------------------------------------------------------------------
COMBINED COMBINED SC INTERNATIONAL TOTAL
GUARANTOR NON-GUARANTOR SERVICES, INC. ELIMINATION SCIS
SUBSIDIARIES SUBSIDIARIES (PARENT ONLY) ENTRIES CONSOLIDATED
------------ ------------- ---------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities...................... $ 43,063 $ 1,646 $ 30,949 $ (38,085) $ 37,573
-------- -------- -------- -------- --------
Cash flows from investing
activities:
Acquisition of business......... -- -- -- -- --
Purchase of property and
equipment.................... (31,477) (5,329) (94) -- (36,900)
Advances from (to) affiliates... (38,310) 5,773 -- 38,085 5,548
Other........................... -- -- -- -- --
-------- -------- -------- -------- --------
Net cash used in investing
activities................. (69,787) 444 (94) 38,085 (31,352)
-------- -------- -------- -------- --------
Cash flows from financing
activities:
Payment of long-term debt and
obligations under capital
leases....................... (645) 236 -- -- (409)
Borrowing (repayments) under
credit agreement............. -- (434) (10,987) -- (11,421)
Dividend payment to parent...... 3,948 (3,948) -- -- --
Net change in (payable to) and
receivable from parent....... -- 6,438 -- -- 6,438
-------- -------- -------- -------- --------
Net cash provided by (used
in) financing activities... 3,303 2,292 (10,987) -- (5,392)
-------- -------- -------- -------- --------
Increase in cash and cash
equivalents..................... (23,421) 4,382 19,868 -- 829
Cash and cash equivalents,
beginning of period............. 24,820 17,135 12,874 -- 54,829
-------- -------- -------- -------- --------
Cash and cash equivalents, end of
period.......................... $ 1,399 $ 21,517 $ 32,742 $ -- $ 55,658
======== ======== ======== ======== ========
</TABLE>
F-34
<PAGE> 157
SC INTERNATIONAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
20. GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS -- (CONTINUED)
CONSOLIDATING STATEMENTS OF CASH FLOWS -- (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
--------------------------------------------------------------------------------
COMBINED COMBINED SC INTERNATIONAL TOTAL
GUARANTOR NON-GUARANTOR SERVICES, INC. ELIMINATION SCIS
SUBSIDIARIES SUBSIDIARIES (PARENT ONLY) ENTRIES CONSOLIDATED
------------ ------------- ---------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Cash provided by (used in) operations:... $ 45,351 $ 23,125 $ 2,635 $ (10,501) $ 60,610
------------ ------------- ---------------- ----------- ------------
Cash flows from investing activities:
Acquisition of businesses.............. (41,219) (173,811) 3,879 -- (211,151)
Purchase of property and equipment..... (7,180) (2,395) -- -- (9,575)
Advances from (to) affiliates.......... 51,242 206,524 (307,098) 10,501 (38,831)
Other.................................. 412 -- -- -- 412
------------ ------------- ---------------- ----------- ------------
Net cash provided by (used in) 3,255 30,318 (303,219) 10,501 (259,145)
investing activities...............
------------ ------------- ---------------- ----------- ------------
Cash flows from financing activities:
Proceeds from issuance of long-term -- -- 350,000 -- 350,000
debt and notes.......................
Deferred financing costs............... -- -- (17,337) -- (17,337)
Payment of debt and capital lease (292) (37,631) (267) -- (38,190)
obligations..........................
Repayment under credit agreement....... (17,500) -- -- -- (17,500)
Purchase of employee stock loans from (6,661) -- -- -- (6,661)
affiliate............................
Net change in payable to and receivable -- -- (18,938) -- (18,938)
from parent..........................
Dividend payment to parent............. (10,465) -- -- -- (10,465)
------------ ------------- ---------------- ----------- ------------
Net cash provided by (used in) (34,918) (37,631) 313,458 -- 240,909
financing activities:..............
------------ ------------- ---------------- ----------- ------------
Increase in cash and cash equivalents.... 13,688 15,812 12,874 -- 42,374
Cash and cash equivalents, beginning of 11,132 1,323 -- -- 12,455
period.................................
------------ ------------- ---------------- ----------- ------------
Cash and cash equivalents, end of $ 24,820 $ 17,135 $ 12,874 $ -- $ 54,829
period.................................
=========== ============= =============== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1994
--------------------------------------------------------------------------------
COMBINED COMBINED SC INTERNATIONAL TOTAL
GUARANTOR NON-GUARANTOR SERVICES, INC. ELIMINATION SCIS
SUBSIDIARIES SUBSIDIARIES (PARENT ONLY) ENTRIES CONSOLIDATED
------------ ------------- ---------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Cash provided by (used in) operations:... $ 20,382 $ 24,606 $ -- $ (23,829) $ 21,159
------------ ------------- ---------------- ----------- ------------
Cash flows from investing activities:
Acquisition of business................ -- (10,582) -- -- (10,582)
Purchase of property and equipment..... (11,456) (319) -- -- (11,775)
Advance from (to) affiliates........... (11,836) (11,993) -- 23,829 --
Other.................................. (1,000) -- -- -- (1,000)
------------ ------------- ---------------- ----------- ------------
Net cash provided by (used in) (24,292) (22,894) -- 23,829 (23,357)
investing activities...............
------------ ------------- ---------------- ----------- ------------
Cash flows from financing activities:
Borrowing under credit agreement....... 17,500 -- -- -- 17,500
Payment of debt and capital (16,106) (389) -- -- (16,495)
obligations..........................
Net increase in payable to parent...... 8,228 -- -- -- 8,228
------------ ------------- ---------------- ----------- ------------
Net cash provided by (used in) 9,622 (389) -- -- 9,233
financing activities...............
------------ ------------- ---------------- ----------- ------------
Increase in cash and cash equivalents.... 5,712 1,323 -- -- 7,035
Cash and cash equivalents, beginning of 5,420 -- -- -- 5,420
period.................................
------------ ------------- ---------------- ----------- ------------
Cash and cash equivalents, end of $ 11,132 $ 1,323 $ -- $ -- $ 12,455
period.................................
=========== ============= =============== ========== ===========
</TABLE>
F-35
<PAGE> 158
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Caterair International Corporation:
We have audited the accompanying consolidated balance sheets of Caterair
International Corporation and Subsidiaries as of December 31, 1996 and 1995 and
the related consolidated statements of operations, shareholder's deficit and
cash flows for each of the two years in the period ended December 31, 1996.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Caterair
International Corporation and Subsidiaries as of December 31, 1996 and 1995 and
the consolidated results of their operations and their cash flows for each of
the two years in the period ended December 31, 1996 in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
March 5, 1997
F-36
<PAGE> 159
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Caterair International Corporation:
We have audited the accompanying consolidated statements of operations,
shareholder's deficit and cash flows of Caterair International Corporation (a
Delaware corporation) and Subsidiaries for the year ended December 31, 1994.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the results of operations and cash flows of Caterair
International Corporation and Subsidiaries for the year ended December 31, 1994,
in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Washington, D.C.
September 28, 1995
F-37
<PAGE> 160
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------- JUNE 30,
1995 1996 1997
--------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents............................... $ 631 $ 6,847 $ 181
Accounts receivable (net of allowance for doubtful
accounts of $355 in 1995, $994 in 1996, and $999 at
June 30, 1997)....................................... 13,854 11,143 10,821
Current portion of amount due from affiliate under
non-compete agreement................................ 3,193 3,130 2,804
Advances to affiliate, net.............................. -- 4,505 9,256
Deferred income taxes................................... 8,200 920 921
Prepaid expenses and other.............................. 2,950 1,312 1,299
--------- --------- -----------
Total current assets............................ 28,828 27,857 25,282
Property and equipment, net............................... 88,623 79,395 73,663
Deferred income taxes..................................... 39,663 38,458 36,264
Deferred financing cost, net.............................. 5,892 4,875 4,368
Due from affiliate under non-competition agreement........ 15,588 12,458 11,418
Net assets of discontinued operations..................... -- 1,399 1,245
Other assets.............................................. 15,683 9,506 9,278
--------- --------- -----------
Total assets.................................... $ 194,277 $ 173,948 $ 161,518
========= ========= =========
LIABILITIES AND SHAREHOLDER'S DEFICIT
Current liabilities:
Accrued interest........................................ $ 668 $ 1,159 $ 831
Payable to affiliate.................................... 1,043 -- --
Other payables and accrued liabilities.................. 30,248 23,682 17,434
Current portion of deferred revenue under
non-competition agreement............................ 3,193 3,130 2,804
Current portion of long-term debt....................... 17,507 17,206 17,201
Current portion of obligations under capital leases..... 95 105 105
--------- --------- -----------
Total current liabilities....................... 52,754 45,282 38,375
Obligations under capital leases.......................... 1,893 1,788 1,788
Long-term debt............................................ 167,503 150,298 138,662
Note payable to affiliate................................. 38,544 41,634 43,253
Deferred revenue under non-competition agreement with
affiliate............................................... 14,805 11,738 10,499
Net liabilities of discontinued operations................ 1,540 -- --
Other long-term liabilities............................... 28,990 25,198 25,066
--------- --------- -----------
Total liabilities............................... 306,029 275,938 257,643
Commitments and contingencies............................. -- -- --
Shareholder's deficit:
Common stock, $.01 par value; 10,000 shares authorized
and issued........................................... -- -- --
Additional paid-in capital.............................. 173,596 173,596 173,596
Advance to parent....................................... (38,947) (38,947) (38,947)
Cumulative translation adjustment....................... -- 23 23
Accumulated deficit..................................... (246,401) (236,662) (230,797)
--------- --------- -----------
Total shareholder's deficit..................... (111,752) (101,990) (96,125)
--------- --------- -----------
Total liabilities and shareholder's deficit..... $ 194,277 $ 173,948 $ 161,518
========= ========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-38
<PAGE> 161
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
------------------------------- ----------------------
1994 1995 1996 1996 1997
-------- -------- ------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues from affiliates:
License income.......................... $ -- $ 8,001 $34,349 $15,989 $16,412
Rental income........................... -- 10,169 40,479 20,652 19,747
Income under non-competition
agreement............................ -- 783 3,130 1,565 1,566
-------- -------- ------- ------- -----------
Total revenues.................. -- 18,953 77,958 38,206 37,725
-------- -------- ------- ------- -----------
Operating expenses:
Cost of operations...................... -- 7,649 30,416 15,659 14,822
Selling, general and administrative..... -- 125 1,393 250 533
Depreciation and amortization........... -- 3,400 11,806 5,994 5,569
-------- -------- ------- ------- -----------
Total operating expenses........ -- 11,174 43,615 21,903 20,924
-------- -------- ------- ------- -----------
Operating income.......................... -- 7,779 34,343 16,303 16,801
Interest income........................... -- (264) (208) (83) (177)
Interest expense.......................... -- 4,979 18,450 9,537 8,926
Other (income) expense.................... -- -- -- -- (492)
-------- -------- ------- ------- -----------
Income from continuing operations before
income taxes............................ -- 3,064 16,101 6,849 8,544
Income tax provision (benefit)............ -- (50,380) 8,044 2,174 2,350
-------- -------- ------- ------- -----------
Income from continuing operations....... -- 53,444 8,057 4,675 6,194
-------- -------- ------- ------- -----------
Discontinued operations, net of taxes:
Income (loss) from discontinued
operations........................... (23,847) (25,430) 904 1,393 (329)
Gain on disposition of discontinued
operations........................... -- 52,674 778 -- --
-------- -------- ------- ------- -----------
Income (loss) from discontinued
operations......................... (23,847) 27,244 1,682 1,393 (329)
-------- -------- ------- ------- -----------
Income (loss) before extraordinary item... (23,847) 80,688 9,739 6,068 5,865
Extraordinary loss from early
extinguishment of debt.................. -- (4,319) -- -- --
-------- -------- ------- ------- -----------
Net income (loss)............... $(23,847) $ 76,369 $ 9,739 $ 6,068 $ 5,865
======== ======== ======= ======= =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-39
<PAGE> 162
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S DEFICIT
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL ADVANCE CUMULATIVE
---------------- PAID-IN TO TRANSLATION ACCUMULATED
SHARES AMOUNT CAPITAL PARENT ADJUSTMENT DEFICIT TOTAL
------ ------ ---------- -------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1993... 10,000 $ -- $173,596 $ -- $ -- $(298,853) $(125,257)
Net loss..................... -- -- -- -- -- (23,847) (23,847)
------ ------ ---------- -------- --- ----------- ---------
Balance, December 31, 1994... 10,000 -- 173,596 -- -- (322,700) (149,104)
Net income................... -- -- -- -- -- 76,369 76,369
Dividend..................... -- -- -- -- -- (70) (70)
Advance to parent............ -- -- -- (38,947) -- -- (38,947)
------ ------ ---------- -------- --- ----------- ---------
Balance, December 31, 1995... 10,000 -- 173,596 (38,947) -- (246,401) (111,752)
Cumulative translation
adjustment................. -- -- -- -- 23 -- 23
Net income................... -- -- -- -- -- 9,739 9,739
------ ------ ---------- -------- --- ----------- ---------
Balance, December 31, 1996... 10,000 -- 173,596 (38,947) 23 (236,662) (101,990)
Net income (unaudited)....... -- -- -- -- -- 5,865 5,865
------ ------ ---------- -------- --- ----------- ---------
Balance, June 30, 1997
(unaudited)................ 10,000 $ -- $173,596 $(38,947) $ 23 $(230,797) $ (96,125)
====== ======= ========= ========= ========== =========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-40
<PAGE> 163
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
--------------------------------- ----------------------
1994 1995 1996 1996 1997
-------- --------- -------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)........................................ $(23,847) $ 76,369 $ 9,739 $ 6,068 $ 5,865
Adjustments to reconcile net income from continuing
operations to net cash provided by operating
activities:
Depreciation and amortization.......................... -- 3,400 11,806 5,994 5,569
Deferred income taxes.................................. -- (50,480) 8,485 2,790 2,193
Interest on note payable to affiliate settled in
kind................................................. -- 756 3,090 1,553 1,619
Noncash interest expense............................... -- 254 1,017 508 508
Extraordinary loss from early extinguishment of debt... -- 4,319 -- -- --
Gain on sale of fixed assets........................... -- -- -- -- (492)
Gain on disposition of discontinued operations......... -- (52,674) (778) -- --
Change in working capital items (Note 13)................ -- (9,852) (744) (3,328) (5,201)
Change in other assets and liabilities................... -- -- -- (455) (1,134)
Proceeds from insurance carrier from loss on capital
assets................................................. -- -- 1,200 -- --
Net effect of discontinued operations.................... 53,250.. (39,683) (2,150) (3,273) 154
-------- --------- -------- ------- -----------
Net cash provided by (used in) operating
activities....................................... 29,403 (67,591) 31,665 9,857 9,081
-------- --------- -------- ------- -----------
Cash flows from investing activities:
Capital expenditures..................................... -- (6,128) (2,300) (2,203) --
Proceeds from sale of discontinued operations............ -- 208,300 -- -- --
Proceeds from sale of fixed assets....................... -- -- -- -- 645
(Advances to) repayments from affiliates................. -- -- (5,548) 1,363 (4,751)
Net effect of discontinued operations.................... (34,611) (5,417) -- -- --
-------- --------- -------- ------- -----------
Net cash provided by (used in) investing
activities....................................... (34,611) 196,755 (7,848) (840) (4,106)
-------- --------- -------- ------- -----------
Cash flows from financing activities:
Net borrowings (repayments) on the revolving credit
facility............................................... 7,500 (62,500) -- -- --
Borrowings of long-term debt............................. 13,774.. 185,000 -- -- --
Repayments of long-term debt............................. (5,667) (301,854) (17,601) (8,804) (11,641)
Proceeds from note payable to affiliate.................. -- 37,788 -- -- --
Net effect of discontinued operations.................... (6,537) -- -- -- --
Other.................................................... (516) -- -- 1,500 --
-------- --------- -------- ------- -----------
Net cash provided by (used in) financing
activities....................................... 8,554 (141,566) (17,601) (7,304) (11,641)
-------- --------- -------- ------- -----------
Increase (decrease) in cash and cash equivalents........... 3,346... (12,402) 6,216 1,713 (6,666)
Cash and cash equivalents, beginning of period............. 9,687... 13,033 631 631 6,847
-------- --------- -------- ------- -----------
Cash and cash equivalents, end of period................... $ 13,033 $ 631 $ 6,847 $ 2,344 $ 181
======== ========= ======== ======= ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest............................................... $ 24,255 $ 67,610 $ 15,268 $ 7,266 $ 7,126
Income taxes........................................... 5,411... 6,945 -- -- --
Supplemental disclosure of noncash financing and investing
activities:
Liabilities assumed by purchaser upon disposition of
discontinued operations................................ $ -- $ 44,048 $ 4,464 $ 4,464 $ --
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-41
<PAGE> 164
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Business and Basis of Consolidation
Caterair International Corporation ("Caterair" or the "Company") is a
wholly-owned subsidiary of Caterair Holdings Corporation ("Holdings"). On
September 29, 1995, the Company, Holdings, SC International Services, Inc. and
its subsidiaries ("SCIS") and its parent, Onex Food Services, Inc. ("OFSI")
consummated transactions with the shareholders and creditor of Holdings (the
"Transactions") whereby OFSI and an affiliate of OFSI exchanged common stock and
warrants of OFSI, valued in the aggregate amount of $38,947, for certain stock
and debt held by Holdings' shareholders and creditor, as a result of which OFSI
and its parent acquired more than 50% of the total outstanding voting shares of
Holdings and approximately 25% of the total outstanding nonvoting shares of
Holdings. In addition, as part of the Transactions, SCIS acquired, licensed,
leased and subleased most of the worldwide business and assets of the Company
(other than with respect to certain operations which have been temporarily
retained as described in Note 2). The proceeds from the Transactions were
approximately $247,247 which consisted of $208,300 in cash and approximately
$38,947 in common stock and warrants of OFSI (See Note 2). The Company
recognized a $52,674 gain, net of transaction fees, on the disposition of
discontinued operations. There was no tax effect on this gain.
Prior to the Transactions, the Company was principally engaged in providing
international and domestic airline catering services. Subsequent to the
Transactions (other than with respect to certain operations which have been
temporarily retained as described in Note 2), the Company is principally engaged
in the business of leasing, subleasing and licensing domestic property to SCIS
and its subsidiaries. The accompanying consolidated financial statements include
the accounts of the Company and all remaining wholly-owned and majority owned
subsidiaries. All significant intercompany transactions have been eliminated.
Management Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amount of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Interim Financial Information
The consolidated balance sheet as of June 30, 1997, the consolidated
statement of shareholder's deficit for the six months then ended, and the
consolidated statements of operations and cash flows for the six months ended
June 30, 1996 and 1997, have been prepared by the Company without audit. In the
opinion of management, all adjustments (which included only normal, recurring
adjustments) necessary to present fairly the financial position at June 30,
1997, and the results of operations and cash flows for all periods presented
have been made. The results of operations for the interim periods are not
necessarily indicative of the operating results for the full year.
Cash and Cash Equivalents
For purposes of the statements of cash flows, all highly liquid debt
instruments purchased with an original maturity of three months or less are
considered to be cash equivalents. Cash flows from swap transactions are
classified in the same category as the items being hedged.
The Company maintains its cash in bank deposit accounts which, at times,
may exceed federally insured limits. The Company has not experienced any losses
in such accounts.
F-42
<PAGE> 165
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
Interest Rate Swap Agreements
The differential to be paid or received on interest rate swap agreements is
accrued as interest rates change and is recognized over the life of the
agreement.
Property and Equipment
The provision for depreciation and amortization of property and equipment
is computed using the straight-line method. The estimated useful lives are as
follows:
<TABLE>
<S> <C>
Buildings................................. 25 years
Leasehold improvements.................... Term of the lease or estimated useful
life, whichever is less
Furniture and equipment................... 4 to 10 years
Vehicles.................................. 4 to 10 years
</TABLE>
Gains and losses from disposals of property and equipment are reflected in
the results of operations in the period of disposal.
Property and equipment under capital leases are amortized over the lives of
the leases or the estimated useful lives of the assets, whichever is less.
Intangible Assets
Intangible assets consisting primarily of rights, licenses and
non-competition agreements are recorded at cost. These assets are being
amortized over their estimated useful lives using the straight-line method.
On March 31, 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
The Company adopted this standard effective January 1, 1996, which did not have
a material impact on the Company's financial position.
Non-Competition Agreements
Revenues under a non-competition agreement are recognized ratably over the
terms of the agreement. Deferred Financing Costs
Costs incurred related to the issuance of debt are deferred and amortized
over the life of the related debt using the effective interest rate method.
Deferred financing costs related to debt outstanding prior to the Transactions
(described in Note 2) were written off as a component of the extraordinary loss
from early extinguishment of debt. Deferred financing costs related to the
Transactions (described in Note 2) amounted to $6,147. The Company amortized
$255 and $1,017 of these costs in 1995 and 1996, respectively, which are
reflected in interest expense.
Income Taxes
The accounts of the Company are included in the consolidated federal income
tax return of Holdings. Current and deferred income taxes are allocated to the
Company as if it were a separate taxpayer.
Deferred income tax assets and liabilities are recognized for the expected
future tax consequences of temporary differences between the income tax and
financial reporting carrying amounts of assets and liabilities.
F-43
<PAGE> 166
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
Reclassification of Prior Period Amounts
Certain prior period amounts have been reclassified to conform to the
current year presentation.
Recent Accounting Standards
During June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130 "Reporting Comprehensive Income" and
Statement of Financial Accounting Standards No. 131 "Disclosures About Segments
of an Enterprise and Related Information." Preliminary analysis of these new
standards by the Company indicates that the standards will not have a material
impact on the Company. The standards are effective for financial statements for
fiscal years beginning after December 15, 1997.
2. DISCONTINUED OPERATIONS:
As described in Note 1, the Company consummated the Transactions on
September 29, 1995 whereby it discontinued most of its airline catering services
business and primarily engaged in the business of leasing, subleasing and
licensing domestic property to affiliates, Sky Chefs, Inc. ("Sky Chefs") and
Caterair International, Inc. (II) ("CII"), both wholly-owned subsidiaries of
SCIS. Accordingly, all operations prior to September 30, 1995 have been
reflected as discontinued.
The Company was unable to obtain certain consents to the Transactions with
respect to certain of the Company's kitchens at which one airline is the major
customer. Such consents with respect to these operations were obtained during
the second quarter of 1996 and such operations were leased, subleased and
licensed to SCIS and its subsidiaries. Prior to acquiring this consent, the
Company and SCIS entered into a management agreement for the operations at these
kitchens whereby the Company continued to operate them with its employees and
SCIS provided management and administration support services in exchange for a
management fee equivalent to 4% of the kitchen's net sales. Management fees paid
under this arrangement amounted to $604 and $1,057 for the period ended December
31, 1995 and 1996, respectively.
In connection with the Transactions, SCIS and its subsidiaries licensed
Caterair's rights under certain customer contracts for a six-year period (the
"License Agreements"). However, after the consummation of such Transactions, the
Company retained certain operations relating to customer contracts for which
consents to assignment were not obtained. Such consents with respect to these
operations were obtained during the second quarter of 1996 and such operations
were leased, subleased and licensed to SCIS and its subsidiaries. Sky Chefs and
CII each have the option to purchase the customer contract rights covered by the
License Agreements for an amount calculated to equal the estimated fair market
value of such rights at the time of the exercise of such option. The option is
exercisable at any time until the date which is 90 days after the termination of
the applicable License Agreement. The Company is not certain whether such
options will be exercised. Caterair agreed, subject to certain exceptions, not
to compete with Sky Chefs in the airline catering business for a six-year term
and Sky Chefs is obligated to pay Caterair $4.0 million per year. At December
31, 1995 and 1996 the non-competition agreement was valued at $18,781 and
$15,588, respectively, representing the present value of payments discounted at
8.25%.
Concurrent with the Transactions, the Company borrowed $185,000 from a
consortium of lenders and $37,788 from SCIS (see Note 5). The borrowings, as
well as the cash proceeds ($208,300, net) from the Transactions, were utilized
to repay indebtedness outstanding under the Company's prior credit agreement,
senior notes and debentures in the aggregate amount of approximately $364,000
plus accrued interest, and to pay certain expenses relating to the Transactions.
The Company recorded an extraordinary loss of $4,319 consisting of the
difference between amounts paid to lenders for full extinguishment of debt and
carrying amounts of debt including deferred financing costs and accrued
interest. There was no tax effect on this extraordinary loss.
F-44
<PAGE> 167
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
Identifiable revenues and expenses from discontinued operations have been
reclassified on the accompanying consolidated statements of operations from
their historical classification to separately identify them as discontinued
operations. Discontinued operations include allocations of general and
administrative and interest expenses that were determined to be directly related
to such operations. Summary operating results for discontinued operations
follows:
<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED DECEMBER 31, ENDED JUNE 30,
--------------------------------- -----------------
1994 1995 1996 1996 1997
---------- -------- ------- ------- ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues........................... $1,023,143 $773,243 $31,169 $28,793 $1,922
Cost of operations................. 916,422 698,689 27,854 26,397 2,100
Selling, general and administrative
expenses......................... 42,803 27,698 1,057 -- --
Depreciation and amortization...... 30,890 21,821 -- -- --
---------- -------- ------- ------- ------
Operating income................... 33,028 25,035 2,258 2,396 (178)
Interest expense................... 50,962 45,626 18 8 8
Other.............................. 890 (674) 920 1,083 312
---------- -------- ------- ------- ------
Income (loss) before income
taxes............................ (18,824) (19,917) 1,320 1,305 (498)
Provision for income taxes......... 5,023 5,513 416 (88) (169)
---------- -------- ------- ------- ------
Income (loss) from discontinued
operations....................... $ (23,847) $(25,430) $ 904 $ 1,393 $ (329)
========= ======== ======= ======= ======
</TABLE>
The identifiable assets and liabilities of discontinued operations have
been reclassified on the accompanying consolidated balance sheet at December 31,
1995 and 1996 from their historical classification to separately identify them
as net assets or liabilities of discontinued operations. The remaining
identifiable assets and liabilities of discontinued operations at December 31,
1995 relate to certain kitchens which were unable to be leased, subleased or
licensed to Sky Chefs at the time of consummation of the Transactions. The
Company leased, subleased or licensed these operations to Sky Chefs during the
second quarter of 1996. The following represents assets and liabilities relating
to discontinued operations:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------- JUNE 30,
1995 1996 1997
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Current assets...................................... $ 4,476 $ 3,019 $ 2,575
Property and equipment, net......................... -- (7) (106)
Other current liabilities........................... (5,148) (1,509) (1,221)
Noncurrent.......................................... (868) (104) (3)
------- ------- -----------
Net assets (liabilities) of discontinued
operations.............................. $(1,540) $ 1,399 1,245
======= ======= =========
</TABLE>
F-45
<PAGE> 168
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
Information concerning operations by geographic area is presented below:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------
1994 1995 1996
---------- -------- --------
<S> <C> <C> <C>
Net sales:
United States..................................... $ 533,016 $384,677 $ 26,859
International..................................... 490,127 388,566 4,310
---------- -------- --------
$1,023,143 $773,243 $ 31,169
========= ======== ========
Operating income (loss):
United States..................................... $ 21,651 $ 18,413 $ 2,562
International..................................... 11,377 6,622 (304)
---------- -------- --------
$ 33,028 $ 25,035 $ 2,258
========= ======== ========
Identifiable assets:
United States..................................... $ 197,102 $ 2,180 $ 1,654
International..................................... 301,726 2,296 1,358
---------- -------- --------
$ 498,828 $ 4,476 $ 3,012
========= ======== ========
</TABLE>
3. PROPERTY AND EQUIPMENT:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- JUNE 30,
1995 1996 1997
-------- -------- --------
(UNAUDITED)
<S> <C> <C> <C>
Land................................................. $ 305 $ 305 $ 10
Buildings and leasehold improvements................. 115,430 117,687 119,361
Machinery and equipment.............................. 59,233 60,330 59,937
Construction in progress............................. 3,663 2,532 40
-------- -------- --------
178,631 180,854 179,348
Less accumulated depreciation and
amortization............................. 90,008 101,459 105,685
-------- -------- --------
$ 88,623 $ 79,395 $ 73,663
======== ======== ========
</TABLE>
As of June 30, 1997, substantially all property and equipment has been
leased or subleased to Sky Chefs and CII.
4. OTHER ASSETS:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------ JUNE 30,
1995 1996 1997
-------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Casualty insurance loss deposits....................... $ 12,410 $ 8,051 $ 8,051
Lease deposits......................................... 1,644 144 144
Intangible assets acquired............................. 1,584 1,137 929
Other.................................................. 45 174 154
-------- ------- -----------
$ 15,683 $ 9,506 $ 9,278
======= ====== =========
</TABLE>
F-46
<PAGE> 169
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
5. LONG-TERM DEBT AND NOTE PAYABLE TO AFFILIATE:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------- JUNE 30,
1995 1996 1997
-------- -------- --------
(UNAUDITED)
<S> <C> <C> <C>
Credit Agreement:
A Term Loan, bearing interest at 2.50% above the
Eurodollar borrowing rate, or 1.50% above the
lender's prime rate, due in quarterly installments
of $4,000 beginning in March 1996 through
September 2000.................................... $ 76,000 $ 60,000 $ 51,390
B Term Loan, bearing interest at 3.00% above the
Eurodollar borrowing rate, or 2.00% above the
lender's prime rate, due in various quarterly
amounts beginning in March 1996 through September
2001.............................................. 109,000 107,500 104,471
Other long-term debt................................... 10 4 2
-------- -------- --------
Total debt................................... 185,010 167,504 155,863
Less current portion of long-term debt............... 17,507 17,206 17,201
-------- -------- --------
Long-term debt....................................... $167,503 $150,298 $138,662
======== ======== ========
Senior Subordinated Note due SCIS in 2001............ $ 38,544 $ 41,634 $ 43,253
======== ======== ========
</TABLE>
In connection with the Transactions, the Company, OFSI, SCIS and Holdings
entered into a $500,000 Senior Secured Credit Agreement with a consortium of
lenders (the "Credit Agreement"). The Credit Agreement provides the Company with
$185,000 of term loans and provides SCIS with $315,000 of financing consisting
of $225,000 of term loans and up to $90,000 of revolving loans (including up to
$50,000 available for letters of credit). Caterair had $185,000 and $167,000 of
term loan borrowings outstanding at December 31, 1995 and 1996, respectively. In
June the term loan borrowings outstanding were $156,000. SCIS' borrowings
outstanding under the Credit Agreement as of December 31, 1995 and 1996 were
$224,733 and $213,746, respectively. As of June 30, 1997, the borrowings
outstanding were $209,600. SCIS paid $6,147 of fees related to the Transactions
on behalf of the Company. These fees were recorded as deferred financing costs
in the Company's financial statements. Caterair repaid these fees to SCIS in
1996.
The term loans under the Credit Agreement bear interest at rates ranging
between 2.50% to 3.00% above the Eurodollar borrowing rate ("Eurodollar Base
Borrowing Rate") or between 1.50% to 2.00% above the lender's prime rate (8.25%
at December 31, 1996). The actual rate charged on each credit instrument is
dependent on the Company's selection of either the 30, 60, 90 or 180 day
Eurodollar borrowing rate or the prime rate. Interest is payable quarterly for
all loans and also at the end of each interest period for Eurodollar borrowings.
The average interest rate of the Company in effect at December 31, 1996, for
loans outstanding under the Credit Agreement was 8.36%.
Effective December 29, 1995, SCIS entered into an interest rate swap
agreement to reduce interest rate exposure on long-term debt. The agreement
covers a notional amount of $350,000 at December 31, 1996, and matures in 2001.
Pursuant to a written agreement, the Company has assumed a ratable participating
interest (based on the respective principal amounts of term loans outstanding
under the Credit Agreement) in SCIS's rights and obligations under the interest
rate swap. When combined with the terms of the Company's senior term loans,
under the Credit Agreement, the Eurodollar Base Borrowing Rate was effectively
fixed at 5.6875% on approximately $158,000 of the Company's term loan borrowings
through June 19, 2000.
The Credit Agreement calls for mandatory prepayments and commitment
reductions under certain circumstances involving the proceeds from equity
issuances or capital contributions, issuances of additional
F-47
<PAGE> 170
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
debt, asset disposals, insurance proceeds from recoverable events and excess
cash flows of the Company and SCIS, as more particularly described in the Credit
Agreement.
All obligations of the Company under the Credit Agreement are jointly and
severally guaranteed by SCIS, certain subsidiaries thereof, Holdings, OFSI (on a
limited basis) and an affiliate of OFSI (on a limited basis). All obligations of
SCIS under the Credit Agreement are jointly and severally guaranteed by the
Company, certain subsidiaries of SCIS, Holdings, OFSI (on a limited basis) and
an affiliate of OFSI (on a limited basis). In addition, the Credit Agreement is
collateralized by (i) a first priority lien on virtually all tangible and
intangible assets of the Company, SCIS and all their respective wholly-owned
domestic subsidiaries and (ii) pledges of all capital stock of the Company and
SCIS and their respective domestic subsidiaries and 65% of the capital stock of
their respective direct foreign subsidiaries.
The Credit Agreement contains covenants that, among other things, place
certain restrictions on the ability of the Company, OFSI, SCIS and their
respective subsidiaries to dispose of assets, incur additional indebtedness,
incur guarantor obligations, repay other indebtedness, pay dividends, make
investments and acquisitions, engage in mergers or consolidations, make capital
expenditures and otherwise engage in certain corporate activities. In addition,
the Credit Agreement requires compliance with financial tests based on combined
results of the Company and SCIS. The Company and SCIS were in compliance with
these financial covenant requirements at December 31, 1996.
At December 31, 1996, approximately $25,680 of bank letters of credit were
issued under the Credit Agreement to SCIS (on behalf of the Company) and
approximately $75 issued directly to the Company, to primarily collateralize the
Company's insurance carriers providing workers' compensation coverage as well as
for surety bonds, leases and requirements of the Company for environmental
remediation of certain assets previously sold.
In connection with the Transactions, SCIS issued $125,000 of 13% Senior
Subordinated Notes due October 1, 2005 (the "Notes"). The Notes are guaranteed
on a joint and several senior subordinated basis by certain subsidiaries of SCIS
and by the Company. The Notes outstanding as of December 31, 1995 and 1996 were
$125,000. The Notes may be redeemed at the option of SCIS starting October 1,
2000 at various premiums above face value. Up to $43,800 of the Notes may also
be redeemed with proceeds obtained through public equity offerings of capital
stock of OFSI or SCIS. The Indenture for the Notes contains covenants which,
among other things, limit the Company's, SCIS's and certain SCIS subsidiaries'
ability to pay dividends, make stock repurchases, incur additional indebtedness,
engage in or use the proceeds of asset sales, create liens or engage in certain
other transactions.
SCIS loaned Caterair approximately $37,788 in connection with the
Transactions. The loan matures in 2001, bears interest at 8% per annum (payable
in-kind) and is collateralized by a second lien on the assets of Caterair
representing collateral under the Credit Agreement. The cumulative amounts due
under this loan were $38,544 and $41,634 at December 31, 1995 and 1996,
respectively. Interest expense related to this loan of $756 and $3,090 is
included in interest expense for the years ended December 31, 1995 and 1996,
respectively.
F-48
<PAGE> 171
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
The combined aggregate amounts of maturities for all long-term borrowings,
excluding the Subordinated Secured Note due to SCIS, for each of the next five
years and thereafter are as follows:
<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
------------------------------------------------------------------
<S> <C>
1997........................................................... $ 17,206
1998........................................................... 17,200
1999........................................................... 17,200
2000........................................................... 38,650
2001........................................................... 77,248
Thereafter..................................................... --
---------
$ 167,504
========
</TABLE>
6. OTHER LONG-TERM LIABILITIES:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------- JUNE 30,
1995 1996 1997
-------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C>
Casualty insurance losses............................. $ 10,125 $ 10,159 $ 10,417
Deferred gain on TriNet sale and leaseback............ 12,375 11,824 11,549
Other................................................. 6,490 3,215 3,100
-------- -------- ------------
$ 28,990 $ 25,198 $ 25,066
======= ======= =========
</TABLE>
In 1993, the Company sold 12 of its off-airport fee-owned properties to
TriNet Corporate Capital ("TriNet") and simultaneously entered into a lease with
TriNet on those properties with a primary term of 25 years and with four renewal
options of five years each. These leases are classified as operating leases and
are included in the properties subleased to Sky Chefs and CII. The gain on the
sale of approximately $13,800 was deferred and is being amortized over the life
of the operating leases as a reduction of operating lease rental expense.
7. LEASES:
The Company leases various types of property, including airline catering
kitchens and equipment, vehicles and office facilities, most of which have been
subleased to Sky Chefs and CII in connection with the Transactions.
Rent expense for all operating leases from continuing operations for the
period September 30, 1995 through December 31, 1995 and for the periods ended
December 31, 1996 and was comprised of the following:
<TABLE>
<CAPTION>
1995 1996
------ -------
<S> <C> <C>
Minimum rent....................................................... $3,298 $30,922
Contingent rent.................................................... 4,489 --
Less deferred gain on sale and leaseback........................... (138) (506)
------ -------
Total rent expense....................................... $7,649 $30,416
====== =======
</TABLE>
Contingent rent represents percentage rent based on gross revenue in excess
of minimum levels.
F-49
<PAGE> 172
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
The future minimum lease payments required under capital leases (together
with the present value of the minimum lease payments) and future minimum lease
payments required under operating leases that have an initial or remaining lease
term in excess of one year as of December 31, 1996, are as follows:
<TABLE>
<CAPTION>
YEAR ENDING CAPITAL OPERATING
DECEMBER 31, LEASES LEASES
----------------------------------------------------------------- ------- ---------
<S> <C> <C>
1997.......................................................... $ 240 $ 19,600
1998.......................................................... 237 19,272
1999.......................................................... 240 18,577
2000.......................................................... 236 18,624
2001.......................................................... 238 17,656
Thereafter.................................................... 1,695 164,834
------- ---------
Total minimum lease payments........................ 2,886 $ 258,563
========
Less imputed interest......................................... 993
-------
Present value of minimum lease payments....................... 1,893
Less current portion.......................................... 105
-------
Long-term portion of minimum lease payments................... $ 1,788
======
</TABLE>
Most leases have initial terms of from 10 to 20 years and contain one or
more renewal options.
In accordance with Statement of Financial Accounting Standards No. 13,
"Accounting for Leases," certain leases for kitchen facilities at airports owned
by governmental units of authorities are being accounted for as operating leases
because special provisions in the lease agreements make the economic life of
such facilities essentially indeterminate.
In connection with the Transactions, pursuant to several leases (the
"Domestic Leases"), Sky Chefs and CII leased and subleased from Caterair
substantially all of its domestic tangible assets for a six-year term. In the
event that Caterair's lease of such assets was for less than six years, the
applicable Domestic Lease is for such shorter period. Sky Chefs and CII have the
option to purchase the assets of Caterair covered by the Domestic Leases for an
amount determined under formulas in the Domestic Leases that were intended to
result in an exercise price equal to the estimated fair market value of such
assets at the time of exercise of such option. The option is exercisable until
the date which is 30 days after termination of the applicable Domestic Lease.
The Company is not certain whether such options will be exercised. Total amounts
receivable by the Company are approximately $126,583 of which approximately
$47,500 relates to lease payments for leasehold improvements and equipment.
The minimum rental income amounts, excluding contingent rents based on
sales, under the above noted operating leases from SkyChefs and CII as of
December 31, 1996, are as follows:
<TABLE>
<CAPTION>
PERIOD ENDED OPERATING
DECEMBER 31, LEASES
------------------------------------------------------------------ ---------
<S> <C>
1997............................................................ $ 27,076
1998............................................................ 26,438
1999............................................................ 25,202
2000............................................................ 24,450
2001............................................................ 23,417
Thereafter...................................................... --
---------
Total minimum rental income............................. $ 126,583
========
</TABLE>
F-50
<PAGE> 173
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
8. INCOME TAXES:
Taxes on income are based on income from continuing operations before
income taxes. The components of the income tax provision (benefit) for the
periods ended December 31, 1995 and 1996, respectively, are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1995 1996
-------- ------
<S> <C> <C>
Current:
Federal........................................................ $ -- $ 325
State and local................................................ 100 --
-------- ------
100 325
-------- ------
Deferred:
Federal........................................................ (44,170) 6,754
State and local................................................ (6,310) 965
-------- ------
(50,480) 7,719
-------- ------
Total income tax provision (benefit)................... $(50,380) $8,044
======== ======
</TABLE>
Components of deferred tax assets and liabilities of continuing operations
recognized in the consolidated financial statements as of December 31, 1995 and
1996, were as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1995 1996
------- --------
<S> <C> <C>
Benefit of federal and state net operating loss carryforwards..... $42,038 $ 31,343
Property and equipment............................................ 979 3,977
Intangible assets acquired........................................ 7,422 4,039
Payroll accruals.................................................. 4,528 154
Casualty insurance................................................ 6,259 6,918
Benefit of federal targeted jobs tax credit carryforwards......... 653 978
Reserves.......................................................... -- 1,803
Other items....................................................... (4,079) 1,415
------- --------
57,800 50,627
Valuation allowance............................................... (9,723) (10,936)
------- --------
Total deferred tax assets, net of valuation allowance... 48,077 39,691
Deferred tax liabilities.......................................... (214) (313)
------- --------
Net deferred tax asset.................................. $47,863 $ 39,378
======= ========
</TABLE>
At December 31, 1994, the Company had a valuation allowance of $68,349 to
fully reserve for its gross deferred tax assets because of the uncertainties
surrounding the losses on operations to be sustained for income tax reporting
purposes. Subsequent to the Transactions, the Company evaluated the potential
for realization of a portion or all of the deferred tax assets. The Company
determined, based upon the weight of evidence, it is more likely than not that a
portion of the deferred tax assets would be realized. The valuation allowance
for deferred tax assets increased by $1,213 in 1996 due to the changes in the
Company's gross deferred tax assets and liabilities. The valuation allowance for
deferred tax assets decreased by $58,626 in 1995 due to the changes in the
Company's gross deferred tax assets and liabilities and the realization of a
portion of the Company's net deferred tax assets.
F-51
<PAGE> 174
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
The Company has the following NOL and tax credit carryforwards available to
offset future U.S. Federal taxable income and income tax:
<TABLE>
<CAPTION>
YEAR AMOUNT OF YEAR OF
GENERATED NOL CREDITS EXPIRATION
- --------- --------- ------- ----------
<S> <C> <C> <C> <C>
1990............................................ $14,831 $ 11 2005
1991............................................ 15,490 243 2006
1992............................................ 4,148 161 2007
1993............................................ -- 146 2008
1994............................................ 35,267 92 2009
1995............................................ 9,526 -- 2010
1996............................................ -- 325 2011
--------- -------
Total................................. $79,262 $ 978
======== =====
</TABLE>
The Company had a payable to its parent for income taxes of $165 included
in other payables and accrued liabilities at December 31, 1995 and 1996.
A reconciliation of the U.S. Federal income tax statutory rate and the
provision for income taxes on income from continuing operations for the periods
ended December 31, 1995 and 1996, is as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1996
-------- -------
<S> <C> <C>
Tax at statutory rate............................................ $ 1,226 $ 6,440
State taxes...................................................... 100 --
Permanent differences............................................ -- 391
Utilization of NOL............................................... (1,226) --
Change in valuation allowance.................................... (50,480) 1,213
-------- -------
Provision (benefit) for income taxes............................. $(50,380) $ 8,044
======== ======
</TABLE>
9. EMPLOYEE SEVERANCE:
In September 1994, the Company implemented the Caterair International
Corporation Key Employee Retention Plan (the "Plan"). The Plan was designed to
ensure the Company of the continued employment and attention to duty of certain
key employees while the Company pursued a financial restructuring or the sale of
the Company. As a result of the Transactions, $2,843 in bonuses were paid in
1995. Except for employees in airport kitchens temporarily retained by the
Company (see Note 2), all employees of the Company were terminated on September
29, 1995 in connection with the Transactions. The employees temporarily retained
by Caterair were terminated in the second quarter of 1996. Most of the employees
terminated by Caterair were subsequently hired by SCIS. Additional severance
benefits accrued relative to the Plan may be paid in future periods upon the
termination of key employees.
In July 1995, the Company adopted the Caterair International Transition
Severance Plan (the "Severance Plan"). Benefits were paid to eligible employees
who continued working for the Company or SCIS, until at least September 30,
1995, and to employees whose employment with the Company or SCIS was
involuntarily terminated between October 1, 1995 and September 30, 1996. Total
severance charges under this plan of $1,800 were included in discontinued
operations in 1995.
The Company's retirement savings and investment plan was a voluntary
defined contribution plan that was fully funded at September 29, 1995 through an
insurance company. In accordance with the terms of the Transactions, the plan
was transferred along with substantially all of the Company participants to
subsidiaries of SCIS and the Company has no further obligations with respect to
this plan.
F-52
<PAGE> 175
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
10. COMMITMENTS AND CONTINGENCIES:
Taxes
The Company is involved in a number of claims from taxing authorities,
including sales tax assessments, value added tax assessments and other related
claims. The Company believes the ultimate resolution of those claims will not
have a material adverse effect on the operating results, financial position or
cash flows of the Company.
Litigation
The Company is involved in routine litigation, including a number of
worker's compensation and related claims, that arise in the ordinary course of
its business. The Company does not believe that any of this litigation is
material to its financial position, results of operations or cash flows.
On June 3, 1991, the Teamsters Union (the "Union") went on strike at the
Company's three Los Angeles kitchens, and the Company hired replacement workers.
On August 26, 1992, a National Labor Relations Board ("NLRB") Administrative Law
Judge ("ALJ") ruled against the Company on unfair labor practice charges,
including refusal to bargain with the Union on the grounds that it no longer
represented a majority of the employees. On December 15, 1992, the NLRB in
Washington, D.C., adopted, without substantive modification or comment, the
ALJ's Recommended Decision and Order. In 1994, the ruling was reviewed by the
U.S. Court of Appeals, which supported the ALJ's Recommended Decision and Order.
The U.S. Supreme Court refused to hear the case in November 1994. The NLRB's
compliance officer is in the process of determining the back pay due the
affected employees. While the Company reinstated striking employees to the
extent reasonably possible, the Company estimates that the liability for back
pay and related losses is approximately $6,400. In accordance with the Statement
of Financial Accounting Standards No. 5 "Accounting for Contingencies" the
Company accrued this liability. The amount payable to settle this liability in
full was subsequently determined to be approximately $4,500 and payment was made
in early 1997. The remaining $1,900 was credited to discontinued operations in
1996.
Environmental Costs
At December 31, 1996 and 1995 Caterair had a $800 provision for the
estimated environmental remediation costs of all known contaminated properties
and the estimated costs for removal of all underground fuel tanks. Caterair is
unable to determine the cost, if any, of remediation actions that might be
necessary if there has been contamination resulting from other underground fuel
tanks.
Casualty Insurance Losses
Casualty insurance losses were charged to operating expenses of
discontinued operations as incurred. The losses are being paid out over several
years. The Company reflects the discounted value of the estimated unpaid losses
as a liability. At December 31, 1996 and 1995, the discount rate used was 7% and
the unpaid balance amounted to $15,056 and $14,829, respectively.
11. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS:
The following disclosure related to the estimated fair-value of financial
instruments has been determined by the Company using available market
information and appropriate valuation methodologies. However, considerable
judgment is required in interpreting market data to develop the estimates of
fair value. Accordingly, the estimates presented herein are not necessarily
indicative of the amounts the Company could realize in a current market
exchange.
The carrying amounts of cash and cash equivalents, accounts receivable,
other payables and accrued liabilities are reasonable estimates of their fair
values. Letters of credit are included in the estimated fair value
F-53
<PAGE> 176
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
of accrued expenses and other liabilities. The estimated fair values and
carrying amount of other financial instruments at December 31, 1995 and 1996 are
as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------------
1995 1996
---------------------- ----------------------
ESTIMATED CARRYING ESTIMATED CARRYING
FAIR VALUE AMOUNT FAIR VALUE AMOUNT
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
Assets:
Interest rate swap agreement(a)........... $ -- $ -- $ 1,661 $ --
Liabilities:
Term loans(b)............................. 185,000 185,000 167,500 167,500
Senior subordinated note due to
affiliate(c)........................... 39,073 38,544 41,634 41,634
Interest rate swap agreement(a)........... 1,253 -- -- --
</TABLE>
The following methods and assumptions were used to estimate the fair value
of each class of financial instrument.
(A) INTEREST RATE SWAP AGREEMENT
At December 31, 1996 and 1995 the Company had interest rate swap
instruments (used for hedging purposes) which were not included in the Company's
consolidated balance sheet. The estimated fair value of this swap agreement was
positive (representing an asset) to the Company at December 31, 1996 and
negative (representing a liability) to the Company at December 31, 1995, as a
result of fluctuations projected futures interest rate swap transaction values
subsequent to the trade date of December 27, 1995.
(B) TERM LOANS
The fair value of the term loans and revolving credit facility approximates
the carrying value since interest rates are variable.
(C) SENIOR SUBORDINATED NOTE DUE TO AFFILIATE
The Company's senior subordinated note due to SCIS in 2001 bears a fixed
rate of interest of 8% (payable in-kind) and was executed September 29, 1995 in
connection with the Transactions. This note is with a related party and as such
there is no market activity. Accordingly, the carrying values approximate
estimated fair value.
These disclosures relate to financial instruments only. The fair value
assumptions were based upon estimates of market conditions and perceived risks
of the financial instruments at December 31, 1996.
12. DISCLOSURE OF SIGNIFICANT RISKS AND UNCERTAINTIES:
The Company's financial instruments expose the Company to market and credit
risks and may at times be concentrated with certain counterparties or groups of
counterparties. The credit worthiness of counterparties is subject to continuing
review and full performance is anticipated unless otherwise specifically
disclosed.
Dependence on Key Customers
As described in Note 2, the Company's revenues subsequent to September 29,
1995, are principally derived from rents, royalties and income under a
non-competition agreement from SCIS and as such the Company is dependent upon
SCIS's financial performance. In addition, the Company has guaranteed certain
indebtedness of SCIS as more fully described in Note 5.
F-54
<PAGE> 177
CATERAIR INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
13. CHANGES IN WORKING CAPITAL ITEMS:
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
----------------------------- -------------------
1994 1995 1996 1996 1997
-------- -------- ------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
(Increase) decrease in accounts
receivable........................... $ -- $ (4,352) $ 2,711 $ 307 $ 1,362
Decrease in prepaid expenses and
other................................ -- 4,891 2,009 174 13
Decrease in other payables and accrued
liabilities.......................... -- (10,391) (5,464) (3,809) (6,576)
-------- -------- ------- -------- --------
Change in working capital items... $ -- $ (9,852) $ (744) $ (3,328) $ (5,201)
======== ======== ======= ======= =======
</TABLE>
F-55
<PAGE> 178
======================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE EXCHANGE OFFER, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE ISSUER OR ANY OF THE GUARANTORS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN
THOSE TO WHICH IT RELATES, NOR DOES IT CONSTITUTE AN OFFER TO SELL, OR THE
SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR THE EXCHANGE PROPOSED TO BE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE ISSUER OR ANY OF THE GUARANTORS SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
Special Note Regarding Forward-Looking
Statements........................... (iii)
Summary................................ 1
Risk Factors........................... 19
Use of Proceeds........................ 25
The Refinancing........................ 25
Capitalization......................... 26
Selected Historical Financial Data..... 27
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 32
The Exchange Offer..................... 42
The Airline Catering Industry.......... 52
Business............................... 54
Management............................. 63
Executive Compensation................. 66
Security Ownership..................... 73
Certain Transactions................... 76
Certain Federal Income Tax
Considerations....................... 81
Description of Certain Indebtedness.... 84
Description of Notes................... 85
Book-Entry; Delivery and Form.......... 113
Plan of Distribution................... 115
Legal Matters.......................... 115
Experts................................ 115
Additional Information................. 116
Index to Financial Statements.......... F-1
</TABLE>
UNTIL , (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE EXCHANGE NOTES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
SELLING EXCHANGE NOTES RECEIVED IN EXCHANGE FOR PRIVATE NOTES HELD FOR THEIR OWN
ACCOUNT. SEE "PLAN OF DISTRIBUTION."
======================================================
======================================================
[LSG LUFTHANSA SERVICE LOGO]
[CATERAIR INTERNATIONAL LOGO]
[SCIS LOGO]
SC INTERNATIONAL SERVICES, INC.
OFFER TO EXCHANGE
9 1/4% SENIOR SUBORDINATED NOTES
DUE 2007, SERIES B
FOR ALL OUTSTANDING
9 1/4% SENIOR SUBORDINATED NOTES
DUE 2007, SERIES A
------------------------------------------
PROSPECTUS
------------------------------------------
, 1997
======================================================
<PAGE> 179
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("DGCL") provides that
a Delaware corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or complete action,
suit or proceeding whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 145 further provides that a Delaware corporation similarly may indemnify
any such person serving in any such capacity who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor,
against expenses actually and reasonably incurred in connection with the defense
or settlement of such action or suit if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Delaware Court
of Chancery or such other court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 102(b)(7) of the DGCL permits a corporation to include in its
certificate of incorporation a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such provision
shall not eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL (relating to
unlawful payment of dividends and unlawful stock purchase and redemption) or
(iv) for any transaction from which the director derived an improper personal
benefit.
SCIS' and each of the Guarantors' Certificate of Incorporation provides
that its directors shall not be liable to the Issuer or its stockholders for
monetary damages for breach of fiduciary duty as a director except to the extent
that exculpation from liabilities is not permitted under the DGCL as in effect
at the time such liability is determined. Each such Certificate of Incorporation
further provides that the Issuer or such Guarantor, as applicable, shall
indemnify its directors and officers to the fullest extent permitted by the
DGCL.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling any of the
registrants pursuant to the foregoing provisions, the registrants have been
informed that in the opinion of the Commission, such indemnification is against
public policy as expressed in the Securities Act, and is therefore
unenforceable.
Pursuant to the Indenture, the holders of the Private Notes, respectively,
have agreed to waive and release all liability of the directors, officers and
controlling persons of each registrant which may arise in connection with any
obligations of the registrants in connection with the Private Notes or the
Indenture.
Pursuant to section 7 of the Registration Rights Agreement, relating to the
Private Notes and the related Guarantees, the holders of such securities have
agreed to indemnify the directors, officers and controlling persons of the
registrants against certain liabilities, costs, and expenses that may be
incurred in connection
II-1
<PAGE> 180
with the registration of such securities, to the extent that such liabilities,
costs and expenses arise from an omission or untrue statement contained in
information provided to the registrants by the holders of such securities.
The Purchase Agreement, dated August 22, 1997, between the Issuer, the
Guarantors and the Initial Purchasers contains provisions by which the Initial
Purchasers agreed to indemnify the Issuer, the Guarantors and their affiliates
(including their officers, directors, employees, agents and controlling persons)
against certain liabilities.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS
<TABLE>
<C> <S>
2.1 Master Agreement, dated as of April 26, 1995, among Onex Food Services, Inc.,
Caterair Holdings Corporation and Caterair International Corporation.
Incorporated by reference to Exhibit 2.1 of SC International Services, Inc.'s
Registration Statement on Form S-1, Registration No. 33-94572.
2.1.1 Amendment No. 1 to Master Agreement, dated as of September 29, 1995, among
Onex Food Services, Inc., Caterair Holdings Corporation and Caterair
International Corporation. Incorporated by reference to Exhibit 2.2 of SC
International Services, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1995.
2.2 Sublease Agreement, dated as of September 29, 1995, between Sky Chefs, Inc.
and Caterair International Corporation, together with Schedule of additional
Subleases between such parties. Incorporated by reference to Exhibit 10.26 of
SC International Services, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1995.
2.3 Sublease Agreement, dated as of September 29, 1995, between Caterair
International, Inc. (II) and Caterair International Corporation, together
with Schedule of additional Subleases between such parties. Incorporated by
reference to Exhibit 10.27 of SC International Services, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 1995.
2.4 License Agreement, dated as of September 29, 1995, between Sky Chefs, Inc.
and Caterair International Corporation. Incorporated by reference to Exhibit
10.24 of SC International Services, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1995.
2.5 License Agreement, dated as of September 29, 1995, between Caterair
International, Inc. (II) and Caterair International Corporation. Incorporated
by reference to Exhibit 10.25 of SC International Services, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1995.
3.1 Certificate of Incorporation of SC International Services, Inc. Incorporated
by reference to Exhibit 3.1 of SC International Services, Inc.'s Registration
Statement on Form S-1, Registration No. 33-94572.
3.2 Amended and Restated Bylaws of SC International Services, Inc.
3.3 Amended and Restated Certificate of Incorporation of Sky Chefs, Inc.
Incorporated by reference to Exhibit 3.3 of Amendment No. 3 to SC
International Services, Inc.'s Registration Statement on Form S-1,
Registration No. 33-94572.
3.4 Bylaws of Sky Chefs, Inc. Incorporated by reference to Exhibit 3.4 of
Amendment No. 3 to SC International Services, Inc.'s Registration Statement
on Form S-1, Registration No. 33-94572.
3.5 Certificate of Incorporation of Caterair International, Inc. (II).
Incorporated by reference to Exhibit 3.5 of SC International Services, Inc.'s
Registration Statement on Form S-1, Registration No. 33-94572.
3.6 Bylaws of Caterair International, Inc. (II). Incorporated by reference to
Exhibit 3.6 of SC International Services, Inc.'s Registration Statement on
Form S-1, Registration No. 33-94572.
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3.7 Certificate of Incorporation of Caterair International Corporation,
Incorporated by reference to Exhibit 3.1 of Caterair International
Corporation's Registration Statement on Form S-1, Registration No. 33-30918.
3.8 Bylaws of Caterair International Corporation. Incorporated by reference to
Exhibit 3.2 of Caterair International Corporation's Registration Statement on
Form S-1, Registration No. 33-30918.
3.9 Certificate of Incorporation of Arlington Services, Inc.
3.10 Bylaws of Arlington Services, Inc.
3.11 Certificate of Incorporation of Arlington Services Holding Corporation.
3.12 Bylaws of Arlington Services Holding Corporation.
3.13 Certificate of Incorporation of JFK Caterers, Inc.
3.14 Bylaws of JFK Caterers, Inc.
3.15 Certificate of Incorporation of Caterair Consulting Services Corporation.
3.16 Bylaws of Caterair Consulting Services Corporation.
3.17 Certificate of Incorporation of Western Aire Chef, Inc.
3.18 Bylaws of Western Aire Chef, Inc.
3.19 Certificate of Incorporation of Bethesda Services, Inc.
3.20 Bylaws of Bethesda Services, Inc.
3.21 Certificate of Incorporation of Caterair New Zealand Limited.
3.22 Bylaws of Caterair New Zealand Limited.
3.23 Certificate of Incorporation of Onex Ohio Finance Corp.
3.24 Bylaws of Onex Ohio Finance Corp.
3.25 Certificate of Incorporation of Onex Ohio Finance Corp. II.
3.26 Bylaws of Onex Ohio Finance Corp. II.
3.27 Certificate of Incorporation of Onex Ohio Equity Corp.
3.28 Bylaws of Onex Ohio Equity Corp.
3.29 Certificate of Incorporation of Onex Ohio Equity Corp. II.
3.30 Bylaws of Onex Ohio Equity Corp. II.
3.31 Certificate of Incorporation of Onex Ohio Credit Corp.
3.32 Bylaws of Onex Ohio Credit Corp.
3.33 Certificate of Incorporation of Onex Ohio Credit Corp. II.
3.34 Bylaws of Onex Ohio Credit Corp. II.
3.35 Certificate of Incorporation of Onex Ohio Acceptance Corporation.
3.36 Bylaws of Onex Ohio Acceptance Corporation.
3.37 Certificate of Incorporation of Onex Ohio Capital Corp.
3.38 Bylaws of Onex Ohio Capital Corp.
3.39 Certificate of Incorporation of Onex Ohio Capital Corp. II.
3.40 Bylaws of Onex Ohio Capital Corp. II.
3.41 Certificate of Incorporation of Onex Ohio Fiscal Corp.
3.42 Bylaws of Onex Ohio Fiscal Corp.
3.43 Certificate of Incorporation of Onex Ohio Fiscal Corp. II.
3.44 Bylaws of Onex Ohio Fiscal Corp. II.
3.45 Certificate of Incorporation of Onex Ohio Funds Corp.
3.46 Bylaws of Onex Ohio Funds Corp.
3.47 Certificate of Incorporation of Onex Ohio Funds Corp. II.
3.48 Bylaws of Onex Ohio Funds Corp. II.
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3.49 Certificate of Incorporation of Caterair International Transition
Corporation.
3.50 Bylaws of Caterair International Transition Corporation.
3.51 Certificate of Incorporation of Sky Chefs International Corp.
3.52 Bylaws of Sky Chefs International Corp.
3.53 Certificate of Incorporation of Caterair Airport Properties, Inc.
3.54 Bylaws of Caterair Airport Properties, Inc.
3.55 Certificate of Incorporation of Caterair St. Thomas Holdings Corporation.
3.56 Bylaws of Caterair St. Thomas Holdings Corporation.
3.57 Certificate of Incorporation of Sky Chefs Argentine Inc.
3.58 Bylaws of Sky Chefs Argentine Inc.
4. Indenture, dated August 28, 1997, among SC International Services, Inc., as
Issuer, The Bank of New York, as Trustee and the Guarantors named therein.
5. Opinion of Kaye, Scholer, Fierman, Hays & Handler, LLP.
8.1 Opinion of Kaye, Scholer, Fierman, Hays & Handler, LLP.
8.2 Opinion of Price Waterhouse LLP.
10.1 Purchase Agreement, dated as of August 22, 1997, among SC International
Services, Inc., the Guarantors named therein, and BT Securities Corporation,
J.P. Morgan Securities Inc., Credit Suisse First Boston Corporation, Goldman,
Sachs & Co., Smith Barney, Inc. and Bankers Trust International PLC, as
Initial Purchasers.
10.2 Registration Rights Agreement, dated as of August 28, 1997, among SC
International Services, Inc., the Guarantors named therein, and BT Securities
Corporation, J.P. Morgan Securities Inc., Credit Suisse First Boston
Corporation, Goldman, Sachs & Co., Smith Barney, Inc., and Bankers Trust
International PLC, as Initial Purchasers.
10.3 Dealer Manager Agreement, dated August 25, 1997, among SC International
Services, Inc., Sky Chefs, Inc., Caterair International, Inc. (II), Caterair
International Corporation and BT Securities Corporation.
10.4 Depositary Agreement, dated as of August 25, 1997, between SC International
Services, Inc. and The Bank of New York, as Depositary.
10.5 Form of Exchange Agent Agreement between SC International Services, Inc. and
The Bank of New York, as Exchange Agent.*
10.6 Marriott Noncompetition Agreement, dated as of December 15, 1989, among
Marriott Corporation, Host International, Inc., Caterair Holdings Corporation
and Caterair International Corporation. Incorporated by reference to Exhibit
10.25 of Caterair International Corporation's Registration Statement on Form
S-1, Registration No. 33-31309.
10.7 Consulting Agreement, dated as of September 29, 1995, between Frederic V.
Malek and SC International Services, Inc. Incorporated by reference to
Exhibit 10.1 of SC International Services, Inc.'s Annual Report on Form 10-K
for the year ended December 31, 1995.
10.8 Agreement, dated as of October 5, 1993, among Onex Corporation, Deutsche
Lufthansa Aktiengesellschaft and LSG Lufthansa Service GmbH. Incorporated by
reference to Exhibit 10.2 of SC International Services, Inc.'s Registration
Statement on Form S-1, Registration No. 33-94572.
10.9 Cooperation Agreement, dated as of October 5, 1993, between LSG Lufthansa
Service GmbH and Sky Chefs, Inc. Incorporated by reference to Exhibit 10.3 of
SC International Services, Inc.'s Registration Statement on Form S-1,
Registration No. 33-94572.
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10.10 Consent Agreement, dated as of April 20, 1995, among Onex Corporation, Onex
Food Services, Inc., OnCap Holdings U.S., Inc., Sky Chefs, Inc. and LSG
Lufthansa Service GmbH. Incorporated by reference to Exhibit 10.3.1 of
Amendment No. 2 to SC International Services, Inc.'s Registration Statement
on Form S-1, Registration No. 33-94572.
10.11 Consent Agreement, dated as of April 20, 1995, among OnCap Holdings U.S.,
Inc., OMI Quebec Inc., Onex Food Services, Inc. and LSG Lufthansa Service
GmbH. Incorporated by reference to Exhibit 10.4.1 of Amendment No. 2 to SC
International Services, Inc.'s Registration Statement on Form S-1,
Registration No. 33-94572.
10.12 Consent Agreement, dated as of April 20, 1995, among Onex Corporation, Onex
Food Services, Inc., OnCap Holdings U.S., Inc., Sky Chefs, Inc. and LSG
Lufthansa Service GmbH. Incorporated by reference to Exhibit 10.4.2 of
Amendment No. 2 to SC International Services, Inc.'s Registration Statement
on Form S-1, Registration No. 33-94572.
10.13 Exchange Agreement and Amendment to Stockholders' Agreement, dated as of
December 28, 1996, among Onex Food Services, Inc., LSG Lufthansa Service GmbH
and LSG Lufthansa Service USA Corporation.
10.14 Stockholders' Agreement, dated as of December 6, 1993, among Onex
Corporation, Onex Food Services, Inc., OnCap Holdings U.S., Inc., OMI Quebec
Inc., LSG Lufthansa Service GmbH and LSG Lufthansa Service USA Corporation.
Incorporated by reference to Exhibit 10.4 of SC International Services,
Inc.'s Registration Statement on Form S-1, Registration No. 33-94572.
10.15 Arbitration Agreement dated as of October 5, 1993, among Onex Corporation,
Onex Food Services, Inc., OnCap Holdings U.S., Inc., OMI Quebec Inc., Sky
Chefs, Inc., Deutsche Lufthansa Aktiengesellschaft and LSG Lufthansa Service
GmbH. Incorporated by reference to Exhibit 10.5 of SC International Services,
Inc.'s Registration Statement on Form S-1, Registration No. 33-94572.
10.16 Master National Agreement, dated August 22, 1969, between Sky Chefs, Inc. and
Hotel Employees and Restaurant Employees International Union. Incorporated by
reference to Exhibit 10.8 of Amendment No. 1 to SC International Services,
Inc.'s Registration Statement on Form S-1, Registration No. 33-94572.
10.17 Sky Chefs, Inc. Supplemental Executive Retirement Plan. Incorporated by
reference to Exhibit 10.13 of SC International Services, Inc.'s Registration
Statement on Form S-1, Registration No. 33-94572.
10.18 Sky Chefs, Inc. Performance Reward Plan. Incorporated by reference to Exhibit
10.13 of Amendment No. 1 to SC International Services, Inc.'s Registration
Statement on Form S-1, Registration No. 33-94572.
10.19 Employment Agreement, dated as of January 1, 1997, between James J. O'Neill
and Onex Food Services, Inc.
10.20 Employment Agreement, dated as of January 1, 1997, between Michael Z. Kay and
Sky Chefs, Inc.
10.21 Employment Agreement, dated as of January 1, 1997, between Patrick W. Tolbert
and Sky Chefs, Inc.
10.22 Employment Agreement, dated as of January 1, 1997, between Randall C. Boyd
and Sky Chefs, Inc.
10.23 Caterair Key Employee Retention Plan. Incorporated by reference to Exhibit
10.11 of SC International Services, Inc.'s Registration Statement on Form
S-1, Registration No. 33-94572.
10.23.1 Amendment No. 1 to Caterair Key Employee Retention Plan. Incorporated by
reference to Exhibit 10.11.1 of SC International Services, Inc.'s
Registration Statement on Form S-1, Registration No. 33-94572.
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10.24 Caterair International Corporation Transition Severance Plan. Incorporated by
reference to Exhibit 10.26 of Amendment No. 2 to SC International Services,
Inc.'s Registration Statement on Form S-1, Registration No. 33-94572.
10.25 Phantom Stock Plan for Management Employees of Onex Food Services, Inc. and
its Subsidiaries. Incorporated by reference to Exhibit 10.6 of Caterair
International Corporation's Annual Report on Form 10-K for the year ended
December 31, 1995.
10.26 Management Advisory Agreement, dated as of September 29, 1995, between OMI
Partnership Holdings Ltd. and SC International Services Inc.
10.27 Lease Agreement, dated as of May 15, 1993, between TriNet Essential
Facilities X, Inc. and Caterair International Corporation, together with
Schedule of substantially similar Lease Agreements between such parties.
10.27.1 First Amendment to Lease Agreement, dated as of September 22, 1995, between
TriNet Essential Facilities X, Inc. and Caterair International Corporation.
10.27.2 Second Amendment to Lease Agreement, dated as of December 1, 1995, between
TriNet Essential Facilities X, Inc. and Caterair International Corporation.
10.27.3 Third Amendment to Lease Agreement, dated as of June 1, 1996, between TriNet
Essential Facilities X, Inc. and Caterair International Corporation.
10.27.4 Fourth Amendment to Lease Agreement, dated as of December 23, 1996, between
TriNet Essential Facilities X, Inc. and Caterair International Corporation.
10.27.5 Fifth Amendment to Lease Agreement, dated as of June 23, 1997, between TriNet
Essential Facilities X, Inc. and Caterair International Corporation.
10.27.6 Sixth Amendment to Lease Agreement, dated as of August 22, 1997, between
TriNet Essential Facilities X, Inc. and Caterair International Corporation.
10.27.7 Limited Waiver dated as of August 22, 1997, by TriNet Essential Facilities X,
Inc., in favor of Caterair International Corporation.
10.28 Lease Agreement, dated as of May 15, 1993, between TriNet Essential
Facilities VIII R, Inc. and Caterair International Corporation, together with
Schedule of substantially similar Lease Agreements between such parties.
10.28.1 First Amendment to Lease Agreement, dated as of September 22, 1995, between
TriNet Essential Facilities VIII R, Inc. and Caterair International
Corporation.
10.28.2 Second Amendment to Lease Agreement, dated as of December 1, 1995, between
TriNet Essential Facilities VIII R, Inc. and Caterair International
Corporation.
10.28.3 Third Amendment to Lease Agreement, dated as of June 1, 1996, between TriNet
Essential Facilities VIII R, Inc. and Caterair International Corporation.
10.28.4 Fourth Amendment to Lease Agreement, dated as of December 23, 1996, between
TriNet Essential Facilities VIII R, Inc. and Caterair International
Corporation.
10.28.5 Fifth Amendment to Lease Agreement, dated as of June 23, 1997, between TriNet
Essential Facilities VIII R, Inc. and Caterair International Corporation.
10.28.6 Sixth Amendment to Lease Agreement, dated as of August 22, 1997, between
TriNet Essential Facilities VIII R, Inc. and Caterair International
Corporation.
10.28.7 Limited Waiver, dated as of August 22, 1997, by TriNet Essential Facilities
VIII R, Inc., in favor of Caterair International Corporation.
10.29 Guaranty, dated as of September 22, 1995, by SC International Services, Inc.,
Sky Chefs, Inc., Onex Food Services, Inc. and Caterair International, Inc.
(II) for the benefit of TriNet Essential Facilities VIII R, Inc.
10.30 Guaranty, dated as of September 22, 1995, by SC International Services, Inc.,
Sky Chefs, Inc., Onex Food Services, Inc. and Caterair International, Inc.
(II) for the benefit of TriNet Essential Facilities X, Inc.
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10.31 Tax Sharing Agreement, dated as of December 15, 1989, among Caterair Holdings
Corporation, Caterair International Corporation and Marriott Corporation.
Incorporated by reference to Exhibit 10.25 of SC International Services,
Inc.'s Registration Statement on Form S-1, Registration No. 33-94572.
10.32 Noncompetition Agreement, dated as of September 29, 1995, between Caterair
International Corporation and Sky Chefs, Inc. Incorporated by reference to
Exhibit 10.16 of Caterair International Corporation's Annual Report on Form
10-K for the year ended December 31, 1995.
10.33 Promissory Note, dated September 29, 1995, by Caterair International
Corporation payable to the order of SC International Services, Inc.
Incorporated by reference to Exhibit 10.18 of Caterair International
Corporation's Annual Report on Form 10-K for the year ended December 31,
1995.
10.34 Credit Agreement, dated as of September 29, 1995, and amended and restated as
of August 28, 1997, among SC International Services, Inc., as borrower, Onex
Food Services, Inc., Caterair Holdings Corporation, Caterair International
Corporation, the guarantors named therein, the lenders party thereto from
time to time, Bankers Trust Company and J.P. Morgan Securities, Inc., as
co-arrangers, Bankers Trust Company, as syndication agent, the Bank of New
York, as co-agent, and Morgan Guaranty Trust Company of New York, as
administrative agent.*
10.35 Term Loan Agreement, dated as of August 28, 1997, among Caterair
International Corporation and SC International Services, Inc., as borrowers,
the guarantors named therein, the lenders party thereto from time to time,
Bankers Trust Company and J.P. Morgan Securities Inc., as co-arrangers,
Bankers Trust Company, as syndication agent, and Morgan Guaranty Trust
Company of New York, as administrative agent.*
10.36 Tax Sharing Agreement, dated as of September 29, 1995, among Onex Food
Services, Inc., Sky Chefs, Inc. and Caterair International, Inc. (II).
Incorporated by reference to Exhibit 10.22 of SC International Services,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1995.
10.37 Shareholders' Agreement, dated as of May 29, 1986, as amended, among Onex
Food Services, Inc., an affiliate of Onex Corporation and certain employees
of Sky Chefs, Inc.*
10.38 Acquisition Agreement, dated as of November 30, 1995, between LSG Lufthansa
Service USA Corporation and Sky Chefs, Inc.
10.39 Acquisition Agreement, dated as of August 14, 1995, between LSG Lufthansa
Service USA Corporation and Sky Chefs, Inc.
10.40 Acquisition Agreement, dated July 18, 1997, between Caterair International,
Inc. (II) and Sky Chefs, Inc.
10.41 Caterair Noncompetition Agreement, dated as of December 15, 1989, among
Marriott Corporation, Host International, Inc., Caterair Holdings Corporation
and, Caterair International Corporation. Incorporated by International
Corporation Registration Statement on Form S-1, Registration No. 33-31309.
12.1 SC International Services, Inc. and Subsidiaries Computation of Ratio of
Earnings to Fixed Charges.
12.2 Caterair International Corporation and Subsidiaries Computation of Ratio of
Earnings to Fixed Charges.
12.3 SC International Services, Inc. and Subsidiaries and Caterair International
Corporation and Subsidiaries Computation of Combined Pro Forma Ratio of
Earnings to Fixed Charges.
21.1 Subsidiaries of the Registrants.
23.1 Consent of Coopers & Lybrand L.L.P.
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23.2 Consent of Kaye, Scholer, Fierman, Hays & Handler, LLP. Incorporated by
reference to Exhibit 5.
23.3 Consent of Price Waterhouse, LLP. Incorporated by reference to Exhibit 8.2.
23.4 Consent of Arthur Andersen LLP.
24.1 Power of Attorney for SC International Services, Inc. (included with
signature pages of SC International Services, Inc. at page II-11)
24.2 Power of Attorney for Sky Chefs, Inc. (included with signature pages of Sky
Chefs, Inc. at page II-13)
24.3 Power of Attorney for Caterair International, Inc. (II) (included with
signature pages of Caterair International, Inc. (II) at page II-14)
24.4 Power of Attorney of Caterair International Corporation (included with
signature pages of Caterair International Corporation at page II-15)
24.5 Power of Attorney for Arlington Services, Inc. (included with signature pages
of Arlington Services, Inc. at page II-16).
24.6 Power of Attorney for Arlington Services Holding Corporation (included with
signature pages of Arlington Services Holding Corporation at page II-17).
24.7 Power of Attorney for JFK Caterers, Inc. (included with signature pages of
JFK Caterers, Inc. at page II-20).
24.8 Power of Attorney for Caterair Consulting Services Corporation (included with
signature pages of Caterair Consulting Services Corporation at page II-21).
24.9 Power of Attorney for Western Aire Chef, Inc. (included with signature pages
of Western Aire Chef, Inc. at page II-22).
24.10 Power of Attorney for Bethesda Services, Inc. (included with signature pages
of Bethesda Services, Inc. at page II-18).
24.11 Power of Attorney for Caterair New Zealand Limited (included with signature
pages of Caterair New Zealand Limited at page II-19).
24.12 Power of Attorney for Onex Ohio Finance Corp. (included with signature pages
of Onex Ohio Finance Corp. at page II-28).
24.13 Power of Attorney for Onex Ohio Finance Corp. II (included with signature
pages of Onex Ohio Finance Corp. II at page II-29).
24.14 Power of Attorney for Onex Ohio Equity Corp. (included with signature pages
of Onex Ohio Equity Corp. at page II-30).
24.15 Power of Attorney for Onex Ohio Equity Corp. II (included with signature
pages of Onex Ohio Equity Corp. II at page II-31).
24.16 Power of Attorney for Onex Ohio Credit Corp. (included with signature pages
of Onex Ohio Credit Corp. at page II-32).
24.17 Power of Attorney for Onex Ohio Credit Corp. II (included with signature
pages of Onex Ohio Credit Corp. II at page II-33).
24.18 Power of Attorney for Onex Ohio Acceptance Corporation (included with
signature pages of Onex Ohio Acceptance Corporation at page II-34).
24.19 Power of Attorney for Onex Ohio Capital Corp. (included with signature pages
of Onex Ohio Capital Corp. at page II-35).
24.20 Power of Attorney for Onex Ohio Capital Corp. II (included with signature
pages of Onex Ohio Capital Corp. II at page II-36).
24.21 Power of Attorney for Onex Ohio Fiscal Corp. (included with signature pages
of Onex Ohio Fiscal Corp. at page II-37).
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24.22 Power of Attorney for Onex Ohio Fiscal Corp. II (included with signature
pages of Onex Ohio Fiscal Corp. II at page II-38).
24.23 Power of Attorney for Onex Ohio Funds Corp. (included with signature pages of
Onex Ohio Funds Corp. at page II-39).
24.24 Power of Attorney for Onex Ohio Funds Corp. II (included with signature pages
of Onex Ohio Funds Corp. II at page II-40).
24.25 Power of Attorney for Caterair International Transition Corporation (included
with signature pages of Caterair International Transition Corporation at page
II-24).
24.26 Power of Attorney for Sky Chefs International Corp. (included with signature
pages of Sky Chefs International Corp. at page II-27).
24.27 Power of Attorney for Caterair Airport Properties, Inc. (included with
signature pages of Caterair Airport Properties, Inc. at page II-26).
24.28 Power of Attorney for Caterair St. Thomas Holdings Corporation (included with
signature pages of Caterair St. Thomas Holdings Corporation at page II-23).
24.29 Power of Attorney for Sky Chefs Argentine, Inc. (included with signature
pages of Sky Chefs Argentine, Inc. at page II-25).
25.1 Statement of Eligibility on Form T-I of Trustee under the Indenture.
27.1 Financial Data Schedules for SC International Services, Inc. and consolidated
subsidiaries for the fiscal year ended December 31, 1996, the six-months
ended June 30, 1997, and the six-months ended June 30, 1996.
27.2 Financial Data Schedules for Caterair International Corporation and
consolidated subsidiaries for the fiscal year ended December 31, 1996, the
six-months ended June 30, 1997 and the six-months ended June 30, 1996.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
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* To be filed by amendment.
(b) FINANCIAL STATEMENT SCHEDULES
All schedules for which provision is made in Regulation S-X of the
Securities and Exchange Commission are not required under the related
instructions or are inapplicable or the required information is included in the
financial statements or notes thereto and, therefore, have been omitted.
ITEM 22. UNDERTAKINGS.
(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrants of expenses incurred or paid by a director, officer or
controlling person of the registrants in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrants will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(b) The undersigned registrants hereby undertake:
(1) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
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(2) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering rate may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(3) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(4) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(c) (1) The undersigned registrants hereby undertake as follows: that prior
to any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(2) The registrants undertake that every prospectus: (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(d) The undersigned registrants hereby undertake to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Trust Indenture Act.
The undersigned registrants hereby undertake to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
SC INTERNATIONAL SERVICES, INC.
By: /s/ PATRICK W. TOLBERT
------------------------------------
Name: Patrick W. Tolbert
Title: Executive Vice President and
Chief
Financial and Administrative
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and other documents in connection therewith.
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<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- -------------------
<C> <S> <C>
/s/ JAMES J. O'NEILL Director, Chief Executive October 6, 1997
- ------------------------------------------ Officer and Vice Chairman
James J. O'Neill of the Board (principal
executive officer)
/s/ PATRICK W. TOLBERT Director, Executive Vice October 6, 1997
- ------------------------------------------ President and Chief
Patrick W. Tolbert Financial and
Administrative Officer
(principal financial
officer)
/s/ DANIEL J. ALTOBELLO Director and Chairman of the October 6, 1997
- ------------------------------------------ Board
Daniel J. Altobello
/s/ GERALD W. SCHWARTZ Director October 6, 1997
- ------------------------------------------
Gerald W. Schwartz
/s/ EWOUT HEERSINK Director October 6, 1997
- ------------------------------------------
Ewout Heersink
Director
- ------------------------------------------
Helmut Woelki
Director
- ------------------------------------------
Gunther Rothig
Director
- ------------------------------------------
Helmut Bleckmann
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<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- -------------------
<C> <S> <C>
/s/ MICHAEL Z. KAY Director October 6, 1997
- ------------------------------------------
Michael Z. Kay
/s/ WILLIAM S. WOODSIDE Director October 6, 1997
- ------------------------------------------
William S. Woodside
/s/ THOMAS J. LEE Director -- Financial October 6, 1997
- ------------------------------------------ Accounting (principal
Thomas J. Lee accounting officer)
</TABLE>
II-12
<PAGE> 191
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
SKY CHEFS, INC.
By: /s/ PATRICK W. TOLBERT
------------------------------------
Name: Patrick W. Tolbert
Title: Executive Vice President and
Chief
Financial and Administrative
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------- ----------------
<C> <S> <C>
/s/ MICHAEL Z. KAY Director, President and Chief October 6, 1997
- ------------------------------------------ Executive Officer (principal
Michael Z. Kay executive officer)
/s/ PATRICK W. TOLBERT Director, Executive Vice October 6, 1997
- ------------------------------------------ President and Chief Financial
Patrick W. Tolbert and Administrative Officer
(principal financial officer)
/s/ GERALD W. SCHWARTZ Director October 6, 1997
- ------------------------------------------
Gerald W. Schwartz
/s/ EWOUT HEERSINK Director October 6, 1997
- ------------------------------------------
Ewout Heersink
Director
- ------------------------------------------
Helmut Woelki
Director
- ------------------------------------------
Gunther Rothig
Director
- ------------------------------------------
Helmut Bleckmann
/s/ WILLIAM S. WOODSIDE Director October 6, 1997
- ------------------------------------------
William S. Woodside
/s/ THOMAS J. LEE Director -- Financial October 6, 1997
- ------------------------------------------ Accounting (principal
Thomas J. Lee accounting officer)
</TABLE>
II-13
<PAGE> 192
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
CATERAIR INTERNATIONAL, INC. (II)
By: /s/ JAMES J. O'NEILL
------------------------------------
Name: James J. O'Neill
Title: Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------- ----------------
<C> <S> <C>
/s/ JAMES J. O'NEILL Director and Chairman of the October 6, 1997
- ------------------------------------------ Board (principal executive,
James J. O'Neill financial and accounting
officer)
/s/ ERIC J. ROSEN Director October 6, 1997
- ------------------------------------------
Eric J. Rosen
/s/ J. THOMAS MARKLEY Director October 6, 1997
- ------------------------------------------
J. Thomas Markley
Director
- ------------------------------------------
Aaron Gellman
</TABLE>
II-14
<PAGE> 193
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
CATERAIR INTERNATIONAL CORPORATION
By: /s/ DANIEL J. ALTOBELLO
------------------------------------
Name: Daniel J. Altobello
Title: President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ --------------------------------- ----------------
<C> <S> <C>
/s/ DANIEL J. ALTOBELLO President and Chief Executive October 6, 1997
- ------------------------------------------ Officer (principal executive,
Daniel J. Altobello financial and accounting
officer)
/s/ ANTHONY R. MELMAN Director October 6, 1997
- ------------------------------------------
Anthony R. Melman
</TABLE>
II-15
<PAGE> 194
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
ARLINGTON SERVICES, INC.
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------- ----------------
<C> <S> <C>
/s/ THOMAS J. LEE Director and President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
/s/ NORMAN J. SHUMAN Director, Vice President October 6, 1997
- ------------------------------------------ and Treasurer
Norman J. Shuman
/s/ DONALD F. WEST Director and Secretary October 6, 1997
- ------------------------------------------
Donald F. West
</TABLE>
II-16
<PAGE> 195
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
ARLINGTON SERVICES HOLDING CORPORATION
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------- ----------------
<C> <S> <C>
/s/ THOMAS J. LEE Director and President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
/s/ NORMAN J. SHUMAN Director, Vice President and October 6, 1997
- ------------------------------------------ Treasurer
Norman J. Shuman
/s/ DONALD F. WEST Director and Secretary October 6, 1997
- ------------------------------------------
Donald F. West
</TABLE>
II-17
<PAGE> 196
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
BETHESDA SERVICES, INC.
By: /s/ DONALD F. WEST
------------------------------------
Name: Donald F. West
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------- ----------------
<C> <S> <C>
/s/ DONALD F. WEST Director, President and October 6, 1997
- ------------------------------------------ Secretary (principal
Donald F. West executive, financial and
accounting officer)
/s/ NORMAN J. SHUMAN Director, Vice President and October 6, 1997
- ------------------------------------------ Treasurer
Norman J. Shuman
</TABLE>
II-18
<PAGE> 197
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
CATERAIR NEW ZEALAND LIMITED
By: /s/ DONALD F. WEST
------------------------------------
Name: Donald F. West
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ --------------------------------- ----------------
<C> <S> <C>
/s/ DONALD F. WEST Director, President and Secretary October 6, 1997
- ------------------------------------------ (principal executive, financial
Donald F. West and accounting officer)
/s/ NORMAN J. SHUMAN Director, Vice President and October 6, 1997
- ------------------------------------------ Treasurer
Norman J. Shuman
</TABLE>
II-19
<PAGE> 198
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
JFK CATERERS, INC.
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------- ----------------
<C> <S> <C>
/s/ THOMAS J. LEE Director and President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
</TABLE>
II-20
<PAGE> 199
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
CATERAIR CONSULTING SERVICES
CORPORATION
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
in his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- -------------------
<C> <S> <C>
/s/ THOMAS J. LEE Director and President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
</TABLE>
II-21
<PAGE> 200
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
WESTERN AIRE CHEF, INC.
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- -------------------
<C> <S> <C>
/s/ THOMAS J. LEE President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
/s/ DANIEL J. ALTOBELLO Director October 6, 1997
- ------------------------------------------
Daniel J. Altobello
/s/ PATRICK W. TOLBERT Director October 6, 1997
- ------------------------------------------
Patrick W. Tolbert
/s/ DONALD F. WEST Director October 6, 1997
- ------------------------------------------
Donald F. West
</TABLE>
II-22
<PAGE> 201
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
CATERAIR ST. THOMAS HOLDINGS
CORPORATION
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------ -------------------
<C> <S> <C>
/s/ THOMAS J. LEE Director and President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
</TABLE>
II-23
<PAGE> 202
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
CATERAIR INTERNATIONAL TRANSITION
CORPORATION
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- -------------------
<C> <S> <C>
/s/ THOMAS J. LEE Director and President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
</TABLE>
II-24
<PAGE> 203
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
SKY CHEFS ARGENTINE, INC.
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- -------------------
<C> <S> <C>
/s/ THOMAS J. LEE President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
/s/ PATRICK W. TOLBERT Director October 6, 1997
- ------------------------------------------
Patrick W. Tolbert
</TABLE>
II-25
<PAGE> 204
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
CATERAIR AIRPORT PROPERTIES, INC.
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ---------------------------- -------------------
<C> <S> <C>
/s/ THOMAS J. LEE President October 6, 1997
- --------------------------------------------- (principal executive,
Thomas J. Lee financial and accounting
officer)
/s/ DANIEL J. ALTOBELLO Director October 6, 1997
- ---------------------------------------------
Daniel J. Altobello
/s/ PATRICK W. TOLBERT Director and Vice President October 6, 1997
- ---------------------------------------------
Patrick W. Tolbert
/s/ DONALD F. WEST Director and Secretary October 6, 1997
- ---------------------------------------------
Donald F. West
</TABLE>
II-26
<PAGE> 205
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
SKY CHEFS INTERNATIONAL CORP.
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- -------------------
<C> <S> <C>
/s/ THOMAS J. LEE President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
/s/ MICHAEL Z. KAY Director, Vice President, October 6, 1997
- ------------------------------------------ Treasurer and Secretary
Michael Z. Kay
/s/ PATRICK W. TOLBERT Director and Vice President October 6, 1997
- ------------------------------------------
Patrick W. Tolbert
/s/ JAMES J. O'NEILL Director and Vice President October 6, 1997
- ------------------------------------------
James J. O'Neill
</TABLE>
II-27
<PAGE> 206
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
ONEX OHIO FINANCE CORP.
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- -------------------
<C> <S> <C>
/s/ THOMAS J. LEE President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
/s/ ANTHONY MELMAN Director October 6, 1997
- ------------------------------------------
Anthony Melman
/s/ JAMES J. O'NEILL Director, Vice President, October 6, 1997
- ------------------------------------------ Treasurer and Secretary
James J. O'Neill
/s/ DONALD F. WEST Director and Vice President October 6, 1997
- ------------------------------------------
Donald F. West
</TABLE>
II-28
<PAGE> 207
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
ONEX OHIO FINANCE CORP. II
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- -------------------
<C> <S> <C>
/s/ THOMAS J. LEE President (principal October 6, 1997
- ------------------------------------------ executive, financial and
Thomas J. Lee accounting officer)
/s/ ANTHONY MELMAN Director October 6, 1997
- ------------------------------------------
Anthony Melman
/s/ JAMES J. O'NEILL Director, Vice President, October 6, 1997
- ------------------------------------------ Treasurer and Secretary
James J. O'Neill
/s/ DONALD F. WEST Director and Vice President October 6, 1997
- ------------------------------------------
Donald F. West
</TABLE>
II-29
<PAGE> 208
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
ONEX OHIO EQUITY CORP.
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- -------------------
<C> <S> <C>
/s/ THOMAS J. LEE President (principal October 6, 1997
- ------------------------------------------ executive, financial and
Thomas J. Lee accounting officer)
/s/ ANTHONY MELMAN Director October 6, 1997
- ------------------------------------------
Anthony Melman
/s/ JAMES J. O'NEILL Director, Vice President, October 6, 1997
- ------------------------------------------ Treasurer and Secretary
James J. O'Neill
/s/ DONALD F. WEST Director and Vice President October 6, 1997
- ------------------------------------------
Donald F. West
</TABLE>
II-30
<PAGE> 209
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
ONEX OHIO EQUITY CORP. II
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- -------------------
<C> <S> <C>
/s/ THOMAS J. LEE President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
/s/ EWOUT HEERSINK Director October 6, 1997
- ------------------------------------------
Ewout Heersink
/s/ JAMES J. O'NEILL Director, Vice President, October 6, 1997
- ------------------------------------------ Treasurer and Secretary
James J. O'Neill
/s/ DONALD F. WEST Director and Vice President October 6, 1997
- ------------------------------------------
Donald F. West
</TABLE>
II-31
<PAGE> 210
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
ONEX OHIO CREDIT CORP.
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------ -------------------
<C> <S> <C>
/s/ THOMAS J. LEE President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
/s/ ANTHONY MELMAN Director October 6, 1997
- ------------------------------------------
Anthony Melman
/s/ JAMES J. O'NEILL Director, Vice President, October 6, 1997
- ------------------------------------------ Treasurer and Secretary
James J. O'Neill
/s/ DONALD F. WEST Director and Vice President October 6, 1997
- ------------------------------------------
Donald F. West
</TABLE>
II-32
<PAGE> 211
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
ONEX OHIO CREDIT CORP. II
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------ -----------------
<C> <S> <C>
/s/ THOMAS J. LEE President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
/s/ EWOUT HEERSINK Director October 6, 1997
- ------------------------------------------
Ewout Heersink
/s/ JAMES J. O'NEILL Director, Vice President, October 6, 1997
- ------------------------------------------ Treasurer and Secretary
James J. O'Neill
/s/ DONALD F. WEST Director and Vice President October 6, 1997
- ------------------------------------------
Donald F. West
</TABLE>
II-33
<PAGE> 212
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
ONEX OHIO ACCEPTANCE CORPORATION
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually, and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------ -----------------
<C> <S> <C>
/s/ THOMAS J. LEE President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
/s/ ANTHONY MELMAN Director October 6, 1997
- ------------------------------------------
Anthony Melman
/s/ JAMES J. O'NEILL Director, Vice President, October 6, 1997
- ------------------------------------------ Treasurer and Secretary
James J. O'Neill
/s/ DONALD F. WEST Director and Vice President October 6, 1997
- ------------------------------------------
Donald F. West
</TABLE>
II-34
<PAGE> 213
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October 6, 1997.
ONEX OHIO CAPITAL CORP.
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually, and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------ -----------------
<C> <S> <C>
/s/ THOMAS J. LEE President (principal October 6, 1997
- ------------------------------------------ executive, financial and
Thomas J. Lee accounting officer)
/s/ ANTHONY MELMAN Director October 6, 1997
- ------------------------------------------
Anthony Melman
/s/ JAMES J. O'NEILL Director, Vice President, October 6, 1997
- ------------------------------------------ Treasurer and Secretary
James J. O'Neill
/s/ DONALD F. WEST Director and Vice President October 6, 1997
- ------------------------------------------
Donald F. West
</TABLE>
II-35
<PAGE> 214
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
ONEX OHIO CAPITAL CORP. II
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually, and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------ -----------------
<C> <S> <C>
/s/ THOMAS J. LEE President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
/s/ EWOUT HEERSINK Director October 6, 1997
- ------------------------------------------
Ewout Heersink
/s/ JAMES J. O'NEILL Director, Vice President, October 6, 1997
- ------------------------------------------ Treasurer and Secretary
James J. O'Neill
/s/ DONALD F. WEST Director and Vice President October 6, 1997
- ------------------------------------------
Donald F. West
</TABLE>
II-36
<PAGE> 215
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
ONEX OHIO FISCAL CORP.
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually, and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- -------------------
<C> <S> <C>
/s/ THOMAS J. LEE President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
/s/ ANTHONY MELMAN Director October 6, 1997
- ------------------------------------------
Anthony Melman
/s/ JAMES J. O'NEILL Director, Vice President, October 6, 1997
- ------------------------------------------ Treasurer and Secretary
James J. O'Neill
/s/ DONALD F. WEST Director and Vice President October 6, 1997
- ------------------------------------------
Donald F. West
</TABLE>
II-37
<PAGE> 216
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
ONEX OHIO FISCAL CORP. II
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually, and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- -------------------
<C> <S> <C>
/s/ THOMAS J. LEE President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
/s/ EWOUT HEERSINK Director October 6, 1997
- ------------------------------------------
Ewout Heersink
/s/ JAMES J. O'NEILL Director, Vice President, October 6, 1997
- ------------------------------------------ Treasurer and Secretary
James J. O'Neill
/s/ DONALD F. WEST Director and Vice President October 6, 1997
- ------------------------------------------
Donald F. West
</TABLE>
II-38
<PAGE> 217
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
ONEX OHIO FUNDS CORP.
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee and any of them, with
full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- -------------------
<C> <S> <C>
/s/ THOMAS J. LEE President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
/s/ ANTHONY MELMAN Director October 6, 1997
- ------------------------------------------
Anthony Melman
/s/ JAMES J. O'NEILL Director, Vice President, October 6, 1997
- ------------------------------------------ Treasurer and Secretary
James J. O'Neill
/s/ DONALD F. WEST Director and Vice President October 6, 1997
- ------------------------------------------
Donald F. West
</TABLE>
II-39
<PAGE> 218
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 6th day of October, 1997.
ONEX OHIO FUNDS CORP. II
By: /s/ THOMAS J. LEE
------------------------------------
Name: Thomas J. Lee
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby authorizes and appoints
Patrick W. Tolbert, Michael Z. Kay and/or Thomas J. Lee, and any of them, with
full power of substitution and resubstitution as his true and lawful
attorneys-in-fact, to sign and file with the Securities and Exchange Commission
on his behalf, individually and in all capacities, all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto,
and any other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- -------------------
<C> <S> <C>
/s/ THOMAS J. LEE President October 6, 1997
- ------------------------------------------ (principal executive,
Thomas J. Lee financial and accounting
officer)
/s/ EWOUT HEERSINK Director October 6, 1997
- ------------------------------------------
Ewout Heersink
/s/ JAMES J. O'NEILL Director, Vice President, October 6, 1997
- ------------------------------------------ Treasurer and Secretary
James J. O'Neill
/s/ DONALD F. WEST Director and Vice President October 6, 1997
- ------------------------------------------
Donald F. West
</TABLE>
II-40
<PAGE> 219
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
-------- ------------------------------------------------------------------ ------------
<C> <S> <C>
2.1 Master Agreement, dated as of April 26, 1995, among Onex Food
Services, Inc., Caterair Holdings Corporation and Caterair
International Corporation. Incorporated by reference to Exhibit
2.1 of SC International Services, Inc.'s Registration Statement on
Form S-1, Registration No. 33-94572. .............................
2.1.1 Amendment No. 1 to Master Agreement, dated as of September 29,
1995, among Onex Food Services, Inc., Caterair Holdings
Corporation and Caterair International Corporation. Incorporated
by reference to Exhibit 2.2 of SC International Services, Inc.'s
Annual Report on Form 10-K for the year ended December 31,
1995. ............................................................
2.2 Sublease Agreement, dated as of September 29, 1995, between Sky
Chefs, Inc. and Caterair International Corporation, together with
Schedule of additional Subleases between such parties.
Incorporated by reference to Exhibit 10.26 of SC International
Services, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1995. ...............................................
2.3 Sublease Agreement, dated as of September 29, 1995, between
Caterair International, Inc. (II) and Caterair International
Corporation, together with Schedule of additional Subleases
between such parties. Incorporated by reference to Exhibit 10.27
of SC International Services, Inc.'s Annual Report on Form 10-K
for the year ended December 31, 1995. ............................
2.4 License Agreement, dated as of September 29, 1995, between Sky
Chefs, Inc. and Caterair International Corporation. Incorporated
by reference to Exhibit 10.24 of SC International Services, Inc.'s
Annual Report on Form 10-K for the year ended December 31,
1995. ............................................................
2.5 License Agreement, dated as of September 29, 1995, between
Caterair International, Inc. (II) and Caterair International
Corporation. Incorporated by reference to Exhibit 10.25 of SC
International Services, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1995. ....................................
3.1 Certificate of Incorporation of SC International Services, Inc.
Incorporated by reference to Exhibit 3.1 of SC International
Services, Inc.'s Registration Statement on Form S-1, Registration
No. 33-94572. ....................................................
3.2 Amended and Restated Bylaws of SC International Services, Inc. ...
3.3 Amended and Restated Certificate of Incorporation of Sky Chefs,
Inc. Incorporated by reference to Exhibit 3.3 of Amendment No. 3
to SC International Services, Inc.'s Registration Statement on
Form S-1, Registration No. 33-94572. .............................
3.4 Bylaws of Sky Chefs, Inc. Incorporated by reference to Exhibit 3.4
of Amendment No. 3 to SC International Services, Inc.'s
Registration Statement on Form S-1, Registration No. 33-94572. ...
3.5 Certificate of Incorporation of Caterair International, Inc. (II).
Incorporated by reference to Exhibit 3.5 of SC International
Services, Inc.'s Registration Statement on Form S-1, Registration
No. 33-94572. ....................................................
3.6 Bylaws of Caterair International, Inc. (II). Incorporated by
reference to Exhibit 3.6 of SC International Services, Inc.'s
Registration Statement on Form S-1, Registration No. 33-94572. ...
3.7 Certificate of Incorporation of Caterair International
Corporation, Incorporated by reference to Exhibit 3.1 of Caterair
International Corporation's Registration Statement on Form S-1,
Registration No. 33-30918. .......................................
</TABLE>
<PAGE> 220
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
-------- ------------------------------------------------------------------ ------------
<C> <S> <C>
3.8 Bylaws of Caterair International Corporation. Incorporated by
reference to Exhibit 3.2 of Caterair International Corporation's
Registration Statement on Form S-1, Registration No. 33-30918. ...
3.9 Certificate of Incorporation of Arlington Services, Inc. .........
3.10 Bylaws of Arlington Services, Inc. ...............................
3.11 Certificate of Incorporation of Arlington Services Holding
Corporation. .....................................................
3.12 Bylaws of Arlington Services Holding Corporation. ................
3.13 Certificate of Incorporation of JFK Caterers, Inc. ...............
3.14 Bylaws of JFK Caterers, Inc. .....................................
3.15 Certificate of Incorporation of Caterair Consulting Services
Corporation. .....................................................
3.16 Bylaws of Caterair Consulting Services Corporation. ..............
3.17 Certificate of Incorporation of Western Aire Chef, Inc. ..........
3.18 Bylaws of Western Aire Chef, Inc. ................................
3.19 Certificate of Incorporation of Bethesda Services, Inc. ..........
3.20 Bylaws of Bethesda Services, Inc. ................................
3.21 Certificate of Incorporation of Caterair New Zealand Limited. ....
3.22 Bylaws of Caterair New Zealand Limited. ..........................
3.23 Certificate of Incorporation of Onex Ohio Finance Corp. ..........
3.24 Bylaws of Onex Ohio Finance Corp. ................................
3.25 Certificate of Incorporation of Onex Ohio Finance Corp. II. ......
3.26 Bylaws of Onex Ohio Finance Corp. II. ............................
3.27 Certificate of Incorporation of Onex Ohio Equity Corp. ...........
3.28 Bylaws of Onex Ohio Equity Corp. .................................
3.29 Certificate of Incorporation of Onex Ohio Equity Corp. II. .......
3.30 Bylaws of Onex Ohio Equity Corp. II. .............................
3.31 Certificate of Incorporation of Onex Ohio Credit Corp. ...........
3.32 Bylaws of Onex Ohio Credit Corp. .................................
3.33 Certificate of Incorporation of Onex Ohio Credit Corp. II. .......
3.34 Bylaws of Onex Ohio Credit Corp. II. .............................
3.35 Certificate of Incorporation of Onex Ohio Acceptance
Corporation. .....................................................
3.36 Bylaws of Onex Ohio Acceptance Corporation. ......................
3.37 Certificate of Incorporation of Onex Ohio Capital Corp. ..........
3.38 Bylaws of Onex Ohio Capital Corp. ................................
3.39 Certificate of Incorporation of Onex Ohio Capital Corp. II. ......
3.40 Bylaws of Onex Ohio Capital Corp. II. ............................
3.41 Certificate of Incorporation of Onex Ohio Fiscal Corp. ...........
3.42 Bylaws of Onex Ohio Fiscal Corp. .................................
3.43 Certificate of Incorporation of Onex Ohio Fiscal Corp. II. .......
3.44 Bylaws of Onex Ohio Fiscal Corp. II. .............................
3.45 Certificate of Incorporation of Onex Ohio Funds Corp. ............
3.46 Bylaws of Onex Ohio Funds Corp. ..................................
3.47 Certificate of Incorporation of Onex Ohio Funds Corp. II. ........
3.48 Bylaws of Onex Ohio Funds Corp. II. ..............................
</TABLE>
<PAGE> 221
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
-------- ------------------------------------------------------------------ ------------
<C> <S> <C>
3.49 Certificate of Incorporation of Caterair International Transition
Corporation. .....................................................
3.50 Bylaws of Caterair International Transition Corporation. .........
3.51 Certificate of Incorporation of Sky Chefs International Corp. ....
3.52 Bylaws of Sky Chefs International Corp. ..........................
3.53 Certificate of Incorporation of Caterair Airport Properties,
Inc. .............................................................
3.54 Bylaws of Caterair Airport Properties, Inc. ......................
3.55 Certificate of Incorporation of Caterair St. Thomas Holdings
Corporation. .....................................................
3.56 Bylaws of Caterair St. Thomas Holdings Corporation. ..............
3.57 Certificate of Incorporation of Sky Chefs Argentine Inc. .........
3.58 Bylaws of Sky Chefs Argentine Inc. ...............................
4. Indenture, dated August 28, 1997, among SC International Services,
Inc., as Issuer, The Bank of New York, as Trustee and the
Guarantors named therein. ........................................
5. Opinion of Kaye, Scholer, Fierman, Hays & Handler, LLP. ..........
8.1 Opinion of Kaye, Scholer, Fierman, Hays & Handler, LLP. ..........
8.2 Opinion of Price Waterhouse LLP. .................................
10.1 Purchase Agreement, dated as of August 22, 1997, among SC
International Services, Inc., the Guarantors named therein, and BT
Securities Corporation, J.P. Morgan Securities Inc., Credit Suisse
First Boston Corporation, Goldman, Sachs & Co., Smith Barney, Inc.
and Bankers Trust International PLC, as Initial Purchasers. ......
10.2 Registration Rights Agreement, dated as of August 28, 1997, among
SC International Services, Inc., the Guarantors named therein, and
BT Securities Corporation, J.P. Morgan Securities Inc., Credit
Suisse First Boston Corporation, Goldman, Sachs & Co., Smith
Barney, Inc., and Bankers Trust International PLC, as Initial
Purchasers. ......................................................
10.3 Dealer Manager Agreement, dated August 25, 1997, among SC
International Services, Inc., Sky Chefs, Inc., Caterair
International, Inc. (II), Caterair International Corporation and
BT Securities Corporation. .......................................
10.4 Depositary Agreement, dated as of August 25, 1997, between SC
International Services, Inc. and The Bank of New York, as
Depositary. ......................................................
10.5 Form of Exchange Agent Agreement between SC International
Services, Inc. and The Bank of New York, as Exchange Agent.* .....
10.6 Marriott Noncompetition Agreement, dated as of December 15, 1989,
among Marriott Corporation, Host International, Inc., Caterair
Holdings Corporation and Caterair International Corporation.
Incorporated by reference to Exhibit 10.25 of Caterair
International Corporation's Registration Statement on Form S-1,
Registration No. 33-31309. .......................................
10.7 Consulting Agreement, dated as of September 29, 1995, between
Frederic V. Malek and SC International Services, Inc. Incorporated
by reference to Exhibit 10.1 of SC International Services, Inc.'s
Annual Report on Form 10-K for the year ended December 31,
1995. ............................................................
10.8 Agreement, dated as of October 5, 1993, among Onex Corporation,
Deutsche Lufthansa Aktiengesellschaft and LSG Lufthansa Service
GmbH. Incorporated by reference to Exhibit 10.2 of SC
International Services, Inc.'s Registration Statement on Form S-1,
Registration No. 33-94572. .......................................
</TABLE>
<PAGE> 222
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
-------- ------------------------------------------------------------------ ------------
<C> <S> <C>
10.9 Cooperation Agreement, dated as of October 5, 1993, between LSG
Lufthansa Service GmbH and Sky Chefs, Inc. Incorporated by
reference to Exhibit 10.3 of SC International Services, Inc.'s
Registration Statement on Form S-1, Registration No. 33-94572. ...
10.10 Consent Agreement, dated as of April 20, 1995, among Onex
Corporation, Onex Food Services, Inc., OnCap Holdings U.S., Inc.,
Sky Chefs, Inc. and LSG Lufthansa Service GmbH. Incorporated by
reference to Exhibit 10.3.1 of Amendment No. 2 to SC International
Services, Inc.'s Registration Statement on Form S-1, Registration
No. 33-94572. ....................................................
10.11 Consent Agreement, dated as of April 20, 1995, among OnCap
Holdings U.S., Inc., OMI Quebec Inc., Onex Food Services, Inc. and
LSG Lufthansa Service GmbH. Incorporated by reference to Exhibit
10.4.1 of Amendment No. 2 to SC International Services, Inc.'s
Registration Statement on Form S-1, Registration No. 33-94572. ...
10.12 Consent Agreement, dated as of April 20, 1995, among Onex
Corporation, Onex Food Services, Inc., OnCap Holdings U.S., Inc.,
Sky Chefs, Inc. and LSG Lufthansa Service GmbH. Incorporated by
reference to Exhibit 10.4.2 of Amendment No. 2 to SC International
Services, Inc.'s Registration Statement on Form S-1, Registration
No. 33-94572. ....................................................
10.13 Exchange Agreement and Amendment to Stockholders' Agreement, dated
as of December 28, 1996, among Onex Food Services, Inc., LSG
Lufthansa Service GmbH and LSG Lufthansa Service USA
Corporation. .....................................................
10.14 Stockholders' Agreement, dated as of December 6, 1993, among Onex
Corporation, Onex Food Services, Inc., OnCap Holdings U.S., Inc.,
OMI Quebec Inc., LSG Lufthansa Service GmbH and LSG Lufthansa
Service USA Corporation. Incorporated by reference to Exhibit 10.4
of SC International Services, Inc.'s Registration Statement on
Form S-1, Registration No. 33-94572. .............................
10.15 Arbitration Agreement dated as of October 5, 1993, among Onex
Corporation, Onex Food Services, Inc., OnCap Holdings U.S., Inc.,
OMI Quebec Inc., Sky Chefs, Inc., Deutsche Lufthansa
Aktiengesellschaft and LSG Lufthansa Service GmbH. Incorporated by
reference to Exhibit 10.5 of SC International Services, Inc.'s
Registration Statement on Form S-1, Registration No. 33-94572. ...
10.16 Master National Agreement, dated August 22, 1969, between Sky
Chefs, Inc. and Hotel Employees and Restaurant Employees
International Union. Incorporated by reference to Exhibit 10.8 of
Amendment No. 1 to SC International Services, Inc.'s Registration
Statement on Form S-1, Registration No. 33-94572. ................
10.17 Sky Chefs, Inc. Supplemental Executive Retirement Plan.
Incorporated by reference to Exhibit 10.13 of SC International
Services, Inc.'s Registration Statement on Form S-1, Registration
No. 33-94572. ....................................................
10.18 Sky Chefs, Inc. Performance Reward Plan. Incorporated by reference
to Exhibit 10.13 of Amendment No. 1 to SC International Services,
Inc.'s Registration Statement on Form S-1, Registration No.
33-94572. ........................................................
10.19 Employment Agreement, dated as of January 1, 1997, between James
J. O'Neill and Onex Food Services, Inc. ..........................
10.20 Employment Agreement, dated as of January 1, 1997, between Michael
Z. Kay and Sky Chefs, Inc. .......................................
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10.21 Employment Agreement, dated as of January 1, 1997, between Patrick
W. Tolbert and Sky Chefs, Inc. ...................................
10.22 Employment Agreement, dated as of January 1, 1997, between Randall
C. Boyd and Sky Chefs, Inc. ......................................
10.23 Caterair Key Employee Retention Plan. Incorporated by reference to
Exhibit 10.11 of SC International Services, Inc.'s Registration
Statement on Form S-1, Registration No. 33-94572. ................
10.23.1 Amendment No. 1 to Caterair Key Employee Retention Plan.
Incorporated by reference to Exhibit 10.11.1 of SC International
Services, Inc.'s Registration Statement on Form S-1, Registration
No. 33-94572. ....................................................
10.24 Caterair International Corporation Transition Severance Plan.
Incorporated by reference to Exhibit 10.26 of Amendment No. 2 to
SC International Services, Inc.'s Registration Statement on Form
S-1, Registration No. 33-94572. ..................................
10.25 Phantom Stock Plan for Management Employees of Onex Food Services,
Inc. and its Subsidiaries. Incorporated by reference to Exhibit
10.6 of Caterair International Corporation's Annual Report on Form
10-K for the year ended December 31, 1995. .......................
10.26 Management Advisory Agreement, dated as of September 29, 1995,
between OMI Partnership Holdings Ltd, and SC International
Services Inc. ....................................................
10.27 Lease Agreement, dated as of May 15, 1993, between TriNet
Essential Facilities X, Inc. and Caterair International
Corporation, together with Schedule of substantially similar Lease
Agreements between such parties. .................................
10.27.1 First Amendment to Lease Agreement, dated as of September 22,
1995, between TriNet Essential Facilities X, Inc. and Caterair
International Corporation. .......................................
10.27.2 Second Amendment to Lease Agreement, dated as of December 1, 1995,
between TriNet Essential Facilities X, Inc. and Caterair
International Corporation. .......................................
10.27.3 Third Amendment to Lease Agreement, dated as of June 1, 1996,
between TriNet Essential Facilities X, Inc. and Caterair
International Corporation. .......................................
10.27.4 Fourth Amendment to Lease Agreement, dated as of December 23,
1996, between TriNet Essential Facilities X, Inc. and Caterair
International Corporation. .......................................
10.27.5 Fifth Amendment to Lease Agreement, dated as of June 23, 1997,
between TriNet Essential Facilities X, Inc. and Caterair
International Corporation. .......................................
10.27.6 Sixth Amendment to Lease Agreement, dated as of August 22, 1997,
between TriNet Essential Facilities X, Inc. and Caterair
International Corporation. .......................................
10.27.7 Limited Waiver dated as of August 22, 1997, by TriNet Essential
Facilities X, Inc., in favor of Caterair International
Corporation. .....................................................
10.28 Lease Agreement, dated as of May 15, 1993, between TriNet
Essential Facilities VIII R, Inc. and Caterair International
Corporation, together with Schedule of substantially similar Lease
Agreements between such parties. .................................
10.28.1 First Amendment to Lease Agreement, dated as of September 22,
1995, between TriNet Essential Facilities VIII R, Inc. and
Caterair International Corporation. ..............................
10.28.2 Second Amendment to Lease Agreement, dated as of December 1, 1995,
between TriNet Essential Facilities VIII R, Inc. and Caterair
International Corporation. .......................................
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10.28.3 Third Amendment to Lease Agreement, dated as of June 1, 1996,
between TriNet Essential Facilities VIII R, Inc. and Caterair
International Corporation. .......................................
10.28.4 Fourth Amendment to Lease Agreement, dated as of December 23,
1996, between TriNet Essential Facilities VIII R, Inc. and
Caterair International Corporation. ..............................
10.28.5 Fifth Amendment to Lease Agreement, dated as of June 23, 1997,
between TriNet Essential Facilities VIII R, Inc. and Caterair
International Corporation. .......................................
10.28.6 Sixth Amendment to Lease Agreement, dated as of August 22, 1997,
between TriNet Essential Facilities VIII R, Inc. and Caterair
International Corporation. .......................................
10.28.7 Limited Waiver, dated as of August 22, 1997, by TriNet Essential
Facilities VIII R, Inc., in favor of Caterair International
Corporation. .....................................................
10.29 Guaranty, dated as of September 22, 1995, by SC International
Services, Inc., Sky Chefs, Inc., Onex Food Services, Inc. and
Caterair International, Inc. (II) for the benefit of TriNet
Essential Facilities VIII R, Inc. ................................
10.30 Guaranty, dated as of September 22, 1995, by SC International
Services, Inc., Sky Chefs, Inc., Onex Food Services, Inc. and
Caterair International, Inc. (II) for the benefit of TriNet
Essential Facilities X, Inc. .....................................
10.31 Tax Sharing Agreement, dated as of December 15, 1989, among
Caterair Holdings Corporation, Caterair International Corporation
and Marriott Corporation. Incorporated by reference to Exhibit
10.25 of SC International Services, Inc.'s Registration Statement
on Form S-1, Registration No. 33-94572. ..........................
10.32 Noncompetition Agreement, dated as of September 29, 1995, between
Caterair International Corporation and Sky Chefs, Inc.
Incorporated by reference to Exhibit 10.16 of Caterair
International Corporation's Annual Report on Form 10-K for the
year ended December 31, 1995. ....................................
10.33 Promissory Note, dated September 29, 1995, by Caterair
International Corporation payable to the order of SC International
Services, Inc. Incorporated by reference to Exhibit 10.18 of
Caterair International Corporation's Annual Report on Form 10-K
for the year ended December 31, 1995. ............................
*10.34 Credit Agreement, dated as of September 29, 1995, and amended and
restated as of August 28, 1997, among SC International Services,
Inc., as borrower, Onex Food Services, Inc., Caterair Holdings
Corporation, Caterair International Corporation, the guarantors
named therein, the lenders party thereto from time to time,
Bankers Trust Company and J.P. Morgan Securities, Inc., as
co-arrangers, Bankers Trust Company, as syndication agent, the
Bank of New York, as co-agent, and Morgan Guaranty Trust Company
of New York, as administrative agent. ............................
*10.35 Term Loan Agreement, dated as of August 28, 1997, among Caterair
International Corporation and SC International Services, Inc., as
borrowers, the guarantors named therein, the lenders party thereto
from time to time, Bankers Trust Company and J.P. Morgan
Securities Inc., as co-arrangers, Bankers Trust Company, as
syndication agent, and Morgan Guaranty Trust Company of New York,
as administrative agent. .........................................
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10.36 Tax Sharing Agreement, dated as of September 29, 1995, among Onex
Food Services, Inc., Sky Chefs, Inc. and Caterair International,
Inc. (II). Incorporated by reference to Exhibit 10.22 of SC
International Services, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1995. ....................................
10.37 Shareholders' Agreement, dated as of May 29, 1986, as amended,
among Onex Food Services, Inc., an affiliate of Onex Corporation
and certain employees of Sky Chefs, Inc.* ........................
10.38 Acquisition Agreement, dated as of November 30, 1995, between LSG
Lufthansa Service USA Corporation and Sky Chefs, Inc. ............
10.39 Acquisition Agreement, dated as of August 14, 1995, between LSG
Lufthansa Service USA Corporation and Sky Chefs, Inc. ............
10.40 Acquisition Agreement, dated July 18, 1997, between Caterair
International, Inc. (II) and Sky Chefs, Inc. .....................
10.41 Caterair Noncompetition Agreement, dated as of December 15, 1989,
among Marriott Corporation, Host International, Inc., Caterair
Holdings Corporation and, Caterair International Corporation.
Incorporated by International Corporation Registration Statement
on Form S-1, Registration No. 33-31309. ..........................
12.1 SC International Services, Inc. and Subsidiaries Computation of
Ratio of Earnings to Fixed Charges. ..............................
12.2 Caterair International Corporation and Subsidiaries Computation of
Ratio of Earnings to Fixed Charges. ..............................
12.3 SC International Services, Inc. and Subsidiaries and Caterair
International Corporation and Subsidiaries Computation of Combined
Pro Forma Ratio of Earnings to Fixed Charges. ....................
21.1 Subsidiaries of the Registrants. .................................
23.1 Consent of Coopers & Lybrand L.L.P. ..............................
23.2 Consent of Kaye, Scholer, Fierman, Hays & Handler, LLP.
Incorporated by reference to Exhibit 5. ..........................
23.3 Consent of Price Waterhouse, LLP. Incorporated by reference to
Exhibit 8.2. .....................................................
23.4 Consent of Arthur Andersen LLP. ..................................
24.1 Power of Attorney for SC International Services, Inc. (included
with signature pages of SC International Services, Inc. at page
II-11) ...........................................................
24.2 Power of Attorney for Sky Chefs, Inc. (included with signature
pages of Sky Chefs, Inc. at page II-13) ..........................
24.3 Power of Attorney for Caterair International, Inc. (II) (included
with signature pages of Caterair International, Inc. (II) at page
II-14) ...........................................................
24.4 Power of Attorney of Caterair International Corporation (included
with signature pages of Caterair International Corporation at page
II-15) ...........................................................
24.5 Power of Attorney for Arlington Services, Inc. (included with
signature pages of Arlington Services, Inc. at page II-16). ......
24.6 Power of Attorney for Arlington Services Holding Corporation
(included with signature pages of Arlington Services Holding
Corporation at page II-17). ......................................
24.7 Power of Attorney for JFK Caterers, Inc. (included with signature
pages of JFK Caterers, Inc. at page II-20). ......................
24.8 Power of Attorney for Caterair Consulting Services Corporation
(included with signature pages of Caterair Consulting Services
Corporation at page II-21). ......................................
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24.9 Power of Attorney for Western Aire Chef, Inc. (included with
signature pages of Western Aire Chef, Inc. at page II-22). .......
24.10 Power of Attorney for Bethesda Services, Inc. (included with
signature pages of Bethesda Services, Inc. at page II-18). .......
24.11 Power of Attorney for Caterair New Zealand Limited (included with
signature pages of Caterair New Zealand Limited at page
II-19). ..........................................................
24.12 Power of Attorney for Onex Ohio Finance Corp. (included with
signature pages of Onex Ohio Finance Corp. at page II-28). .......
24.13 Power of Attorney for Onex Ohio Finance Corp. II (included with
signature pages of Onex Ohio Finance Corp. II at page II-29). ....
24.14 Power of Attorney for Onex Ohio Equity Corp. (included with
signature pages of Onex Ohio Equity Corp. at page II-30). ........
24.15 Power of Attorney for Onex Ohio Equity Corp. II (included with
signature pages of Onex Ohio Equity Corp. II at page II-31). .....
24.16 Power of Attorney for Onex Ohio Credit Corp. (included with
signature pages of Onex Ohio Credit Corp. at page II-32). ........
24.17 Power of Attorney for Onex Ohio Credit Corp. II (included with
signature pages of Onex Ohio Credit Corp. II at page II-33). .....
24.18 Power of Attorney for Onex Ohio Acceptance Corporation (included
with signature pages of Onex Ohio Acceptance Corporation at page
II-34). ..........................................................
24.19 Power of Attorney for Onex Ohio Capital Corp. (included with
signature pages of Onex Ohio Capital Corp. at page II-35). .......
24.20 Power of Attorney for Onex Ohio Capital Corp. II (included with
signature pages of Onex Ohio Capital Corp. II at page II-36). ....
24.21 Power of Attorney for Onex Ohio Fiscal Corp. (included with
signature pages of Onex Ohio Fiscal Corp. at page II-37). ........
24.22 Power of Attorney for Onex Ohio Fiscal Corp. II (included with
signature pages of Onex Ohio Fiscal Corp. II at page II-38). .....
24.23 Power of Attorney for Onex Ohio Funds Corp. (included with
signature pages of Onex Ohio Funds Corp. at page II-39). .........
24.24 Power of Attorney for Onex Ohio Funds Corp. II (included with
signature pages of Onex Ohio Funds Corp. II at page II-40). ......
24.25 Power of Attorney for Caterair International Transition
Corporation (included with signature pages of Caterair
International Transition Corporation at page II-24). .............
24.26 Power of Attorney for Sky Chefs International Corp. (included with
signature pages of Sky Chefs International Corp. at page
II-27). ..........................................................
24.27 Power of Attorney for Caterair Airport Properties, Inc. (included
with signature pages of Caterair Airport Properties, Inc. at page
II-26). ..........................................................
24.28 Power of Attorney for Caterair St. Thomas Holdings Corporation
(included with signature pages of Caterair St. Thomas Holdings
Corporation at page II-23). ......................................
24.29 Power of Attorney for Sky Chefs Argentine, Inc. (included with
signature pages of Sky Chefs Argentine, Inc. at page II-25). .....
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25.1 Statement of Eligibility on Form T-I of Trustee under the
Indenture. .......................................................
27.1 Financial Data Schedules for SC International Services, Inc. and
consolidated subsidiaries for the fiscal year ended December 31,
1996, the six-months ended June 30, 1997 and the six-months ended
June 30, 1996. ...................................................
27.2 Financial Data Schedules for Caterair International Corporation
and consolidated subsidiaries for the fiscal year ended December
31, 1996, the six-months ended June 30, 1997 and the six-months
ended June 30, 1996. .............................................
99.1 Form of Letter of Transmittal. ...................................
99.2 Form of Notice of Guaranteed Delivery. ...........................
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* To be filed by amendment.
<PAGE> 1
EXHIBIT 3.2
AMENDED AND RESTATED
BY-LAWS
of
SC INTERNATIONAL SERVICES, INC.
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the first of June in each year, or as soon thereafter as practicable, and shall
be held at a place and time determined by the board of directors (the "Board").
1.2 Special Meetings. Special meetings of the stockholders may be called
by resolution of the Board or by the president and shall be called by the
president or secretary upon the written request (stating the purpose or purposes
of the meeting) of a majority of the directors then in office or of the holders
of 51% of the outstanding shares entitled to vote. Only business related to the
purposes set forth in the notice of the meeting may be transacted at a special
meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be held
in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each meeting
of stockholders shall be given to each stockholder entitled to vote at the
meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If mailed, notice shall be considered
given when mailed to a stockholder at his address on the corporation's records.
The attendance of any stockholder at a meeting, without protesting at the
beginning of the meeting that the meeting is not lawfully called or convened,
shall constitute a waiver of notice by him.
1.5 Quorum. At any meeting of stockholders, the presence in person or by
proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum a majority in voting interest of those present or, if no stockholders are
present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are announced at the meeting at
which the adjournment is taken except that, if adjournment is for
<PAGE> 2
more than thirty days or if, after the adjournment, a new record date is fixed
for the meeting, notice of the adjourned meeting shall be given pursuant to
Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to one
vote for every share registered in his name. Corporate action to be taken by
stockholder vote, other than the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 1.8 of these by-laws. Directors shall be elected
in the manner provided in Section 2.1 of these by-laws. Voting need not be by
ballot unless requested by a stockholder at the meeting or ordered by the
chairman of the meeting; however, all elections of directors shall be by written
ballot, unless otherwise provided in the certificate of incorporation. Each
stockholder entitled to vote at any meeting of stockholders or to express
consent to or dissent from corporate action in writing without a meeting may
authorize another person to act for him by proxy. Every proxy must be signed by
the stockholder or his attorney-in-fact. No proxy shall be valid after three
years from its date unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of any
meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in his name. For a period of not less than 10 days prior to
the meeting, the list shall be available during ordinary business hours for
inspection by any stockholder for any purpose germane to the meeting. During
this period, the list shall be kept either (a) at a place within the city where
the meeting is to be held, if that place shall have been specified in the notice
of the meeting, or (b) if not so specified, at the place where the meeting is to
be held. The list shall also be available for inspection by stockholders at the
time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or permitted
to be taken at any meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting. Prompt notice of the taking of any such action shall be
given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business of
the corporation shall be managed by the Board, which shall consist of between 1
and 15 directors, to be determined by resolution. The number of directors may be
changed by resolution of a majority of the Board or by the stockholders, but no
decrease may shorten the term of any incumbent director. Directors shall be
elected at each annual meeting of stockholders by a plurality of the votes cast
and shall hold office until the next annual meeting of stockholders and until
the election and qualification of their respective successors, subject to the
provisions of
2
<PAGE> 3
Section 2.9. As used in these by-laws, the term "entire Board" means the total
number of directors which the corporation would have if there were no vacancies
on the Board.
2.2 Quorum and Manner of Acting. A majority of the entire Board shall
constitute a quorum for the transaction of business at any meeting, except as
provided in Section 2.10 of these by-laws. Action of the Board shall be
authorized by the vote of a majority of the directors present at the time of the
vote if there is a quorum, unless otherwise provided by law or these by-laws. In
the absence of a quorum a majority of the directors present may adjourn any
meeting from time to time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by the
chairman of the board, the president or by at least one-third of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place of
each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
2.8 Participation in Board or Committee Meetings by Conference Telephone.
Any or all members of the Board or of any committee of the Board may participate
in a meeting of the Board or of the committee by means of a conference telephone
or similar communications
3
<PAGE> 4
equipment allowing all persons participating in the meeting to hear each other
at the same time. Participation by such means shall constitute presence in
person at the meeting.
2.9 Resignation and Removal of Directors. Any director may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the Board
determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority of
the entire Board, may designate an Executive Committee of one or more directors
which shall have all the powers and authority of the Board, except as otherwise
provided in the resolution, section 141(c) of the Delaware General Corporation
Law, or any other applicable law. The members of the Executive Committee shall
serve at the pleasure of the Board. All action of the Executive Committee shall
be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4
<PAGE> 5
4.1 Number; Security. The executive officers of the corporation shall be,
the president, one or more vice presidents (including an executive vice
president, if the Board so determines), a secretary and a treasurer. Any two or
more offices may be held by the same person. The Board may require any officer,
agent or employee to give security for the faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 Chairman of the Board. The chairman of the board shall preside at all
meetings of the board and of the stockholders and shall have such powers and
duties as the Board expressly assigns to him.
4.7 The President. The president shall be the chief operating officer of
the corporation. Subject to the control of the Board, he shall have general
supervision over the business of the corporation and shall have such other
powers and duties as presidents of corporations usually have or as the Board
assigns to him.
4.8 Executive Vice President. The executive vice president shall be the
chief financial and administrative officer of the corporation. He shall have
such powers and duties as chief financial and administrative officers or
executive vice presidents of corporations usually have or as the president or
the Board assigns to him.
4.9 Vice President. Each vice president shall have such powers and duties
as the Board or the president assigns to him.
5
<PAGE> 6
4.10 The Treasurer. The treasurer shall be in charge of the corporation's
books and accounts. Subject to the control of the Board, he shall have such
other powers and duties as the Board, the president or the executive vice
president assigns to him.
4.11 The Secretary. The secretary shall be the secretary of, and keep the
minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the secretary from any meeting, the minutes shall be kept by the person
appointed for that purpose by the presiding officer.
4.12 Salaries. The Board may fix the officers' salaries, if any, or it may
authorize the president to fix the salary of any other officer.
4.13 Employment With Subsidiaries. The Board may assign to any officer of
the Corporation duties and powers to be performed and exercised for the benefit
of any subsidiary of the corporation. The Board may require that any officer
employed by the corporation fulfill the terms of his or her employment with the
corporation by rendering that officers' services to a subsidiary of the
corporation.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the president or a vice president and by the secretary or an assistant
secretary, or the treasurer or an assistant treasurer, and shall be sealed with
the corporation's seal or a facsimile of the seal. Any or all of the signatures
on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
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6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other corporations
which are held by the corporation may be represented and voted by the president
or a vice president of this corporation or by proxy or proxies appointed by one
of them. The Board may, however, appoint some other person to vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders.
************
As adopted by the Board of Directors of the Corporation on August __,
1996.
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EXHIBIT 3.9
CERTIFICATE OF INCORPORATION
OF
ARLINGTON SERVICES, INC.
1. The name of the corporation is Arlington Services, Inc. (the
"Corporation").
2. The address of registered office of the Corporation in the State of
Delaware is 200 West Ninth Street Plaza, County of New Castle, Delaware 19899,
and the name of its registered agent at such address is Belfint, Lyons and
Shuman.
3. The nature of the business or purposes to be conducted or promoted
is to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of stock that the Corporation shall have
authority to issue is one thousand (1,000). The par value of each of such shares
is one cent ($0.01). All such shares are of one class and are shares of common
stock.
5. The name and mailing address of the incorporator are Jakes Jordaan,
1445 Ross Avenue, Suite 4000, Dallas, Texas 75202-2790.
6. The name and mailing address of each person who is to serve as a
director until the first annual meeting of the stockholders or until a successor
is elected and qualified pursuant to the bylaws of the Corporation are as
follows:
NAME ADDRESS
Thomas J. Lee 601 Ryan Plaza Drive
Arlington, Texas 76011
Donald F. West c/o Onex Ohio Holdings, Inc.
P.O. Box 500
Marion, Ohio 43302
Norman J. Shuman Belfint, Lyons and Shuman
200 West Ninth St. Plaza
Wilmington, Delaware 19899
7. The Corporation is to have perpetual existence.
8. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter or repeal
the bylaws of the Corporation, which shall not divest the stockholders of the
power nor limit their power to adopt. amend or repeal the bylaws of the
Corporation.
<PAGE> 2
9. The management of the business and the conduct of the affairs of the
Corporation shall be vested in the Board of Directors. The number of directors
that shall constitute the whole Board of Directors shall be fixed exclusively in
accordance with the procedures set forth in the Corporation's bylaws.
10. The personal liability of directors of the Corporation is hereby
eliminated to the fullest extent permitted by the provisions of paragraph (7) of
subsection (b) of Section 102 of the General Corporation Law of the State of
Delaware, as the same may be amended or supplemented.
11. The Corporation shall, to the fullest extent permitted by the
provisions of Section 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify any and all
persons whom it shall have the power to indemnify under said section from and
against any and all of the expenses, liabilities or other matters referred to in
or covered by said section, and the indemnification provided for herein shall
not be deemed exclusive of any other rights to which those disinterested
directors or otherwise, both as to action in that director's official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such a person.
12. Elections of directors need not be by written ballot unless the
bylaws of the Corporation shall so provide. Meetings of stockholders may be held
within or without the State of Delaware, as the bylaws may provide. The books of
the Corporation may be kept (subject to any provision contained in the statutes)
outside the State of Delaware at such place or places as may be designated from
time to time by the Board of Directors or in the bylaws of the Corporation.
13. From time to time any of the provisions of this certificate of
incorporation may be amended, altered or repealed and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the Corporation by this
certificate of incorporation are granted subject to the provisions of this
Article.
THE UNDERSIGNED, for the purpose of forming a corporation pursuant to
the General Corporation Law of the State of Delaware, does make this
certificate, hereby declaring and certifying that this is his act and deed and
the facts herein stated are true, and accordingly has hereunto set his hand this
7th day of December, 1992.
INCORPORATOR:
/s/ Jakes Jordaan
----------------------------
Jakes Jordaan
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EXHIBIT 3.10
BYLAWS
OF
ARLINGTON SERVICES, INC.
A Delaware Corporation
(the "Corporation")
ARTICLE I
STOCKHOLDERS
1.01 CERTIFICATES REPRESENTING STOCK. Certificates representing stock
in the Corporation shall be signed by, or in the name of, the Corporation by the
Chairperson or Vice Chairperson of the Board of Directors, if any, or by the
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary of the Corporation. Any or all the
signatures on any such certificate may be a facsimile. In case any officer,
transfer agent, or registrar who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer, transfer
agent, or registrar before such certificate is issued, it may be issued by the
Corporation with the same effect as if such person were such officer, transfer
agent, or registrar at the date of issue.
Whenever the Corporation shall be authorized to issue more than one
class of stock or more than one series of any class of stock, and whenever the
Corporation shall issue any shares of its stock as partly paid stock, the
certificates representing shares of any such class or series or of any such
partly paid stock shall set forth thereon the statements prescribed by the
General Corporation Law. Any restrictions on the transfer or registration of
transfer of any shares of stock of any class or series shall be noted
conspicuously on the certificate representing such shares.
The Corporation may issue a new certificate of stock or uncertificated
shares in place of any certificate theretofore issued by it, alleged to have
been lost, stolen, or destroyed, and the Board of Directors may require the
owner of the lost, stolen, or destroyed certificate, or such stockholder's legal
representative, to give the Corporation a bond sufficient to indemnify the
Corporation against any claim that may be made against it on account of the
alleged loss, theft, or destruction of any such certificate or the issuance of
any such new certificate or uncertificated shares.
1.02 UNCERTIFICATED SHARES. Subject to any conditions imposed by the
General Corporation Law, the Board of Directors of the Corporation may provide
by resolution or resolutions that some or all of any or all classes or series of
the stock of the Corporation shall be uncertificated shares. Within a reasonable
time after the issuance or transfer of any uncertificated shares, the
Corporation shall send to the registered owner thereof any written notice
prescribed by the General Corporation Law.
1.03 FRACTIONAL SHARE INTERESTS. The Corporation may, but shall not be
required to, issue fractions of a share. If the Corporation does not issue
fractions of a share, it shall (1) arrange for the disposition of fractional
interests by those entitled thereto, (2) pay in cash the fair value of fractions
of a share as of the time when those entitled to receive such
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fractions are determined, or (3) issue scrip or warrants in registered form
(either represented by a certificate or uncertificated) or bearer form
(represented by a certificate) that shall entitle the holder to receive a full
share upon the surrender of such scrip or warrants aggregating a full share. A
certificate for a fractional share or an uncertificated fractional share shall,
but scrip or warrants shall not unless otherwise provided therein, entitle the
holder to exercise voting rights, to receive dividends thereon, and to
participate in any of the assets of the Corporation in the event of liquidation.
The Board of Directors may cause scrip or warrants to be issued subject to the
conditions that they shall become void if not exchanged for certificates
representing the full shares or uncertificated full shares before a specified
date, or subject to the conditions that the shares for which scrip or warrants
are exchangeable may be sold by the Corporation and the proceeds thereof
distributed to the holders of scrip or warrants, or subject to any other
conditions that the Board of Directors may impose.
1.04 STOCK TRANSFERS. Upon compliance with provisions restricting the
transfer or registration of transfer of shares of stock, if any, transfers or
registration of transfers of shares of stock of the Corporation shall be made
only on the stock ledger of the Corporation by the registered holder thereof, or
by such registered holder's attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary of the Corporation or with a transfer
agent or a registrar, if any, and, in the case of shares represented by
certificates, on surrender of the certificate or certificates for such shares of
stock properly endorsed and the payment of all taxes due thereon.
1.05 RECORD DATE FOR STOCKHOLDERS. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board of Directors may fix a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and which record
date shall not be more than sixty (60) nor less than ten (10) days before the
date of such meeting. If no record date is fixed by the Board of Directors, the
record date for determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting. In order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the Board
of Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which date shall not be more than ten (10) days after the date
upon which the resolution fixing the record date is adopted by the Board of
Directors. If no record date has been fixed by the Board of Directors, the
record date for determining the stockholders entitled to consent to corporate
action in writing without a meeting, when no prior action by the Board of
Directors is required by the General Corporation Law, shall be the first date on
which a
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signed written consent setting forth the action taken or proposed to be taken is
delivered to the Corporation by delivery to its registered office in the State
of Delaware, its principal place of business, or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
If no record date has been fixed by the Board of Directors and prior action by
the Board of Directors is required by the General Corporation Law, the record
date for determining stockholders entitled to consent to corporate action in
writing without a meeting shall be at the close of business on the day on which
the Board of Directors adopts the resolution taking such prior action. In order
that the Corporation may determine the stockholders entitled to receive payment
of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion, or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty (60) days prior to such
action. If no record date is fixed, the record date for determining stockholders
for any such purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto.
1.06 MEANING OF CERTAIN TERMS. As used herein in respect of the right
to notice of a meeting of stockholders or a waiver thereof or to participate or
vote thereat or to consent or dissent in writing in lieu of a meeting, as the
case may be, the term "share" or "shares" or "share of stock" or "shares of
stock" or "stockholder" or "stockholders" refers to an outstanding share or
shares of stock and to a holder or holders of record of outstanding shares of
stock when the Corporation is authorized to issue only one class of shares of
stock, and said reference is also intended to include any outstanding share or
shares of stock and any holder or holders of record of outstanding shares of
stock of any class upon which or upon whom the certificate of incorporation
confers such rights where there are two or more classes or series of shares of
stock or upon which or upon whom the General Corporation Law confers such rights
notwithstanding that the certificate of incorporation may provide for more than
one class or series of shares of stock, one or more of which are limited or
denied such rights thereunder; provided, however, that no such right shall vest
in the event of an increase or a decrease in the authorized number of shares of
stock of any class or series that is otherwise denied voting rights under the
provisions of the certificate of incorporation, except as any provision of law
may otherwise require.
1.07 STOCKHOLDER MEETINGS.
(a) TIME. The annual meeting shall be held on the date and at
the time fixed, from time to time, by the directors, provided, that the
first annual meeting shall be held on a date within thirteen months
after the organization of the Corporation, and each successive annual
meeting shall be held on a date within thirteen months after the date
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of the preceding annual meeting. A special meeting shall be held on the
date and at the time fixed by the directors.
(b) PLACE. Annual meetings and special meetings shall be held
at such place, within or without the State of Delaware, as the
directors may, from time to time, fix. Whenever the directors shall
fail to fix such place, the meeting shall be held at the registered
office of the Corporation in the State of Delaware.
(c) CALL. Annual meetings and special meetings may be called
by the directors or by any officer instructed by the directors to call
the meeting.
(d) NOTICE OR WAIVER OF NOTICE. Written notice of all meetings
shall be given, stating the place, date, and hour of the meeting and
stating the place within the city or other municipality or community at
which the list of stockholders of the Corporation may be examined. The
notice of an annual meeting shall state that the meeting is called for
the election of directors and for the transaction of other business
that may properly come before the meeting, and shall (if any other
action that could be taken at a special meeting is to be taken at such
annual meeting) state the purpose or purposes. The notice of a special
meeting shall in all instances state the purpose or purposes for which
the meeting is called. The notice of any meeting shall also include, or
be accompanied by, any additional statements, information, or documents
prescribed by the General Corporation Law. Except as otherwise provided
by the General Corporation Law, a copy of the notice of any meeting
shall be given, personally or by mail, not less than ten (10) days nor
more than sixty days before the date of the meeting, unless the lapse
of the prescribed period of time shall have been waived, and directed
to each stockholder at such stockholder's record address or at such
other address that such stockholder may have furnished by request in
writing to the Secretary of the Corporation. Notice by mail shall be
deemed to be given when deposited, with postage thereon prepaid, in the
United States Mail. If a meeting is adjourned to another time, not more
than thirty days hence, and/or to another place, and if an announcement
of the adjourned time and/or place is made at the meeting, it shall not
be necessary to give notice of the adjourned meeting unless the
directors, after adjournment, fix a new record date for the adjourned
meeting. Notice need not be given to any stockholder who submits a
written waiver of notice signed by such stockholder before or after the
time stated therein. Attendance of a stockholder at a meeting of
stockholders shall constitute a waiver of notice of such meeting,
except when the stockholder attends the meeting for the express purpose
of objecting, at the beginning of the meeting, to the transaction of
any business because the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders need be specified in any
written waiver of notice.
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(e) STOCKHOLDER LIST. The officer who has charge of the stock
ledger of the Corporation shall prepare and make, at least ten (10)
days before every meeting of stockholders, a complete list of the
stockholders, arranged in alphabetical order, and showing the address
of each stockholder and the number of shares registered in the name of
each stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten (10) days prior to the
meeting, either at a place within the city or other municipality or
community where the meeting is to be held, which place shall be
specified in the notice of the meeting, or if not so specified, at the
place where the meeting is to be held. The list shall also be produced
and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present. The
stock ledger shall be the only evidence as to who are the stockholders
entitled to examine the stock ledger, the list required by this section
or the books of the Corporation, or to vote at any meeting of
stockholders.
(f) CONDUCT OF MEETING. Meetings of the stockholders shall be
presided over by one of the following officers in the order of
seniority and if present and acting - the Chairperson of the Board, if
any, the Vice Chairperson of the Board, if any, the President, a Vice
President, or, if none of the foregoing is in office and present and
acting, by a chairperson to be chosen by the stockholders. The
Secretary of the Corporation, or in the Secretary's absence, an
Assistant Secretary, shall act as secretary of every meeting, but if
neither the Secretary nor an Assistant Secretary is present the
Chairperson of the meeting shall appoint a secretary of the meeting.
(g) PROXY REPRESENTATION. Every stockholder may authorize
another person or persons to act for such stockholder by proxy in all
matters in which a stockholder is entitled to participate, whether by
waiving notice of any meeting, voting or participating at a meeting, or
expressing consent or dissent without a meeting. Every proxy must be
signed by the stockholder or by such stockholder's attorney-in-fact. No
proxy shall be voted or acted upon after three years from its date
unless such proxy provides for a longer period. A duly executed proxy
shall be irrevocable if it states that it is irrevocable and, if, and
only as long as, it is coupled with an interest sufficient in law to
support an irrevocable power. A proxy may be made irrevocable
regardless of whether the interest with which it is coupled is an
interest in the stock itself or an interest in the Corporation
generally.
(h) INSPECTORS. The directors, in advance of any meeting, may,
but need not, appoint one or more inspectors of election to act at the
meeting or any adjournment thereof. If an inspector or inspectors are
not appointed, the person presiding at the meeting may, but need not,
appoint one or more inspectors. In case any person who may be appointed
as an inspector fails to appear or act, the vacancy may be filled by
appointment made by the directors in advance of the meeting or at the
meeting by the
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person presiding thereat. Each inspector, if any, before entering upon
the discharge of such inspector's duties, shall take and sign an oath
faithfully to execute the duties of inspectors at such meeting with
strict impartiality and according to the best of such inspector's
ability. The inspectors, if any, shall determine the number of shares
of stock outstanding and the voting power of each, the shares of stock
represented at the meeting, the existence of a quorum, the validity and
effect of proxies, and shall receive votes, ballots, or consents, hear
and determine all challenges and questions arising in connection with
the right to vote, count and tabulate all votes, ballots, or consents,
determine the result, and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the
person presiding at the meeting, the inspector or inspectors, if any,
shall make a report in writing of any challenge, question, or matter
determined by such inspector or them and execute a certificate of any
fact found by such inspector or inspectors.
(i) QUORUM. The holders of a majority of the outstanding
shares of stock shall constitute a quorum at a meeting of stockholders
for the transaction of any business. The stockholders present may
adjourn the meeting despite the absence of a quorum.
(j) VOTING. Each share of stock shall entitle the holders
thereof to one vote. Directors shall be elected by a plurality of the
votes of the shares present in person or represented by proxy at the
meeting and entitled to vote on the election of directors. Any other
action shall be authorized by a majority of the votes cast except where
the General Corporation Law prescribes a different percentage of votes
and/or a different exercise of voting power, and except as may be
otherwise prescribed by the provisions of the certificate of
incorporation and these Bylaws. In the election of directors, and for
any other action, voting need not be by ballot.
1.08 STOCKHOLDER ACTION WITHOUT MEETINGS. Any action required by the
General Corporation Law to be taken at any annual or special meeting of
stockholders, or any action that may be taken at any annual or special meeting
of stockholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing. Action taken pursuant to this paragraph shall be
subject to the provisions of Section 228 of the General Corporation Law.
ARTICLE II
DIRECTORS
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2.01 FUNCTIONS AND DEFINITION. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of Directors
of the Corporation. The Board of Directors shall have the authority to fix the
compensation of the members thereof. The use of the phrase "whole board" herein
refers to the total number of directors that the Corporation would have if there
were no vacancies.
2.02 QUALIFICATIONS AND NUMBER. A director need not be a stockholder, a
citizen of the United States, or a resident of the State of Delaware. The
initial Board of Directors shall consist of not less than one (1) person.
Thereafter the number of directors constituting the whole board shall be at
least one (1). Subject to the foregoing limitation and except for the first
Board of Directors, such number may be fixed from time to time by action of the
stockholders or of the directors, or, if the number is not fixed, the number
shall be one (1). The number of directors may be increased or decreased by
action of the stockholders or of the directors.
2.03 ELECTION AND TERM. The first Board of Directors, unless the
members thereof shall have been named in the certificate of incorporation, shall
be elected by the incorporator or incorporators and shall hold office until the
first annual meeting of stockholders and until their successors are elected and
qualified or until their earlier resignation or removal. Any director may resign
at any time upon written notice to the Corporation. Thereafter, directors who
are elected at an annual meeting of stockholders, and directors who are elected
in the interim to fill vacancies and newly created directorships, shall hold
office until the next annual meeting of stockholders and until their successors
are elected and qualified or until their earlier resignation or removal. Except
as the General Corporation Law may otherwise require, in the interim between
annual meetings of stockholders or of special meetings of stockholders called
for the election of directors and/or for the removal of one or more directors
and for the filling of any vacancy in that connection, newly created
directorships and any vacancies in the Board of Directors, including unfilled
vacancies resulting from the removal of directors for cause or without cause,
may be filled by the vote of a majority of the remaining directors then in
office, although less than a quorum, or by the sole remaining director.
2.04 MEETINGS.
(a) TIME. Meetings shall be held at such time as the Board
shall fix, except that the first meeting of a newly elected Board shall
be held as soon after its election as the directors may conveniently
assemble.
(b) PLACE. Meetings shall be held at such place within or
without the State of Delaware as shall be fixed by the Board.
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(c) CALL. No call shall be required for regular meetings for
which the time and place have been fixed. Special meetings may be
called by or at the direction of the Chairperson of the Board, if any,
the Vice Chairperson of the Board, if any, of the President, or of a
majority of the directors in office.
(d) NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall
be required for regular meetings for which the time and place have been
fixed. Written, oral, or any other mode of notice of the time and place
shall be given for special meetings in sufficient time for the
convenient assembly of the directors thereat. Notice need not be given
to any director or to any member of a committee of directors who
submits a written waiver of notice signed by such director before or
after the time stated therein. Attendance of any such person at a
meeting shall constitute a waiver of notice of such meeting, except
when such person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the directors need be specified in any
written waiver of notice.
(e) QUORUM AND ACTION. A majority of the whole Board shall
constitute a quorum except when a vacancy or vacancies prevents such
majority, whereupon a majority of the directors in office shall
constitute a quorum, provided, that such majority shall constitute at
least one-third of the whole Board. A majority of the directors
present, whether or not a quorum is present, may adjourn a meeting to
another time and place. Except as herein otherwise provided, and except
as otherwise provided by the General Corporation Law, the vote of the
majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board. The quorum and voting provisions
herein stated shall not be construed as conflicting with any provisions
of the General Corporation Law and these Bylaws that govern a meeting
of directors held to fill vacancies and newly created directorships in
the Board or action of disinterested directors.
Any member or members of the Board of Directors or of any
committee designated by the Board, may participate in a meeting of the
Board, or any such committee, as the case may be, by means of
conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other.
(f) CHAIRPERSON OF THE MEETING. The Chairperson of the Board,
if any and if present and acting, shall preside at all meetings.
Otherwise, the Vice Chairperson of the Board, if any and if present and
acting, or the President, if present and acting, or any other director
chosen by the Board, shall preside.
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2.05 REMOVAL OF DIRECTORS. Except as may otherwise be provided by the
General Corporation Law, any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of the shares then
entitled to vote at an election of directors.
2.06 COMMITTEES. The Board of Directors may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee to
consist of one or more of the directors of the Corporation. The Board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
the absence or disqualification of any member of any such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he, she or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board, shall have and
may exercise the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation with the exception of
any authority the delegation of which is prohibited by Section 141 of the
General Corporation Law, and may authorize the seal of the Corporation to be
affixed to all papers that may require it.
2.07 WRITTEN ACTION. Any action required or permitted to be taken at
any meeting of the Board of Directors or any committee thereof may be taken
without a meeting if all members of the Board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board or committee.
ARTICLE III
OFFICERS
3.01 ELECTION. The officers of the Corporation shall consist of a
President, a Secretary, a Treasurer, and, if deemed necessary, expedient, or
desirable by the Board of Directors, a Chairperson of the Board, a Vice
Chairperson of the Board, an Executive Vice President, one or more other Vice
Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers,
and such other officers with such titles as the resolution of the Board of
Directors choosing them shall designate. Except as may otherwise be provided in
the resolution of the Board of Directors choosing such officer, no officer other
than the Chairperson or Vice Chairperson of the Board, if any, need be a
director. Any number of offices may be held by the same person, as the directors
may determine.
3.02 TERM. Unless otherwise provided in the resolution choosing such
officer, each officer shall be chosen for a term that shall continue until the
meeting of the Board of Directors
9
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following the next annual meeting of stockholders and until such officer's
successor shall have been chosen and qualified.
3.03 DUTIES. All officers of the Corporation shall have such authority
and perform such duties in the management and operation of the Corporation as
shall be prescribed in the resolutions of the Board of Directors designating and
choosing such officers and prescribing their authority and duties, and shall
have such additional authority and duties as are incident to their office except
to the extent that such resolutions may be inconsistent therewith. The Secretary
or an Assistant Secretary of the Corporation shall record all of the proceedings
of all meetings and actions in writing of stockholders, directors, and
committees of directors, and shall exercise such additional authority and
perform such additional duties as the Board shall assign to such officer.
3.04 REMOVAL. Any officer may be removed, with or without cause, by the
Board of Directors. Any vacancy in any office may be filled by the Board of
Directors.
ARTICLE IV
MISCELLANEOUS
4.01 CORPORATE SEAL. The corporate seal shall be in such form as the
Board of Directors shall prescribe.
4.02 FISCAL YEAR. The fiscal year of the Corporation shall be fixed,
and shall be subject to change, by the Board of Directors.
4.03 AMENDMENTS. Subject to the provisions of the certificate of
incorporation and the provisions of the General Corporation Law, the power to
amend, alter, or repeal these Bylaws and to adopt new Bylaws may be exercised by
the Board of Directors or by the stockholders.
I HEREBY CERTIFY that the foregoing is a full, true, and correct copy
of the Bylaws of Arlington Services, Inc., a Delaware corporation, as in effect
on the date hereof.
Dated: December 8, 1992
/s/ Donald F. West
______________________________
Donald F. West, Secretary
10
<PAGE> 1
EXHIBIT 3.11
CERTIFICATE OF INCORPORATION
OF
ARLINGTON SERVICES HOLDING CORPORATION
1. The name of the corporation is Arlington Services Holding
Corporation (the "Corporation").
2. The address of the Corporation's registered office in Delaware is 15
East North Street, Dover (Kent County), Delaware 19901. United Corporate
Services, Inc. is the Corporation's registered agent at that address.
3. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The Corporation shall have authority to issue a total of 3,000
shares of common stock, $.01 par value per share.
5. The name of the sole incorporator is Joshua S. Teitelbaum and his
mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue,
New York, New York 10022.
6. The Corporation's board of directors shall have the power to make,
alter or repeal the by-laws of the Corporation.
7. The election of the Corporation's board of directors need not be by
written ballot.
8. The Corporation shall indemnify to the fullest extent permitted by
Section 145 of the Delaware General Corporation Law as amended from time to time
each person that such Section grants the Corporation the power to indemnify.
9. No director shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director for
any act or omission occurring subsequent to the date when this provision becomes
effective, except that he may be liable (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law or (iv) for any transaction from which the director derived an improper
personal benefit.
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10. The Corporation elects not to be governed by Section 203 of the
Delaware General Corporation Law.
Dated: September 15, 1995
/s/ Joshua S. Teitelbaum
------------------------
Joshua S. Teitelbaum
Sole Incorporator
2
<PAGE> 1
EXHIBIT 3.12
BY-LAWS
OF
ARLINGTON SERVICES HOLDING CORPORATION
ARTICLE I
Stockholders
Section 1.1. Annual Meetings. An annual meeting of stockholders shall
be held for the election of directors at such date, time and place, either
within or without the State of Delaware, as may be designated by resolution of
the Board of Directors from time to time. Any other proper business may be
transacted at the annual meeting.
Section 1.2. Special Meetings. Special meetings of stockholders for any
purpose or purposes may be called at any time by the Board of Directors, or by a
committee of the Board of Directors that has been duly designated by the Board
of Directors and whose powers and authority, as expressly provided in a
resolution of the Board of Directors, include the power to call such meetings,
but such special meetings may not be called by any other person or persons.
Section 1.3. Notice of Meetings. Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given that shall state the place, date and hour of the meeting and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called. Unless otherwise provided by law, the certificate of incorporation or
these by-laws, the written notice of any meeting shall be given not less than
ten (10) nor more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting. If mailed, such notice shall be
deemed to be given when deposited in the United States mail, postage prepaid,
directed to the stockholder at his address as it appears on the records of the
corporation.
Section 1.4. Adjournments. Any meeting of stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, notice of the
<PAGE> 2
adjourned meeting shall be given to each stockholder of record entitled to vote
at the meeting.
Section 1.5. Quorum. Except as otherwise provided by law, the
certificate of incorporation or these by-laws, at each meeting of stockholders
the presence in person or by proxy of the holders of a majority in voting power
of the outstanding shares of stock entitled to vote at the meeting shall be
necessary and sufficient to constitute a quorum. In the absence of a quorum, the
stockholders so present may, by majority vote, adjourn the meeting from time to
time in the manner provided in Section 1.4 of these by-laws until a quorum shall
attend. Shares of its own stock belonging to the corporation or to another
corporation, if a majority of the shares entitled to vote in the election of
directors of such other corporation is held, directly or indirectly, by the
corporation, shall neither be entitled to vote nor be counted for quorum
purposes; provided, however, that the foregoing shall not limit the right of the
corporation or any subsidiary of the corporation to vote stock, including but
not limited to its own stock, held by it in a fiduciary capacity.
Section 1.6. Organization. Meetings of stockholders shall be presided
over by the Chairman of the Board, if any, or in his absence by the Vice
Chairman of the Board, if any, or in his absence by the President, or in his
absence by a Vice President, or in the absence of the foregoing persons by a
chairman designated by the Board of Directors, or in the absence of such
designation by a chairman chosen at the meeting. The Secretary shall act as
secretary of the meeting, but in his absence the person presiding over the
meeting may appoint any person to act as secretary of the meeting. The person
presiding over the meeting shall announce at the meeting of stockholders the
date and time of the opening and the closing of the polls for each matter upon
which the stockholders will vote.
Section 1.7. Voting; Proxies. Except as otherwise provided by the
certificate of incorporation, each stockholder entitled to vote at any meeting
of stockholders shall be entitled to one (1) vote for each share of stock held
by him which has voting power upon the matter in question. Each stockholder
entitled to vote at a meeting of stockholders or to express consent or dissent
to corporate action in writing without a meeting may authorize another person or
persons to act for him by proxy, but no such proxy shall be voted or acted upon
after three (3) years from its date, unless the proxy provides for a longer
period. A proxy shall be irrevocable if it states that it is irrevocable and if,
and only as long as, it is coupled with an interest sufficient in law to support
an irrevocable power. A stockholder may revoke any proxy which is not
irrevocable by attending the meeting and voting in person or by filing with the
Secretary of the corporation an instrument in writing revoking the proxy or by
delivering a proxy in accordance with applicable law bearing a later date to the
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Secretary of the corporation. Voting at meetings of stockholders need not be by
written ballot. At all meetings of stockholders for the election of directors a
plurality of the votes cast shall be sufficient to elect. All other elections
and questions shall, unless otherwise provided by law, the certificate of
incorporation or these by-laws, be decided by the affirmative vote of the
holders of a majority in voting power of the shares of stock which are present
in person or by proxy and entitled to vote thereon.
Section 1.8. Fixing Date for Determination of Stockholders of Record.
In order that the corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which record date: (i) in the case of determination of
stockholders entitled to vote at any meeting of stockholders or adjournment
thereof, shall, unless otherwise required by law, not be more than sixty (60)
nor less than ten (10) days before the date of such meeting; (ii) in the case of
determination of stockholders entitled to express consent to corporate action in
writing without a meeting, shall not be more than ten (10) days from the date
upon which the resolution fixing the record date is adopted by the Board of
Directors; and (iii) in the case of determination of stockholders for the
purpose of any other lawful action, shall not be more than sixty (60) days prior
to such other action. If no record date is fixed: (iv) the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held; (v) the record date
for determining stockholders entitled to express consent to corporate action in
writing without a meeting, when no prior action of the Board of Directors is
required by law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
corporation in accordance with applicable law, or, if prior action by the Board
of Directors is required by law, shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior action; and
(vi) the record date for determining stockholders for the purpose of any other
lawful action, shall be at the close of business on the day on which the Board
of Directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record
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<PAGE> 4
date for the adjourned meeting.
Section 1.9. List of Stockholders Entitled to Vote. The Secretary shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof and may be inspected by any stockholder who is present. Upon the willful
neglect or refusal of the directors to produce such a list at any meeting for
the election of directors, they shall be ineligible for election to any office
at such meeting. Except as otherwise provided by law, the stock ledger shall be
the only evidence as to who are the stockholders entitled (i) to examine the
stock ledger, the list of stockholders entitled to vote at the meeting or the
books of the corporation, (ii) to vote in person or by proxy at any meeting of
stockholders, or (iii) to express consent or dissent to corporate action in
writing without a meeting.
Section 1.10. Action By Consent of Stockholders. Unless otherwise
restricted by the certificate of incorporation, any action required or permitted
to be taken at any annual or special meeting of the stockholders may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted and shall be
delivered (by hand or by certified or registered mail, return receipt requested)
to the corporation by delivery to its registered office in the State of
Delaware, its principal place of business, or an officer or agent of the
corporation having custody of the book in which minutes of proceedings of
meetings of stockholders are recorded. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.
Section 1.11. Inspectors of Election. The corporation may, and shall if
required by law, in advance of any meeting of stockholders, appoint one (1) or
more inspectors of election, who may be employees of the corporation, to act at
the meeting or any adjournment thereof and to make a written report thereof. The
corporation may designate one (1) or more persons as alternate
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inspectors to replace any inspector who fails to act. In the event that no
inspector so appointed or designated is able to act at a meeting of the
stockholders, the person presiding at the meeting shall appoint one (1) or more
inspectors to act at the meeting. Each inspector, before entering upon the
discharge of his or her duties, shall take and sign an oath to execute
faithfully the duties of inspector with strict impartiality and according to the
best of his or her ability. The inspector or inspectors so appointed or
designated shall (i) ascertain the number of shares of capital stock of the
corporation outstanding and the voting power of each such share, (ii) determine
the shares of capital stock of the corporation represented at the meeting and
the validity of proxies and ballots, (iii) count all votes and ballots, (iv)
determine and retain for a reasonable period a record of the disposition of any
challenges made to any determination by the inspectors, and (v) certify their
determination of the number of shares of capital stock of the corporation
represented at the meeting and such inspector's or inspectors' count of all
votes and ballots. Such certification and report shall specify such other
information as may be required by law. In determining validity and counting of
proxies and ballots cast at any meeting of stockholders of the corporation, the
inspectors may consider such information as is permitted by applicable law. No
person who is a candidate for an office at an election may serve as an inspector
at such election.
Section 1.12. Conduct of Meetings. The Board of Directors of the
corporation may adopt by resolution such rules and regulations for the conduct
of the meeting of stockholders as it shall deem appropriate. Except to the
extent inconsistent with such rules and regulations as adopted by the Board of
Directors, the person presiding over any meeting of stockholders shall have the
right and authority to prescribe such rules, regulations and procedures and to
do all such acts as, in the judgment of such person, are appropriate for the
proper conduct of the meeting. Such rules, regulations or procedures, whether
adopted by the Board of Directors or prescribed by the person presiding over the
meeting, may include, without limitation, the following: (i) the establishment
of an agenda or order of business for the meeting; (ii) rules and procedures for
maintaining order at the meeting and the safety of those present; (iii)
limitations on attendance at or participation in the meeting to stockholders of
record of the corporation, their duly authorized and constituted proxies or such
other persons as the person presiding over the meeting shall determine; (iv)
restrictions on entry to the meeting after the time fixed for the commencement
thereof; and (v) limitations on the time allotted to questions or comments by
participants. Unless and to the extent determined by the Board of Directors or
the person presiding over the meeting, meetings of stockholders shall not be
required to be held in accordance with the rules of parliamentary procedure.
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ARTICLE II
Board of Directors
Section 2.1. Number; Qualifications. The Board of Directors shall
consist of one (1) or more members. The number of members comprising the Board
of Directors initially shall be the number of persons named as directors in the
certificate of incorporation (or if no person is so named, the number of persons
elected by the Incorporator). The number of members comprising the Board of
Directors thereafter shall be determined from time to time by resolution of the
Board of Directors. Directors need not be stockholders.
Section 2.2. Election; Resignation; Removal; Vacancies. The Board of
Directors initially shall consist of the person or persons named as Directors in
the certificate of incorporation (or, if no person is so named, the person or
persons elected by the Incorporator), and each director so elected shall hold
office until his successor is elected and qualified or until his earlier death,
resignation, or removal. At the first annual meeting of stockholders and at each
annual meeting thereafter, the stockholders shall elect directors each of whom
shall hold office until his successor is elected and qualified or until his
earlier death, resignation, or removal. Any director may resign at any time upon
written notice to the corporation. Any newly created directorship or any vacancy
occurring in the Board of Directors for any cause may be filled by a majority of
the remaining members of the Board of Directors, although such majority is less
than a quorum, or by a plurality of the votes cast at a meeting of stockholders,
and each director so elected shall hold office until the expiration of the term
of office of the director whom he has replaced, or until his successor is
elected and qualified, or until his earlier death, resignation, or removal.
Section 2.3. Regular Meetings. Regular meetings of the Board of
Directors may be held at such places within or without the State of Delaware and
at such times as the Board of Directors may from time to time determine, and if
so determined notices thereof need not be given.
Section 2.4. Special Meetings. Special meetings of the Board of
Directors may be held at any time or place within or without the State of
Delaware whenever called by the President, any Vice President, the Secretary, or
by any member of the Board of Directors. Notice of a special meeting of the
Board of Directors shall be given by the person or persons calling the meeting
at least twenty-four (24) hours before the special meeting.
Section 2.5. Telephonic Meetings Permitted. Members of the Board of
Directors, or any committee designated by the Board of
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Directors, may participate in a meeting thereof by means of conference telephone
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, and participation in a meeting pursuant to
this by-law shall constitute presence in person at such meeting.
Section 2.6. Quorum; Vote Required for Action. At all meetings of the
Board of Directors a majority of the whole Board of Directors shall constitute a
quorum for the transaction of business. Except in cases in which the certificate
of incorporation, these by-laws or applicable law otherwise provides, the vote
of a majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
Section 2.7. Organization. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board, if any, or in his absence by the
Vice Chairman of the Board, if any, or in his absence by the President, or in
the absence of the foregoing persons by a chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his absence the person
presiding over the meeting may appoint any person to act as secretary of the
meeting.
Section 2.8. Informal Action by Directors. Unless otherwise restricted
by the certificate of incorporation or these by-laws, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board of
Directors or such committee, as the case may be, consent thereto in writing, and
the writing or writings are filed with the minutes of proceedings of the Board
of Directors or committee.
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ARTICLE III
Committees
Section 3.1. Committees. The Board of Directors may, by resolution
passed by a majority of the whole Board of Directors, designate one (1) or more
committees, each committee to consist of one (1) or more of the directors of the
corporation. The Board of Directors may designate one (1) or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of a
member of the committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member. Any such committee,
to the extent permitted by law and to the extent provided in the resolution of
the Board of Directors, shall have and may exercise all the powers and authority
of the Board of Directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it.
Section 3.2. Committee Rules. Unless the Board of Directors otherwise
provides, each committee designated by the Board of Directors may make, alter
and repeal rules for the conduct of its business. In the absence of such rules
each committee shall conduct its business in the same manner as the Board of
Directors conducts its business pursuant to Article II of these by-laws.
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ARTICLE IV
Officers
Section 4.1. Executive Officers; Election; Qualifications; Term of
Office; Resignation; Removal; Vacancies. The Board of Directors shall elect a
President and Secretary, and it may, if it so determines, choose a Chairman of
the Board and a Vice Chairman of the Board from among its members. The Board of
Directors may also choose one (1) or more Vice Presidents, one (1) or more
Assistant Secretaries, a Treasurer and one (1) or more Assistant Treasurers.
Each such officer shall hold office until the first meeting of the Board of
Directors after the annual meeting of stockholders next succeeding his election,
and until his successor is elected and qualified or until his earlier death,
resignation, or removal. Any officer may resign at any time upon written notice
to the corporation. The Board of Directors may remove any officer with or
without cause at any time, but such removal shall be without prejudice to the
contractual rights of such officer, if any, with the corporation. Any number of
offices may be held by the same person. Any vacancy occurring in any office of
the corporation by death, resignation, removal, or otherwise may be filled for
the unexpired portion of the term by the Board of Directors at any regular or
special meeting.
Section 4.2. Powers and Duties of Executive Officers.
(i) President. The President shall be the chief executive
officer of the corporation. Subject to the provisions of the certificate of
incorporation, these by-laws, and the direction of the Board of Directors, the
President shall have the responsibility for the general management and control
of the business and affairs of the corporation and shall perform all duties and
have all powers which are commonly incident to the office of chief executive or
which are delegated to him or her by the Board of Directors. The President shall
have power to execute in the name of the corporation all contracts, agreements,
deeds, bonds, mortgages, and other obligations and instruments of the
corporation which are authorized, and to affix the corporate seal thereto. The
President shall have general supervision and direction of all of the other
officers, employees, and agents of the corporation.
(ii) Vice President. Each Vice President, if any, shall have
such powers and perform such duties as the Board of Directors may from time to
time prescribe. The Vice President (if only one (1) Vice President is chosen by
the Board) or one (1) Vice President designated by the Board (if two (2) or more
Vice Presidents are chosen by the Board of Directors) shall perform the duties
and exercise the powers of the President in the event of the President's absence
or disability.
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(iii) Treasurer. The Treasurer, if any, shall have the
responsibility for maintaining the financial records of the corporation. The
Treasurer shall make such disbursements of the funds of the corporation as are
authorized and shall render from time to time an account of all such
transactions and of the financial condition of the corporation. The Treasurer
shall have such other powers and perform such other duties as the Board of
Directors may from time to time prescribe.
(iv) Secretary. The Secretary shall issue all authorized
notices for, and shall keep minutes of, all meetings of the stockholders and of
the Board of Directors. The Secretary shall have charge of the corporate books
and shall have such other powers and perform such other duties as the Board of
Directors may from time to time prescribe.
(v) Assistant Secretary and Assistant Treasurer. Each
Assistant Secretary, if any, and each Assistant Treasurer, if any, shall have
such powers and perform such duties as the Board of Directors may from time to
time prescribe.
(vi) Delegation of Authority. The Board of Directors may from
time to time delegate the powers or duties of any officer to any other officers
or agents, notwithstanding any provision hereof.
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ARTICLE V
Stock
Section 5.1. Certificates. Every holder of stock shall be entitled to
have a certificate signed by or in the name of the corporation by the Chairman
or Vice Chairman of the Board of Directors, if any, or the President or a Vice
President, and by the Treasurer or an Assistant Treasurer, or the Secretary or
an Assistant Secretary, of the corporation certifying the number of shares owned
by him in the corporation. Any of or all the signatures on the certificate may
be a facsimile. In case any officer, transfer agent, or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent, or registrar before such certificate
is issued, it may be issued by the corporation with the same effect as if he
were such officer, transfer agent, or registrar at the date of issue.
Section 5.2. Lost, Stolen or Destroyed Stock Certificates; Issuance of
New Certificates. The corporation may issue a new certificate of stock in the
place of any certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the corporation may require the owner of the lost,
stolen or destroyed certificate, or his legal representative, to give the
corporation a bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
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ARTICLE VI
Indemnification
Section 6.1. Right to Indemnification. The corporation shall indemnify
and hold harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person who was or is made or
is threatened to be made a party or is otherwise involved in any threatened,
pending, or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "proceeding") by reason of the fact that he,
or a person for whom he is the legal representative, is or was a director or
officer of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust, other enterprise or non-profit entity,
including service with respect to employee benefit plans (an "indemnitee"),
against all liability and loss suffered and expenses (including attorneys' fees)
reasonably incurred by such indemnitee. The corporation shall be required to
indemnify an indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if the initiation of such proceeding (or part
thereof) by the indemnitee was authorized by the Board of Directors of the
corporation.
Section 6.2. Advancement of Expenses. The corporation shall pay the
expenses (including attorneys' fees) incurred by an indemnitee in defending any
proceeding referred to in Section 6.1 in advance of its final disposition;
provided, however, that the payment of expenses incurred by an indemnitee in
advance of the final disposition of such proceeding shall be made only upon
receipt of an undertaking by the indemnitee to repay all amounts advanced if it
should ultimately be determined that the indemnitee is not entitled to be
indemnified under this Article or otherwise.
Section 6.3. Claims. If a claim for indemnification or advancement of
expenses under this Article is not paid in full within sixty (60) days after a
written claim therefor by the indemnitee has been received by the corporation,
the indemnitee may file suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the corporation shall have the burden
of proving that the indemnitee was not entitled to the requested indemnification
or advancement of expenses.
Section 6.4. Non-Exclusivity of Rights. The rights conferred on any
person by this Article shall not be exclusive of any other rights which such
person may have or hereafter acquire under any statute, provision of the
certificate of incorporation, these by-laws, agreement, vote of stockholders or
disinterested directors or otherwise.
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Section 6.5. Other Indemnification. The corporation's obligation, if
any, to indemnify any person who was or is serving at its request as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, enterprise or non-profit entity shall be reduced by any amount such
person may collect as indemnification from such other corporation, partnership,
joint venture, trust, enterprise or non-profit entity.
Section 6.6. Amendment or Repeal. Any repeal or modification of the
foregoing provisions of this Article shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification.
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ARTICLE VII
Miscellaneous
Section 7.1. Fiscal Year. The fiscal year of the corporation shall be
determined by resolution of the Board of Directors.
Section 7.2. Seal. The corporate seal shall have the name of the
corporation inscribed thereon and shall be in such form as may be approved from
time to time by the Board of Directors.
Section 7.3. Waiver of Notice of Meetings of Stockholders, Directors
and Committees. Any written waiver of notice, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of any
regular or special meeting of the stockholders, directors, or members of a
committee of directors need be specified in any written waiver of notice.
Section 7.4. Interested Directors; Quorum. No contract or transaction
between the corporation and one (1) or more of its directors or officers, or
between the corporation and any other corporation, partnership, association, or
other organization in which one (1) or more of its directors or officers are
directors or officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the director or officer is present at
or participates in the meeting of the Board of Directors or committee thereof
which authorizes the contract or transaction, or solely because his or their
votes are counted for such purpose, if: (i) the material facts as to his
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (ii) the material facts as to
his relationship or interest and as to the contract or transaction are disclosed
or are known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the stockholders;
or (iii) the contract or transaction is fair as to the corporation as of the
time it is authorized, approved or ratified, by the Board of Directors, a
committee thereof, or the stockholders. Common or interested directors may be
counted in determining the presence of a quorum at a meeting of the Board of
Directors or of a committee which authorizes the contract or transaction.
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<PAGE> 15
Section 7.5. Form of Records. Any records maintained by the corporation
in the regular course of its business, including its stock ledger, books of
account, and minute books, may be kept on, or be in the form of, punch cards,
magnetic tape, photographs, microphotographs, or any other information storage
device, provided that the records so kept can be converted into clearly legible
form within a reasonable time.
Section 7.6. Amendment of By-Laws. These by-laws may be altered or
repealed, and new by-laws made, by the Board of Directors to the extent
permitted by the certificate of incorporation, but the stockholders may make
additional by-laws and may alter and repeal any by-laws whether adopted by them
or otherwise.
Date: September 15, 1995
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<PAGE> 1
EXHIBIT 3.13
CERTIFICATE OF INCORPORATION
OF
JFK CATERERS, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:
FIRST: The name of the corporation (hereinafter called the
"corporation") is
JFK CATERERS, INC.
SECOND: The address, including street, number, city, and county, of the
registered office of the corporation in the State of Delaware is 229 South State
Street, City of Dover, County of Kent; and the name of the registered agent of
the corporation in the State of Delaware at such address is The Prentice-Hall
Corporation System, Inc.
THIRD: The nature of the business and of the purposes to be conducted
and promoted by the corporation, which shall be in addition to the authority of
the corporation to conduct any lawful business, to promote any lawful purpose,
and to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware, is as
follows:
To carry on and conduct a general food and beverage business;
to operate in connection therewith facilities for the manufacture,
productions, processing, storage, distribution, and sale of foods and
beverages and any other related items; to sell at wholesale and retail;
to operate such facilities on its own account, under management
contracts with others, or under franchise, or in any other legitimate
capacity; to engage in the business of providing and promoting
entertainments, amusements, and other means of recreation.
<PAGE> 2
To carry on and conduct a general hotel business; to operate
in connection therewith hotels, motels, inns, taverns, and other places
of lodging of every kind and description; and to provide and operate
facilities necessary or desirable in connection therewith; and to
operate such facilities on its own account, under management contracts
with others, or under franchises, or in any other legitimate capacity.
To acquire, by purchase, exchange, lease, franchise, license,
or any other lawful manner, and to build, own, operate, manage, sell,
lease, mortgage, or otherwise dispose of, the facilities and properties
which are or may be, required in the conduct of such general food and
beverage business and hotel business and all other businesses related
thereto, also to purchase, acquire, own, hold, use, lease (either as
lessor or lessee), rent, sublet, grant, sell, exchange, subdivide,
mortgage, encumber, deed in trust, manage, improve, develop, maintain,
construct, operate and generally deal in, any and all real estate,
improved and unimproved, stores, office buildings, apartment houses,
shopping centers, commercial buildings, restaurants, hotels, garages,
warehouses, manufacturing plants, and other buildings of any kind or
description, and any and all other property of every kind or
description, real, personal, and mixed, and any interest or right
therein, wheresoever situated.
To manufacture, purchase, or acquire in any lawful manner, and
to hold, own, mortgage, pledge, sell, lease, rent, transfer, or in any
manner dispose of, and to deal and trade in, goods, wares, merchandise,
including equipment, furniture and fixtures, and property of any and
every class and description.
To acquire the good will, business, rights and property,
franchises, and assets of every kind, with or without undertaking the
whole or any part of the liabilities, of any person, firm, association,
or corporation; and to acquire any property or business as a going
concern or otherwise by (i) purchase of the assets thereof wholly or in
part, (ii) by acquisition of the shares or any part thereof, or (iii)
in any other manner; and to pay for the same in cash, the stock of this
corporation, bonds, or otherwise; to hold, maintain and operate, or in
any manner dispose of the whole or any part of the good will, business,
rights, and property so ac-
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<PAGE> 3
quired; and to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
To apply for, purchase, or in any manner to acquire, and to
hold, own, use and operate, and to sell, assign, transfer, or in any
manner dispose of, and to grant licenses, franchises, or other rights
in respect of, and in any manner deal with, any and all rights, trade
and service marks, systems, inventions, improvements, and processes
used in connection with or secured under letters patent or copy-rights
of the United States or other countries, or otherwise, and to work,
operate, or develop the same, and to carry on any business,
manufacturing or otherwise, which may directly or indirectly effectuate
these objects or any of them.
To guarantee, purchase, hold, sell, assign, transfer,
mortgage, pledge, or otherwise dispose of the shares of the capital
stock of, or any bonds, securities, or evidences of indebtedness
created by any other corporation or corporations of this State or any
other state, country, nation, or government and while owner of said
stock, to exercise all the rights, powers, and privileges of ownership,
including the right to vote thereon, to the same extent as natural
persons might or could do, and to promote or to aid in any manner,
financially or otherwise, any corporation of which any shares of stock,
bonds, notes, debentures, or other securities or evidences of
indebtedness are held directly or indirectly by this corporation, and
for this purpose to guarantee the contracts, dividends, shares, bonds,
notes, debentures, and other obligations of such other corporations.
To issue bonds, debentures, or obligations from time to time
for any of the objects or purposes of the corporation and to secure the
same by mortgage, pledge, deed of trust, or otherwise, including, but
without limitation, bonds, debentures, and other obligations
convertible into other securities of the corporation.
To conduct business in any of the States, territories,
colonies, or dependencies of the United States, in the District of
Columbia, and in any and all foreign countries, to have one or more
offices
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<PAGE> 4
therein, and therein to hold, purchase, mortgage, and convey real and
personal property, without limit as to the amount.
To do any or all of the things herein set forth to the same
extent as a natural person might or could do and in any part of the
world, as principals, agents, contractors, trustees, or otherwise, and
either alone or in company with others.
To purchase, hold, and reissue any of the shares of its
capital stock.
To exercise all powers enumerated in the General Corporation
Law of Delaware; and, in addition, to exercise all powers granted by
any other law or by this certificate of incorporation, together with
any powers incidental thereto, so far as such powers are necessary or
convenient to the conduct, promotion or attainment of the business or
purposes set forth herein.
FOURTH: The total number of shares of stock which the
corporation shall have authority to issue is One Hundred (100), all of
which are without par value. All such shares are of one class and are
Common Stock.
No holder of any of the shares of the stock of the
corporation, whether now or hereafter authorized and issued, shall be
entitled as of right to purchase or subscribe for (1) any unissued
stock of any class, or (2) any additional shares of any class to be
issued by reason of any increase of the authorized capital stock of the
corporation of any class, or (3) bonds, certificates of indebtedness,
debentures or other securities convertible into stock of the
corporation, or carrying any right to purchase stock of any class, but
any such unissued stock or such additional authorized issue of any
stock or of other securities convertible into stock, or carrying any
right to purchase stock, may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms,
corporations or associations and upon such terms as may be deemed
advisable by the Board of Directors in the exercise of its discretion.
FIFTH: The name and the mailing address of the incorporator
are as follows:
NAME MAILING ADDRESS
R.G. Dickerson 229 South State Street, Dover, Delaware
SIXTH: The corporation is to have perpetual existence.
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<PAGE> 5
SEVENTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application
in a summary way of this corporation or of any creditor or stockholder
thereof or on the application of any receiver or receivers appointed for
this corporation under the provisions of section 291 of Title 8 of the
Delaware Code or on the application of trustees in dissolution or of any
receiver or receivers appointed for this corporation under the provisions of
section 279 of Title 8 of the Delaware Code order a meeting of the creditors
or class of creditors, and/or of the stockholders or class of stockholders
of this corporation, as the case may be, to be summoned in such manner as
the said court directs. If a majority in number representing three-fourths
in value of the creditors or class of creditors, and/or of the stockholders
or class of stockholders of this corporation, as the case may be, agree to
any compromise or arrangement and to any reorganization of this corporation
as consequence of such compromise or arrangement, the said compromise or
arrangement and the said reorganization shall, if sanctioned by the court to
which the said application has been made, be binding on all the creditors or
class of creditors, and/or on all the stockholders or class of stockholders,
of this corporation, as the case may be, and also on this corporation.
EIGHTH: For the management of the business and for the conduct of the
affairs of the corporation, and in further definition, limitation and
regulation of the powers of the corporation and of its directors and of its
stockholders or any class thereof, as the case may be, it is further
provided:
1. The management of the business and the conduct of the affairs of the
corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be
fixed by, or in the manner provided in, the By-Laws. The phrase "whole
Board" and the phrase "total number of directors" shall be deemed to
have the same meaning, to wit, the total number of directors which the
corporation would have if there were no vacancies. No election of
directors need be by written ballot.
2. After the original or other By-Laws of the corporation have been
adopted, amended, or repealed, as the case may be, in accordance with
the provisions of Section 109 of the General Corporation Law of the
State of Delaware, and,
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<PAGE> 6
after the corporation has received any payment for any of its
stock, the power to adopt, amend, or repeal the By-Laws of the
corporation may be exercised by the Board of Directors of the
corporation; provided, however, that any provision for the
classification of directors of the corporation for staggered
terms pursuant to the provisions of subsection (d) of Section
141 of the General Corporation Law of the State of Delaware
shall be set forth in an initial By-Law or in a By-Law adopted
by the stockholders entitled to vote of the corporation unless
provisions for such classification shall be set forth in this
certificate of incorporation.
3. Whenever the corporation shall be authorized to
issue only one class of stock, each outstanding share shall
entitle the holder thereof to notice of, and the right to vote
at, any meeting of stockholders. Whenever the corporation
shall be authorized to issue more than one class of stock, no
outstanding share of any class of stock which is denied voting
power under the provisions of the certificate of incorporation
shall entitle the holder thereof to the right to vote at any
meeting of stockholders except as the provisions of paragraph
(c) (2) of section 242 of the General Corporation Law of the
State of Delaware shall otherwise require; provided, that no
share of any such class which is otherwise denied voting power
shall entitle the holder thereof to vote upon the increase or
decrease in the number of authorized shares of said class.
NINTH: The corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented, indemnify any and all persons whom it shall
have power to indemnify under said section from and against any and all of the
expenses, liabilities or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any By-Law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
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<PAGE> 7
TENTH: From time to time any of the provisions of this certificate of
incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the corporation by this
certificate of incorporation are granted subject to the provisions of this
Article TENTH.
Signed on October 11, 1983.
/s/ R. G. Dickerson
------------------------------
R. G. Dickerson
Incorporator
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<PAGE> 8
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
JFK CATERERS, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "corporation")
is
JFK CATERERS, INC.
2. The certificate of incorporation of the corporation is hereby
amended by adding a new Article TENTH and renumbering former Article TENTH as
Article ELEVENTH so that as amended, said Articles shall be and read as follows:
TENTH. No director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
under Section 374 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived an improper personal
benefit.
ELEVENTH. From time to time any of the provisions of this certificate
of incorporation may be amended, altered or repealed, and other
provisions authorized by the laws of the State of Delaware at the time
in force may be added or inserted in the manner and at the time
prescribed by said laws, and all rights at any time conferred upon the
stockholders of the corporation by this certificate of incorporation
are granted subject to the provisions of this Article ELEVENTH.
3. The amendments of the certificate of incorporation herein certified
have been duly adopted in accordance with the provisions of Sections 228 and 242
of the General Corporation Law of the State of Delaware.
Signed and attested to on October 12, 1986.
/s/ Richard E. Marriott
---------------------------------
Richard E. Marriott, President
Attest:
/s/ Shirley J. Evans
- ---------------------------------
Shirley J. Evans, Secretary
<PAGE> 9
CERTIFICATE OF CHANGE OF REGISTERED AGENT
AND
REGISTERED OFFICE
* * * * *
JFK CATERERS, INC., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:
The present registered agent of the corporation is The Prentice-Hall
Corporation System, Inc. and the present registered office of the
corporation is in the county of Kent
The Board of Directors of JFK CATERERS, INC. adopted the following
resolution on the 21st day of February, 1990.
Resolved, that the registered office of JFK CATERERS, INC. in
the state of Delaware be and it hereby is changed to Corporation Trust
Center, 1209 Orange Street, in the City of Wilmington, County of New
Castle, and the authorization of the present registered agent of this
corporation be and the same is hereby withdrawn, and THE CORPORATION
TRUST COMPANY, shall be and is hereby constituted and appointed the
registered agent of this corporation at the address of its registered
office.
IN WITNESS WHEREOF, JFK CATERERS, INC. has caused this statement to be
signed by Gary L. Theurer, its Vice President and attested by John C. Carr, its
Secretary this 21st day of February, 1990.
By /s/ Gary L. Theurer
----------------------------
Vice President
ATTEST:
By /s/ John C. Carr
----------------------------
Secretary
<PAGE> 1
EXHIBIT 3.14
AMENDED AND RESTATED BY-LAWS
of
JFK CATERERS, INC.
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be called
by resolution of the Board or by the president and shall be called by the
president or secretary upon the written request (stating the purpose or purposes
of the meeting) of a majority of the directors then in office or the holders of
a majority of the outstanding shares entitled to vote. Only business related to
the purposes set forth in the notice of the meeting may be transacted at a
special meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be held
in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each meeting
of stockholders shall be given to each stockholder entitled to vote at the
meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If mailed, notice shall be considered
given when mailed to a stockholder at his address on the corporation's records.
The attendance of any stockholder at a meeting, without protesting at the
beginning of the meeting that the meeting is not lawfully called or convened,
shall constitute a waiver of notice by such stockholder.
1.5 Quorum. At any meeting of stockholders, the presence in person or by
proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum, a majority in voting interest of those present or, if no stockholders
are present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are announced at the meeting at
which the adjournment is taken except that, if adjournment is for
<PAGE> 2
more than thirty days or if, after the adjournment, a new record date is fixed
for the meeting, notice of the adjourned meeting shall be given pursuant to
Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to one
vote for every share registered in his name. Corporate action to be taken by
stockholder vote, other than including the election of directors, shall be
authorized by a majority of the votes cast at a meeting of stockholders, except
as otherwise provided by law or by Section 1.8 of these by-laws. Voting need not
be by ballot unless requested by a stockholder at the meeting or ordered by the
chairman of the meeting; however, all elections of directors shall be by written
ballot, unless otherwise provided in the certificate of incorporation. Each
stockholder entitled to vote at any meeting of stockholders or to express
consent to or dissent from corporate action in writing without a meeting may
authorize another person to act for him by proxy. Every proxy must be signed by
the stockholder or his attorney-in-fact. No proxy shall be valid after three
years from its date unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of any
meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in his name. For a period of not less than 10 days prior to
the meeting, the list shall be available during ordinary business hours for
inspection by any stockholder for any purpose germane to the meeting. During
this period, the list shall be kept either (a) at a place within the city where
the meeting is to be held, if that place shall have been specified in the notice
of the meeting, or (b) if not so specified, at the place where the meeting is to
be held. The list shall also be available for inspection by stockholders at the
time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or permitted
to be taken at any meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting. Prompt notice of the taking of any such action shall be
given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business of
the corporation shall be managed by the Board, which shall consist of one or
more directors. The number of directors may be changed by resolution of a
majority of the Board or by the stockholders, but no decrease may shorten the
term of any incumbent director. Directors shall be elected at each annual
meeting of stockholders and shall hold office until the next annual meeting
of stockholders and until the election and qualification of their respective
successors, subject to the provisions of Section 2.9.
2
<PAGE> 3
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
except as provided in Section 2.10 of these by-laws. Action of the Board shall
be authorized by the vote of a majority of the directors present at the time of
the vote if there is a quorum, unless otherwise provided by law or these
by-laws. In the absence of a quorum a majority of the directors present may
adjourn any meeting from time to time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by the
president or by any of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place of
each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
2.8 Participation in Board or Committee Meetings by Conference Telephone.
Any or all members of the Board or of any committee of the Board may participate
in a meeting of the Board or of the committee by means of a conference telephone
or similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.
3
<PAGE> 4
2.9 Resignation and Removal of Directors. Any director may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the Board
determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority of
the entire Board, may designate an Executive Committee of one or more directors
which shall have all the powers and authority of the Board, except as otherwise
provided in the resolution, section 141(c) of the Delaware General Corporation
Law, or any other applicable law. The members of the Executive Committee shall
serve at the pleasure of the Board. All action of the Executive Committee shall
be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall be
the president, one or more vice presidents (including an executive vice
president, if the Board so determines), a secretary and a treasurer. Any two or
more offices may be held by the same person. The Board
4
<PAGE> 5
may require any officer, agent or employee to give security for the faithful
performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 The President. The president shall be the chief executive officer of
the corporation and shall preside at all meetings of the Board and of the
stockholders. Subject to the control of the Board, he shall have general
supervision over the business of the corporation and shall have such other
powers and duties as presidents of corporations usually have or as the Board
assigns to him.
4.7 Vice President. Each vice president shall have such powers and duties
as the Board or the president assigns to him.
4.8 The Treasurer. The treasurer shall be the chief financial officer of
the corporation and shall be in charge of the corporation's books and accounts.
Subject to the control of the Board, he shall have such other powers and duties
as the Board or the president assigns to him.
4.9 The Secretary. The secretary shall be the secretary of, and keep the
minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the
5
<PAGE> 6
secretary from any meeting, the minutes shall be kept by the person appointed
for that purpose by the presiding officer.
4.10 Salaries. The Board may fix the officers' salaries, if any, or it may
authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the president or a vice president and by the secretary or an assistant
secretary, or the treasurer or an assistant treasurer, and shall be sealed with
the corporation's seal or a facsimile of the seal. Any or all of the signatures
on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other corporations
which are held by the corporation may be represented and voted by the president
or a vice president of this corporation or by proxy or proxies appointed by one
of them. The Board may, however, appoint some other person to vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders.
6
<PAGE> 7
* * * * * *
As adopted by the Board of Directors of the
Corporation on August 20, 1997.
7
<PAGE> 1
EXHIBIT 3.15
CERTIFICATE OF INCORPORATION
OF
KCI CATERERS, INC.
FIRST. The name of the corporation is
KCI CATERERS, INC.
SECOND. The address of its registered office in the State of Delaware
is No. 100 West Tenth Street, in the City of Wilmington, County of New Castle.
The name of its registered agent at such address is The Corporation Trust
Company.
THIRD. The nature of the business, or objects or purposes to be
transacted, promoted or carried on are:
To acquire by purchase, exchange, lease or otherwise, and to build,
own, operate, manage, sell, lease, mortgage or otherwise dispose of hotels,
motor hotels, motels, motor courts, inns, taverns, and other places of lodging
of every kind and description; to provide facilities necessary in connection
therewith including, but not by way of limitation, camps, camp sites, cabins,
cottages, automobile service stations, garages, parking facilities, play
grounds, club rooms, halls, amusement and recreational facilities, gift shops,
beauty parlors, barber shops, shoe shining establishments, dry cleaning and
laundry facilities, and other places of entertainment, recreation and
convenience for guests and others, as may be necessary or desirable in the
conduct of the business.
To acquire by purchase, lease or otherwise, and to maintain, operate,
sell, lease, or otherwise dispose of restaurants, cafes, cafeterias, dining
rooms, and places of entertainment and refreshment; to carry on a general
catering business; to buy, sell, prepare for use, serve, deal in and deal with
foods and food products, vegetables, meats, beverages (non-alcoholic and
alcoholic, the sale of which is permitted by law), cigars, cigarettes, and
tobacco, and refreshments of all kinds and descriptions; to provide
entertainment, plays, acts, dancing facilities, diversions, and for any of such
purposes to hire actors, dancers, entertainers, orchestras, musicians and
others; to construct, purchase, maintain, operate, lease, sell or otherwise
dispose of such real estate, buildings, personal property, and other facilities
as may be necessary, incidental or advantageous in carrying on any of the
business of this corporation.
To carry on and conduct a general restaurant, cafe, cafeteria, catering
and grocery business, and to own and operate "drive in" stands and other shops
for the purpose of carrying on said business.
<PAGE> 2
To build, construct, purchase, lease, or otherwise acquire, to operate,
lease, sell or otherwise dispose of stores, restaurants, cafes, amusement and
recreational facilities, hotels, apartment houses, office buildings, garages,
plants, warehouses, and all other buildings and improvements on real estate and
business of any kind and character whatever.
To purchase, lease or in any manner acquire, and to hold, own, develop,
operate, manage, build upon, improve, mortgage, sell or otherwise dispose of,
and otherwise deal in or with, or in any manner turn to account, any land or
lands, improved or unimproved, or interest therein, situated either within or
without the State of Delaware.
To manufacture, purchase or otherwise acquire, invest in, own,
mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade, deal
in and deal with goods, wares and merchandise and personal property of every
class and description.
Without limitation by the foregoing specifically enumerated objects and
purposes, to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.
The objects and purposes specified in the foregoing clauses shall,
except where otherwise expressed, be in nowise limited or restricted by
reference to, or inference from, the terms of any other clause in this
certificate of incorporation, but the objects and purposes specified in each of
the foregoing clauses of this article shall be regarded as independent objects
and purposes.
FOURTH. The total number of shares of stock which the corporation shall
have authority to issue is One Hundred (100); all of such shares shall be
without par value.
FIFTH. The names and mailing address of each incorporator is as
follows:
NAMES MAILING ADDRESSES
B.J. Consono 100 West Tenth Street
Wilmington, Delaware 19899
F.J. Obara, Jr. 100 West Tenth Street
Wilmington, Delaware 19899
J.L. Rivera 100 West Tenth Street
Wilmington, Delaware 19899
SIXTH. The corporation is to have perpetual existence.
SEVENTH. In furtherance and not in limitation of the powers conferred
by statute, the board of directors is expressly authorized:
-2-
<PAGE> 3
To make, alter or repeal the by-laws of the corporation.
To authorize and cause to be executed mortgages and liens upon the real
and personal property of the corporation.
To set apart out of any of the funds of the corporation available for
dividends a reserve or reserves for any proper purpose and to abolish any such
reserve in the manner in which it was created.
By resolution passed by a majority of the whole board, to designate one
or more committees, each committee to consist of two or more of the directors of
the corporation, which, to the extent provided in the resolution or in the
by-laws of the corporation, shall have and may exercise the powers of the board
of directors in the management of the business and affairs of the corporation,
and may authorize the seal of the corporation to be affixed to all papers which
may require it. Such committee or committees shall have such name or names as
may be stated in the by-laws of the corporation or as may be determined from
time to time by resolution adopted by the board of directors.
When and as authorized by the affirmative vote of the holders of a
majority of the stock issued and outstanding having voting power given at a
stockholders' meeting duly called for that purpose, or when authorized by the
written consent of the holders of a majority of the voting stock issued and
outstanding, to sell, lease or exchange all of the property and assets of the
corporation, including its good will and its corporate franchises, upon such
terms and conditions and for such consideration, which may be in whole or in
part shares of stock in, and/or other securities of, any other corporation or
corporations, as its board of directors shall deem expedient and for the best
interests of the corporation.
EIGHTH. Meetings of stockholders may be held outside the State of
Delaware, if the by-laws so provide. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the by-laws of the corporation. Elections of directors
need not be by ballot unless the by-laws of the corporation shall so provide.
NINTH. The corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate of incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
-3-
<PAGE> 4
WE, THE UNDERSIGNED, being each of the incorporators hereinbefore
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, do make this certificate, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set our hands and seals this 2nd day of July A.D. 1971.
/s/ B. J. Consono
____________________________(SEAL)
/s/ F. J. Obara, Jr.
____________________________(SEAL)
/s/ J. L. Rivera
____________________________(SEAL)
STATE OF DELAWARE ) ss:
COUNTY OF NEW CASTLE )
BE IT REMEMBERED that on this 2nd day of July A.D. 1971, personally
came before me, a Notary Public for the State of Delaware, B.J. Consono, F.J.
Obara, Jr. and J.L. Rivera all of the parties of the foregoing certificate of
incorporation, known to me personally to be such, and severally acknowledged the
said certificate to be the act and deed of the signers respectively and that the
facts therein stated are truly set forth.
GIVEN under my hand and seal of office the day and year aforesaid.
/s/ [Illegible]
_________________________________
Notary Public
[Notary Seal]
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<PAGE> 5
CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED OFFICE
AND OF REGISTERED AGENT
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"corporation") is
KCI CATERERS, INC.
2. The registered office of the corporation within the State
of Delaware is hereby changed to 229 South State Street, City of Dover
19901, County of Kent.
3. The registered agent of the corporation within the State of
Delaware is hereby changed to The Prentice-Hall Corporation System,
Inc., the business office of which is identical with the registered
office of the corporation as hereby changed.
4. The corporation has authorized the changes hereinbefore set
forth by resolution of its Board of Directors.
Signed on DEC 4, 1978
/s/ Authorized Signatory
_____________________________
President
Attest:
/s/ Authorized Signatory
_____________________________
Asst. Secretary
<PAGE> 6
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
KCI CATERERS, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "corporation")
is
KCI CATERERS, INC.
2. The certificate of incorporation of the corporation is hereby
amended by adding a new Article NINTH and renumbering former Article NINTH as
Article TENTH so that as amended, said Articles shall be and read as follows:
NINTH. No director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability
(i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.
TENTH. The corporation reserves the right to amend, alter,
change or repeal any provision contained in this certificate
of incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are
granted subject to this reservation.
3. The amendments of the certificate of incorporation herein certified
have been duly adopted in accordance with the provisions of Sections 228 and 242
of the General Corporation Law of the State of Delaware.
Signed and attested to on August 20, 1986.
/s/ Richard E. Marriott
--------------------------------
Richard E. Marriott, President
[CORPORATE SEAL]
Attest:
/s/ Shirley J. Evans
- --------------------------------
Shirley J. Evans, Secretary
1824w
<PAGE> 7
CERTIFICATE OF CHANGE OF REGISTERED AGENT
AND
REGISTERED OFFICE
* * * * *
KCI CATERERS, INC. , a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:
The present registered agent of the corporation is The Prentice-Hall
Corporation System, Inc. and the present registered office of the
corporation is in the county of Kent
The Board of Directors of KCI CATERERS, INC. adopted the following
resolution on the 21st day of February, 1990.
Resolved, that the registered office of KCI CATERERS, INC.
in the state of Delaware be and it hereby is changed to Corporation
Trust Center, 1209 Orange Street, in the City of Wilmington, County of
New Castle, and the authorization of the present registered agent of
this corporation be and the same is hereby withdrawn, and THE
CORPORATION TRUST COMPANY, shall be and is hereby constituted and
appointed the registered agent of this corporation at the address of
its registered office.
IN WITNESS WHEREOF, KCI CATERERS, INC. has caused this statement to be
signed by Gary L. Theurer, its Vice President and attested by John C. Carr, its
Secretary this 21st day of February, 1990.
By /s/ Gary L. Theurer
---------------------------
Vice President
ATTEST:
By /s/ John C. Carr
---------------------------
Secretary
<PAGE> 8
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
* * * * *
KCI CATERERS, INC., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation, by unanimous
written consent of its members, filed with the minutes of the Board, adopted a
resolution proposing and declaring advisable the following amendment to the
Certificate of Incorporation of said corporation:
RESOLVED, that the Certificate of Incorporation of KCI CATERERS, INC.
be amended by changing the First Article thereof so that, as amended, said
Article shall be and read as follows:
FIRST: The name of the corporation is CATERAIR CONSULTING SERVICES
CORPORATION.
SECOND: That in lieu of a meeting and vote of stockholders, the
stockholders have given unanimous written consent to said amendment in
accordance with the provisions of Section 228 of the General Corporation Law of
the State of Delaware.
THIRD: That the aforesaid amendment was duly adopted in accordance with
the applicable provisions of Sections 242 and 228 of the General Corporation Law
of the State of Delaware.
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<PAGE> 9
IN WITNESS WHEREOF, said KCI CATERERS, INC. has caused this certificate to be
signed by Daniel J. Altobello, its President and attested by John C. Carr, its
Secretary, this 24th day of January, 1995.
By /s/ Daniel J. Altobello
-------------------------------
President
ATTEST:
By /s/ John C. Carr
-------------------------------
Secretary
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<PAGE> 1
EXHIBIT 3.16
AMENDED AND RESTATED BY-LAWS
of
CATERAIR CONSULTING SERVICES CORPORATION
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be called
by resolution of the Board or by the president and shall be called by the
president or secretary upon the written request (stating the purpose or purposes
of the meeting) of a majority of the directors then in office or the holders of
a majority of the outstanding shares entitled to vote. Only business related to
the purposes set forth in the notice of the meeting may be transacted at a
special meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be held
in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each meeting
of stockholders shall be given to each stockholder entitled to vote at the
meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If mailed, notice shall be considered
given when mailed to a stockholder at his address on the corporation's records.
The attendance of any stockholder at a meeting, without protesting at the
beginning of the meeting that the meeting is not lawfully called or convened,
shall constitute a waiver of notice by such stockholder.
1.5 Quorum. At any meeting of stockholders, the presence in person or by
proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum, a majority in voting interest of those present or, if no stockholders
are present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are announced at the meeting at
which the adjournment is taken except that, if adjournment is for
<PAGE> 2
more than thirty days or if, after the adjournment, a new record date is fixed
for the meeting, notice of the adjourned meeting shall be given pursuant to
Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to one
vote for every share registered in his name. Corporate action to be taken by
stockholder vote, other than including the election of directors, shall be
authorized by a majority of the votes cast at a meeting of stockholders, except
as otherwise provided by law or by Section 1.8 of these by-laws. Voting need not
be by ballot unless requested by a stockholder at the meeting or ordered by the
chairman of the meeting; however, all elections of directors shall be by written
ballot, unless otherwise provided in the certificate of incorporation. Each
stockholder entitled to vote at any meeting of stockholders or to express
consent to or dissent from corporate action in writing without a meeting may
authorize another person to act for him by proxy. Every proxy must be signed by
the stockholder or his attorney-in-fact. No proxy shall be valid after three
years from its date unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of any
meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in his name. For a period of not less than 10 days prior to
the meeting, the list shall be available during ordinary business hours for
inspection by any stockholder for any purpose germane to the meeting. During
this period, the list shall be kept either (a) at a place within the city where
the meeting is to be held, if that place shall have been specified in the notice
of the meeting, or (b) if not so specified, at the place where the meeting is to
be held. The list shall also be available for inspection by stockholders at the
time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or permitted
to be taken at any meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting. Prompt notice of the taking of any such action shall be
given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business of
the corporation shall be managed by the Board, which shall consist of one or
more directors. The number of directors may be changed by resolution of a
majority of the Board or by the stockholders, but no decrease may shorten the
term of any incumbent director. Directors shall be elected at each annual
meeting of stockholders and shall hold office until the next annual meeting of
stockholders and until the election and qualification of their respective
successors, subject to the provisions of Section 2.9.
2
<PAGE> 3
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
except as provided in Section 2.10 of these by-laws. Action of the Board shall
be authorized by the vote of a majority of the directors present at the time of
the vote if there is a quorum, unless otherwise provided by law or these
by-laws. In the absence of a quorum a majority of the directors present may
adjourn any meeting from time to time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by the
president or by any of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place of
each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
2.8 Participation in Board or Committee Meetings by Conference Telephone.
Any or all members of the Board or of any committee of the Board may participate
in a meeting of the Board or of the committee by means of a conference telephone
or similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.
3
<PAGE> 4
2.9 Resignation and Removal of Directors. Any director may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the Board
determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority of
the entire Board, may designate an Executive Committee of one or more directors
which shall have all the powers and authority of the Board, except as otherwise
provided in the resolution, section 141(c) of the Delaware General Corporation
Law, or any other applicable law. The members of the Executive Committee shall
serve at the pleasure of the Board. All action of the Executive Committee shall
be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall be
the president, one or more vice presidents (including an executive vice
president, if the Board so determines), a secretary and a treasurer. Any two or
more offices may be held by the same person. The Board
4
<PAGE> 5
may require any officer, agent or employee to give security for the faithful
performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 The President. The president shall be the chief executive officer of
the corporation and shall preside at all meetings of the Board and of the
stockholders. Subject to the control of the Board, he shall have general
supervision over the business of the corporation and shall have such other
powers and duties as presidents of corporations usually have or as the Board
assigns to him.
4.7 Vice President. Each vice president shall have such powers and duties
as the Board or the president assigns to him.
4.8 The Treasurer. The treasurer shall be the chief financial officer of
the corporation and shall be in charge of the corporation's books and accounts.
Subject to the control of the Board, he shall have such other powers and duties
as the Board or the president assigns to him.
4.9 The Secretary. The secretary shall be the secretary of, and keep
the minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the
5
<PAGE> 6
secretary from any meeting, the minutes shall be kept by the person appointed
for that purpose by the presiding officer.
4.10 Salaries. The Board may fix the officers' salaries, if any, or it may
authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the president or a vice president and by the secretary or an assistant
secretary, or the treasurer or an assistant treasurer, and shall be sealed with
the corporation's seal or a facsimile of the seal. Any or all of the signatures
on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other corporations
which are held by the corporation may be represented and voted by the president
or a vice president of this corporation or by proxy or proxies appointed by one
of them. The Board may, however, appoint some other person to vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders.
6
<PAGE> 7
* * * * * *
As adopted by the Board of Directors of the
Corporation on August 20, 1997.
7
<PAGE> 1
EXHIBIT 3.17
CERTIFICATE OF INCORPORATION
OF
WESTERN AIRE CHEF, INC.
* * * * *
FIRST. The name of the corporation is
WESTERN AIRE CHEF, INC.
SECOND. The address of its registered office in the State of Delaware
is No. 100 West Tenth Street, in the City of Wilmington, County of New Castle.
The name of its registered agent at such address is The Corporation Trust
Company.
THIRD. The nature of the business, or objects or purposes to be
transacted, promoted or carried on are:
To acquire by purchase, exchange, lease or otherwise, and to build,
own, operate, manage, sell, lease, mortgage or otherwise dispose of hotels,
motor hotels, motels, motor courts, inns, taverns, and other places of lodging
of every kind and description; to provide facilities necessary in connection
herewith including, but not by way of limitation, camps, camp sites, cabins,
cottages, automobile service station, garages, parking facilities, play grounds,
club rooms, halls, amusement and recreational facilities, gift shops, beauty
parlors, barber shops, shoe shining establishments, dry cleaning and laundry
facilities, and other places of entertainment, recreation and convenience for
guests and others, as may be necessary or desirable in the conduct of the
business.
To acquire by purchase, lease or otherwise, and to maintain, operate,
sell, lease, or otherwise dispose of restaurants, cafes, cafeterias, dining
rooms, and places of entertainment and refreshment; to carry on a general
catering business; to buy, sell, prepare for use, serve, deal in and deal with
foods, and food products, vegetables, meats, beverages (non-alcoholic and
alcoholic, the sale of which is permitted by law), cigars, cigarettes, and
tobacco, and refreshments of all kinds and descriptions; to provide
entertainment, plays, acts, dancing facilities, diversions, and for any of such
purposes to hire actors, dancers, entertainers, orchestras, musicians and
others; to construct, purchase, maintain, operate, lease, sell or otherwise
dispose of such real estate, buildings, personal property, and other facilities
as may be necessary, incidental or advantageous in carrying on any of the
business of this corporation.
To carry on and conduct a general restaurant, cafe , cafeteria,
catering, inflite feeding, recreational facilities, and grocery business, and to
own and operate "drive in" stands and other shops for the purpose of carrying on
said business.
<PAGE> 2
To build, construct, purchase, lease, or otherwise acquire, to operate,
lease, sell or otherwise dispose of stores, restaurants, cafes, amusement and
recreational facilities, hotels, apartment houses, office buildings, garages,
plants, warehouses, and all other buildings and improvements on real estate and
business of any kind and character whatever.
To purchase, lease or in any manner acquire, and to hold, own, develop,
operate, manage, build upon, improve, mortgage, sell or otherwise dispose of,
and otherwise deal in or with, or in any manner turn to account, any land or
lands, improved or unimproved, or interest therein, situated either within or
without the State of Delaware.
To manufacture, purchase or otherwise acquire, invest in, own,
mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade, deal
in and deal with goods, wares and merchandise and personal property of every
class and description.
Without limitation by the foregoing specifically enumerated objects and
purposes, to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.
The objects and purposes specified in the foregoing clauses shall,
except where otherwise expressed, be in nowise limited or restricted by
reference to, or inference from, the terms of any other clause in this
certificate of incorporation, but the objects and purposes specified in each of
the foregoing clauses of this article shall be regarded as independent objects
and purposes.
FOURTH. The total number of shares of stock which the corporation shall
have authority to issue is One Hundred (100); all of such shares shall be
without par value.
FIFTH. The names and mailing address of each incorporator is as
follows:
NAMES MAILING ADDRESSES
----- -----------------
S.E. Widdoes 100 West Tenth Street
Wilmington, Delaware 19801
B.A. Pennington 100 West Tenth Street
Wilmington, Delaware 19801
J.L. Rivera 100 West Tenth Street
Wilmington, Delaware 19801
SIXTH. The corporation is to have perpetual existence.
SEVENTH. In furtherance and not in limitation of the powers conferred
by statute, the board of directors is expressly authorized:
-2-
<PAGE> 3
To make, alter or repeal the by-laws of the corporation.
To authorize and cause to be executed mortgages and liens upon the real
and personal property of the corporation.
To set apart out of any of the funds of the corporation available for
dividends a reserve or reserves for any proper purpose and to abolish any such
reserve in the manner in which it was created.
By resolution passed by a majority of the whole board, to designate one
or more committees, each committee to consist or two or more of the directors of
the corporation, which, to the extent provided in the resolution or in the
by-laws of the corporation, shall have and may exercise the powers of the board
of directors in the management of the business and affairs of the corporation,
and may authorize the seal of the corporation to be affixed to all papers which
may require it. Such committee or committees shall have such name or names as
may be stated in the by-laws of the corporation or as may be determined from
time to time by resolution adopted by the board of directors.
When and as authorized by the affirmative vote of the holders of a
majority of the stock issued and outstanding having voting power given at a
stockholders' meeting duly called for that purpose, or when authorized by the
written consent of the holders of a majority of the voting stock issued and
outstanding, to sell, lease or exchange all of the property and assets of the
corporation, including its good will and its corporate franchises, upon such
terms and conditions and for such consideration, which say be in whole or in
part shares of stock in, and/or other securities of, any other corporation or
corporations, as its board of directors shall deem expedient and for the best
interests of the corporation.
EIGHTH. Meetings of stockholders may be held outside the State of
Delaware, if the by-laws so provide. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the by-laws of the corporation. Elections of directors
need not be by ballot unless the by-laws of the corporation shall so provide.
NINTH. The corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate of incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
- 3 -
<PAGE> 4
WE, THE UNDERSIGNED, being each of the incorporators hereinbefore
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, do make this certificate, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set our hands and seals this 17th day of May, A.D. 1973.
/s/ S.E. Widdoes (SEAL)
-------------------------
/s/ B.A. Pennington (SEAL)
------------------------
/s/ J.L. Rivera (SEAL)
-------------------------
-4-
<PAGE> 5
CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED OFFICE
AND OF REGISTERED AGENT
It is hereby certified that:
1. The name or the corporation (hereinafter called the "corporation")
is
WESTERN AIRE CHEF, INC.
2. The registered office or the corporation within the State of
Delaware is hereby changed to 229 South State Street, City of Dover 19901,
County of Kent.
3. The registered agent of the corporation within the State of Delaware
is hereby changed to The Prentice-Hall Corporation System, Inc., the business
office of which is identical with the registered office of the corporation as
hereby changed.
4. The corporation has authorized the changes hereinbefore set forth by
resolution of its Board of Directors.
Signed on DEC 4 1978.
/s/ Authorized Signatory
___________________________
Vice-President
Attest:
/s/ Authorized Signatory
___________________________
Secretary
<PAGE> 6
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
WESTERN AIRE CHEF, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "corporation")
is
WESTERN AIRE CHEF, INC.
2. The certificate of incorporation of the corporation is hereby
amended by adding a new Article NINTH and renumbering former Article NINTH as
Article TENTH so that as amended, said Articles shall be and read as follows:
NINTH. No director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability
(i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.
TENTH. The corporation reserves the right to amend, alter,
change or repeal any provision contained in this certificate
of incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are
granted subject to this reservation.
3. The amendments of the certificate of incorporation herein certified
have been duly adopted in accordance with the provisions of Sections 228 and 242
of the General Corporation Law of the State of Delaware.
Signed and attested to on August 20, 1986.
/s/ Richard E. Marriott
-------------------------------
Richard E. Marriott, President
[CORPORATE SEAL]
Attest:
/s/ Shirley J. Evans
- -------------------------------
Shirley J. Evans, Secretary
1389w
<PAGE> 7
CERTIFICATE OF CHANGE OF REGISTERED AGENT
AND
REGISTERED OFFICE
*****
WESTERN AIRE CHEF, INC, a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:
The present registered agent of the corporation is The Prentice-Hall
Corporation System, Inc and the present registered office of the corporation is
in the county of Kent
The Board of Directors of WESTERN AIRE CHEF, INC., adopted the
following resolution on the 21 day of February 1990.
Resolved, that the registered office of WESTERN AIRE CHEF,
INC., in the state of Delaware be and it hereby is changed to
Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle, and the authorization of the present
registered agent of this corporation be and the same is hereby
withdrawn, and THE CORPORATION TRUST COMPANY, shall be and is hereby
constituted and appointed the registered agent of this corporation at
the address of its registered office.
IN WITNESS WHEREOF, WESTERN AIRE CHEF, INC. has caused this statement
to be signed by Gary L. Theurer, its Vice President and attested by John C.
Carr, its Secretary this 21st day of February, 1990.
By /s/ Gary L. Theurer
--------------------------------
Vice President
ATTEST:
By /s/ John C. Carr
--------------------------------
Secretary
<PAGE> 1
EXHIBIT 3.18
WESTERN AIRE CHEF, INC.
---ooOoo---
BY - LAWS
---ooooo---
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of Wilmington,
County of New Castle, State of Delaware.
Section 2. The corporation may also have offices at such other places
both within and without the State of Delaware as the board of directors may from
time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election of
directors shall be held in the County of Montgomery, State of Maryland, at such
place as may be fixed from time to time by the board of directors, or at such
other place either within or without the State of Delaware as shall be
designated from time to time by the board of directors and
<PAGE> 2
stated in the notice of the meeting. Meetings of stockholders for any other
purpose may be held at such time and place, within or without the State of
Delaware, as shall be stated in the notice of the meeting or in a duly executed
waiver of notice thereof.
Section 2. Annual meetings of stockholders, commencing with the year
1974, shall be held on the first day of August if not a legal holiday, and if a
legal holiday, then on the next secular day following, at 12:25 P.M., or at such
other date and time as shall be designated from time to time by the board of
directors and stated in the notice of the meeting, at which they shall elect by
a plurality vote a board of directors, and transact such other business as may
properly be brought before the meeting.
Section 3. Written notice of the annual meeting stating the place, date
and hour of the meeting shall be given to each stockholder entitled to vote at
such meeting not less than ten nor more than sixty days before the date of the
meeting.
Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged
<PAGE> 3
in alphabetical order, and showing the address of each stockholder and the
number of shares registered in the name of each stockholder. Such list shall be
open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten days prior
to the meeting, either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 5. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the certificate of
incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the board of
directors, or at the request in writing of stockholders owning a majority in
amount of the entire capital stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.
Section 6. Written notice of a special meeting
<PAGE> 4
stating the place, date and hour of the meeting and the purpose or purposes for
which the meeting is called, shall be given not less than ten nor more than
sixty days before the date of the meeting, to each stockholder entitled to vote
at such meeting.
Section 7. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting, at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjourn-
<PAGE> 5
ment is for more than thirty days, or if after the adjournment a new record date
is fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.
Section 9. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the certificate of incorporation, a different vote is required in which case
such express provision shall govern and control the decision of such question.
Section 10. Unless otherwise provided in the certificate of
incorporation each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder, but no proxy shall be voted on
after three years from its date, unless the proxy provides for a longer period.
Section 11. Unless otherwise provided in the certificate of
incorporation, any action required to be taken at any annual or special meeting
of stockholders of the corporation, or any action which may be taken at any
annual or special meeting of such stockholders, may be taken without a meeting,
<PAGE> 6
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the whole
board shall be three. The directors shall be elected at the annual meeting of
the stockholders, except as provided in Section 2 of this Article, and each
director elected shall hold office until his successor is elected and qualified.
Directors need not be stockholders.
Section 2. Vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a majority of
the directors then in office, though less than a quorum, or by a sole remaining
director, and the directors so chosen shall hold office until the next annual
election and until their successors are duly elected and shall qualify, unless
sooner
<PAGE> 7
displaced. If there are no directors in office, then an election of directors
may be held in the manner provided by statute. If, at the time of filling any
vacancy or any newly created directorship, the directors then in office shall
constitute less than a majority of the whole board (as constituted immediately
prior to any such increase), the Court of Chancery may, upon application of any
stockholder or stockholders holding at least ten percent of the total number of
the shares at the time outstanding having the right to vote for such directors,
summarily order an election to be held to fill any such vacancies or newly
created directorships, or to replace the directors chosen by the directors then
in office.
Section 3. The business of the corporation shall be managed by its
board of directors which may exercise all such powers of the corporation and do
all such lawful acts and things as are not by statute or by the certificate of
incorporation or by these by-laws directed or required to be exercised or done
by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold meetings,
both regular and special, either within or without the State of Delaware.
<PAGE> 8
Section 5. The first meeting of each newly elected board of directors
shall be held at such time and place as shall be fixed by the vote of the
stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of the newly elected
board of directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 6. Regular meetings of the board of directors may be held
without notice at such time and at such place as shall from time to time be
determined by the board,
Section 7. Special meetings of the board may be called by the president
on two days' notice to each director, either personally or by mail or by
telegram; special meetings shall be called by the president or secretary in like
manner and on like notice on the written request of two directors.
<PAGE> 9
Section 8. At all meetings of the board a majority of the directors
shall constitute a quorum for the transaction of business and the act of a
majority of the directors present at any meeting at which there is a quorum
shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall not be present at any meeting of the board of directors the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 9. Unless otherwise restricted by the certificate of
incorporation or these by-laws, any action required or permitted to be taken at
any meeting of the board of directors or of any committee thereof may be taken
without a meeting, if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
Section 10. Unless otherwise restricted by the certificate of
incorporation or these by-laws, members of the board of directors, or any
committee designated by the board of directors, may participate in a meeting of
the board of directors, or any committee, by means of conference
<PAGE> 10
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such participation in a
meeting shall constitute presence in person at the meeting.
COMMITTEES OF DIRECTORS
Section 11. The board of directors may, by resolution passed by a
majority of the whole board, designate one or more committees, each committee to
consist of one or more of the directors of the corporation. The board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. Any
such committee, to the extent provided in the resolution of the board of
directors, shall have and may exercise all the powers and authority of the board
of directors in the management of the business and affairs of the corporation,
and may authorize the seal of the corporation to be affixed to all papers which
may require it; but no such committee shall have the power or authority in
reference to amending the certificate of incorporation, adopting an agreement of
merger or consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the corporation's property and assets,
recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolu-
<PAGE> 11
tion, or amending the by-laws of the corporation; and, unless the resolution or
the certificate of incorporation expressly so provide, no such committee shall
have the power or authority to declare a dividend or to authorize the issuance
of stock. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the board of directors.
Section 12. Each committee shall keep regular minutes of its meetings
and report the same to the board of directors when required.
COMPENSATION OF DIRECTORS
Section 13. Unless otherwise restricted by the certificate of
incorporation or these by-laws, the board of directors shall have the authority
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance at each meeting of the board of directors and may be paid
a fixed sum for attendance at each meeting of the board of directors or a stated
salary as director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
<PAGE> 12
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these by-laws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of these
by-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the board
of directors and shall be a president,
<PAGE> 13
a vice-president, a secretary and a treasurer. The board of directors may also
choose additional vice-presidents, and one or more assistant secretaries and
assistant treasurers. Any number of offices may be held by the same person,
unless the certificate of incorporation or these by-laws otherwise provide.
Section 2. The board of directors at its first meeting after each
annual meeting of stockholders shall choose a president, one or more
vice-presidents, a secretary and a treasurer.
Section 3. The board of directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board.
Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualify. Any officer elected or appointed by the
board of directors may be removed at any time by the affirmative vote of a
majority of the board of directors. Any vacancy occurring in any office of the
corporation shall be filled by the board of directors.
<PAGE> 14
THE PRESIDENT
Section 6. The president shall be the chief executive officer of the
corporation, shall preside at all meetings of the stockholders and the board of
directors, shall have general and active management of the business of the
corporation and shall see that all orders and resolutions of the board of
directors are carried into effect.
Section 7. He shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the board of
directors to some other officer or agent of the corporation.
THE VICE-PRESIDENTS
Section 8. In the absence of the president or in the event of his
inability or refusal to act, the vice-president (or in the event there be more
than one vice-president, the vice-presidents in the order designated by the
directors, or in the absence of any designation then in the order of their
election) shall perform the duties of the president, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
president. The vice-presidents shall perform
<PAGE> 15
such other duties and have such other powers as the board of directors may from
time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 9. The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or
president, under whose supervision he shall be. He shall have custody of the
corporate seal of the corporation and he, or an assistant secretary, shall have
authority to affix the same to any instrument requiring it and when so affixed,
it may be attested by his signature or by the signature of such assistant
secretary. The board of directors may give general authority to any other
officer to affix the seal of the corporation and to attest the affixing by his
signature.
Section 10. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the board of directors (or if
there be no
<PAGE> 16
such determination, then in the order of their election), shall, in the absence
of the secretary or in the event of his inability or refusal to act, perform the
duties and exercise the powers of the secretary and shall perform such other
duties and have such other powers as the board of directors may from time to
time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 12. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors, at
its regular meetings, or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
Section 13. If required by the board of directors, he shall give the
corporation a bond (which shall be renewed
<PAGE> 17
every six years) in such sum and with such surety or sureties as shall be
satisfactory to the board of directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.
Section 14. The assistant treasurer, or if there shall be more than
one, the assistant treasurers in the order determined by the board of directors
(or if there be no such determination, then in the order of their election),
shall, in the absence of the treasurer or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the treasurer and
shall perform such other duties and have such other powers as the board of
directors may from time to time prescribe.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Every holder of stock in the corporation shall be entitled
to have a certificate, signed by, or in the name of the corporation by, the
chairman or vice-chairman of the board of directors or the president or a
vice-president and the treasurer or an assistant treasurer, or the secretary
<PAGE> 18
or an assistant secretary of the corporation, certifying the number of shares
owned by him in the corporation.
Section 2. Any of or all the signatures on the certificate may be
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer, transfer agent or registrar at the date of issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the board of directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the
<PAGE> 19
corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost, stolen or destroyed.
TRANSFERS OF STOCK
Section 4. Upon surrender to the corporation or the transfer agent of
the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
FIXING RECORD DATE
Section 5. In order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten
<PAGE> 20
days before the date of such meeting, nor more than sixty days prior to any
other action. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation, subject
to the provisions of the certificate of incorporation, if any, may be declared
by the board of directors
<PAGE> 21
at any regular or special meeting, pursuant to law. Dividends may be paid in
cash, in property, or in shares of the capital stock, subject to the provisions
of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set aside out
of any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
ANNUAL STATEMENT
Section 3. The board of directors shall present at each annual meeting,
and at any special meeting of the stockholders when called for by vote of the
stockholders, a full and clear statement of the business and condition of the
corporation.
CHECKS
Section 4. All checks or demands for money and notes of the corporation
shall be signed by such officer or
<PAGE> 22
officers or such other person or persons as the board of directors may from time
to time designate.
FISCAL YEAR
Section 5. The corporation's fiscal year shall consist of a fifty-two
(52) calendar week period in each year to commence on a date on or between July
25th and July 31st, inclusive on a basis to be fixed and determined by the board
of directors.
SEAL
Section 6. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE VIII
AMENDMENTS
Section 1. These by-laws may be altered, amended or repealed or new
by-laws may be adopted by the stockholders or by the board of directors, when
such power is conferred upon the board of directors by the certificate of
incorporation, at any regular meeting of the stockholders or of the board of
directors or at any special meeting of the stock-
<PAGE> 23
holders or of the board of directors if notice of such alteration, amendment,
repeal or adoption of new by-laws be contained in the notice of such special
meeting.
<PAGE> 1
EXHIBIT 3.19
CERTIFICATE OF INCORPORATION
OF
BETHESDA SERVICES, INC.
1. The name of the corporation is Bethesda Services, Inc. (the
"Corporation").
2. The address of the Corporation's registered office in Delaware is
15 East North Street, Dover (Kent County), Delaware 19901. United Corporate
Services, Inc. is the Corporation's registered agent at that address.
3. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The Corporation shall have authority to issue a total of 3,000
shares of common stock, $.01 par value per share.
5. The name of the sole incorporator is Jennifer C. Foster and her
mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue,
New York, New York 10022.
6. The Corporation's board of directors shall have the power to
make, alter or repeal the by-laws of the Corporation.
7. The election of the Corporation's board of directors need not be
by written ballot.
8. The Corporation shall indemnify to the fullest extent permitted
by Section 145 of the Delaware General Corporation Law as amended from time to
time each person that such Section grants the Corporation the power to
indemnify.
9. No director shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director for
any act or omission occurring subsequent to the date when this provision becomes
effective, except that he may be liable (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law or (iv) for any transaction from which the director derived an improper
personal benefit.
<PAGE> 2
10. The Corporation elects not to be governed by Section 203 of the
Delaware General Corporation Law.
Dated: September 21, 1995
/s/ Jennifer C. Foster
---------------------------
Jennifer C. Foster
Sole Incorporator
2
<PAGE> 1
EXHIBIT 3.20
BY-LAWS
OF
BETHESDA SERVICES, INC.
ARTICLE I
Stockholders
Section 1.1. Annual Meetings. An annual meeting of stockholders shall
be held for the election of directors at such date, time and place, either
within or without the State of Delaware, as may be designated by resolution of
the Board of Directors from time to time. Any other proper business may be
transacted at the annual meeting.
Section 1.2. Special Meetings. Special meetings of stockholders for any
purpose or purposes may be called at any time by the Board of Directors, or by a
committee of the Board of Directors that has been duly designated by the Board
of Directors and whose powers and authority, as expressly provided in a
resolution of the Board of Directors, include the power to call such meetings,
but such special meetings may not be called by any other person or persons.
Section 1.3. Notice of Meetings. Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given that shall state the place, date and hour of the meeting and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called. Unless otherwise provided by law, the certificate of incorporation or
these by-laws, the written notice of any meeting shall be given not less than
ten (10) nor more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting. If mailed, such notice shall be
deemed to be given when deposited in the United States mail, postage prepaid,
directed to the stockholder at his address as it appears on the records of the
corporation.
Section 1.4. Adjournments. Any meeting of stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, notice of the
<PAGE> 2
adjourned meeting shall be given to each stockholder of record entitled to vote
at the meeting.
Section 1.5. Quorum. Except as otherwise provided by law, the
certificate of incorporation or these by-laws, at each meeting of stockholders
the presence in person or by proxy of the holders of a majority in voting power
of the outstanding shares of stock entitled to vote at the meeting shall be
necessary and sufficient to constitute a quorum. In the absence of a quorum, the
stockholders so present may, by majority vote, adjourn the meeting from time to
time in the manner provided in Section 1.4 of these by-laws until a quorum shall
attend. Shares of its own stock belonging to the corporation or to another
corporation, if a majority of the shares entitled to vote in the election of
directors of such other corporation is held, directly or indirectly, by the
corporation, shall neither be entitled to vote nor be counted for quorum
purposes; provided, however, that the foregoing shall not limit the right of the
corporation or any subsidiary of the corporation to vote stock, including but
not limited to its own stock, held by it in a fiduciary capacity.
Section 1.6. Organization. Meetings of stockholders shall be presided
over by the Chairman of the Board, if any, or in his absence by the Vice
Chairman of the Board, if any, or in his absence by the President, or in his
absence by a Vice President, or in the absence of the foregoing persons by a
chairman designated by the Board of Directors, or in the absence of such
designation by a chairman chosen at the meeting. The Secretary shall act as
secretary of the meeting, but in his absence the person presiding over the
meeting may appoint any person to act as secretary of the meeting. The person
presiding over the meeting shall announce at the meeting of stockholders the
date and time of the opening and the closing of the polls for each matter upon
which the stockholders will vote.
Section 1.7. Voting; Proxies. Except as otherwise provided by the
certificate of incorporation, each stockholder entitled to vote at any meeting
of stockholders shall be entitled to one (1) vote for each share of stock held
by him which has voting power upon the matter in question. Each stockholder
entitled to vote at a meeting of stockholders or to express consent or dissent
to corporate action in writing without a meeting may authorize another person or
persons to act for him by proxy, but no such proxy shall be voted or acted upon
after three (3) years from its date, unless the proxy provides for a longer
period. A proxy shall be irrevocable if it states that it is irrevocable and if,
and only as long as, it is coupled with an interest sufficient in law to support
an irrevocable power. A stockholder may revoke any proxy which is not
irrevocable by attending the meeting and voting in person or by filing with the
Secretary of the corporation an instrument in writing revoking the proxy or by
delivering a proxy in accordance with applicable law bearing a later date to the
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<PAGE> 3
Secretary of the corporation. Voting at meetings of stockholders need not be by
written ballot. At all meetings of stockholders for the election of directors a
plurality of the votes cast shall be sufficient to elect. All other elections
and questions shall, unless otherwise provided by law, the certificate of
incorporation or these by-laws, be decided by the affirmative vote of the
holders of a majority in voting power of the shares of stock which are present
in person or by proxy and entitled to vote thereon.
Section 1.8. Fixing Date for Determination of Stockholders of Record.
In order that the corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which record date: (i) in the case of determination of
stockholders entitled to vote at any meeting of stockholders or adjournment
thereof, shall, unless otherwise required by law, not be more than sixty (60)
nor less than ten (10) days before the date of such meeting; (ii) in the case of
determination of stockholders entitled to express consent to corporate action in
writing without a meeting, shall not be more than ten (10) days from the date
upon which the resolution fixing the record date is adopted by the Board of
Directors; and (iii) in the case of determination of stockholders for the
purpose of any other lawful action, shall not be more than sixty (60) days prior
to such other action. If no record date is fixed: (iv) the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held; (v) the record date
for determining stockholders entitled to express consent to corporate action in
writing without a meeting, when no prior action of the Board of Directors is
required by law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
corporation in accordance with applicable law, or, if prior action by the Board
of Directors is required by law, shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior action; and
(vi) the record date for determining stockholders for the purpose of any other
lawful action, shall be at the close of business on the day on which the Board
of Directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record
-3-
<PAGE> 4
date for the adjourned meeting.
Section 1.9. List of Stockholders Entitled to Vote. The Secretary shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof and may be inspected by any stockholder who is present. Upon the willful
neglect or refusal of the directors to produce such a list at any meeting for
the election of directors, they shall be ineligible for election to any office
at such meeting. Except as otherwise provided by law, the stock ledger shall be
the only evidence as to who are the stockholders entitled (i) to examine the
stock ledger, the list of stockholders entitled to vote at the meeting or the
books of the corporation, (ii) to vote in person or by proxy at any meeting of
stockholders, or (iii) to express consent or dissent to corporate action in
writing without a meeting.
Section 1.10. Action By Consent of Stockholders. Unless otherwise
restricted by the certificate of incorporation, any action required or permitted
to be taken at any annual or special meeting of the stockholders may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted and shall be
delivered (by hand or by certified or registered mail, return receipt requested)
to the corporation by delivery to its registered office in the State of
Delaware, its principal place of business, or an officer or agent of the
corporation having custody of the book in which minutes of proceedings of
meetings of stockholders are recorded. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.
Section 1.11. Inspectors of Election. The corporation may, and shall if
required by law, in advance of any meeting of stockholders, appoint one (1) or
more inspectors of election, who may be employees of the corporation, to act at
the meeting or any adjournment thereof and to make a written report thereof. The
corporation may designate one (1) or more persons as alternate
-4-
<PAGE> 5
inspectors to replace any inspector who fails to act. In the event that no
inspector so appointed or designated is able to act at a meeting of the
stockholders, the person presiding at the meeting shall appoint one (1) or more
inspectors to act at the meeting. Each inspector, before entering upon the
discharge of his or her duties, shall take and sign an oath to execute
faithfully the duties of inspector with strict impartiality and according to the
best of his or her ability. The inspector or inspectors so appointed or
designated shall (i) ascertain the number of shares of capital stock of the
corporation outstanding and the voting power of each such share, (ii) determine
the shares of capital stock of the corporation represented at the meeting and
the validity of proxies and ballots, (iii) count all votes and ballots, (iv)
determine and retain for a reasonable period a record of the disposition of any
challenges made to any determination by the inspectors, and (v) certify their
determination of the number of shares of capital stock of the corporation
represented at the meeting and such inspector's or inspectors' count of all
votes and ballots. Such certification and report shall specify such other
information as may be required by law. In determining validity and counting of
proxies and ballots cast at any meeting of stockholders of the corporation, the
inspectors may consider such information as is permitted by applicable law. No
person who is a candidate for an office at an election may serve as an inspector
at such election.
Section 1.12. Conduct of Meetings. The Board of Directors of the
corporation may adopt by resolution such rules and regulations for the conduct
of the meeting of stockholders as it shall deem appropriate. Except to the
extent inconsistent with such rules and regulations as adopted by the Board of
Directors, the person presiding over any meeting of stockholders shall have the
right and authority to prescribe such rules, regulations and procedures and to
do all such acts as, in the judgment of such person, are appropriate for the
proper conduct of the meeting. Such rules, regulations or procedures, whether
adopted by the Board of Directors or prescribed by the person presiding over the
meeting, may include, without limitation, the following: (i) the establishment
of an agenda or order of business for the meeting; (ii) rules and procedures for
maintaining order at the meeting and the safety of those present; (iii)
limitations on attendance at or participation in the meeting to stockholders of
record of the corporation, their duly authorized and constituted proxies or such
other persons as the person presiding over the meeting shall determine; (iv)
restrictions on entry to the meeting after the time fixed for the commencement
thereof; and (v) limitations on the time allotted to questions or comments by
participants. Unless and to the extent determined by the Board of Directors or
the person presiding over the meeting, meetings of stockholders shall not be
required to be held in accordance with the rules of parliamentary procedure.
-5-
<PAGE> 6
ARTICLE II
Board of Directors
Section 2.1. Number; Qualifications. The Board of Directors shall
consist of one (1) or more members. The number of members comprising the Board
of Directors initially shall be the number of persons named as directors in the
certificate of incorporation (or if no person is so named, the number of persons
elected by the Incorporator). The number of members comprising the Board of
Directors thereafter shall be determined from time to time by resolution of the
Board of Directors. Directors need not be stockholders.
Section 2.2. Election; Resignation; Removal; Vacancies. The Board of
Directors initially shall consist of the person or persons named as Directors in
the certificate of incorporation (or, if no person is so named, the person or
persons elected by the Incorporator), and each director so elected shall hold
office until his successor is elected and qualified or until his earlier death,
resignation, or removal. At the first annual meeting of stockholders and at each
annual meeting thereafter, the stockholders shall elect directors each of whom
shall hold office until his successor is elected and qualified or until his
earlier death, resignation, or removal. Any director may resign at any time upon
written notice to the corporation. Any newly created directorship or any vacancy
occurring in the Board of Directors for any cause may be filled by a majority of
the remaining members of the Board of Directors, although such majority is less
than a quorum, or by a plurality of the votes cast at a meeting of stockholders,
and each director so elected shall hold office until the expiration of the term
of office of the director whom he has replaced, or until his successor is
elected and qualified, or until his earlier death, resignation, or removal.
Section 2.3. Regular Meetings. Regular meetings of the Board of
Directors may be held at such places within or without the State of Delaware and
at such times as the Board of Directors may from time to time determine, and if
so determined notices thereof need not be given.
Section 2.4. Special Meetings. Special meetings of the Board of
Directors may be held at any time or place within or without the State of
Delaware whenever called by the President, any Vice President, the Secretary, or
by any member of the Board of Directors. Notice of a special meeting of the
Board of Directors shall be given by the person or persons calling the meeting
at least twenty-four (24) hours before the special meeting.
Section 2.5. Telephonic Meetings Permitted. Members of the Board of
Directors, or any committee designated by the Board of
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<PAGE> 7
Directors, may participate in a meeting thereof by means of conference telephone
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, and participation in a meeting pursuant to
this by-law shall constitute presence in person at such meeting.
Section 2.6. Quorum; Vote Required for Action. At all meetings of the
Board of Directors a majority of the whole Board of Directors shall constitute a
quorum for the transaction of business. Except in cases in which the certificate
of incorporation, these by-laws or applicable law otherwise provides, the vote
of a majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
Section 2.7. Organization. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board, if any, or in his absence by the
Vice Chairman of the Board, if any, or in his absence by the President, or in
the absence of the foregoing persons by a chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his absence the person
presiding over the meeting may appoint any person to act as secretary of the
meeting.
Section 2.8. Informal Action by Directors. Unless otherwise restricted
by the certificate of incorporation or these by-laws, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board of
Directors or such committee, as the case may be, consent thereto in writing, and
the writing or writings are filed with the minutes of proceedings of the Board
of Directors or committee.
-7-
<PAGE> 8
ARTICLE III
Committees
Section 3.1. Committees. The Board of Directors may, by resolution
passed by a majority of the whole Board of Directors, designate one (1) or more
committees, each committee to consist of one (1) or more of the directors of the
corporation. The Board of Directors may designate one (1) or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of a
member of the committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member. Any such committee,
to the extent permitted by law and to the extent provided in the resolution of
the Board of Directors, shall have and may exercise all the powers and authority
of the Board of Directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it.
Section 3.2. Committee Rules. Unless the Board of Directors otherwise
provides, each committee designated by the Board of Directors may make, alter
and repeal rules for the conduct of its business. In the absence of such rules
each committee shall conduct its business in the same manner as the Board of
Directors conducts its business pursuant to Article II of these by-laws.
-8-
<PAGE> 9
ARTICLE IV
Officers
Section 4.1. Executive Officers; Election; Qualifications; Term of
Office; Resignation; Removal; Vacancies. The Board of Directors shall elect a
President and Secretary, and it may, if it so determines, choose a Chairman of
the Board and a Vice Chairman of the Board from among its members. The Board of
Directors may also choose one (1) or more Vice Presidents, one (1) or more
Assistant Secretaries, a Treasurer and one (1) or more Assistant Treasurers.
Each such officer shall hold office until the first meeting of the Board of
Directors after the annual meeting of stockholders next succeeding his election,
and until his successor is elected and qualified or until his earlier death,
resignation, or removal. Any officer may resign at any time upon written notice
to the corporation. The Board of Directors may remove any officer with or
without cause at any time, but such removal shall be without prejudice to the
contractual rights of such officer, if any, with the corporation. Any number of
offices may be held by the same person. Any vacancy occurring in any office of
the corporation by death, resignation, removal, or otherwise may be filled for
the unexpired portion of the term by the Board of Directors at any regular or
special meeting.
Section 4.2. Powers and Duties of Executive Officers.
(i) President. The President shall be the chief executive officer of
the corporation. Subject to the provisions of the certificate of incorporation,
these by-laws, and the direction of the Board of Directors, the President shall
have the responsibility for the general management and control of the business
and affairs of the corporation and shall perform all duties and have all powers
which are commonly incident to the office of chief executive or which are
delegated to him or her by the Board of Directors. The President shall have
power to execute in the name of the corporation all contracts, agreements,
deeds, bonds, mortgages, and other obligations and instruments of the
corporation which are authorized, and to affix the corporate seal thereto. The
President shall have general supervision and direction of all of the other
officers, employees, and agents of the corporation.
(ii) Vice President. Each Vice President, if any, shall have such
powers and perform such duties as the Board of Directors may from time to time
prescribe. The Vice President (if only one (1) Vice President is chosen by the
Board) or one (1) Vice President designated by the Board (if two (2) or more
Vice Presidents are chosen by the Board of Directors) shall perform the duties
and exercise the powers of the President in the event of the President's absence
or disability.
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<PAGE> 10
(iii) Treasurer. The Treasurer, if any, shall have the responsibility
for maintaining the financial records of the corporation. The Treasurer shall
make such disbursements of the funds of the corporation as are authorized and
shall render from time to time an account of all such transactions and of the
financial condition of the corporation. The Treasurer shall have such other
powers and perform such other duties as the Board of Directors may from time to
time prescribe.
(iv) Secretary. The Secretary shall issue all authorized notices for,
and shall keep minutes of, all meetings of the stockholders and of the Board of
Directors. The Secretary shall have charge of the corporate books and shall have
such other powers and perform such other duties as the Board of Directors may
from time to time prescribe.
(v) Assistant Secretary and Assistant Treasurer. Each Assistant
Secretary, if any, and each Assistant Treasurer, if any, shall have such powers
and perform such duties as the Board of Directors may from time to time
prescribe.
(vi) Delegation of Authority. The Board of Directors may from time to
time delegate the powers or duties of any officer to any other officers or
agents, notwithstanding any provision hereof.
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ARTICLE V
Stock
Section 5.1. Certificates. Every holder of stock shall be entitled to
have a certificate signed by or in the name of the corporation by the Chairman
or Vice Chairman of the Board of Directors, if any, or the President or a Vice
President, and by the Treasurer or an Assistant Treasurer, or the Secretary or
an Assistant Secretary, of the corporation certifying the number of shares owned
by him in the corporation. Any of or all the signatures on the certificate may
be a facsimile. In case any officer, transfer agent, or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent, or registrar before such certificate
is issued, it may be issued by the corporation with the same effect as if he
were such officer, transfer agent, or registrar at the date of issue.
Section 5.2. Lost, Stolen or Destroyed Stock Certificates; Issuance of
New Certificates. The corporation may issue a new certificate of stock in the
place of any certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the corporation may require the owner of the lost,
stolen or destroyed certificate, or his legal representative, to give the
corporation a bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
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ARTICLE VI
Indemnification
Section 6.1. Right to Indemnification. The corporation shall indemnify
and hold harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person who was or is made or
is threatened to be made a party or is otherwise involved in any threatened,
pending, or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "proceeding") by reason of the fact that he,
or a person for whom he is the legal representative, is or was a director or
officer of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust, other enterprise or non-profit entity,
including service with respect to employee benefit plans (an "indemnitee"),
against all liability and loss suffered and expenses (including attorneys' fees)
reasonably incurred by such indemnitee. The corporation shall be required to
indemnify an indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if the initiation of such proceeding (or part
thereof) by the indemnitee was authorized by the Board of Directors of the
corporation.
Section 6.2. Advancement of Expenses. The corporation shall pay the
expenses (including attorneys' fees) incurred by an indemnitee in defending any
proceeding referred to in Section 6.1 in advance of its final disposition;
provided, however, that the payment of expenses incurred by an indemnitee in
advance of the final disposition of such proceeding shall be made only upon
receipt of an undertaking by the indemnitee to repay all amounts advanced if it
should ultimately be determined that the indemnitee is not entitled to be
indemnified under this Article or otherwise.
Section 6.3. Claims. If a claim for indemnification or advancement of
expenses under this Article is not paid in full within sixty (60) days after a
written claim therefor by the indemnitee has been received by the corporation,
the indemnitee may file suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the corporation shall have the burden
of proving that the indemnitee was not entitled to the requested indemnification
or advancement of expenses.
Section 6.4. Non-Exclusivity of Rights. The rights conferred on any
person by this Article shall not be exclusive of any other rights which such
person may have or hereafter acquire under any statute, provision of the
certificate of incorporation, these by-laws, agreement, vote of stockholders or
disinterested directors or otherwise.
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Section 6.5. Other Indemnification. The corporation's obligation, if
any, to indemnify any person who was or is serving at its request as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, enterprise or non-profit entity shall be reduced by any amount such
person may collect as indemnification from such other corporation, partnership,
joint venture, trust, enterprise or non-profit entity.
Section 6.6. Amendment or Repeal. Any repeal or modification of the
foregoing provisions of this Article shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification.
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ARTICLE VII
Miscellaneous
Section 7.1. Fiscal Year. The fiscal year of the corporation shall be
determined by resolution of the Board of Directors.
Section 7.2. Seal. The corporate seal shall have the name of the
corporation inscribed thereon and shall be in such form as may be approved from
time to time by the Board of Directors.
Section 7.3. Waiver of Notice of Meetings of Stockholders, Directors
and Committees. Any written waiver of notice, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of any
regular or special meeting of the stockholders, directors, or members of a
committee of directors need be specified in any written waiver of notice.
Section 7.4. Interested Directors; Quorum. No contract or transaction
between the corporation and one (1) or more of its directors or officers, or
between the corporation and any other corporation, partnership, association, or
other organization in which one (1) or more of its directors or officers are
directors or officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the director or officer is present at
or participates in the meeting of the Board of Directors or committee thereof
which authorizes the contract or transaction, or solely because his or their
votes are counted for such purpose, if: (i) the material facts as to his
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (ii) the material facts as to
his relationship or interest and as to the contract or transaction are disclosed
or are known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the stockholders;
or (iii) the contract or transaction is fair as to the corporation as of the
time it is authorized, approved or ratified, by the Board of Directors, a
committee thereof, or the stockholders. Common or interested directors may be
counted in determining the presence of a quorum at a meeting of the Board of
Directors or of a committee which authorizes the contract or transaction.
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Section 7.5. Form of Records. Any records maintained by the corporation
in the regular course of its business, including its stock ledger, books of
account, and minute books, may be kept on, or be in the form of, punch cards,
magnetic tape, photographs, microphotographs, or any other information storage
device, provided that the records so kept can be converted into clearly legible
form within a reasonable time.
Section 7.6. Amendment of By-Laws. These by-laws may be altered or
repealed, and new by-laws made, by the Board of Directors to the extent
permitted by the certificate of incorporation, but the stockholders may make
additional by-laws and may alter and repeal any by-laws whether adopted by them
or otherwise.
Date: September 21, 1995
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<PAGE> 1
EXHIBIT 3.21
CERTIFICATE OF INCORPORATION
OF
BETHESDA SERVICES HOLDING CORPORATION
1. The name of the corporation is Bethesda Services Holding
Corporation (the "Corporation").
2. The address of the Corporation's registered office in Delaware is
15 East North Street, Dover (Kent County), Delaware 19901. United Corporate
Services, Inc. is the Corporation's registered agent at that address.
3. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The Corporation shall have authority to issue a total of 3,000
shares of common stock, $.01 par value per share.
5. The name of the sole incorporator is Jennifer C. Foster and her
mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue,
New York, New York 10022.
6. The Corporation's board of directors shall have the power to
make, alter or repeal the by-laws of the Corporation.
7. The election of the Corporation's board of directors need not be
by written ballot.
8. The Corporation shall indemnify to the fullest extent permitted
by Section 145 of the Delaware General Corporation Law as amended from time to
time each person that such Section grants the Corporation the power to
indemnify.
9. No director shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director for
any act or omission occurring subsequent to the date when this provision becomes
effective, except that he may be liable (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law or (iv) for any transaction from which the director derived an improper
personal benefit.
<PAGE> 2
10. The Corporation elects not to be governed by Section 203 of the
Delaware General Corporation Law.
Dated: September 21, 1995
/s/ Jennifer C. Foster
---------------------------
Jennifer C. Foster
Sole Incorporator
2
<PAGE> 3
CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED OFFICE
AND/OR
REGISTERED AGENT
OF
BETHESDA SERVICES HOLDING CORPORATION
Pursuant to the provisions of Section 133 of Title 8 of the Delaware
Code, the Board of Directors of Bethesda Services Holding Corporation, a
Corporation of Delaware, on the 26th day of September, A.D., 1995, the
Corporation hereby resolve and order that the location of the Registered Office
of this Corporation within this State be, and the same hereby is 222 Delaware
Avenue, P.O. Box 2306, in the City of Wilmington, Zip Code 19899, in the county
of New Castle.
The name of the Registered Agent therein and in charge thereof upon
whom process against this Corporation may be served, is Delaware Corporate
Services Inc.
Bethesda Services Holding Corporation, a Corporation or Delaware, does
hereby certify that the foregoing is a true copy of a resolution adopted by the
Board of Directors at a meeting held as herein stated.
IN WITNESS WHEREOF, said Corporation has caused this Certificate to be
signed by its Assistant Secretary, on this 6th day of October, A.D., 1995.
BETHESDA SERVICES HOLDING CORPORATION
By: /s/ Steven R. Director
---------------------------------
Name: Steven R. Director
Title: Assistant Secretary
<PAGE> 4
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
BETHESDA SERVICES HOLDING CORPORATION
Bethesda Services Holding Corporation, a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), by and through the undersigned authorized officer, does hereby
certify that:
1. The Corporation's Board of Directors has duly adopted an amendment to
the Corporation's Certificate of Incorporation (the "Certificate of
Incorporation"), in accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware, as follows:
The Certificate of Incorporation shall be amended by striking
paragraph 1 in its entirety and inserting in lieu thereof the
following new paragraphs
1. The name of the corporation is Caterair New Zealand Limited (the
"Corporation").
2. The within amendment was duly adopted in accordance with Section 242
of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be duly executed this 3rd day of July, 1997.
BETHESDA SERVICES HOLDING CORPORATION
By: /s/ NORMAN J. SHUMAN
-------------------------------
Norman J. Shuman
Vice President
<PAGE> 1
EXHIBIT 3.22
BY-LAWS
OF
BETHESDA SERVICES HOLDING CORPORATION
ARTICLE I
Stockholders
Section 1.1. Annual Meetings. An annual meeting of stockholders shall
be held for the election of directors at such date, time and place, either
within or without the State of Delaware, as may be designated by resolution of
the Board of Directors from time to time. Any other proper business may be
transacted at the annual meeting.
Section 1.2. Special Meetings. Special meetings of stockholders for any
purpose or purposes may be called at any time by the Board of Directors, or by a
committee of the Board of Directors that has been duly designated by the Board
of Directors and whose powers and authority, as expressly provided in a
resolution of the Board of Directors, include the power to call such meetings,
but such special meetings may not be called by any other person or persons.
Section 1.3. Notice of Meetings. Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given that shall state the place, date and hour of the meeting and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called. Unless otherwise provided by law, the certificate of incorporation or
these by-laws, the written notice of any meeting shall be given not less than
ten (10) nor more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting. If mailed, such notice shall be
deemed to be given when deposited in the United States mail, postage prepaid,
directed to the stockholder at his address as it appears on the records of the
corporation.
Section 1.4. Adjournments. Any meeting of stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, notice of the
<PAGE> 2
adjourned meeting shall be given to each stockholder of record entitled to vote
at the meeting.
Section 1.5. Quorum. Except as otherwise provided by law, the
certificate of incorporation or these by-laws, at each meeting of stockholders
the presence in person or by proxy of the holders of a majority in voting power
of the outstanding shares of stock entitled to vote at the meeting shall be
necessary and sufficient to constitute a quorum. In the absence of a quorum, the
stockholders so present may, by majority vote, adjourn the meeting from time to
time in the manner provided in Section 1.4 of these by-laws until a quorum shall
attend. Shares of its own stock belonging to the corporation or to another
corporation, if a majority of the shares entitled to vote in the election of
directors of such other corporation is held, directly or indirectly, by the
corporation, shall neither be entitled to vote nor be counted for quorum
purposes; provided, however, that the foregoing shall not limit the right of the
corporation or any subsidiary of the corporation to vote stock, including but
not limited to its own stock, held by it in a fiduciary capacity.
Section 1.6. Organization. Meetings of stockholders shall be presided
over by the Chairman of the Board, if any, or in his absence by the Vice
Chairman of the Board, if any, or in his absence by the President, or in his
absence by a Vice President, or in the absence of the foregoing persons by a
chairman designated by the Board of Directors, or in the absence of such
designation by a chairman chosen at the meeting. The Secretary shall act as
secretary of the meeting, but in his absence the person presiding over the
meeting may appoint any person to act as secretary of the meeting. The person
presiding over the meeting shall announce at the meeting of stockholders the
date and time of the opening and the closing of the polls for each matter upon
which the stockholders will vote.
Section 1.7. Voting; Proxies. Except as otherwise provided by the
certificate of incorporation, each stockholder entitled to vote at any meeting
of stockholders shall be entitled to one (1) vote for each share of stock held
by him which has voting power upon the matter in question. Each stockholder
entitled to vote at a meeting of stockholders or to express consent or dissent
to corporate action in writing without a meeting may authorize another person or
persons to act for him by proxy, but no such proxy shall be voted or acted upon
after three (3) years from its date, unless the proxy provides for a longer
period. A proxy shall be irrevocable if it states that it is irrevocable and if,
and only as long as, it is coupled with an interest sufficient in law to support
an irrevocable power. A stockholder may revoke any proxy which is not
irrevocable by attending the meeting and voting in person or by filing with the
Secretary of the corporation an instrument in writing revoking the proxy or by
delivering a proxy in accordance with applicable law bearing a later date to the
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<PAGE> 3
Secretary of the corporation. Voting at meetings of stockholders need not be by
written ballot. At all meetings of stockholders for the election of directors a
plurality of the votes cast shall be sufficient to elect. All other elections
and questions shall, unless otherwise provided by law, the certificate of
incorporation or these by-laws, be decided by the affirmative vote of the
holders of a majority in voting power of the shares of stock which are present
in person or by proxy and entitled to vote thereon.
Section 1.8. Fixing Date for Determination of Stockholders of Record.
In order that the corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which record date: (i) in the case of determination of
stockholders entitled to vote at any meeting of stockholders or adjournment
thereof, shall, unless otherwise required by law, not be more than sixty (60)
nor less than ten (10) days before the date of such meeting; (ii) in the case of
determination of stockholders entitled to express consent to corporate action in
writing without a meeting, shall not be more than ten (10) days from the date
upon which the resolution fixing the record date is adopted by the Board of
Directors; and (iii) in the case of determination of stockholders for the
purpose of any other lawful action, shall not be more than sixty (60) days prior
to such other action. If no record date is fixed: (iv) the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held; (v) the record date
for determining stockholders entitled to express consent to corporate action in
writing without a meeting, when no prior action of the Board of Directors is
required by law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
corporation in accordance with applicable law, or, if prior action by the Board
of Directors is required by law, shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior action; and
(vi) the record date for determining stockholders for the purpose of any other
lawful action, shall be at the close of business on the day on which the Board
of Directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record
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<PAGE> 4
date for the adjourned meeting.
Section 1.9. List of Stockholders Entitled to Vote. The Secretary shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof and may be inspected by any stockholder who is present. Upon the willful
neglect or refusal of the directors to produce such a list at any meeting for
the election of directors, they shall be ineligible for election to any office
at such meeting. Except as otherwise provided by law, the stock ledger shall be
the only evidence as to who are the stockholders entitled (i) to examine the
stock ledger, the list of stockholders entitled to vote at the meeting or the
books of the corporation, (ii) to vote in person or by proxy at any meeting of
stockholders, or (iii) to express consent or dissent to corporate action in
writing without a meeting.
Section 1.10. Action By Consent of Stockholders. Unless otherwise
restricted by the certificate of incorporation, any action required or permitted
to be taken at any annual or special meeting of the stockholders may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted and shall be
delivered (by hand or by certified or registered mail, return receipt requested)
to the corporation by delivery to its registered office in the State of
Delaware, its principal place of business, or an officer or agent of the
corporation having custody of the book in which minutes of proceedings of
meetings of stockholders are recorded. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.
Section 1.11. Inspectors of Election. The corporation may, and shall if
required by law, in advance of any meeting of stockholders, appoint one (1) or
more inspectors of election, who may be employees of the corporation, to act at
the meeting or any adjournment thereof and to make a written report thereof. The
corporation may designate one (1) or more persons as alternate
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<PAGE> 5
inspectors to replace any inspector who fails to act. In the event that no
inspector so appointed or designated is able to act at a meeting of the
stockholders, the person presiding at the meeting shall appoint one (1) or more
inspectors to act at the meeting. Each inspector, before entering upon the
discharge of his or her duties, shall take and sign an oath to execute
faithfully the duties of inspector with strict impartiality and according to the
best of his or her ability. The inspector or inspectors so appointed or
designated shall (i) ascertain the number of shares of capital stock of the
corporation outstanding and the voting power of each such share, (ii) determine
the shares of capital stock of the corporation represented at the meeting and
the validity of proxies and ballots, (iii) count all votes and ballots, (iv)
determine and retain for a reasonable period a record of the disposition of any
challenges made to any determination by the inspectors, and (v) certify their
determination of the number of shares of capital stock of the corporation
represented at the meeting and such inspector's or inspectors' count of all
votes and ballots. Such certification and report shall specify such other
information as may be required by law. In determining validity and counting of
proxies and ballots cast at any meeting of stockholders of the corporation, the
inspectors may consider such information as is permitted by applicable law. No
person who is a candidate for an office at an election may serve as an inspector
at such election.
Section 1.12. Conduct of Meetings. The Board of Directors of the
corporation may adopt by resolution such rules and regulations for the conduct
of the meeting of stockholders as it shall deem appropriate. Except to the
extent inconsistent with such rules and regulations as adopted by the Board of
Directors, the person presiding over any meeting of stockholders shall have the
right and authority to prescribe such rules, regulations and procedures and to
do all such acts as, in the judgment of such person, are appropriate for the
proper conduct of the meeting. Such rules, regulations or procedures, whether
adopted by the Board of Directors or prescribed by the person presiding over the
meeting, may include, without limitation, the following: (i) the establishment
of an agenda or order of business for the meeting; (ii) rules and procedures for
maintaining order at the meeting and the safety of those present; (iii)
limitations on attendance at or participation in the meeting to stockholders of
record of the corporation, their duly authorized and constituted proxies or such
other persons as the person presiding over the meeting shall determine; (iv)
restrictions on entry to the meeting after the time fixed for the commencement
thereof; and (v) limitations on the time allotted to questions or comments by
participants. Unless and to the extent determined by the Board of Directors or
the person presiding over the meeting, meetings of stockholders shall not be
required to be held in accordance with the rules of parliamentary procedure.
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<PAGE> 6
ARTICLE II
Board of Directors
Section 2.1. Number; Qualifications. The Board of Directors shall
consist of one (1) or more members. The number of members comprising the Board
of Directors initially shall be the number of persons named as directors in the
certificate of incorporation (or if no person is so named, the number of persons
elected by the Incorporator). The number of members comprising the Board of
Directors thereafter shall be determined from time to time by resolution of the
Board of Directors. Directors need not be stockholders.
Section 2.2. Election; Resignation; Removal; Vacancies. The Board of
Directors initially shall consist of the person or persons named as Directors in
the certificate of incorporation (or, if no person is so named, the person or
persons elected by the Incorporator), and each director so elected shall hold
office until his successor is elected and qualified or until his earlier death,
resignation, or removal. At the first annual meeting of stockholders and at each
annual meeting thereafter, the stockholders shall elect directors each of whom
shall hold office until his successor is elected and qualified or until his
earlier death, resignation, or removal. Any director may resign at any time upon
written notice to the corporation. Any newly created directorship or any vacancy
occurring in the Board of Directors for any cause may be filled by a majority of
the remaining members of the Board of Directors, although such majority is less
than a quorum, or by a plurality of the votes cast at a meeting of stockholders,
and each director so elected shall hold office until the expiration of the term
of office of the director whom he has replaced, or until his successor is
elected and qualified, or until his earlier death, resignation, or removal.
Section 2.3. Regular Meetings. Regular meetings of the Board of
Directors may be held at such places within or without the State of Delaware and
at such times as the Board of Directors may from time to time determine, and if
so determined notices thereof need not be given.
Section 2.4. Special Meetings. Special meetings of the Board of
Directors may be held at any time or place within or without the State of
Delaware whenever called by the President, any Vice President, the Secretary, or
by any member of the Board of Directors. Notice of a special meeting of the
Board of Directors shall be given by the person or persons calling the meeting
at least twenty-four (24) hours before the special meeting.
Section 2.5. Telephonic Meetings Permitted. Members of the Board of
Directors, or any committee designated by the Board of
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Directors, may participate in a meeting thereof by means of conference telephone
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, and participation in a meeting pursuant to
this by-law shall constitute presence in person at such meeting.
Section 2.6. Quorum; Vote Required for Action. At all meetings of the
Board of Directors a majority of the whole Board of Directors shall constitute a
quorum for the transaction of business. Except in cases in which the certificate
of incorporation, these by-laws or applicable law otherwise provides, the vote
of a majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
Section 2.7. Organization. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board, if any, or in his absence by the
Vice Chairman of the Board, if any, or in his absence by the President, or in
the absence of the foregoing persons by a chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his absence the person
presiding over the meeting may appoint any person to act as secretary of the
meeting.
Section 2.8. Informal Action by Directors. Unless otherwise restricted
by the certificate of incorporation or these by-laws, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board of
Directors or such committee, as the case may be, consent thereto in writing, and
the writing or writings are filed with the minutes of proceedings of the Board
of Directors or committee.
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ARTICLE III
Committees
Section 3.1. Committees. The Board of Directors may, by resolution
passed by a majority of the whole Board of Directors, designate one (1) or more
committees, each committee to consist of one (1) or more of the directors of the
corporation. The Board of Directors may designate one (1) or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of a
member of the committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member. Any such committee,
to the extent permitted by law and to the extent provided in the resolution of
the Board of Directors, shall have and may exercise all the powers and authority
of the Board of Directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it.
Section 3.2. Committee Rules. Unless the Board of Directors otherwise
provides, each committee designated by the Board of Directors may make, alter
and repeal rules for the conduct of its business. In the absence of such rules
each committee shall conduct its business in the same manner as the Board of
Directors conducts its business pursuant to Article II of these by-laws.
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ARTICLE IV
Officers
Section 4.1. Executive Officers; Election; Qualifications; Term of
Office; Resignation; Removal; Vacancies. The Board of Directors shall elect a
President and Secretary, and it may, if it so determines, choose a Chairman of
the Board and a Vice Chairman of the Board from among its members. The Board of
Directors may also choose one (1) or more Vice Presidents, one (1) or more
Assistant Secretaries, a Treasurer and one (1) or more Assistant Treasurers.
Each such officer shall hold office until the first meeting of the Board of
Directors after the annual meeting of stockholders next succeeding his election,
and until his successor is elected and qualified or until his earlier death,
resignation, or removal. Any officer may resign at any time upon written notice
to the corporation. The Board of Directors may remove any officer with or
without cause at any time, but such removal shall be without prejudice to the
contractual rights of such officer, if any, with the corporation. Any number of
offices may be held by the same person. Any vacancy occurring in any office of
the corporation by death, resignation, removal, or otherwise may be filled for
the unexpired portion of the term by the Board of Directors at any regular or
special meeting.
Section 4.2. Powers and Duties of Executive Officers.
(i) President. The President shall be the chief executive
officer of the corporation. Subject to the provisions of the certificate of
incorporation, these by-laws, and the direction of the Board of Directors, the
President shall have the responsibility for the general management and control
of the business and affairs of the corporation and shall perform all duties and
have all powers which are commonly incident to the office of chief executive or
which are delegated to him or her by the Board of Directors. The President shall
have power to execute in the name of the corporation all contracts, agreements,
deeds, bonds, mortgages, and other obligations and instruments of the
corporation which are authorized, and to affix the corporate seal thereto. The
President shall have general supervision and direction of all of the other
officers, employees, and agents of the corporation.
(ii) Vice President. Each Vice President, if any, shall have
such powers and perform such duties as the Board of Directors may from time to
time prescribe. The Vice President (if only one (1) Vice President is chosen by
the Board) or one (1) Vice President designated by the Board (if two (2) or more
Vice Presidents are chosen by the Board of Directors) shall perform the duties
and exercise the powers of the President in the event of the President's absence
or disability.
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(iii) Treasurer. The Treasurer, if any, shall have the
responsibility for maintaining the financial records of the corporation. The
Treasurer shall make such disbursements of the funds of the corporation as are
authorized and shall render from time to time an account of all such
transactions and of the financial condition of the corporation. The Treasurer
shall have such other powers and perform such other duties as the Board of
Directors may from time to time prescribe.
(iv) Secretary. The Secretary shall issue all authorized
notices for, and shall keep minutes of, all meetings of the stockholders and of
the Board of Directors. The Secretary shall have charge of the corporate books
and shall have such other powers and perform such other duties as the Board of
Directors may from time to time prescribe.
(v) Assistant Secretary and Assistant Treasurer. Each
Assistant Secretary, if any, and each Assistant Treasurer, if any, shall have
such powers and perform such duties as the Board of Directors may from time to
time prescribe.
(vi) Delegation of Authority. The Board of Directors may from
time to time delegate the powers or duties of any officer to any other officers
or agents, notwithstanding any provision hereof.
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ARTICLE V
Stock
Section 5.1. Certificates. Every holder of stock shall be entitled to
have a certificate signed by or in the name of the corporation by the Chairman
or Vice Chairman of the Board of Directors, if any, or the President or a Vice
President, and by the Treasurer or an Assistant Treasurer, or the Secretary or
an Assistant Secretary, of the corporation certifying the number of shares owned
by him in the corporation. Any of or all the signatures on the certificate may
be a facsimile. In case any officer, transfer agent, or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent, or registrar before such certificate
is issued, it may be issued by the corporation with the same effect as if he
were such officer, transfer agent, or registrar at the date of issue.
Section 5.2. Lost, Stolen or Destroyed Stock Certificates; Issuance of
New Certificates. The corporation may issue a new certificate of stock in the
place of any certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the corporation may require the owner of the lost,
stolen or destroyed certificate, or his legal representative, to give the
corporation a bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
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ARTICLE VI
Indemnification
Section 6.1. Right to Indemnification. The corporation shall indemnify
and hold harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person who was or is made or
is threatened to be made a party or is otherwise involved in any threatened,
pending, or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "proceeding") by reason of the fact that he,
or a person for whom he is the legal representative, is or was a director or
officer of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust, other enterprise or non-profit entity,
including service with respect to employee benefit plans (an "indemnitee"),
against all liability and loss suffered and expenses (including attorneys' fees)
reasonably incurred by such indemnitee. The corporation shall be required to
indemnify an indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if the initiation of such proceeding (or part
thereof) by the indemnitee was authorized by the Board of Directors of the
corporation.
Section 6.2. Advancement of Expenses. The corporation shall pay the
expenses (including attorneys' fees) incurred by an indemnitee in defending any
proceeding referred to in Section 6.1 in advance of its final disposition;
provided, however, that the payment of expenses incurred by an indemnitee in
advance of the final disposition of such proceeding shall be made only upon
receipt of an undertaking by the indemnitee to repay all amounts advanced if it
should ultimately be determined that the indemnitee is not entitled to be
indemnified under this Article or otherwise.
Section 6.3. Claims. If a claim for indemnification or advancement of
expenses under this Article is not paid in full within sixty (60) days after a
written claim therefor by the indemnitee has been received by the corporation,
the indemnitee may file suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the corporation shall have the burden
of proving that the indemnitee was not entitled to the requested indemnification
or advancement of expenses.
Section 6.4. Non-Exclusivity of Rights. The rights conferred on any
person by this Article shall not be exclusive of any other rights which such
person may have or hereafter acquire under any statute, provision of the
certificate of incorporation, these by-laws, agreement, vote of stockholders or
disinterested directors or otherwise.
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Section 6.5. Other Indemnification. The corporation's obligation, if
any, to indemnify any person who was or is serving at its request as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, enterprise or non-profit entity shall be reduced by any amount such
person may collect as indemnification from such other corporation, partnership,
joint venture, trust, enterprise or non-profit entity.
Section 6.6. Amendment or Repeal. Any repeal or modification of the
foregoing provisions of this Article shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification.
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ARTICLE VII
Miscellaneous
Section 7.1. Fiscal Year. The fiscal year of the corporation shall be
determined by resolution of the Board of Directors.
Section 7.2. Seal. The corporate seal shall have the name of the
corporation inscribed thereon and shall be in such form as may be approved from
time to time by the Board of Directors.
Section 7.3. Waiver of Notice of Meetings of Stockholders, Directors
and Committees. Any written waiver of notice, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of any
regular or special meeting of the stockholders, directors, or members of a
committee of directors need be specified in any written waiver of notice.
Section 7.4. Interested Directors; Quorum. No contract or transaction
between the corporation and one (1) or more of its directors or officers, or
between the corporation and any other corporation, partnership, association, or
other organization in which one (1) or more of its directors or officers are
directors or officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the director or officer is present at
or participates in the meeting of the Board of Directors or committee thereof
which authorizes the contract or transaction, or solely because his or their
votes are counted for such purpose, if: (i) the material facts as to his
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (ii) the material facts as to
his relationship or interest and as to the contract or transaction are disclosed
or are known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the stockholders;
or (iii) the contract or transaction is fair as to the corporation as of the
time it is authorized, approved or ratified, by the Board of Directors, a
committee thereof, or the stockholders. Common or interested directors may be
counted in determining the presence of a quorum at a meeting of the Board of
Directors or of a committee which authorizes the contract or transaction.
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Section 7.5. Form of Records. Any records maintained by the corporation
in the regular course of its business, including its stock ledger, books of
account, and minute books, may be kept on, or be in the form of, punch cards,
magnetic tape, photographs, microphotographs, or any other information storage
device, provided that the records so kept can be converted into clearly legible
form within a reasonable time.
Section 7.6. Amendment of By-Laws. These by-laws may be altered or
repealed, and new by-laws made, by the Board of Directors to the extent
permitted by the certificate of incorporation, but the stockholders may make
additional by-laws and may alter and repeal any by-laws whether adopted by them
or otherwise.
Date: September 21, 1995
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<PAGE> 1
EXHIBIT 3.23
CERTIFICATE OF INCORPORATION
OF
SKY CHEFS FINANCE CORP.
1. The name of the corporation is Sky Chefs Finance Corp.
2. The address of the corporation's registered office in Delaware is
410 South State Street, Dover (Kent County), Delaware 19901. United Corporate
Services, Inc. is the cor- poration's registered agent at that address.
3. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The corporation shall have authority to issue a total of 1000 shares
of common stock of the par value of $0.01 per share.
5. The name of the sole incorporator is Andrew M. Arsiotis and his
mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue,
New York, New York 10022.
6. The Board of Directors shall have the power to make, alter or repeal
the by-laws of the corporation.
7. The election of the Board of Directors need not be by written
ballot.
8. The corporation shall Indemnify to the fullest extent permitted by
Section 145 of the General Corporation Law of Delaware as amended from time to
time each person that such Section grants the corporation the power to
indemnify.
9. No director shall be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director for
any act or omission occurring subsequent to the date when this provision becomes
effective, except that he may be liable (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law or (iv) for any transaction from which the director derived an improper
personal benefit.
Dated: December 14, 1987
/s/ Andrew M. Arsiotis
----------------------
Andrew M. Arsiotis
Sole Incorporator
<PAGE> 2
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF
SKY CHEFS FINANCE CORP.
Pursuant to Section 242 of the
General Corporation Law of Delaware
The undersigned, the President of Sky Chefs Finance Corp., a Delaware
corporation (the "Corporation"), does hereby certify as follows:
1. Paragraph 1 of the Certificate of Incorporation of the
Corporation is hereby amended to read in its entirety as follows:
"1. The name of the Corporation is Onex Ohio Finance
Corp."
2. The foregoing amendment was approved by the board of
directors of the Corporation in accordance with the provisions of
Section 242(b) of the General Corporation Law of Delaware, and
consented to by the holders of all of the outstanding common stock of
the Corporation in accordance with the provisions of Section 228 of the
General Corporation Law of Delaware.
Dated: November 29, 1993
/s/ Donald F. West
----------------------------------
Donald F. West, President
Attest:
/s/ James J. O'Neill
- -------------------------------
James J. O'Neill, Secretary
<PAGE> 1
EXHIBIT 3.24
BY-LAW
OF
SKY CHEFS FINANCE CORP.
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be
called by resolution of the Board or by the chairman of the board or the
president and shall be called by the president or secretary upon the written
request (stating the purpose or purposes of the meeting) of a majority of the
directors then in office or of the holders of a majority of the outstanding
shares entitled to vote. Only business related to the purposes set forth in the
notice of the meeting may be transacted at a special meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be
held in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
<PAGE> 2
1.4 Notice of Meetings; Waiver of Notice. Written notice of each
meeting of stockholders shall be given to each stockholder entitled to vote at
the meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If mailed, notice shall be considered
given when mailed to a stockholder at his address on the corporation's records.
The attendance of any stockholder at a meeting, without protesting at the
beginning of the meeting that the meeting is not lawfully called or convened,
shall constitute a waiver of notice by him.
1.5 Quorum. At any meeting of stockholders, the presence in person or
by proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum a majority in voting interest of those present or, if no stockholders are
present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a
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quorum is present any action may be taken which might have been taken at the
meeting as originally called. No notice of an adjourned meeting need be given if
the time and place are announced at the meeting at which the adjournment is
taken except that, if adjournment is for more than thirty days or if, after the
adjournment, a new record date is fixed for the meeting, notice of the adjourned
meeting shall be given pursuant to Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to
one vote for every share registered in his name. Corporate action to be taken by
stockholder vote, including the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 1.8 of these by-laws. Directors shall be elected
in the manner provided in Section 2.1 of these by-laws. Voting need not be by
ballot unless requested by a stockholder at the meeting or ordered by the
chairman of the meeting; however, all elections of directors shall be by written
ballot, unless otherwise provided in the certificate of incorporation. Each
stockholder entitled to vote at any meeting of stockholders or to express
consent to or dissent from corporate action in writing without a meeting may
authorize another person to act for him by proxy. Every proxy must be signed by
the stockholder or his attorney-in-fact. No proxy shall be valid after three
years from its date unless it provides otherwise.
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1.7 List of Stockholders. Not less than 10 days prior to the date of
any meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in his name. For a period of not less than 10 days prior to
the meeting, the list shall be available during ordinary business hours for
inspection by any stockholder for any purpose germane to the meeting. During
this period, the list shall be kept either (a) at a place within the city where
the meeting is to be held, if that place shall have been specified in the notice
of the meeting, or (b) if not so specified, at the place where the meeting is to
be held. The list shall also be available for inspection by stockholders at the
time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or
permitted to be taken at any meeting of stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voting. Prompt notice of the taking of any such
action shall be given to those stockholders who did not consent in writing.
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2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business
of the corporation shall be managed by the Board, which shall consist of one or
more directors. The number of directors may be changed by resolution of a
majority of the Board or by the stockholders, but no decrease may shorten the
term of any incumbent director. Directors shall be elected at each annual
meeting of stockholders and shall hold office until the next annual meeting of
stockholders and until the election and qualification of their respective
successors, subject to the provisions of Section 2.9. As used in these by-laws,
the term "entire Board" means the total number of directors which the
corporation would have if there were no vacancies on the Board.
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
except as provided in Section 2.10 of these by-laws. Action of the Board shall
be authorized by the vote of a majority of the directors present at the time of
the vote if there is a quorum, unless otherwise provided by law or these
by-laws. In the absence of a quorum a majority of the directors present may
adjourn any meeting from time to time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
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2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by
the chairman of the board, the president or by any of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place
of each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was
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not lawfully called or convened. Notice of any adjourned meeting need not be
given, other than by announcement at the meeting at which the adjournment is
taken.
2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
2.8 Participation in Board or Committee Meetings by Conference
Telephone. Any or all members of the Board or of any committee of the Board may
participate in a meeting of the Board or of the committee by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at the meeting.
2.9 Resignation and Removal of Directors. Any director may resign at
any time by delivering his resignation in writing to the president or secretary
of the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the
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directors may be removed at any time, either with or without cause, by vote of
the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the
Board determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority
of the entire Board, may designate an Executive Committee of one or more
directors which shall have all the powers and authority of the Board, except as
otherwise provided in the resolution, section 141(c) of the Delaware General
Corporation Law, or any other applicable law. The members of the Executive
Committee shall serve at the pleasure of the Board. All action of the Executive
Committee shall be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall
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serve at the Board's pleasure and have such powers and duties as the Board
determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall
be the chairman of the board, the president, one or more vice presidents
(including executive or senior vice presidents, if the Board so determines), a
secretary and a treasurer. Any two or more offices may be held by the same
person. The Board may require any officer, agent or employee to give security
for the faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next
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annual meeting of the Board and until the election of his successor, subject to
the provisions of Section 4.4.
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
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4.6 Chairman of the Board. The chairman of the board shall preside at
all meetings of the Board and of the stockholders and shall have such powers and
duties as the Board assigns to him.
4.7 The President. The president shall be subject to the control of the
Board and the chairman of the board, have general supervision over the business
of the corporation and shall have such other powers and duties as presidents of
corporations usually have or as the Board assigns to him.
4.8 Vice President. Each vice president shall have such powers and
duties as the Board or the president assigns to him.
4.9 The Treasurer. The treasurer shall be the chief financial officer
of the corporation and shall be in charge of the corporation's books and
accounts. Subject to the control of the Board, he shall have such other powers
and duties as the Board or the president assigns to him.
4.10 The Secretary. The secretary shall be the secretary of, and keep
the minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the secretary from
11
<PAGE> 12
any meeting, the minutes shall be kept by the person appointed for that purpose
by the presiding officer.
4.11 Salaries. The Board may fix the officers' salaries, if any, or it
may authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the chairman of the board, the president or a vice president and by the
secretary or an assistant secretary, or the treasurer or an assistant treasurer,
and shall be sealed with the corporation's seal or a facsimile of the seal. Any
or all of the signatures on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be
12
<PAGE> 13
more than 60 or less than 10 days before the date of the meeting or more than 60
days before any other action.
6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other
corporations which are held by the corporation may be represented and voted by
the president or a vice president of this corporation or by proxy or proxies
appointed by one of them. The Board may, however, appoint some other person to
vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders.
13
<PAGE> 1
EXHIBIT 3.25
CERTIFICATE OF INCORPORATION
OF
SKY CHEFS FINANCE CORP. II
1. The name of the corporation is Sky Chefs Finance Corp. II.
2. The address of the corporation's registered office in Delaware is
410 South State Street, Dover (Kent County), Delaware 19901. United Corporate
Services, Inc. is the corporation's registered agent at that address.
3. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The corporation shall have authority to issue a total of 1000 shares
of common stock of the par value of $0.01 per share.
5. The name of the sole incorporator is Philip H. Ehrlich and his
mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue,
New York, New York 10022.
6. The Board of Directors shall have the power to make, alter or repeal
the by-laws of the corporation.
7. The election of the Board of Directors need not be by written
ballot.
8. The corporation shall indemnify to the fullest extent permitted by
Section 145 of the General Corporation Law of Delaware as amended from time to
time each person that such Section grants the corporation the power to
indemnify.
9. No director shall be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director for
any act or omission occurring subsequent to the date when this provision becomes
effective, except that he may be liable (i) for any breach of the director's
duty of loyalty to the corporation or its
<PAGE> 2
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware General Corporation Law or (iv) for any transaction from which the
director derived an improper personal benefit.
Dated: February 15, 1989
/s/ Philip H. Ehrlich
---------------------
Philip H. Ehrlich
Sole Incorporator
<PAGE> 3
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF
SKY CHEFS FINANCE CORP. II
Pursuant to Section 242 of the
General Corporation Law of Delaware
The undersigned, the President of Sky Chefs Finance Corp. II, a
Delaware corporation (the "Corporation"), does hereby certify as follows:
1. Paragraph 1 of the Certificate of Incorporation of the
Corporation is hereby amended to read in its entirety as follows:
"1. The name of the Corporation is Onex Ohio Finance
Corp. II"
2. The foregoing amendment was approved by the board of
directors of the Corporation in accordance with the provisions of
Section 242(b) of the General Corporation Law of Delaware, and
consented to by holders of all of the outstanding common stock of the
Corporation in accordance with the provisions of Section 228 of the
General Corporation Law of Delaware.
Dated: November 29, 1993
Attest: /s/ Donald F. West
-------------------------
/s/ James J. O'Neill Donald F. West, President
- ---------------------------
James J. O'Neill, Secretary
<PAGE> 1
EXHIBIT 3.26
BY-LAWS
of
SKY CHEFS FINANCE CORP. II
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be called
by resolution of the Board or by the president and shall be called by the
president or secretary upon the written request (stating the purpose or purposes
of the meeting) of a majority of the directors then in office or of the holders
of a majority of the outstanding shares entitled to vote. Only business related
to the purposes set forth in the notice of the meeting may be transacted at a
special meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be held
in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each meeting
of stockholders shall be given to each stockholder entitled to vote at the
meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If
<PAGE> 2
mailed, notice shall be considered given when mailed to a stockholder at his
address on the corporation's records. The attendance of any stockholder at a
meeting, without protesting at the beginning of the meeting that the meeting is
not lawfully called or convened, shall constitute a waiver of notice by him.
1.5 Quorum. At any meeting of stockholders, the presence in person or by
proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum a majority in voting interest of those present or, if no stockholders are
present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are announced at the meeting at
which the adjournment is taken except that, if adjournment is for more than
thirty days or if, after the adjournment, a new record date is fixed for the
meeting, notice of the adjourned meeting shall be given pursuant to Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to one
vote for every share registered in his name. Corporate action to be taken by
stockholder vote, including the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 1.8 of these by-laws. Voting need not be by ballot
unless requested by a stockholder at the meeting or ordered by the chairman of
the meeting; however, all elections of directors shall be by written ballot,
unless otherwise provided in the certificate of incorporation. Each stockholder
entitled to vote at any meeting of stockholders or to express consent to or
dissent from corporate action in writing without a meeting may authorize another
person to act for him by proxy. Every proxy must be signed by the stockholder or
his attorney-in-fact. No proxy shall be valid after three years from its date
unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of any
meeting of stockholders, the secretary of the
2
<PAGE> 3
corporation shall prepare a complete list of stockholders entitled to vote at
the meeting, arranged in alphabetical order and showing the address of each
stockholder and the number of shares registered in his name. For a period of not
less than 10 days prior to the meeting, the list shall be available during
ordinary business hours for inspection by any stockholder for any purpose
germane to the meeting. During this period, the list shall be kept either (a) at
a place within the city where the meeting is to be held, if that place shall
have been specified in the notice of the meeting, or (b) if not so specified, at
the place where the meeting is to be held. The list shall also be available for
inspection by stockholders at the time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or permitted
to be taken at any meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting. Prompt notice of the taking of any such action shall be
given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business of
the corporation shall be managed by the Board, which shall consist of one or
more directors. The number of directors may be changed by resolution of a
majority of the Board or by the stockholders, but no decrease may shorten the
term of any incumbent director. Directors shall be elected at each annual
meeting of stockholders and shall hold office until the next annual meeting of
stockholders and until the election and qualification of their respective
successors, subject to the provisions of Section 2.9.
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
except as provided in
3
<PAGE> 4
Section 2.10 of these by-laws. Action of the Board shall be authorized by the
vote of a majority of the directors present at the time of the vote if there is
a quorum, unless otherwise provided by law or these by-laws. In the absence of a
quorum a majority of the directors present may adjourn any meeting from time to
time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by the
president or by any of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place of
each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
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<PAGE> 5
2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
2.8 Participation in Board or Committee Meetings by Conference Telephone.
Any or all members of the Board or of any committee of the Board may participate
in a meeting of the Board or of the committee by means of a conference telephone
or similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.
2.9 Resignation and Removal of Directors. Any director may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the Board
determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority of
the entire Board, may designate an Executive
5
<PAGE> 6
Committee of one or more directors which shall have all the powers and authority
of the Board, except as otherwise provided in the resolution, section 141(c) of
the Delaware General Corporation Law, or any other applicable law. The members
of the Executive Committee shall serve at the pleasure of the Board. All action
of the Executive Committee shall be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall be
the president, one or more vice presidents (including an executive vice
president, if the Board so determines), a secretary and a treasurer. Any two or
more offices may be held by the same person. The Board may require any officer,
agent or employee to give security for the faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
6
<PAGE> 7
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 The President. The president shall be the chief executive officer of
the corporation and shall preside at all meetings of the Board and of the
stockholders. Subject to the control of the Board, he shall have general
supervision over the business of the corporation and shall have such other
powers and duties as presidents of corporations usually have or as the Board
assigns to him.
4.7 Vice President. Each vice president shall have such powers and duties
as the Board or the president assigns to him.
4.8 The Treasurer. The treasurer shall be the chief financial officer of
the corporation and shall be in charge of the corporation's books and accounts.
Subject to the control of the Board, he shall have such other powers and duties
as the Board or the president assigns to him.
7
<PAGE> 8
4.9 The Secretary. The secretary shall be the secretary of, and keep the
minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the secretary from any meeting, the minutes shall be kept by the person
appointed for that purpose by the presiding officer.
4.10 Salaries. The Board may fix the officers' salaries, if any, or it may
authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the president or a vice president and by the secretary or an assistant
secretary, or the treasurer or an assistant treasurer, and shall be sealed with
the corporation's seal or a facsimile of the seal. Any or all of the signatures
on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
8
<PAGE> 9
6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other corporations
which are held by the corporation may be represented and voted by the president
or a vice president of this corporation or by proxy or proxies appointed by one
of them. The Board may, however, appoint some other person to vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders.
9
<PAGE> 1
EXHIBIT 3.27
CERTIFICATE OF INCORPORATION
OF
SKY CHEFS EQUITY CORP.
1. The name of the corporation is Sky Chefs Equity Corp.
2. The address of the corporation's registered office in Delaware is
410 South State Street, Dover (Kent County), Delaware 19901. United Corporate
Services, Inc. is the corporation's registered agent at that address.
3. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The corporation shall have authority to issue a total of 1000 shares
of common stock of the par value of $0.01 per share.
5. The name of the sole incorporator is Andrew M. Arsiotis and his
mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue,
New York, New York 10022.
6. The Board of Directors shall have the power to make, alter or repeal
the by-laws of the corporation.
7. The election of the Board of Directors need not be by written
ballot.
8. The corporation shall indemnify to the fullest extent permitted by
Section 145 of the General Corporation Law of Delaware as amended from time to
time each person that such Section grants the corporation the power to
indemnify.
9. No director shall be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director for
any act or omission occurring subsequent to the date when this provision becomes
effective, except that he may be liable (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law or (iv) for any transaction from which the director derived an improper
personal benefit.
Dated: April 24, 1987
/s/ Andrew M. Arsiotis
-----------------------------
Andrew M. Arsiotis
Sole Incorporator
<PAGE> 2
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF
SKY CHEFS EQUITY CORP.
Pursuant to Section 242 of the
General Corporation Law of Delaware
The undersigned, the President of Sky Chefs Equity Corp., a Delaware
corporation (the "Corporation"), does hereby certify as follows:
1. Paragraph 1 of the Certificate of Incorporation of the
Corporation is hereby amended to read in its entirety as follows:
"1. The name of the Corporation is
Onex Ohio Equity Corp."
2. The foregoing amendment was approved by the board of
directors of the Corporation in accordance with the provisions of
Section 242(b) of the General Corporation Law of Delaware, and
consented to by the holders of all of the outstanding common stock of
the Corporation in accordance with the provisions of Section 228 of the
General Corporation Law of Delaware.
Dated: November 29, 1993
/s/ Donald F. West
---------------------------------
Donald F. West, President
Attest:
/s/ James J. O'Neill
- --------------------------------
James J. O'Neill, Secretary
<PAGE> 1
EXHIBIT 3.28
BY-LAWS
OF
SKY CHEFS EQUITY CORP.
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be
called by resolution of the Board or by the chairman of the board or the
president and shall be called by the president or secretary upon the written
request (stating the purpose or purposes of the meeting) of a majority of the
directors then in office or of the holders of a majority of the outstanding
shares entitled to vote. Only business related to the purposes set forth in the
notice of the meeting may be transacted at a special meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be
held in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each
meeting of stockholders shall be given to each stockholder entitled to vote at
the meeting, except that (a) it shall not be necessary to give notice to any
stockholder
<PAGE> 2
who submits a signed waiver of notice before or after the meeting, and (b) no
notice of an adjourned meeting need be given except when required under Section
1.5 of these by-laws or by law. Each notice of a meeting shall be given,
personally or by mail, not less than 10 nor more than 60 days before the meeting
and shall state the time and place of the meeting, and unless it is the annual
meeting, shall state at whose direction or request the meeting is called and the
purposes for which it is called. If mailed, notice shall be considered given
when mailed to a stockholder at his address on the corporation's records. The
attendance of any stockholder at a meeting, without protesting at the beginning
of the meeting that the meeting is not lawfully called or convened, shall
constitute a waiver of notice by him.
1.5 Quorum. At any meeting of stockholders, the presence in person or
by proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum a majority in voting interest of those present or, if no stockholders are
present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are announced at the meeting at
which the adjournment is taken ex-
2
<PAGE> 3
cept that, if adjournment is for more than thirty days or if, after the
adjournment, a new record date is fixed for the meeting, notice of the adjourned
meeting shall be given pursuant to Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to
one vote for every share registered in his name. Corporate action to be taken by
stockholder vote, including the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 1.8 of these by-laws. Directors shall be elected
in the manner provided in Section 2.1 of these by-laws. Voting need not be by
ballot unless requested by a stockholder at the meeting or ordered by the
chairman of the meeting; however, all elections of directors shall be by written
ballot, unless otherwise provided in the certificate of incorporation. Each
stockholder entitled to vote at any meeting of stockholders or to express
consent to or dissent from corporate action in writing without a meeting may
authorize another person to act for him by proxy. Every proxy must be signed by
the stockholder or his attorney-in-fact. No proxy shall be valid after three
years from its date unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of
any meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in al-
3
<PAGE> 4
phabetical order and showing the address of each stockholder and the number of
shares registered in his name. For a period of not less than 10 days prior to
the meeting, the list shall be available during ordinary business hours for
inspection by any stockholder for any purpose germane to the meeting. During
this period, the list shall be kept either (a) at a place within the city where
the meeting is to be held, if that place shall have been specified in the notice
of the meeting, or (b) if not so specified, at the place where the meeting is to
be held. The list shall also be available for inspection by stockholders at the
time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or
permitted to be taken at any meeting of stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voting. Prompt notice of the taking of any such
action shall be given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Di- rectors. The
business of the corporation shall be managed by the Board, which shall consist
of one or more directors. The
4
<PAGE> 5
number of directors may be changed by resolution of a majority of the Board or
by the stockholders, but no decrease may shorten the term of any incumbent
director. Directors shall be elected at each annual meeting of stockholders and
shall hold office until the next annual meeting of stockholders and until the
election and qualification of their respective successors, subject to the
provisions of Section 2.9. As used in these by-laws, the term "entire Board"
means the total number of directors which the corporation would have if there
were no vacancies on the Board.
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
except as provided in Section 2.10 of these by-laws. Action of the Board shall
be authorized by the vote of a majority of the directors present at the time of
the vote if there is a quorum, unless otherwise provided by law or these
by-laws. In the absence of a quorum a majority of the directors present may
adjourn any meeting from time to time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice im- mediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual
5
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meeting of stockholders, on notice as provided in Section 2.6 of these by-laws.
Regular meetings of the Board may be held without notice at such times and
places as the Board determines. If the day fixed for a regular meeting is a
legal holiday, the meeting shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by
the chairman of the board, the president or by any of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place
of each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or
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by any committee of the Board may be taken without a meeting if all of the
members of the Board or of the committee consent in writing to the adoption of a
resolution authorizing the action. The resolution and the written consents by
the members of the Board or the committee shall be filed with the minutes of the
proceeding of the Board or of the committee.
2.8 Participation in Board or Committee Meetings by Conference
Telephone. Any or all members of the Board or of any committee of the Board may
participate in a meeting of the Board or of the committee by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at the meeting.
2.9 Resignation and Removal of Directors. Any director may resign at
any time by delivering his resignation in writing to the president or secretary
of the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
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<PAGE> 8
2.11 Compensation. Directors shall receive such compensation as the
Board determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority
of the entire Board, may designate an Executive Committee of one or more
directors which shall have all the powers and authority of the Board, except as
otherwise provided in the resolution, section 141(c) of the Delaware General
Corporation Law, or any other applicable law. The members of the Executive
Committee shall serve at the pleasure of the Board. All action of the Executive
Committee shall be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members
8
<PAGE> 9
present at a meeting of the committee and not disqualified, whether or not a
quorum, may unanimously appoint another director to act at the meeting in place
of the absent or disqualified member. All action of a committee shall be
reported to the Board at its next meeting. Each committee shall adopt rules of
procedure and shall meet as provided by those rules or by resolutions of the
Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall
be the chairman of the board, the president, one or more vice presidents
(including executive or senior vice presidents, if the Board so determines), a
secretary and a treasurer. Any two or more offices may be held by the same
person. The Board may require any officer, agent or employee to give security
for the faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive
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<PAGE> 10
officer or to any committee the power to appoint and define the powers and
duties of any subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 Chairman of the Board. The chairman of the board shall preside at
all meetings of the Board and of the stockholders and shall have such powers and
duties as the Board assigns to him.
4.7 The President. The president shall be subject to the control of the
Board and the chairman of the board, have general supervision over the business
of the corporation
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<PAGE> 11
and shall have such other powers and duties as presidents of corporations
usually have or as the Board assigns to him.
4.8 Vice President. Each vice president shall have such powers and
duties as the Board or the president assigns to him.
4.9 The Treasurer. The treasurer shall be the chief financial officer
of the corporation and shall be in charge of the corporation's books and
accounts. Subject to the control of the Board, he shall have such other powers
and duties as the Board or the president assigns to him.
4.10 The Secretary. The secretary shall be the secretary of, and keep
the minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the secretary from any meeting, the minutes shall be kept by the person
appointed for that purpose by the presiding officer.
4.11 Salaries. The Board may fix the officers' salaries, if any, or it
may authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the
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<PAGE> 12
Board. Each certificate shall be signed by the chairman of the board, the
president or a vice president and by the secretary or an assistant secretary, or
the treasurer or an assistant treasurer, and shall be sealed with the
corporation's seal or a facsimile of the seal. Any or all of the signatures on
the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
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<PAGE> 13
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other
corporations which are held by the corporation may be represented and voted by
the president or a vice president of this corporation or by proxy or proxies
appointed by one of them. The Board may, however, appoint some other person to
vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders.
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<PAGE> 1
EXHIBIT 3.29
CERTIFICATE OF INCORPORATION
OF
ONEX OHIO EQUITY CORP. II
1. The name of the corporation is Onex Ohio Equity Corp. II.
2. The address of the corporation's registered office in Delaware is
15 East North Street, Dover (Kent County), Delaware 19901. United Corporate
Services, Inc. is the corporation's registered agent at that address.
3. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The corporation shall have authority to issue a total of 1,000
shares of common stock of the par value of $.01 per share.
5. The name of the sole incorporator is Mark S. Kingsley and his
mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue,
New York, New York 10022.
6. The Board of Directors shall have the power to make, alter or
repeal the by-laws of the corporation.
7. The election of the Board of Directors need not be by written
ballot.
8. The corporation shall indemnify to the fullest extent permitted
by Section 145 of the General Corporation Law of Delaware as amended from time
to time each person who is or was a director or officer of the corporation and
the heirs, executors and administrators of such a person.
9. No director shall be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director for
any act or omission occurring
<PAGE> 2
subsequent to the date when this provision becomes effective, except that he may
be liable (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit.
10. The corporation elects not to be governed by Section 203 of the
Delaware General Corporation Law.
Dated: December 29, 1993
/s/ Mark S. Kingsley
------------------------------------
Mark S. Kingsley
Sole Incorporator
2
<PAGE> 1
EXHIBIT 3.30
BY-LAWS
of
ONEX OHIO EQUITY CORP. II
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be called
by resolution of the Board or by the president and shall be called by the
president or secretary upon the written request (stating the purpose or purposes
of the meeting) of a majority of the directors then in office or of the holders
of a majority of the outstanding shares entitled to vote. Only business related
to the purposes set forth in the notice of the meeting may be transacted at a
special meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be held
in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each meeting
of stockholders shall be given to each stockholder entitled to vote at the
meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If
<PAGE> 2
mailed, notice shall be considered given when mailed to a stockholder at his
address on the corporation's records. The attendance of any stockholder at a
meeting, without protesting at the beginning of the meeting that the meeting is
not lawfully called or convened, shall constitute a waiver of notice by him.
1.5 Quorum. At any meeting of stockholders, the presence in person or by
proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum a majority in voting interest of those present or, if no stockholders are
present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are announced at the meeting at
which the adjournment is taken except that, if adjournment is for more than
thirty days or if, after the adjournment, a new record date is fixed for the
meeting, notice of the adjourned meeting shall be given pursuant to Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to one
vote for every share registered in his name. Corporate action to be taken by
stockholder vote, including the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 1.8 of these by-laws. Voting need not be by ballot
unless requested by a stockholder at the meeting or ordered by the chairman of
the meeting; however, all elections of directors shall be by written ballot,
unless otherwise provided in the certificate of incorporation. Each stockholder
entitled to vote at any meeting of stockholders or to express consent to or
dissent from corporate action in writing without a meeting may authorize another
person to act for him by proxy. Every proxy must be signed by the stockholder or
his attorney-in-fact. No proxy shall be valid after three years from its date
unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of any
meeting of stockholders, the secretary of the
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<PAGE> 3
corporation shall prepare a complete list of stockholders entitled to vote at
the meeting, arranged in alphabetical order and showing the address of each
stockholder and the number of shares registered in his name. For a period of not
less than 10 days prior to the meeting, the list shall be available during
ordinary business hours for inspection by any stockholder for any purpose
germane to the meeting. During this period, the list shall be kept either (a) at
a place within the city where the meeting is to be held, if that place shall
have been specified in the notice of the meeting, or (b) if not so specified, at
the place where the meeting is to be held. The list shall also be available for
inspection by stockholders at the time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or permitted
to be taken at any meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting. Prompt notice of the taking of any such action shall be
given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business of
the corporation shall be managed by the Board, which shall consist of one or
more directors. The number of directors may be changed by resolution of a
majority of the Board or by the stockholders, but no decrease may shorten the
term of any incumbent director. Directors shall be elected at each annual
meeting of stockholders and shall hold office until the next annual meeting of
stockholders and until the election and qualification of their respective
successors, subject to the provisions of Section 2.9.
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
except as provided in
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<PAGE> 4
Section 2.10 of these by-laws. Action of the Board shall be authorized by the
vote of a majority of the directors present at the time of the vote if there is
a quorum, unless otherwise provided by law or these by-laws. In the absence of a
quorum a majority of the directors present may adjourn any meeting from time to
time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by the
president or by any of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place of
each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
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<PAGE> 5
2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
2.8 Participation in Board or Committee Meetings by Conference Telephone.
Any or all members of the Board or of any committee of the Board may participate
in a meeting of the Board or of the committee by means of a conference telephone
or similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.
2.9 Resignation and Removal of Directors. Any director may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the Board
determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority of
the entire Board, may designate an Executive
5
<PAGE> 6
Committee of one or more directors which shall have all the powers and authority
of the Board, except as otherwise provided in the resolution, section 141(c) of
the Delaware General Corporation Law, or any other applicable law. The members
of the Executive Committee shall serve at the pleasure of the Board. All action
of the Executive Committee shall be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall be
the president, one or more vice presidents (including an executive vice
president, if the Board so determines), a secretary and a treasurer. Any two or
more offices may be held by the same person. The Board may require any officer,
agent or employee to give security for the faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
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<PAGE> 7
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 The President. The president shall be the chief executive officer of
the corporation and shall preside at all meetings of the Board and of the
stockholders. Subject to the control of the Board, he shall have general
supervision over the business of the corporation and shall have such other
powers and duties as presidents of corporations usually have or as the Board
assigns to him.
4.7 Vice President. Each vice president shall have such powers and duties
as the Board or the president assigns to him.
4.8 The Treasurer. The treasurer shall be the chief financial officer of
the corporation and shall be in charge of the corporation's books and accounts.
Subject to the control of the Board, he shall have such other powers and duties
as the Board or the president assigns to him.
7
<PAGE> 8
4.9 The Secretary. The secretary shall be the secretary of, and keep the
minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the secretary from any meeting, the minutes shall be kept by the person
appointed for that purpose by the presiding officer.
4.10 Salaries. The Board may fix the officers' salaries, if any, or it may
authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the president or a vice president and by the secretary or an assistant
secretary, or the treasurer or an assistant treasurer, and shall be sealed with
the corporation's seal or a facsimile of the seal. Any or all of the signatures
on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
8
<PAGE> 9
6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other corporations
which are held by the corporation may be represented and voted by the president
or a vice president of this corporation or by proxy or proxies appointed by one
of them. The Board may, however, appoint some other person to vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders.
9
<PAGE> 1
EXHIBIT 3.31
CERTIFICATE OF INCORPORATION
OF
SKY CHEFS CREDIT CORP.
1. The name of the corporation is Sky Chefs Credit Corp.
2. The address of the corporation's registered office in Delaware is
410 South State Street, Dover (Kent County), Delaware 19901. Waited Corporate
Services, Inc. is the corporation's registered agent at that address.
3. The purpose of the corporation to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The corporation shall have authority to issue a total of 1,000
shares of common stock of the par value of $0.01 per share.
5. The name of the sole incorporator is Carsten R. Eggers and his
mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue,
New York, New York 10022.
6. The Board of Directors shall have the power to make, alter or repeal
the by-laws of the corporation.
7. The election of the board of Directors need not be by written
ballot.
8. The corporation shall indemnify to the fullest extent permitted by
Section 145 of the General Corporation Law of Delaware as amended from time to
time each person who may be indemnified thereunder.
Dated: April 22, 1986
/s/ Carsten R. Eggers
-----------------------
Carsten R. Eggers
Sole Incorporator
<PAGE> 2
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF
SKY CHEFS CREDIT CORP.
Pursuant to Section 242 of the
General Corporation Law of Delaware
The undersigned, the President of Sky Chefs Credit
Corp., a Delaware corporation (the "Corporation"), does hereby
certify as follows:
1. Paragraph 1 of the Certificate of Incorporation of the
Corporation is hereby amended to read in its entirety as follows:
"1. The name of the Corporation is Onex Ohio Credit
Corp."
2. The foregoing amendment was approved by the board of
directors of the Corporation in accordance with the provisions of
Section 242(b) of the General Corporation Law of Delaware, and
consented to by the holders of all of the outstanding common stock of
the Corporation in accordance with the provisions of Section 228 of the
General Corporation Law of Delaware.
Dated: November 29, 1993
/s/ Donald F. West
--------------------------
Donald F. West, President
Attest:
/s/ James J. O'Neill
- ---------------------------
James J. O'Neill, Secretary
<PAGE> 1
EXHIBIT 3.32
BY-LAWS
OF
SKY CHEFS CREDIT CORP.
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be
called by resolution of the Board or by the chairman of the board or the
president and shall be called by the president or secretary upon the written
request (stating the purpose or purposes of the meeting) of a majority of the
directors then in office or of the holders of a majority of the outstanding
shares entitled to vote. Only business related to the purposes set forth in the
notice of the meeting may be transacted at a special meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be
held in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each
meeting of stockholders shall be given to each stockholder entitled to vote at
the meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the
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meeting, and (b) no notice of an adjourned meeting need be given except when
required under Section 1.5 of these by-laws or by law. Each notice of a meeting
shall be given, personally or by mail, not less than 10 nor more than 60 days
before the meeting and shall state the time and place of the meeting, and unless
it is the annual meeting, shall state at whose direction or request the meeting
is called and the purposes for which it is called. If mailed, notice shall be
considered given when mailed to a stockholder at his address on the
corporation's records. The attendance of any stockholder at a meeting, without
protesting at the beginning of the meeting that the meeting is not lawfully
called or convened, shall constitute a waiver of notice by him.
1.5 Quorum. At any meeting of stockholders, the presence in person or
by proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum a majority in voting interest of those present or, if no stockholders are
present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are announced at the meeting at
which the adjournment is taken except that, if adjournment is for more than
thirty days or if,
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after the adjournment, a new record date is fixed for the meeting, notice of the
adjourned meeting shall be given pursuant to Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to
one vote for every share registered in his name. Corporate action to be taken by
stockholder vote, including the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 1.8 of these by-laws. Voting need not be by ballot
unless requested by a stockholder at the meeting or ordered by the chairman of
the meeting; however, all elections of directors shall be by written ballot,
unless otherwise provided in the certificate of incorporation. Each stockholder
entitled to vote at any meeting of stockholders or to express consent to or
dissent from corporate action in writing without a meeting may authorize another
person to act for him by proxy. Every proxy must be signed by the stockholder or
his attorney-in-fact. No proxy shall be valid after three years from its date
unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of
any meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in his name. For a period
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of not less than 10 days prior to the meeting, the list shall be available
during ordinary business hours for inspection by any stockholder for any purpose
germane to the meeting. During this period, the list shall be kept either (a) at
a place within the city where the meeting is to be held, if that place shall
have been specified in the notice of the meeting, or (b) if not so specified, at
the place where the meeting is to be held. The list shall also be available for
inspection by stockholders at the time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or
permitted to be taken at any meeting of stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voting. Prompt notice of the taking of any such
action shall be given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business
of the corporation shall be managed by the Board, which shall consist of one or
more directors. The number of directors may be changed by resolution of a
majority of the Board or by the stockholders, but no decrease may
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shorten the term of any incumbent director. Directors shall be elected at each
annual meeting of stockholders and shall hold office until the next annual
meeting of stockholders and until the election and qualification of their
respective successors, subject to the provisions of Section 2.9.
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
except as provided in Section 2.10 of these by-laws. Action of the Board shall
be authorized by the vote of a majority of the directors present at the time of
the vote if there is a quorum, unless otherwise provided by law or these
by-laws. In the absence of a quorum a majority of the directors present may
adjourn any meeting from time to time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
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2.5 Special Meetings. Special meetings of the Board may be called by
the chairman of the board, the president or by any of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place
of each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members
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of the Board or the committee shall be filed with the minutes of the proceeding
of the Board or of the committee.
2.8 Participation in Board or Committee Meetings by Conference
Telephone. Any or all members of the Board or of any committee of the Board may
participate in a meeting of the Board or of the committee by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at the meeting.
2.9 Resignation and Removal of Directors. Any director may resign at
any time by delivering his resignation in writing to the president or secretary
of the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the
Board determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
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serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority
of the entire Board, may designate an Executive Committee of one or more
directors which shall have all the powers and authority of the Board, except as
otherwise provided in the resolution, section 141(c) of the Delaware General
Corporation Law, or any other applicable law. The members of the Executive
Committee shall serve at the pleasure of the Board. All action of the Executive
Committee shall be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported
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<PAGE> 9
to the Board at its next meeting. Each committee shall adopt rules of procedure
and shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall
be the chairman of the board, the president, one or more vice presidents
(including executive or senior vice presidents, if the Board so determines), a
secretary and a treasurer. Any two or more offices may be held by the same
person. The Board may require any officer, agent or employee to give security
for the faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
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4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 Chairman of the Board. The chairman of the board shall preside at
all meetings of the Board and of the stockholders and shall have such powers and
duties as the Board assigns to him.
4.7 The President. The president shall be subject to the control of the
Board and the chairman of the board, have general supervision over the business
of the corporation and shall have such other powers and duties as presidents of
corporations usually have or as the Board assigns to him.
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4.8 Vice President. Each vice president shall have such powers and
duties as the Board or the president assigns to him.
4.9 The Treasurer. The treasurer shall be the chief financial officer
of the corporation and shall be in charge of the corporation's books and
accounts. Subject to the control of the Board, he shall have such other powers
and duties as the Board or the president assigns to him.
4.10 The Secretary. The secretary shall be the secretary of, and keep
the minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the secretary from any meeting, the minutes shall be kept by the person
appointed for that purpose by the presiding officer.
4.11 Salaries. The Board may fix the officers' salaries, if any, or it
may authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the chairman of the board, the president or a vice president and by the
secre-
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tary or an assistant secretary, or the treasurer or an assistant treasurer, and
shall be sealed with the corporation's seal or a facsimile of the seal. Any or
all of the signatures on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
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6.3 Voting of Shares in Other Corporations. Shares in other
corporations which are held by the corporation may be represented and voted by
the president or a vice president of this corporation or by proxy or proxies
appointed by one of them. The Board may, however, appoint some other person to
vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders.
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EXHIBIT 3.33
CERTIFICATE OF INCORPORATION
OF
ONEX OHIO CREDIT CORP. II
1. The name of the corporation is Onex Ohio Credit Corp. II.
2. The address of the corporation's registered office in Delaware is
15 East North Street, Dover (Kent County), Delaware 19901. United Corporate
Services, Inc. is the corporation's registered agent at that address.
3. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The corporation shall have authority to issue a total of 1,000
shares of common stock of the par value of $.01 per share.
5. The name of the sole incorporator is Mark S. Kingsley and his
mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue,
New York, New York 10022.
6. The Board of Directors shall have the power to make, alter or
repeal the by-laws of the corporation.
7. The election of the Board of Directors need not be by written
ballot.
8. The corporation shall indemnify to the fullest extent permitted
by Section 145 of the General Corporation Law of Delaware as amended from time
to time each person who is or was a director or officer of the corporation and
the heirs, executors and administrators of such a person.
9. No director shall be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director for
any act or omission occurring
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subsequent to the date when this provision becomes effective, except that he may
be liable (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit.
10. The corporation elects not to be governed by Section 203 of the
Delaware General Corporation Law.
Dated: December 29, 1993
/s/ Mark S. Kinglsey
-----------------------------------
Mark S. Kingsley
Sole Incorporator
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EXHIBIT 3.34
BY-LAWS
of
ONEX OHIO CREDIT CORP. II
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be called
by resolution of the Board or by the president and shall be called by the
president or secretary upon the written request (stating the purpose or purposes
of the meeting) of a majority of the directors then in office or of the holders
of a majority of the outstanding shares entitled to vote. Only business related
to the purposes set forth in the notice of the meeting may be transacted at a
special meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be held
in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each meeting
of stockholders shall be given to each stockholder entitled to vote at the
meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If
<PAGE> 2
mailed, notice shall be considered given when mailed to a stockholder at his
address on the corporation's records. The attendance of any stockholder at a
meeting, without protesting at the beginning of the meeting that the meeting is
not lawfully called or convened, shall constitute a waiver of notice by him.
1.5 Quorum. At any meeting of stockholders, the presence in person or by
proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum a majority in voting interest of those present or, if no stockholders are
present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are announced at the meeting at
which the adjournment is taken except that, if adjournment is for more than
thirty days or if, after the adjournment, a new record date is fixed for the
meeting, notice of the adjourned meeting shall be given pursuant to Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to one
vote for every share registered in his name. Corporate action to be taken by
stockholder vote, including the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 1.8 of these by-laws. Voting need not be by ballot
unless requested by a stockholder at the meeting or ordered by the chairman of
the meeting; however, all elections of directors shall be by written ballot,
unless otherwise provided in the certificate of incorporation. Each stockholder
entitled to vote at any meeting of stockholders or to express consent to or
dissent from corporate action in writing without a meeting may authorize another
person to act for him by proxy. Every proxy must be signed by the stockholder or
his attorney-in-fact. No proxy shall be valid after three years from its date
unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of any
meeting of stockholders, the secretary of the
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corporation shall prepare a complete list of stockholders entitled to vote at
the meeting, arranged in alphabetical order and showing the address of each
stockholder and the number of shares registered in his name. For a period of not
less than 10 days prior to the meeting, the list shall be available during
ordinary business hours for inspection by any stockholder for any purpose
germane to the meeting. During this period, the list shall be kept either (a) at
a place within the city where the meeting is to be held, if that place shall
have been specified in the notice of the meeting, or (b) if not so specified, at
the place where the meeting is to be held. The list shall also be available for
inspection by stockholders at the time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or permitted
to be taken at any meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting. Prompt notice of the taking of any such action shall be
given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business of
the corporation shall be managed by the Board, which shall consist of one or
more directors. The number of directors may be changed by resolution of a
majority of the Board or by the stockholders, but no decrease may shorten the
term of any incumbent director. Directors shall be elected at each annual
meeting of stockholders and shall hold office until the next annual meeting of
stockholders and until the election and qualification of their respective
successors, subject to the provisions of Section 2.9.
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
except as provided in
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Section 2.10 of these by-laws. Action of the Board shall be authorized by the
vote of a majority of the directors present at the time of the vote if there is
a quorum, unless otherwise provided by law or these by-laws. In the absence of a
quorum a majority of the directors present may adjourn any meeting from time to
time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by the
president or by any of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place of
each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
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2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
2.8 Participation in Board or Committee Meetings by Conference Telephone.
Any or all members of the Board or of any committee of the Board may participate
in a meeting of the Board or of the committee by means of a conference telephone
or similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.
2.9 Resignation and Removal of Directors. Any director may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the Board
determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority of
the entire Board, may designate an Executive
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Committee of one or more directors which shall have all the powers and authority
of the Board, except as otherwise provided in the resolution, section 141(c) of
the Delaware General Corporation Law, or any other applicable law. The members
of the Executive Committee shall serve at the pleasure of the Board. All action
of the Executive Committee shall be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall be
the president, one or more vice presidents (including an executive vice
president, if the Board so determines), a secretary and a treasurer. Any two or
more offices may be held by the same person. The Board may require any officer,
agent or employee to give security for the faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
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4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 The President. The president shall be the chief executive officer of
the corporation and shall preside at all meetings of the Board and of the
stockholders. Subject to the control of the Board, he shall have general
supervision over the business of the corporation and shall have such other
powers and duties as presidents of corporations usually have or as the Board
assigns to him.
4.7 Vice President. Each vice president shall have such powers and duties
as the Board or the president assigns to him.
4.8 The Treasurer. The treasurer shall be the chief financial officer of
the corporation and shall be in charge of the corporation's books and accounts.
Subject to the control of the Board, he shall have such other powers and duties
as the Board or the president assigns to him.
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<PAGE> 8
4.9 The Secretary. The secretary shall be the secretary of, and keep the
minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the secretary from any meeting, the minutes shall be kept by the person
appointed for that purpose by the presiding officer.
4.10 Salaries. The Board may fix the officers' salaries, if any, or it may
authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the president or a vice president and by the secretary or an assistant
secretary, or the treasurer or an assistant treasurer, and shall be sealed with
the corporation's seal or a facsimile of the seal. Any or all of the signatures
on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
8
<PAGE> 9
6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other corporations
which are held by the corporation may be represented and voted by the president
or a vice president of this corporation or by proxy or proxies appointed by one
of them. The Board may, however, appoint some other person to vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders.
9
<PAGE> 1
EXHIBIT 3.35
CERTIFICATE OF INCORPORATION
OF
SKY CHEFS ACCEPTANCE CORPORATION
1. The name of the corporation is Sky Chefs Acceptance Corporation.
2. The address of the corporation's registered office in Delaware is
410 South State Street, Dover (Kent County), Delaware 19901. United Corporate
Services, Inc. is the corporation's registered agent at that address.
3. The purpose of the corporation to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The corporation shall have authority to issue a total of 1,000
shares of common stock of the par value of $0.01 per share.
5. The name of the sole incorporator is Carsten R. Eggers and his
mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue,
New York, New York 10022.
6. The Board of Directors shall have the power to make, alter or repeal
the by-laws of the corporation.
7. The election of the board of Directors need not be by written
ballot.
8. The corporation shall indemnify to the fullest extent permitted by
Section 145 of the General Corporation Law of Delaware as amended from time to
time each person who may be indemnified thereunder.
Dated: April 22, 1986
/s/ Carsten R. Eggers
-----------------------------------
Carsten R. Eggers
Sole Incorporator
<PAGE> 2
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF
SKY CHEFS ACCEPTANCE CORPORATION
Pursuant to Section 242 of the
General Corporation Law of Delaware
The undersigned, the President of Sky Chefs Acceptance Corporation, a
Delaware corporation (the "Corporation"), does hereby certify as follows:
1. Paragraph 1 of the Certificate of Incorporation of the
Corporation is hereby amended to read in its entirety as follows:
"1. The name of the Corporation is Onex Ohio
Acceptance Corporation."
2. The foregoing amendment was approved by the board of
directors of the Corporation in accordance with the provisions of
Section 242(b) of the General Corporation Law of Delaware, and
consented to by the holders of all of the outstanding common stock of
the Corporation in accordance with the provisions of Section 228 of the
General Corporation Law of Delaware.
Dated: November 29, 1993
/s/ Donald F. West
--------------------------
Donald F. West, President
Attest:
/s/ James J. O'Neill
- ----------------------------
James J. O'Neill, Secretary
<PAGE> 1
EXHIBIT 3.36
BY-LAWS
OF
SKY CHEFS ACCEPTANCE CORPORATION
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be
called by resolution of the Board or by the chairman of the board or the
president and shall be called by the president or secretary upon the written
request (stating the purpose or purposes of the meeting) of a majority of the
directors then in office or of the holders of a majority of the outstanding
shares entitled to vote. Only business related to the purposes set forth in the
notice of the meeting may be transacted at a special meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be
held in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each
meeting of stockholders shall be given to each stockholder entitled to vote at
the meeting, except that (a)
<PAGE> 2
it shall not be necessary to give notice to any stockholder who submits a signed
waiver of notice before or after the meeting, and (b) no notice of an adjourned
meeting need be given except when required under Section 1.5 of these by-laws or
by law. Each notice of a meeting shall be given, personally or by mail, not less
than 10 nor more than 60 days before the meeting and shall state the time and
place of the meeting, and unless it is the annual meeting, shall state at whose
direction or request the meeting is called and the purposes for which it is
called. If mailed, notice shall be considered given when mailed to a stockholder
at his address on the corporation's records. The attendance of any stockholder
at a meeting, without protesting at the beginning of the meeting that the
meeting is not lawfully called or convened, shall constitute a waiver of notice
by him.
1.5 Quorum. At any meeting of stockholders, the presence in person or
by proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum a majority in voting interest of those present or, if no stockholders are
present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are an-
2
<PAGE> 3
nounced at the meeting at which the adjournment is taken except that, if
adjournment is for more than thirty days or if, after the adjournment, a new
record date is fixed for the meeting, notice of the adjourned meeting shall be
given pursuant to Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to
one vote for every share registered in his name. Corporate action to be taken by
stockholder vote, including the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 1.8 of these by-laws. Voting need not be by ballot
unless requested by a stockholder at the meeting or ordered by the chairman of
the meeting; however, all elections of directors shall be by written ballot,
unless otherwise provided in the certificate of incorporation. Each stockholder
entitled to vote at any meeting of stockholders or to express consent to or
dissent from corporate action in writing without a meeting may authorize another
person to act for him by proxy. Every proxy must be signed by the stockholder or
his attorney-in-fact. No proxy shall be valid after three years from its date
unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of
any meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in al-
3
<PAGE> 4
phabetical order and showing the address of each stockholder and the number of
shares registered in his name. For a period of not less than 10 days prior to
the meeting, the list shall be available during ordinary business hours for
inspection by any stockholder for any purpose germane to the meeting. During
this period, the list shall be kept either (a) at a place within the city where
the meeting is to be held, if that place shall have been specified in the notice
of the meeting, or (b) if not so specified, at the place where the meeting is to
be held. The list shall also be available for inspection by stockholders at the
time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or
permitted to be taken at any meeting of stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voting. Prompt notice of the taking of any such
action shall be given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business
of the corporation shall be managed by the Board, which shall consist of one or
more directors. The
4
<PAGE> 5
number of directors may be changed by resolution of a majority of the Board or
by the stockholders, but no decrease may shorten the term of any incumbent
director. Directors shall be elected at each annual meeting of stockholders and
shall hold office until the next annual meeting of stockholders and until the
election and qualification of their respective successors, subject to the
provisions of Section 2.9.
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
except as provided in Section 2.10 of these by-laws. Action of the Board shall
be authorized by the vote of a majority of the directors present at the time of
the vote if there is a quorum, unless otherwise provided by law or these
by-laws. In the absence of a quorum a majority of the directors present may
adjourn any meeting from time to time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board deter-
5
<PAGE> 6
mines. If the day fixed for a regular meeting is a legal holiday, the meeting
shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by
the chairman of the board, the president or by any of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place
of each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the ac-
6
<PAGE> 7
tion. The resolution and the written consents by the members of the Board or the
committee shall be filed with the minutes of the proceeding of the Board or of
the committee.
2.8 Participation in Board or Committee Meetings by Conference
Telephone. Any or all members of the Board or of any committee of the Board may
participate in a meeting of the Board or of the committee by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at the meeting.
2.9 Resignation and Removal of Directors. Any director may resign at
any time by delivering his resignation in writing to the president or secretary
of the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the
Board determines, together with reimbursement of their reasonable expenses in
connection with the per-
7
<PAGE> 8
formance of their duties. A director may also be paid for serving the
corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority
of the entire Board, may designate an Executive Committee of one or more
directors which shall have all the powers and authority of the Board, except as
otherwise provided in the resolution, section 141(c) of the Delaware General
Corporation Law, or any other applicable law. The members of the Executive
Committee shall serve at the pleasure of the Board. All action of the Executive
Committee shall be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or dis-
8
<PAGE> 9
qualified member. All action of a committee shall be reported to the Board at
its next meeting. Each committee shall adopt rules of procedure and shall meet
as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall
be the chairman of the board, the president, one or more vice presidents
(including executive or senior vice presidents, if the Board so determines), a
secretary and a treasurer. Any two or more offices may be held by the same
person. The Board may require any officer, agent or employee to give security
for the faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
9
<PAGE> 10
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 Chairman of the Board. The chairman of the board shall preside at
all meetings of the Board and of the stockholders and shall have such powers and
duties as the Board assigns to him.
4.7 The President. The president shall be subject to the control of the
Board and the chairman of the board, have general supervision over the business
of the corporation and shall have such other powers and duties as presidents of
corporations usually have or as the Board assigns to him.
10
<PAGE> 11
4.8 Vice President. Each vice president shall have such powers and
duties as the Board or the president assigns to him.
4.9 The Treasurer. The treasurer shall be the chief financial officer
of the corporation and shall be in charge of the corporation's books and
accounts. Subject to the control of the Board, he shall have such other powers
and duties as the Board or the president assigns to him.
4.10 The Secretary. The secretary shall be the secretary of, and keep
the minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the secretary from any meeting, the minutes shall be kept by the person
appointed for that purpose by the presiding officer.
4.11 Salaries. The Board may fix the officers' salaries, if any, or it
may authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the chairman of the board, the president or a vice president and by the
secre-
11
<PAGE> 12
tary or an assistant secretary, or the treasurer or an assistant treasurer, and
shall be sealed with the corporation's seal or a facsimile of the seal. Any or
all of the signatures on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal
year. Until changed by the Board, the corporation's fiscal year shall be the
calendar year.
12
<PAGE> 13
6.3 Voting of Shares in Other Corporations. Shares in other
corporations which are held by the corporation may be represented and voted by
the president or a vice president of this corporation or by proxy or proxies
appointed by one of them. The Board may, however, appoint some other person to
vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders.
13
<PAGE> 1
EXHIBIT 3.37
CERTIFICATE OF INCORPORATION
OF
SKY CHEFS CAPITAL CORP.
1. The name of the corporation is Sky Chefs Capital Corp.
2. The address of the corporation's registered office in Delaware is
410 South State Street, Dover (Kent County), Delaware 19901. United Corporate
Services, Inc. is the corporation's registered agent at that address.
3. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The corporation shall have authority to issue a total of 1000 shares
of common stock of the par value of $0.01 per share.
5. The name of the sole incorporator is Philip R.
Ehrlich and his mailing address is c/o Kaye, Scholer, Fierman,
Hays & Handler, 425 Park Avenue, New York, New York 10022.
6. The Board of Directors shall have the power to make, alter or repeal
the by-laws of the corporation.
7. The election of the Board of Directors need not be by written
ballot.
8. The corporation shall indemnify to the fullest extent permitted by
Section 145 of the General Corporation Law of Delaware as amended from time to
time each person that such Section grants the corporation the power to
indemnify.
9. No director shall be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director for
any act or omission occurring subsequent to the date when this provision becomes
effective, except that he may be liable (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law or (iv) for any transaction from which the director derived an improper
personal benefit.
Dated: September 26, 1988
/s/ Philip R. Ehrlich
---------------------
Philip R. Ehrlich
Sole Incorporator
<PAGE> 2
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF
SKY CHEFS CAPITAL CORP.
Pursuant to Section 242 of the
General Corporation Law of Delaware
The undersigned, the President of Sky Chefs Capital Corp., a Delaware
corporation (the "Corporation"), does hereby certify as follows:
1. Paragraph 1 of the Certificate of Incorporation
of the Corporation is hereby amended to read in its
entirety as follows:
"1. The name of the Corporation is
Onex Ohio Capital Corp."
2. The foregoing amendment was approved by the board of
directors of the Corporation in accordance with the provisions of
Section 242(b) of the General Corporation Law of Delaware, and
consented to by the holders of all of the outstanding common stock of
the Corporation in accordance with the provisions of Section 228 of the
General Corporation Law of Delaware.
Dated: November 29, 1993
/s/ Donald F. West
------------------
Donald F. West, President
Attest:
/s/ James J. O'Neill
- --------------------
James J. O'Neill, Secretary
<PAGE> 1
EXHIBIT 3.38
BY-LAWS
of
SKY CHEFS CAPITAL CORP.
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be
called by resolution of the Board or by the chairman of the Board or the
president and shall be called by the president or secretary upon the written
request (stating the purpose or purposes of the meeting) of a majority of the
directors then in office or of the holders of shares representing a majority of
the total number of votes entitled to be cast. Only business related to the
purposes set forth in the notice of the meeting may be transacted at a special
meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be
held in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each
meeting of stockholders shall be given to each stockholder entitled to vote at
the meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If mailed, notice shall be considered
given when mailed to a stockholder at his address on the corporation's records.
The attendance of any stockholder at a meeting, without protesting at the
beginning of the meeting that the meeting is not lawfully called or convened,
shall constitute a waiver of notice by him.
1.5 Quorum. At any meeting of stockholders, the presence in person or
by proxy of the holders of shares representing a majority of the votes entitled
to be cast shall constitute a quorum for the transaction of any business. In the
absence of a quorum a majority in voting interest of those
<PAGE> 2
present or, if no stockholders are present, any officer entitled to preside at
or to act as secretary of the meeting, may adjourn the meeting until a quorum is
present. At any adjourned meeting at which a quorum is present any action may be
taken which might have been taken at the meeting as originally called. No notice
of an adjourned meeting need be given if the time and place are announced at the
meeting at which the adjournment is taken except that, if adjournment is for
more than thirty days or if, after the adjournment, a new record date is fixed
for the meeting, notice of the adjourned meeting shall be given pursuant to
Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to
one vote for every share registered in his name. Corporate action to be taken by
stockholder vote, including the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 1.8 of these by-laws. Voting need not be by ballot
unless requested by a stockholder at the meeting or ordered by the chairman of
the meeting; however, all elections of directors shall be by written ballot,
unless otherwise provided in the certificate of incorporation. Each stockholder
entitled to vote at any meeting of stockholders or to express consent to or
dissent from corporate action in writing without a meeting may authorize another
person to act for him by proxy. Every proxy must be signed by the stockholder or
his attorney-in-fact. No proxy shall be valid after three years from its date
unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of
any meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in his name. For a period of not less than 10 days prior to
the meeting, the list shall be available during ordinary business hours for
inspection by any stockholder for any purpose germane to the meeting. During
this period, the list shall be kept either (a) at a place within the city where
the meeting is to be held, if that place shall have been specified in the notice
of the meeting, or (b) if not so specified, at the place where the meeting is to
be held. The list shall also be available for inspection by stockholders at the
time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required to be
taken at any annual or special meeting of stockholders of the corporation, or
any action which may be taken at any annual or special meeting of the
stockholders, may be taken, without a meeting, without prior notice and without
a vote, if a consent or consents in writing, setting forth the action so taken,
shall be signed by the holders of outstanding
2
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stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted and shall be delivered to the corporation
by delivery to its registered office in Delaware, its principal place of
business, or an officer or agent of the corporation having custody of the book
in which proceedings of meetings of stockholders are recorded. Delivery made to
the corporation's registered office shall be made by hand or by certified or
registered mail, return receipt requested.
Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless, within sixty days of the
date the earliest dated consent is delivered to the corporation, a written
consent or consents signed by a sufficient number of holders to take action are
delivered to the corporation in the manner prescribed in the first paragraph of
this Section.
2. BOARD OF DIRECTORS.
2.1 Number, qualification, Election and Term of Directors. The
business of the corporation shall be managed by the Board, which shall consist
of four directors. The number of directors may be changed by resolution of a
majority of the entire Board or by the stockholders, but no decrease may
shorten the term of any incumbent director. Directors shall be elected at each
annual meeting of stockholders and until the election and qualification of
their respective successors, subject to the provisions of Section 2.9. As used
in these by-laws, the term "entire Board" means the total number of directors
which the corporation would have if there were no vacancies on the Board.
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any
meeting, unless otherwise provided by these by-laws. Action of the Board shall
be authorized by the vote of a majority of the directors present at the time of
the vote if there is a quorum, unless otherwise provided by law, these by-laws
or the Certificate of Incorporation of the corporation. In the absence of a
quorum a majority of the directors present may adjourn any meeting from time to
time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or
outside Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by
the chairman of the Board, the president or by any of the directors then in
office.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place
of each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
2.8 Participation in Board or Committee Meetings by Conference
Telephone. Any or all members of the Board or of any committee of the Board may
participate in a meeting of the Board or of the committee by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at the meeting.
2.9 Resignation and Removal of Directors. Any director may resign at
any time by delivering his resignation in writing to the president or secretary
of the corporation, to take effect at the time specified in the resignation; the
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acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation together
with reimbursement of their reasonable expenses in connection with the
performance of their duties, all as the Board determines. A director may also be
paid for serving the corporation, its affiliates or subsidiaries in other
capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority
of the entire Board, may designate an Executive Committee of one or more
directors which shall have all the powers and authority of the Board, except as
otherwise provided in the resolution, section 141(c) of the Delaware General
Corporation Law, or any other applicable law. The members of the Executive
Committee shall serve at the pleasure of the Board. All action of the Executive
Committee shall be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation may
include a chairman of the board, the president,
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one or more vice presidents (including executive or senior vice presidents, if
the Board so determines), a secretary or senior assistant secretary and a
treasurer. Any two or more offices may be held by the same person, except the
offices of president and secretary. The Board may require any officer, agent or
employee to give security for the faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 Chairman of the Board. The chairman of the board, shall preside at
all meetings of the Board and of the stockholders and shall have such powers and
duties as the Board assigns to him.
4.7 The President. The president shall be subject to the control of the
Board and the chairman of the board, he shall have general supervision over the
business of the corporation and shall have such other powers and duties as
presidents of corporations usually have or as the Board assigns to him.
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4.8 Vice President. Each vice president shall have such powers and
duties as the Board or the president assigns to him.
4.9 The Treasurer. The treasurer shall be the chief financial officer
of the corporation and shall be in charge of the corporation's books and
accounts. Subject to the control of the Board, he shall have such other powers
and duties as the Board or the president assigns to him.
4.10 The Secretary. The secretary shall be the secretary of, and keep
the minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the secretary from any meeting, the minutes shall be kept by the person
appointed for that purpose by the presiding officer.
4.11 Salaries. The Board may fix the officers' salaries, if any, or it
may authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the chairman of the board, the president or a vice president and by the
secretary or an assistant secretary, or the treasurer or an assistant treasurer,
and shall be sealed with the corporation's seal or a facsimile of the seal. Any
or all of the signatures on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. In order that the
corporation may determine the stockholders entitled to notice of or to vote at
any meeting of stockholders, or to receive payment of any dividend or other
distribution or allotment of any rights or to exercise any rights in respect of
any change, conversion or exchange of stock or for the purpose of any other
lawful action, the Board may fix a record date, which record date shall not
precede the date on which the resolution fixing the record date is adopted and
which record date shall not be more than sixty nor less than ten days before
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the date of any meeting of stockholders, nor more than sixty days prior to the
time for such other action as hereinbefore described; provided, however, that if
no record date is fixed by the Board, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held, and for determining stockholders
entitled to receive payment of any dividend or other distribution or allotment
of rights or to exercise any rights of change, conversion or exchange of stock
or for any other purpose, the record date shall be at the close of business on
the day on which the Board adopts a resolution relating thereto.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board may fix a new record date for the adjourned
meeting.
In order that the corporation may determine the stockholders entitled
to consent to corporate action in writing without a meeting, the Board may fix a
record date, which shall not precede the date upon which the resolution fixing
the record date is adopted by the Board, and which record date shall be not more
than ten days after the date upon which the resolution fixing the record date is
adopted. If no record date has been fixed by the Board and no prior action by
the Board is required by the Delaware General Corporation Law, the record date
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the Corporation in the
manner prescribed by Section 1.8. If no record date has been fixed by the Board
and prior action by the Board is required by the Delaware General Corporation
Law with stockholders, the record date for determining stockholders entitled to
consent to corporate action in writing shall be at the close of business on the
day on which the Board adopts the resolution taken such prior action.
6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other
corporations which are held by the corporation may be
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represented and voted by the president or a vice president of this corporation
or by proxy or proxies appointed by one of them. The Board may, however, appoint
some other person to vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders except as otherwise
provided in the Certificate of Incorporation of the corporation.
6.5 Inconsistent Provisions. In the event of any inconsistency between
any provision of these by-laws and any provision of the Certificate of
Incorporation of the corporation, the provisions of the Certificate of
Incorporation of the corporation shall govern.
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EXHIBIT 3.39
CERTIFICATE OF INCORPORATION
OF
ONEX OHIO CAPITAL CORP. II
1. The name of the corporation is Onex Ohio Capital Corp. II.
2. The address of the corporation's registered office in Delaware is
15 East North Street, Dover (Kent County), Delaware 19901. United Corporate
Services, Inc. is the corporation's registered agent at that address.
3. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The corporation shall have authority to issue a total of 1,000
shares of common stock of the par value of $.01 per share.
5. The name of the sole incorporator is Mark S. Kingsley and his
mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue,
New York, New York 10022.
6. The Board of Directors shall have the power to make, alter or
repeal the by-laws of the corporation.
7. The election of the Board of Directors need not be by written
ballot.
8. The corporation shall indemnify to the fullest extent permitted
by Section 145 of the General Corporation Law of Delaware as amended from time
to time each person who is or was a director or officer of the corporation and
the heirs, executors and administrators of such a person.
9. No director shall be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director for
any act or omission occurring
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subsequent to the date when this provision becomes effective, except that he may
be liable (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit.
10. The corporation elects not to be governed by Section 203 of the
Delaware General Corporation Law.
Dated: December 29, 1993
/s/ Mark S. Kingsley
---------------------------------
Mark S. Kingsley
Sole Incorporator
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EXHIBIT 3.40
BY-LAWS
of
ONEX OHIO CAPITAL CORP. II
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be called
by resolution of the Board or by the president and shall be called by the
president or secretary upon the written request (stating the purpose or purposes
of the meeting) of a majority of the directors then in office or of the holders
of a majority of the outstanding shares entitled to vote. Only business related
to the purposes set forth in the notice of the meeting may be transacted at a
special meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be held
in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each meeting
of stockholders shall be given to each stockholder entitled to vote at the
meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If
<PAGE> 2
mailed, notice shall be considered given when mailed to a stockholder at his
address on the corporation's records. The attendance of any stockholder at a
meeting, without protesting at the beginning of the meeting that the meeting is
not lawfully called or convened, shall constitute a waiver of notice by him.
1.5 Quorum. At any meeting of stockholders, the presence in person or by
proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum a majority in voting interest of those present or, if no stockholders are
present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are announced at the meeting at
which the adjournment is taken except that, if adjournment is for more than
thirty days or if, after the adjournment, a new record date is fixed for the
meeting, notice of the adjourned meeting shall be given pursuant to Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to one
vote for every share registered in his name. Corporate action to be taken by
stockholder vote, including the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 1.8 of these by-laws. Voting need not be by ballot
unless requested by a stockholder at the meeting or ordered by the chairman of
the meeting; however, all elections of directors shall be by written ballot,
unless otherwise provided in the certificate of incorporation. Each stockholder
entitled to vote at any meeting of stockholders or to express consent to or
dissent from corporate action in writing without a meeting may authorize another
person to act for him by proxy. Every proxy must be signed by the stockholder or
his attorney-in-fact. No proxy shall be valid after three years from its date
unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of any
meeting of stockholders, the secretary of the
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corporation shall prepare a complete list of stockholders entitled to vote at
the meeting, arranged in alphabetical order and showing the address of each
stockholder and the number of shares registered in his name. For a period of not
less than 10 days prior to the meeting, the list shall be available during
ordinary business hours for inspection by any stockholder for any purpose
germane to the meeting. During this period, the list shall be kept either (a) at
a place within the city where the meeting is to be held, if that place shall
have been specified in the notice of the meeting, or (b) if not so specified, at
the place where the meeting is to be held. The list shall also be available for
inspection by stockholders at the time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or permitted
to be taken at any meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting. Prompt notice of the taking of any such action shall be
given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business of
the corporation shall be managed by the Board, which shall consist of one or
more directors. The number of directors may be changed by resolution of a
majority of the Board or by the stockholders, but no decrease may shorten the
term of any incumbent director. Directors shall be elected at each annual
meeting of stockholders and shall hold office until the next annual meeting of
stockholders and until the election and qualification of their respective
successors, subject to the provisions of Section 2.9.
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
except as provided in
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Section 2.10 of these by-laws. Action of the Board shall be authorized by the
vote of a majority of the directors present at the time of the vote if there is
a quorum, unless otherwise provided by law or these by-laws. In the absence of a
quorum a majority of the directors present may adjourn any meeting from time to
time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by the
president or by any of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place of
each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
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2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
2.8 Participation in Board or Committee Meetings by Conference Telephone.
Any or all members of the Board or of any committee of the Board may participate
in a meeting of the Board or of the committee by means of a conference telephone
or similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.
2.9 Resignation and Removal of Directors. Any director may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the Board
determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority of
the entire Board, may designate an Executive
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Committee of one or more directors which shall have all the powers and authority
of the Board, except as otherwise provided in the resolution, section 141(c) of
the Delaware General Corporation Law, or any other applicable law. The members
of the Executive Committee shall serve at the pleasure of the Board. All action
of the Executive Committee shall be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall be
the president, one or more vice presidents (including an executive vice
president, if the Board so determines), a secretary and a treasurer. Any two or
more offices may be held by the same person. The Board may require any officer,
agent or employee to give security for the faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
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4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 The President. The president shall be the chief executive officer of
the corporation and shall preside at all meetings of the Board and of the
stockholders. Subject to the control of the Board, he shall have general
supervision over the business of the corporation and shall have such other
powers and duties as presidents of corporations usually have or as the Board
assigns to him.
4.7 Vice President. Each vice president shall have such powers and duties
as the Board or the president assigns to him.
4.8 The Treasurer. The treasurer shall be the chief financial officer of
the corporation and shall be in charge of the corporation's books and accounts.
Subject to the control of the Board, he shall have such other powers and duties
as the Board or the president assigns to him.
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4.9 The Secretary. The secretary shall be the secretary of, and keep the
minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the secretary from any meeting, the minutes shall be kept by the person
appointed for that purpose by the presiding officer.
4.10 Salaries. The Board may fix the officers' salaries, if any, or it may
authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the president or a vice president and by the secretary or an assistant
secretary, or the treasurer or an assistant treasurer, and shall be sealed with
the corporation's seal or a facsimile of the seal. Any or all of the signatures
on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
8
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6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other corporations
which are held by the corporation may be represented and voted by the president
or a vice president of this corporation or by proxy or proxies appointed by one
of them. The Board may, however, appoint some other person to vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders.
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<PAGE> 1
EXHIBIT 3.41
CERTIFICATE OF INCORPORATION
OF
SKY CHEFS FISCAL CORP.
1. The name of the corporation is Sky Chefs Fiscal Corp.
2. The address of the corporation's registered office in Delaware is
410 South State Street, Dover (Kent County), Delaware 19901. United Corporate
Services, Inc. is the corporation's registered agent at that address.
3. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The corporation shall have authority to issue a total of 1000 shares
of common stock of the par value of $0.01 per share.
5. The name of the sole incorporator is Philip H. Ehrlich and his
mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue,
New York, New York 10022.
6. The Board of Directors shall have the power to make, alter or repeal
the by-laws of the corporation.
7. The election of the Board of Directors need not be by written
ballot.
8. The corporation shall indemnify to the fullest extent permitted by
Section 145 of the General Corporation Law of Delaware as amended from time to
time each person that such Section grants the corporation the power to
indemnify.
9. No director shall be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director for
any act or omission occurring subsequent to the date when this provision becomes
effective, except that he may be liable (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law or (iv) for any transaction from which the director derived an improper
personal benefit.
Dated: September 26, 1988
/s/ Philip H. Ehrlich
-------------------------------------
Philip H. Ehrlich
Sole Incorporator
<PAGE> 2
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF
SKY CHEFS FISCAL CORP.
Pursuant to Section 242 of the
General Corporation Law of Delaware
The undersigned, the President of Sky Chefs Fiscal Corp., a Delaware
corporation (the "Corporation"), does hereby certify as follows:
1. Paragraph 1 of the Certificate of Incorporation of the
Corporation is hereby amended to read in its entirety as follows:
"1. The name of the Corporation is Onex Ohio Fiscal
Corp."
2. The foregoing amendment was approved by the board of
directors of the Corporation in accordance with the provisions of
Section 242(b) of the General Corporation Law of Delaware, and
consented to by the holders of all of the outstanding common stock of
the Corporation in accordance with the provisions of Section 228 of the
General Corporation Law of Delaware.
Dated: November 29, 1993
/s/ Donald F. West
-----------------------------
Donald F. West, President
Attest:
/s/ James J. O'Neill
- ------------------------------
James J. O'Neill, Secretary
<PAGE> 1
EXHIBIT 3.42
BY-LAWS
of
SKY CHEFS FISCAL CORP.
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be
called by resolution of the Board or by the chairman of the Board or the
president and shall be called by the president or secretary upon the written
request (stating the purpose or purposes of the meeting) of a majority of the
directors then in office or of the holders of shares representing a majority of
the total number of votes entitled to be cast. Only business related to the
purposes set forth in the notice of the meeting may be transacted at a special
meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be
held in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each
meeting of stockholders shall be given to each stockholder entitled to vote at
the meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If mailed, notice shall be considered
given when mailed to a stockholder at his address on the corporation's records.
The attendance of any stockholder at a meeting, without protesting at the
beginning of the meeting that the meeting is not lawfully called or convened,
shall constitute a waiver of notice by him.
1.5 Quorum. At any meeting of stockholders, the presence in person or
by proxy of the holders of shares representing a majority of the votes entitled
to be cast shall constitute a quorum for the transaction of any business. In the
absence of a quorum a majority in voting interest of those
<PAGE> 2
present or, if no stockholders are present, any officer entitled to preside at
or to act as secretary of the meeting, may adjourn the meeting until a quorum is
present. At any adjourned meeting at which a quorum is present any action may be
taken which might have been taken at the meeting as originally called. No notice
of an adjourned meeting need be given if the time and place are announced at the
meeting at which the adjournment is taken except that, if adjournment is for
more than thirty days or if, after the adjournment, a new record date is fixed
for the meeting, notice of the adjourned meeting shall be given pursuant to
Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to
one vote for every share registered in his name. Corporate action to be taken by
stockholder vote, including the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 1.8 of these by-laws. Voting need not be by ballot
unless requested by a stockholder at the meeting or ordered by the chairman of
the meeting; however, all elections of directors shall be by written ballot,
unless otherwise provided in the certificate of incorporation. Each stockholder
entitled to vote at any meeting of stockholders or to express consent to or
dissent from corporate action in writing without a meeting may authorize another
person to act for him by proxy. Every proxy must be signed by the stockholder or
his attorney-in-fact. No proxy shall be valid after three years from its date
unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of
any meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in his name. For a period of not less than 10 days prior to
the meeting, the list shall be available during ordinary business hours for
inspection by any stockholder for any purpose germane to the meeting. During
this period, the list shall be kept either (a) at a place within the city where
the meeting is to be held, if that place shall have been specified in the notice
of the meeting, or (b) if not so specified, at the place where the meeting is to
be held. The list shall also be available for inspection by stockholders at the
time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required to be
taken at any annual or special meeting of stockholders of the corporation, or
any action which may be taken at any annual or special meeting of the
stockholders, may be taken, without a meeting, without prior notice and without
a vote, if a consent or consents in writing, setting forth the action so taken,
shall be signed by the holders of outstanding
2
<PAGE> 3
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted and shall be delivered to the corporation by
delivery to its registered office in Delaware, its principal place of business,
or an officer or agent of the corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
corporation's registered office shall be made by hand or by certified or
registered mail, return receipt requested.
Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless, within sixty days of the
date the earliest dated consent is delivered to the corporation, a written
consent or consents signed by a sufficient number of holders to take action are
delivered to the corporation in the manner prescribed in the first paragraph of
this Section.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business
of the corporation shall be managed by the Board, which shall consist of four
directors. The number of directors may be changed by resolution of a majority of
the entire Board or by the stockholders, but no decrease may shorten the term of
any incumbent director. Directors shall be elected at each annual meeting of
stockholders and shall hold office until the next annual meeting of stockholders
and until the election and qualification of their respective successors, subject
to the provisions of Section 2.9. As used in these by-laws, the term "entire
Board" means the total number of directors which the corporation would have if
there were no vacancies on the Board.
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
unless otherwise provided by these by-laws. Action of the Board shall be
authorized by the vote of a majority of the directors present at the time of the
vote if there is a quorum, unless otherwise provided by law, these by-laws or
the Certificate of Incorporation of the corporation. In the absence of a quorum
a majority of the directors present may adjourn any meeting from time to time
until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of
3
<PAGE> 4
other matters, shall be held either (a) without notice immediately after the
annual meeting of stockholders and at the same place, or (b) as soon as
practicable after the annual meeting of stockholders, on notice as provided in
Section 2.6 of these by-laws. Regular meetings of the Board may be held without
notice at such times and places as the Board determines. If the day fixed for a
regular meeting is a legal holiday, the meeting shall be held on the next
business day.
2.5 Special Meetings. Special meetings of the Board may be called by
the chairman of the Board, the president or by any of the directors then in
office.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place
of each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
2.8 Participation in Board or Committee Meetings by Conference
Telephone. Any or all members of the Board or of any committee of the Board may
participate in a meeting of the Board or of the committee by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at the meeting.
2.9 Resignation and Removal of Directors. Any director may resign at
any time by delivering his resignation in writing to the president or secretary
of the corporation, to take effect at the time specified in the resignation; the
4
<PAGE> 5
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation together
with reimbursement of their reasonable expenses in connection with the
performance of their duties, all as the Board determines. A director may also be
paid for serving the corporation, its affiliates or subsidiaries in other
capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority
of the entire Board, may designate an Executive Committee of one or more
directors which shall have all the powers and authority of the Board, except as
otherwise provided in the resolution, section 141(c) of the Delaware General
Corporation Law, or any other applicable law. The members of the Executive
Committee shall serve at the pleasure of the Board. All action of the Executive
Committee shall be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation may
include a chairman of the board, the president,
5
<PAGE> 6
one or more vice presidents (including executive or senior vice presidents, if
the Board so determines), a secretary or senior assistant secretary and a
treasurer. Any two or more offices may be held by the same person, except the
offices of president and secretary. The Board may require any officer, agent or
employee to give security for the faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 Chairman of the Board. The chairman of the board, shall preside at
all meetings of the Board and of the stockholders and shall have such powers and
duties as the Board assigns to him.
4.7 The President. The president shall be subject to the control of the
Board and the chairman of the board, he shall have general supervision over the
business of the corporation and shall have such other powers and duties as
presidents of corporations usually have or as the Board assigns to him.
6
<PAGE> 7
4.8 Vice President. Each vice president shall have such powers and
duties as the Board or the president assigns to him.
4.9 The Treasurer. The treasurer shall be the chief financial officer
of the corporation and shall be in charge of the corporation's books and
accounts. Subject to the control of the Board, he shall have such other powers
and duties as the Board or the president assigns to him.
4.10 The Secretary. The secretary shall be the secretary of, and keep
the minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the secretary from any meeting, the minutes shall be kept by the person
appointed for that purpose by the presiding officer.
4.11 Salaries. The Board may fix the officers' salaries, if any, or it
may authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the chairman of the board, the president or a vice president and by the
secretary or an assistant secretary, or the treasurer or an assistant treasurer,
and shall be sealed with the corporation's seal or a facsimile of the seal. Any
or all of the signatures on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. In order that the
corporation may determine the stockholders entitled to notice of or to vote at
any meeting of stockholders, or to receive payment of any dividend or other
distribution or allotment of any rights or to exercise any rights in respect of
any change, conversion or exchange of stock or for the purpose of any other
lawful action, the Board may fix a record date, which record date shall not
precede the date on which the resolution fixing the record date is adopted and
which record date shall not be more than sixty nor less than ten days before
7
<PAGE> 8
the date of any meeting of stockholders, nor more than sixty days prior to the
time for such other action as hereinbefore described; provided, however, that if
no record date is fixed by the Board, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held, and for determining stockholders
entitled to receive payment of any dividend or other distribution or allotment
of rights or to exercise any rights of change, conversion or exchange of stock
or for any other purpose, the record date shall be at the close of business on
the day on which the Board adopts a resolution relating thereto.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board may fix a new record date for the adjourned
meeting.
In order that the corporation may determine the stockholders entitled
to consent to corporate action in writing without a meeting, the Board may fix a
record date, which shall not precede the date upon which the resolution fixing
the record date is adopted by the Board, and which record date shall be not more
than ten days after the date upon which the resolution fixing the record date is
adopted. If no record date has been fixed by the Board and no prior action by
the Board is required by the Delaware General Corporation Law, the record date
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the Corporation in the
manner prescribed by Section 1.8. If no record date has been fixed by the Board
and prior action by the Board is required by the Delaware General Corporation
Law with stockholders, the record date for determining stockholders entitled to
consent to corporate action in writing shall be at the close of business on the
day on which the Board adopts the resolution taken such prior action.
6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other
corporations which are held by the corporation may be
8
<PAGE> 9
represented and voted by the president or a vice president of this corporation
or by proxy or proxies appointed by one of them. The Board may, however, appoint
some other person to vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders except as otherwise
provided in the Certificate of Incorporation of the corporation.
6.5 Inconsistent Provisions. In the event of any inconsistency between
any provision of these by-laws and any provision of the Certificate of
Incorporation of the corporation, the provisions of the Certificate of
Incorporation of the corporation shall govern.
9
<PAGE> 1
EXHIBIT 3.43
CERTIFICATE OF INCORPORATION
OF
ONEX OHIO FISCAL CORP. II
1. The name of the corporation is Onex Ohio Fiscal Corp. II.
2. The address of the corporation's registered office in Delaware is
15 East North Street, Dover (Kent County), Delaware 19901. United Corporate
Services, Inc. is the corporation's registered agent at that address.
3. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The corporation shall have authority to issue a total of 1,000
shares of common stock of the par value of $.01 per share.
5. The name of the sole incorporator is Mark S. Kingsley and his
mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue,
New York, New York 10022.
6. The Board of Directors shall have the power to make, alter or
repeal the by-laws of the corporation.
7. The election of the Board of Directors need not be by written
ballot.
8. The corporation shall indemnify to the fullest extent permitted
by Section 145 of the General Corporation Law of Delaware as amended from time
to time each person who is or was a director or officer of the corporation and
the heirs, executors and administrators of such a person.
9. No director shall be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director for
any act or omission occurring
<PAGE> 2
subsequent to the date when this provision becomes effective, except that he may
be liable (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit.
10. The corporation elects not to be governed by Section 203 of the
Delaware General Corporation Law.
Dated: December 29, 1993
/s/ Mark S. Kingsley
---------------------------
Mark S. Kingsley
Sole Incorporator
2
<PAGE> 1
EXHIBIT 3.44
BY-LAWS
of
ONEX OHIO FISCAL CORP. II
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be called
by resolution of the Board or by the president and shall be called by the
president or secretary upon the written request (stating the purpose or purposes
of the meeting) of a majority of the directors then in office or of the holders
of a majority of the outstanding shares entitled to vote. Only business related
to the purposes set forth in the notice of the meeting may be transacted at a
special meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be held
in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each meeting
of stockholders shall be given to each stockholder entitled to vote at the
meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If
<PAGE> 2
mailed, notice shall be considered given when mailed to a stockholder at his
address on the corporation's records. The attendance of any stockholder at a
meeting, without protesting at the beginning of the meeting that the meeting is
not lawfully called or convened, shall constitute a waiver of notice by him.
1.5 Quorum. At any meeting of stockholders, the presence in person or by
proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum a majority in voting interest of those present or, if no stockholders are
present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are announced at the meeting at
which the adjournment is taken except that, if adjournment is for more than
thirty days or if, after the adjournment, a new record date is fixed for the
meeting, notice of the adjourned meeting shall be given pursuant to Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to one
vote for every share registered in his name. Corporate action to be taken by
stockholder vote, including the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 1.8 of these by-laws. Voting need not be by ballot
unless requested by a stockholder at the meeting or ordered by the chairman of
the meeting; however, all elections of directors shall be by written ballot,
unless otherwise provided in the certificate of incorporation. Each stockholder
entitled to vote at any meeting of stockholders or to express consent to or
dissent from corporate action in writing without a meeting may authorize another
person to act for him by proxy. Every proxy must be signed by the stockholder or
his attorney-in-fact. No proxy shall be valid after three years from its date
unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of any
meeting of stockholders, the secretary of the
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corporation shall prepare a complete list of stockholders entitled to vote at
the meeting, arranged in alphabetical order and showing the address of each
stockholder and the number of shares registered in his name. For a period of not
less than 10 days prior to the meeting, the list shall be available during
ordinary business hours for inspection by any stockholder for any purpose
germane to the meeting. During this period, the list shall be kept either (a) at
a place within the city where the meeting is to be held, if that place shall
have been specified in the notice of the meeting, or (b) if not so specified, at
the place where the meeting is to be held. The list shall also be available for
inspection by stockholders at the time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or permitted
to be taken at any meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting. Prompt notice of the taking of any such action shall be
given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business of
the corporation shall be managed by the Board, which shall consist of one or
more directors. The number of directors may be changed by resolution of a
majority of the Board or by the stockholders, but no decrease may shorten the
term of any incumbent director. Directors shall be elected at each annual
meeting of stockholders and shall hold office until the next annual meeting of
stockholders and until the election and qualification of their respective
successors, subject to the provisions of Section 2.9.
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
except as provided in
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Section 2.10 of these by-laws. Action of the Board shall be authorized by the
vote of a majority of the directors present at the time of the vote if there is
a quorum, unless otherwise provided by law or these by-laws. In the absence of a
quorum a majority of the directors present may adjourn any meeting from time to
time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by the
president or by any of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place of
each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
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2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
2.8 Participation in Board or Committee Meetings by Conference Telephone.
Any or all members of the Board or of any committee of the Board may participate
in a meeting of the Board or of the committee by means of a conference telephone
or similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.
2.9 Resignation and Removal of Directors. Any director may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the Board
determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority of
the entire Board, may designate an Executive
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Committee of one or more directors which shall have all the powers and authority
of the Board, except as otherwise provided in the resolution, section 141(c) of
the Delaware General Corporation Law, or any other applicable law. The members
of the Executive Committee shall serve at the pleasure of the Board. All action
of the Executive Committee shall be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall be
the president, one or more vice presidents (including an executive vice
president, if the Board so determines), a secretary and a treasurer. Any two or
more offices may be held by the same person. The Board may require any officer,
agent or employee to give security for the faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
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4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 The President. The president shall be the chief executive officer of
the corporation and shall preside at all meetings of the Board and of the
stockholders. Subject to the control of the Board, he shall have general
supervision over the business of the corporation and shall have such other
powers and duties as presidents of corporations usually have or as the Board
assigns to him.
4.7 Vice President. Each vice president shall have such powers and duties
as the Board or the president assigns to him.
4.8 The Treasurer. The treasurer shall be the chief financial officer of
the corporation and shall be in charge of the corporation's books and accounts.
Subject to the control of the Board, he shall have such other powers and duties
as the Board or the president assigns to him.
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4.9 The Secretary. The secretary shall be the secretary of, and keep the
minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the secretary from any meeting, the minutes shall be kept by the person
appointed for that purpose by the presiding officer.
4.10 Salaries. The Board may fix the officers' salaries, if any, or it may
authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the president or a vice president and by the secretary or an assistant
secretary, or the treasurer or an assistant treasurer, and shall be sealed with
the corporation's seal or a facsimile of the seal. Any or all of the signatures
on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
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6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other corporations
which are held by the corporation may be represented and voted by the president
or a vice president of this corporation or by proxy or proxies appointed by one
of them. The Board may, however, appoint some other person to vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders.
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Exhibit 3.45
CERTIFICATE OF INCORPORATION
OF
SKY CHEFS FUNDS CORP.
1. The name of the corporation is Sky Chefs Funds Corp.
2. The address of the corporation's registered office in Delaware
is 410 South State Street, Dover (Kent County), Delaware 19901. United
Corporate Services, Inc. is the corporation's registered agent at that address.
3. The purpose of the corporation is to engage in any lawful act
or activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The corporation shall have authority to issue a total of 1000
shares of common stock of the par value of $0.01 per share.
5. The name of the sole incorporator is Philip H. Ehrlich and his
mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue,
New York, New York 10022.
6. The Board of Directors shall have the power to make, alter or
repeal the by-laws of the corporation.
7. The election of the Board of Directors need not be by written
ballot.
8. The corporation shall indemnify to the fullest extent permitted
by Section 145 of the General Corporation Law of Delaware as amended from time
to time each person that such Section grants the corporation the power to
indemnify.
9. No director shall be personally liable to the corporation as
its stockholders for monetary damages for breach of fiduciary duty as a director
for any act or omission occurring subsequent to the date when this provision
becomes effective, except that he may be liable (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived an
improper personal benefit.
Dated: September 28, 1988
/s/ Philip B. Ehrlich
------------------------------
Philip B. Ehrlich
Sole Incorporator
<PAGE> 2
Certificate of Amendment
of the Certificate of Incorporation
of
Sky Chefs Funds Corp.
Pursuant to Section 242 of the
General Corporation Law of Delaware
The undersigned, the President of Sky Chefs Funds Corp., a Delaware
corporation (the "Corporation"), does hereby certify as follows:
1. Paragraph 1 of the Certificate of Incorporation of the
Corporation is hereby amended to read in its entirety as follows:
"1. The name of the Corporation is Ohio Funds Corp."
2. The foregoing amendment was approved by the board of directors
of the Corporation in accordance with the provisions of Section 242(b)
of the General Corporation Law of Delaware, and consented to by the
holders of all of the outstanding common stock of the Corporation in
accordance with the provisions of Section 220 of the General
Corporation Law of Delaware.
Dated: November 29, 1993
/s/ Donald F. West
----------------------------
Donald F. West, President
Attest:
/s/ James J. O'Neill
- --------------------------------
James J. O'Neill, Secretary
<PAGE> 1
EXHIBIT 3.46
BY-LAWS
of
SKY CHEFS FUNDS CORP.
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held
on the third Tuesday of April in each year, or as soon thereafter as
practicable, and shall be held at a place and time determined by the board of
directors (the "Board").
1.2 Special Meetings. Special meetings of the stockholders may be
called by resolution of the Board or by the chairman of the Board or the
president and shall be called by the president or secretary upon the written
request (stating the purpose or purposes of the meeting) of a majority of the
directors then in office or of the holders of shares representing a majority of
the total number of votes entitled to be cast. Only business related to the
purposes set forth in the notice of the meeting may be transacted at a special
meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be
held in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each
meeting of stockholders shall be given to each stockholder entitled to vote at
the meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If mailed, notice shall be considered
given when mailed to a stockholder at his address on the corporation's records.
The attendance of any stockholder at a meeting, without protesting at the
beginning of the meeting that the meeting is not lawfully called or convened,
shall constitute a waiver of notice by him.
1.5 Quorum. At any meeting of stockholders, the presence in person
or by proxy of the holders of shares representing a majority of the votes
entitled to be cast shall constitute a quorum for the transaction of any
business. In the absence of a quorum a majority in voting interest of those
<PAGE> 2
present or, if no stockholders are present, any officer entitled to preside at
or to act as secretary of the meeting, may adjourn the meeting until a quorum is
present. At any adjourned meeting at which a quorum is present any action may be
taken which might have been taken at the meeting as originally called. No notice
of an adjourned meeting need be given if the time and place are announced at the
meeting at which the adjournment is taken except that, if adjournment is for
more than thirty days or if, after the adjournment, a new record date is fixed
for the meeting, notice of the adjourned meeting shall be given pursuant to
Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to
one vote for every share registered in his name. Corporate action to be taken by
stockholder vote, including the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 1.8 of these by-laws. Voting need not be by ballot
unless requested by a stockholder at the meeting or ordered by the chairman of
the meeting; however, all elections of directors shall be by written ballot,
unless otherwise provided in the certificate of incorporation. Each stockholder
entitled to vote at any meeting of stockholders or to express consent to or
dissent from corporate action in writing without a meeting may authorize another
person to act for him by proxy. Every proxy must be signed by the stockholder or
his attorney-in-fact. No proxy shall be valid after three years from its date
unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of
any meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in his name. For a period of not less than 10 days prior to
the meeting, the list shall be available during ordinary business hours for
inspection by any stockholder for any purpose germane to the meeting. During
this period, the list shall be kept either (a) at a place within the city where
the meeting is to be held, if that place shall have been specified in the notice
of the meeting, or (b) if not so specified, at the place where the meeting is to
be held. The list shall also be available for inspection by stockholders at the
time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required to be
taken at any annual or special meeting of stockholders of the corporation, or
any action which may be taken at any annual or special meeting of the
stockholders, may be taken, without a meeting, without prior notice and without
a vote, if a consent or consents in writing, setting forth the action so taken,
shall be signed by the holders of outstanding
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stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted and shall be delivered to the corporation by
delivery to its registered office in Delaware, its principal place of business,
or an officer or agent of the corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
corporation's registered office shall be made by hand or by certified or
registered mail, return receipt requested.
Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless, within sixty days of the
date the earliest dated consent is delivered to the corporation, a written
consent or consents signed by a sufficient number of holders to take action are
delivered to the corporation in the manner prescribed in the first paragraph of
this section.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The
business of the corporation shall be managed by the Board, which shall consist
of four directors. The number of directors may be changed by resolution of a
majority of the entire Board or by the stockholders, but no decrease may shorten
the term of any incumbent director. Directors shall be elected at each annual
meeting of stockholders and shall hold office until the next annual meeting of
stockholders and until the election and qualification of their respective
successors, subject to the provisions of Section 2.9. As used in these by-laws,
the term "entire Board" means the total number of directors which the
corporation would have if there were no vacancies on the Board.
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
unless otherwise provided by these by-laws. Action of the Board shall be
authorized by the vote of a majority of the directors present at the time of the
vote if there is a quorum, unless otherwise provided by law, these by-laws or
the Certificate of incorporation of the corporation. In the absence of a quorum
a majority of the directors present may adjourn any meeting from time to time
until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or
outside Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for
the election of officers and consideration of
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other matters, shall be held either (a) without notice immediately after the
annual meeting of stockholders and at the same place, or (b) as soon as
practicable after the annual meeting of stockholders, on notice as provided in
Section 2.6 of these bylaws. Regular meetings of the Board may be held without
notice at such times and places as the Board determines. If the day fixed for a
regular meeting is a legal holiday, the meeting shall be held on the next
business day.
2.5 Special Meetings. Special meetings of the Board may be called by
the chairman of the Board, the president or by any of the directors then in
office.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and
place of each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
2.7 Board or Committee Action Without a fleeting. Any action
required or permitted to be taken by the Board or by any committee of the Board
may be taken without a meeting if all of the members of the Board or of the
committee consent in writing to the adoption of a resolution authorizing the
action. The resolution and the written consents by the members of the Board or
the committee shall be filed with the minutes of the proceeding of the Board or
of the committee.
2.8 Participation in Board or Committee Meetings by Conference
Telephone. Any or all members of the Board or of any committee of the Board may
participate in a meeting of the Board or of the committee by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at the meeting.
2.9 Resignation and Removal of Directors. Any director may resign at
any time by delivering his resignation in writing to the president or secretary
of the corporation, to take effect at the time specified in the resignation; the
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<PAGE> 5
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by
an increase in the number of directors, may be filled for the unexpired term by
a majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation
together with reimbursement of their reasonable expenses in connection with the
performance of their duties, all as the Board determines. A director may also be
paid for serving the corporation, its affiliates or subsidiaries in other
capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a
majority of the entire Board, may designate an Executive Committee of one or
more directors which shall have all the powers and authority of the Board,
except as otherwise provided in the resolution, section 141(c) of the Delaware
General Corporation Law, or any other applicable law. The members of the
Executive Committee shall serve at the pleasure of the Board. All action of the
Executive Committee shall be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority
of the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation may
include a chairman of the board, the president,
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<PAGE> 6
one or more vice presidents (including executive or senior vice presidents, if
the Board so determines), a secretary or senior assistant secretary and a
treasurer. Any two or more offices may be held by the same person, except the
offices of president and secretary. The Board may require any officer, agent or
employee to give security for the faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the
corporation shall be elected annually by the Board, and each such officer shall
hold office until the next annual meeting of the Board and until the election of
his successor, subject to the provisions of Section 4.4.
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at
any time by delivering his resignation in writing to the president or secretary
of the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the
unexpired term in the manner prescribed in sections 4.2 and 4.3 of these by-laws
for election or appointment to the office.
4.6 Chairman of the Board. The chairman of the board, shall preside
at all meetings of the Board and of the stockholders and shall have such powers
and duties as the Board assigns to him.
4.7 The president. The president shall be subject to the control of
the Board and the chairman of the board, he shall have general supervision over
the business of the corporation and shall have such other powers and duties as
presidents of corporations usually have or as the Board assigns to him.
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4.8 Vice President. Each vice president shall have such powers and
duties as the Board or the president assigns to him.
4.9 The Treasurer. The treasurer shall be the chief financial
officer of the corporation and shall be in charge of the corporation's books and
accounts. Subject to the control of the Board, he shall have such other powers
and duties as the Board or the president assigns to him.
4.10 The Secretary. The secretary shall be the secretary of, and
keep the minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the secretary from any meeting, the minutes shall be kept by the person
appointed for that purpose by the presiding officer.
4.11 Salaries. The Board may fix the officers' salaries, if any, or
it may authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the chairman of the board, the president or a vice president and by the
secretary or an assistant secretary, or the treasurer or an assistant treasurer,
and shall be sealed with the corporation's seal or a facsimile of the seal. Any
or all of the signatures on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the
corporation's books, upon surrender of the certificate for the shares, properly
endorsed. The Board may require satisfactory surety before issuing a new
certificate to replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. In order that the
corporation may determine the stockholders entitled to notice of or to vote at
any meeting of stockholders, or to receive payment of any dividend or other
distribution or allotment of any rights or to exercise any rights in respect of
any change, conversion or exchange of stock or for the purpose of any other
lawful action, the Board may fix a record date, which record date shall not
precede the date on which the resolution fixing the record date is adopted and
which record date shall not be more than sixty nor less than ten days before
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the date of any meeting of stockholders, nor more than sixty days prior to the
time for such other action as hereinbefore described; provided, however, that if
no record date is fixed by the Board, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held, and for determining stockholders
entitled to receive payment of any dividend or other distribution or allotment
of rights or to exercise any rights of change, conversion or exchange of stock
or for any other purpose, the record date shall be at the close of business on
the day on which the Board adopts a resolution relating thereto.
A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board may fix a new record date for the
adjourned meeting.
In order that the corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the Board
may fix a record date, which shall not precede the date upon which the
resolution fixing the record date is adopted by the Board, and which record date
shall be not more than ten days after the date upon which the resolution fixing
the record date is adopted. If no record date has been fixed by the Board and no
prior action by the Board is required by the Delaware General Corporation Law,
the record date shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation in the manner prescribed by Section 1.8. If no record date has been
fixed by the Board and prior action by the Board is required by the Delaware
General Corporation Law with stockholders, the record date for determining
stockholders entitled to consent to corporate action in writing shall be at the
close of business on the day on which the Board adopts the resolution taken such
prior action.
6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in
the form of a circle and shall bear the corporation's name and the year and
state in which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal
year. Until changed by the Board, the corporation's fiscal year shall be the
calendar year.
6.3 Voting of Shares in Other Corporations. Shares in other
corporations which are held by the corporation may be
8
<PAGE> 9
represented and voted by the president or a vice president of this corporation
or by proxy or proxies appointed by one of them. The Board may, however, appoint
some other person to vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders except as otherwise
provided in the Certificate of Incorporation of the corporation.
6.5 Inconsistent Provisions. In the event of any inconsistency
between any provision of these by-laws and any provision of the Certificate of
Incorporation of the corporation, the provisions of the Certificate of
Incorporation of the corporation shall govern.
9
<PAGE> 1
Exhibit 3.47
CERTIFICATE OF INCORPORATION
OF
ONEX OHIO FUNDS CORP. II
1. The name of the corporation is Onex Ohio Funds
Corp. II.
2. The address of the corporation's registered office in
Delaware is 15 East North Street, Dover (Kent County), Delaware 19901. United
Corporate Services, Inc. is the corporation's registered agent at that address.
3. The purpose of the corporation is to engage in any lawful
act or activity for which corporations may be organized under the Delaware
General Corporation Law.
4. The corporation shall have authority to issue a total of
1,000 shares of common stock of the par value of $.01 per share.
5. The name of the sole incorporator is Mark S. Kingsley and
his mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, 425 Park
Avenue, New York, New York 10022.
6. The Board of Directors shall have the power to
make, alter or repeal the by-laws of the corporation.
7. The election of the Board of Directors need not be
by written ballot.
8. The corporation shall indemnify to the fullest extent
permitted by Section 145 of the General Corporation Law of Delaware as amended
from time to time each person who is or was a director or officer of the
corporation and the heirs, executors and administrators of such a person.
9. No director shall be personally liable to the
corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director for any act or omission occurring
<PAGE> 2
subsequent to the date when this provision becomes effective, except that he may
be liable (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit.
10. The corporation elects not to be governed by Section 203
of the Delaware General Corporation Law.
Dated: December 29, 1993
/s/ Mark S. Kingsley
--------------------
Mark S. Kingsley
Sole Incorporator
2
<PAGE> 1
EXHIBIT 3.48
BY-LAWS
of
ONEX OHIO FUNDS CORP. II
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be called
by resolution of the Board or by the president and shall be called by the
president or secretary upon the written request (stating the purpose or purposes
of the meeting) of a majority of the directors then in office or of the holders
of a majority of the outstanding shares entitled to vote. Only business related
to the purposes set forth in the notice of the meeting may be transacted at a
special meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be held
in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each meeting
of stockholders shall be given to each stockholder entitled to vote at the
meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If
<PAGE> 2
mailed, notice shall be considered given when mailed to a stockholder at his
address on the corporation's records. The attendance of any stockholder at a
meeting, without protesting at the beginning of the meeting that the meeting is
not lawfully called or convened, shall constitute a waiver of notice by him.
1.5 Quorum. At any meeting of stockholders, the presence in person or by
proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum a majority in voting interest of those present or, if no stockholders are
present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are announced at the meeting at
which the adjournment is taken except that, if adjournment is for more than
thirty days or if, after the adjournment, a new record date is fixed for the
meeting, notice of the adjourned meeting shall be given pursuant to Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to one
vote for every share registered in his name. Corporate action to be taken by
stockholder vote, including the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 1.8 of these by-laws. Voting need not be by ballot
unless requested by a stockholder at the meeting or ordered by the chairman of
the meeting; however, all elections of directors shall be by written ballot,
unless otherwise provided in the certificate of incorporation. Each stockholder
entitled to vote at any meeting of stockholders or to express consent to or
dissent from corporate action in writing without a meeting may authorize another
person to act for him by proxy. Every proxy must be signed by the stockholder or
his attorney-in-fact. No proxy shall be valid after three years from its date
unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of any
meeting of stockholders, the secretary of the
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<PAGE> 3
corporation shall prepare a complete list of stockholders entitled to vote at
the meeting, arranged in alphabetical order and showing the address of each
stockholder and the number of shares registered in his name. For a period of not
less than 10 days prior to the meeting, the list shall be available during
ordinary business hours for inspection by any stockholder for any purpose
germane to the meeting. During this period, the list shall be kept either (a) at
a place within the city where the meeting is to be held, if that place shall
have been specified in the notice of the meeting, or (b) if not so specified, at
the place where the meeting is to be held. The list shall also be available for
inspection by stockholders at the time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or permitted
to be taken at any meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting. Prompt notice of the taking of any such action shall be
given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business of
the corporation shall be managed by the Board, which shall consist of one or
more directors. The number of directors may be changed by resolution of a
majority of the Board or by the stockholders, but no decrease may shorten the
term of any incumbent director. Directors shall be elected at each annual
meeting of stockholders and shall hold office until the next annual meeting of
stockholders and until the election and qualification of their respective
successors, subject to the provisions of Section 2.9.
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
except as provided in
3
<PAGE> 4
Section 2.10 of these by-laws. Action of the Board shall be authorized by the
vote of a majority of the directors present at the time of the vote if there is
a quorum, unless otherwise provided by law or these by-laws. In the absence of a
quorum a majority of the directors present may adjourn any meeting from time to
time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by the
president or by any of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place of
each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
4
<PAGE> 5
2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
2.8 Participation in Board or Committee Meetings by Conference Telephone.
Any or all members of the Board or of any committee of the Board may participate
in a meeting of the Board or of the committee by means of a conference telephone
or similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.
2.9 Resignation and Removal of Directors. Any director may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the Board
determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority of
the entire Board, may designate an Executive
5
<PAGE> 6
Committee of one or more directors which shall have all the powers and authority
of the Board, except as otherwise provided in the resolution, section 141(c) of
the Delaware General Corporation Law, or any other applicable law. The members
of the Executive Committee shall serve at the pleasure of the Board. All action
of the Executive Committee shall be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall be
the president, one or more vice presidents (including an executive vice
president, if the Board so determines), a secretary and a treasurer. Any two or
more offices may be held by the same person. The Board may require any officer,
agent or employee to give security for the faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
6
<PAGE> 7
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 The President. The president shall be the chief executive officer of
the corporation and shall preside at all meetings of the Board and of the
stockholders. Subject to the control of the Board, he shall have general
supervision over the business of the corporation and shall have such other
powers and duties as presidents of corporations usually have or as the Board
assigns to him.
4.7 Vice President. Each vice president shall have such powers and duties
as the Board or the president assigns to him.
4.8 The Treasurer. The treasurer shall be the chief financial officer of
the corporation and shall be in charge of the corporation's books and accounts.
Subject to the control of the Board, he shall have such other powers and duties
as the Board or the president assigns to him.
7
<PAGE> 8
4.9 The Secretary. The secretary shall be the secretary of, and keep the
minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the secretary from any meeting, the minutes shall be kept by the person
appointed for that purpose by the presiding officer.
4.10 Salaries. The Board may fix the officers' salaries, if any, or it may
authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the president or a vice president and by the secretary or an assistant
secretary, or the treasurer or an assistant treasurer, and shall be sealed with
the corporation's seal or a facsimile of the seal. Any or all of the signatures
on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
8
<PAGE> 9
6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other corporations
which are held by the corporation may be represented and voted by the president
or a vice president of this corporation or by proxy or proxies appointed by one
of them. The Board may, however, appoint some other person to vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders.
9
<PAGE> 1
Exhibit 3.49
Certificate of Incorporation
of
Caterair International Transition Corporation
1. The name of the corporation is Caterair International Transition
Corporation (the "Corporation")
2. The address of the Corporation's registered office in Delaware is
15 East North Street, Denver (Kent County), Delaware 19901. United Corporate
Services, Inc. is the Corporation's registered agent at that address.
3. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The Corporation shall have authority to issue a total of 3,000
shares of common stock, $.01 per value per share.
5. The name of the sole incorporator is Joshua S. Teitelbaum and his
mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue,
New York, New York 10022.
6. The Corporation's board of directors shall have the power to make,
alter or repeal the by-laws of the Corporation.
7. The election of the Corporation's board of directors need not be by
written ballot.
8. The Corporation shall indemnify to the fullest extent permitted by
Section 145 of the Delaware General Corporation Law as amended from time to time
each person that such Section grants the corporation the power to indemnify.
9. No director shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director for
any act or omission occurring subsequent to the date when this provision becomes
effective, except that he may be liable (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law or (iv) for any transaction from which the director derived an improper
personal benefit.
<PAGE> 2
10. The Corporation elects not to be governed by Section 203 of
Delaware General Corporation Law.
Dated: October 12, 1995
/s/ Joshua S. Teitelbaum
--------------------------------
Joshua S. Teitelbaum
Sole Incorporator
<PAGE> 1
EXHIBIT 3.50
BY-LAWS
OF
CATERAIR INTERNATIONAL TRANSITION CORPORATION
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the first of June in each year, or as soon thereafter as practicable, and shall
be held at a place and time determined by the board of directors (the "Board").
1.2 Special Meetings. Special meetings of the stockholders may be
called by resolution of the Board or by the president and shall be called by the
president or secretary upon the written request (stating the purpose or purposes
of the meeting) of a majority of the directors then in office or of the holders
of 51% of the outstanding shares entitled to vote. Only business related to the
purposes set forth in the notice of the meeting may be transacted at a special
meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be
held in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each
meeting of stockholders shall be given to each stockholder entitled to vote at
the meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If mailed, notice shall be considered
given when mailed to a stockholder at his address on the corporation's records.
The attendance of any stockholder at a meeting, without protesting at the
beginning of the meeting that the meeting is not lawfully called or convened,
shall constitute a waiver of notice by him.
1.5 Quorum. At any meeting of stockholders, the presence in person or
by proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum a majority in voting interest of those present or, if no stockholders are
present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as
<PAGE> 2
originally called. No notice of an adjourned meeting need be given if the time
and place are announced at the meeting at which the adjournment is taken except
that, if adjournment is for more than thirty days or if, after the adjournment,
a new record date is fixed for the meeting, notice of the adjourned meeting
shall be given pursuant to Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to
one vote for every share registered in his name. Corporate action to be taken by
stockholder vote, other than the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 1.8 of these by-laws. Directors shall be elected
in the manner provided in Section 2.1 of these by-laws. Voting need not be by
ballot unless requested by a stockholder at the meeting or ordered by the
chairman of the meeting; however, all elections of directors shall be by written
ballot, unless otherwise provided in the certificate of incorporation. Each
stockholder entitled to vote at any meeting of stockholders or to express
consent to or dissent from corporate action in writing without a meeting may
authorize another person to act for him by proxy. Every proxy must be signed by
the stockholder or his attorney-in-fact. No proxy shall be valid after three
years from its date unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of
any meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in his name. For a period of not less than 10 days prior to
the meeting, the list shall be available during ordinary business hours for
inspection by any stockholder for any purpose germane to the meeting. During
this period, the list shall be kept either (a) at a place within the city where
the meeting is to be held, if that place shall have been specified in the notice
of the meeting, or (b) if not so specified, at the place where the meeting is to
be held. The list shall also be available for inspection by stockholders at the
time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or
permitted to be taken at any meeting of stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voting. Prompt notice of the taking of any such
action shall be given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business
of the corporation shall be managed by the Board, which shall consist of between
1 and 15 directors, as determined by resolution. The number of directors may be
changed by resolution of a majority of the Board or by the stockholders, but no
decrease may shorten the term of any incumbent director. Directors shall be
elected at each annual meeting of stockholders by a plurality of the
2
<PAGE> 3
votes cast and shall hold office until the next annual meeting of stockholders
and until the election and qualification of their respective successors, subject
to the provisions of Section 2.9. As used in these by-laws, the term "entire
Board" means the total number of directors which the corporation would have if
there were no vacancies on the Board.
2.2 Quorum and Manner of Acting. A majority of the entire Board shall
constitute a quorum for the transaction of business at any meeting, except as
provided in Section 2.10 of these by-laws. Action of the Board shall be
authorized by the vote of a majority of the directors present at the time of the
vote if there is a quorum, unless otherwise provided by law or these by-laws. In
the absence of a quorum a majority of the directors present may adjourn any
meeting from time to time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by
the chairman of the board, the president or by at least one-third of the
directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place
of each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
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2.8 Participation in Board or Committee Meetings by Conference
Telephone. Any or all members of the Board or of any committee of the Board may
participate in a meeting of the Board or of the committee by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at the meeting.
2.9 Resignation and Removal of Directors. Any director may resign at
any time by delivering his resignation in writing to the president or secretary
of the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the
Board determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority
of the entire Board, may designate an Executive Committee of one or more
directors which shall have all the powers and authority of the Board, except as
otherwise provided in the resolution, section 141(c) of the Delaware General
Corporation Law, or any other applicable law. The members of the Executive
Committee shall serve at the pleasure of the Board. All action of the Executive
Committee shall be reported to the Board at its next meeting.
3.2 Executive Labor Committee. There shall be an Executive Labor
Committee (the "Labor Committee"), consisting of three directors to be appointed
by the Board, at least two of which shall be non-management directors of the
Corporation. The Labor Committee shall be responsible for all matters affecting
the corporation related to labor, employment, unions or any like subject matter.
The Labor Committee shall have all the powers and authority of the Board, except
as otherwise provided by resolution of the Board, section 141(c) of the Delaware
General Corporation Law, or any other applicable law. The members of the Labor
Committee shall serve at the pleasure of the Board. All action of the Labor
Committee shall be reported to the Board at its next meeting.
3.3 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
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<PAGE> 5
3.4 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall
be, the chairman of the board, the president, one or more vice presidents
(including an executive vice president, if the Board so determines), a secretary
and a treasurer. Any two or more offices may be held by the same person. The
Board may require any officer, agent or employee to give security for the
faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 Chairman of the Board. The chairman of the board shall be the chief
executive officer of the corporation, shall preside at all meetings of the board
and of the stockholders and shall have such powers and duties as the Board
assigns to him.
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4.7 The President. The president shall be the chief operating officer
of the corporation. Subject to the control of the Board and the chairman of the
board, he shall have general supervision over the business of the corporation
and shall have such other powers and duties as presidents of corporations
usually have or as the Board assigns to him.
4.8 Vice President. Each vice president shall have such powers and
duties as the Board or the president assigns to him.
4.9 The Treasurer. The treasurer shall be the chief financial officer of
the corporation and shall be in charge of the corporation's books and accounts.
Subject to the control of the Board, he shall have such other powers and duties
as the Board or the president assigns to him.
4.10 The Secretary. The secretary shall be the secretary of, and keep the
minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the secretary from any meeting, the minutes shall be kept by the person
appointed for that purpose by the presiding officer.
4.11 Salaries. The Board may fix the officers' salaries, if any, or it may
authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the chairman of the board, the president or a vice president and by the
secretary or an assistant secretary, or the treasurer or an assistant treasurer,
and shall be sealed with the corporation's seal or a facsimile of the seal. Any
or all of the signatures on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
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6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other
corporations which are held by the corporation may be represented and voted by
the president or a vice president of this corporation or by proxy or proxies
appointed by one of them. The Board may, however, appoint some other person to
vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders.
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EXHIBIT 3.51
CERTIFICATE OF INCORPORATION
OF
SKY CHEFS INTERNATIONAL CORP.
1. The name of the corporation is Sky Chefs International Corp.
2. The address of the corporation's registered office in Delaware is
15 East North Street, Dover (Kent County), Delaware 19901. United Corporate
Services, Inc. is the corporation's registered agent at that address.
3. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
4. The corporation shall have authority to issue a total of 1,000
shares of common stock of the par value of $.01 per share.
5. The name of the sole incorporator is Mark S. Kingsley and his
mailing address is c/o Kaye, Scholer, Fierman, Hays & Handler, 425 Park Avenue,
New York, New York 10022.
6. The Board of Directors shall have the power to make, alter or
repeal the by-laws of the corporation.
7. The election of the Board of Directors need not be by written
ballot.
8. The corporation shall indemnify to the fullest extent permitted
by Section 145 of the General Corporation Law of Delaware as amended from time
to time each person who is or was a director or officer of the corporation and
the heirs, executors and administrators of such a person.
9. No director shall be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director for
any act or omission occurring
<PAGE> 2
subsequent to the date when this provision becomes effective, except that he may
be liable (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit.
10. The corporation elects not to be governed by Section 203 of the
Delaware General Corporation Law.
Dated: November 9, 1993
/s/ Mark S. Kingsley
---------------------------
Mark S. Kingsley
Sole Incorporator
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EXHIBIT 3.52
BY-LAWS
of
SKY CHEFS INTERNATIONAL CORP.
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be called
by resolution of the Board or by the president and shall be called by the
president or secretary upon the written request (stating the purpose or purposes
of the meeting) of a majority of the directors then in office or of the holders
of a majority of the outstanding shares entitled to vote. Only business related
to the purposes set forth in the notice of the meeting may be transacted at a
special meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be held
in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each meeting
of stockholders shall be given to each stockholder entitled to vote at the
meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If
<PAGE> 2
mailed, notice shall be considered given when mailed to a stockholder at his
address on the corporation's records. The attendance of any stockholder at a
meeting, without protesting at the beginning of the meeting that the meeting is
not lawfully called or convened, shall constitute a waiver of notice by him.
1.5 Quorum. At any meeting of stockholders, the presence in person or by
proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum a majority in voting interest of those present or, if no stockholders are
present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are announced at the meeting at
which the adjournment is taken except that, if adjournment is for more than
thirty days or if, after the adjournment, a new record date is fixed for the
meeting, notice of the adjourned meeting shall be given pursuant to Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to one
vote for every share registered in his name. Corporate action to be taken by
stockholder vote, including the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 1.8 of these by-laws. Voting need not be by ballot
unless requested by a stockholder at the meeting or ordered by the chairman of
the meeting; however, all elections of directors shall be by written ballot,
unless otherwise provided in the certificate of incorporation. Each stockholder
entitled to vote at any meeting of stockholders or to express consent to or
dissent from corporate action in writing without a meeting may authorize another
person to act for him by proxy. Every proxy must be signed by the stockholder or
his attorney-in-fact. No proxy shall be valid after three years from its date
unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of any
meeting of stockholders, the secretary of the
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corporation shall prepare a complete list of stockholders entitled to vote at
the meeting, arranged in alphabetical order and showing the address of each
stockholder and the number of shares registered in his name. For a period of not
less than 10 days prior to the meeting, the list shall be available during
ordinary business hours for inspection by any stockholder for any purpose
germane to the meeting. During this period, the list shall be kept either (a) at
a place within the city where the meeting is to be held, if that place shall
have been specified in the notice of the meeting, or (b) if not so specified, at
the place where the meeting is to be held. The list shall also be available for
inspection by stockholders at the time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or permitted
to be taken at any meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting. Prompt notice of the taking of any such action shall be
given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business of
the corporation shall be managed by the Board, which shall consist of one or
more directors. The number of directors may be changed by resolution of a
majority of the Board or by the stockholders, but no decrease may shorten the
term of any incumbent director. Directors shall be elected at each annual
meeting of stockholders and shall hold office until the next annual meeting of
stockholders and until the election and qualification of their respective
successors, subject to the provisions of Section 2.9.
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
except as provided in
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Section 2.10 of these by-laws. Action of the Board shall be authorized by the
vote of a majority of the directors present at the time of the vote if there is
a quorum, unless otherwise provided by law or these by-laws. In the absence of a
quorum a majority of the directors present may adjourn any meeting from time to
time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by the
president or by any of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place of
each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
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2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
2.8 Participation in Board or Committee Meetings by Conference Telephone.
Any or all members of the Board or of any committee of the Board may participate
in a meeting of the Board or of the committee by means of a conference telephone
or similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.
2.9 Resignation and Removal of Directors. Any director may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the Board
determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority of
the entire Board, may designate an Executive
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<PAGE> 6
Committee of one or more directors which shall have all the powers and authority
of the Board, except as otherwise provided in the resolution, section 141(c) of
the Delaware General Corporation Law, or any other applicable law. The members
of the Executive Committee shall serve at the pleasure of the Board. All action
of the Executive Committee shall be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall be
the president, one or more vice presidents (including an executive vice
president, if the Board so determines), a secretary and a treasurer. Any two or
more offices may be held by the same person. The Board may require any officer,
agent or employee to give security for the faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
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4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 The President. The president shall be the chief executive officer of
the corporation and shall preside at all meetings of the Board and of the
stockholders. Subject to the control of the Board, he shall have general
supervision over the business of the corporation and shall have such other
powers and duties as presidents of corporations usually have or as the Board
assigns to him.
4.7 Vice President. Each vice president shall have such powers and duties
as the Board or the president assigns to him.
4.8 The Treasurer. The treasurer shall be the chief financial officer of
the corporation and shall be in charge of the corporation's books and accounts.
Subject to the control of the Board, he shall have such other powers and duties
as the Board or the president assigns to him.
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<PAGE> 8
4.9 The Secretary. The secretary shall be the secretary of, and keep the
minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the secretary from any meeting, the minutes shall be kept by the person
appointed for that purpose by the presiding officer.
4.10 Salaries. The Board may fix the officers' salaries, if any, or it may
authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the president or a vice president and by the secretary or an assistant
secretary, or the treasurer or an assistant treasurer, and shall be sealed with
the corporation's seal or a facsimile of the seal. Any or all of the signatures
on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
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6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other corporations
which are held by the corporation may be represented and voted by the president
or a vice president of this corporation or by proxy or proxies appointed by one
of them. The Board may, however, appoint some other person to vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders.
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EXHIBIT 3.53
CERTIFICATE OF INCORPORATION
OF
MARRIOTT IN-FLITE SERVICES GUAM, INC.
* * * * *
1. The name of the corporation is
MARRIOTT IN-FLITE SERVICES GUAM, INC.
2. The address of its registered office in the State of Delaware is No.
100 West Tenth Street, in the City of Wilmington, County of New Castle. The name
of its registered agent at such address is The Corporation Trust Company.
3. The nature of the business or purposes to be conducted or promoted
is:
To carry on and conduct a general restaurant, cafe, cafeteria, airline
catering, general catering and grocery business, and to own and operate "drive
in" stands and other shops for the purpose of carrying on said business.
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
To manufacture, purchase or otherwise acquire, invest in, own,
mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade, deal
in and deal with goods, wares and merchandise and personal property of every
class and description.
<PAGE> 2
To acquire, and pay for in cash, stock or bonds of this corporation or
otherwise, the good will, rights, assets and property, and to undertake or
assume the whole or any part of the obligations or liabilities of any person,
firm, association or corporation.
To acquire, hold, use, sell, assign, lease, grant licenses in respect
of, mortgage or otherwise dispose of letters patent of the United States or any
foreign country, patent rights, licenses and privileges, inventions,
improvements and processes, copyrights, trade-marks and trade names, relating to
or useful in connection with any business of this corporation.
To acquire by purchase, subscription or otherwise, and to receive,
hold, own, guarantee, sell, assign, exchange, transfer, mortgage, pledge or
otherwise dispose of or deal in and with any of the shares of the capital stock,
or any voting trust certificates in respect of the shares of capital stock,
scrip, warrants, rights, bonds, debentures, notes, trust receipts, and other
securities, obligations, choses in action and evidences of indebtedness or
interest issued or created by any corporations, joint stock companies,
syndicates, associations, firms, trusts or persons, public or private, or by the
government of the United States of America, or by any foreign government, or by
any state, territory, province, municipality or other political subdivision or
by any governmental agency, and as owner thereof to possess and exercise all the
rights, powers and privileges of ownership, including the right to execute
consents and vote thereon, and to do any and all acts and things neces-
2
<PAGE> 3
sary or advisable for the preservation, protection, improvement and
enhancement in value thereof.
To borrow or raise money for any of the purposes of the corporation
and, from time to time without limit as to amount, to draw, make, accept,
endorse, execute and issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures and other negotiable or non-negotiable instruments
and evidences of indebtedness, and to secure the payment of any thereof and of
the interest thereon by mortgage upon or pledge, conveyance or assignment in
trust of the whole or any part of the property of the corporation, whether at
the time owned or thereafter acquired, and to sell, pledge or otherwise dispose
of such bonds or other obligations of the corporation for its corporate
purposes.
To purchase, receive, take by grant, gift, devise, bequest or
otherwise, lease, or otherwise acquire, own, hold, improve, employ, use and
otherwise deal in and with real or personal property, or any interest therein,
wherever situated, and to sell, convey, lease, exchange, transfer or otherwise
dispose of, or mortgage or pledge, all or any of the corporation's property and
assets, or any interest therein, wherever situated.
In general, to possess and exercise all the powers and privileges
granted by the General Corporation Law of Delaware or by any other law of
Delaware or by this certificate of incorporation together with any powers
incidental thereto, so far as such powers and privileges are necessary or
convenient to the conduct, promotion or attainment of the business or purposes
of the corporation.
The business and purposes specified in the foregoing clauses shall,
except where otherwise expressed, be in
3
<PAGE> 4
nowise limited or restricted by reference to, or inference from, the terms of
any other clause in this certificate of incorporation, but the business and
purposes specified in each of the foregoing clauses of this article shall be
regarded as independent business and purposes.
4. The total number of shares of stock which the corporation shall have
authority to issue is one hundred (100); all of such shares shall be without
par value.
5. The name and mailing address of each incorporator is as follows:
NAME MAILING ADDRESS
S.E. Wiodoes 100 West Tenth Street
Wilmington, Delaware 19801
W.J. Reif 100 West Tenth Street
Wilmington, Delaware 19801
R.A. Finger 100 West Tenth Street
Wilmington, Delaware 19801
6. The corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized:
To make, alter or repeal the by-laws of the corporation.
To authorize and cause to be executed mortgages and liens upon the real
and personal property of the corporation.
To set apart out of any of the funds of the corporation available for
dividends a reserve or reserves for any proper purpose and to abolish any such
reserve in the manner in which it was created.
4
<PAGE> 5
By a majority of the whole board, to designate one or more committees,
each committee to consist of one or more of the directors of the corporation.
The board may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. The by-laws may provide that in the absence or disqualification
of a member of a committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the board of directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the board of directors,
or in the by-laws of the corporation, shall have and may exercise all the powers
and authority of the board of directors in the management of the business and
affairs of the corporation, and may authorize the seal of the corporation to be
affixed to all papers which may require it; but no such committee shall have the
power or authority in reference to amending the certificate of incorporation,
adopting an agreement of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending the
by-laws of the corporation; and, unless the resolution or by-laws, expressly so
provide, no such committee shall have the power or authority to declare a
dividend or to authorize the issuance of stock.
5
<PAGE> 6
When and as authorized by the stockholders in accordance with statute,
to sell, lease or exchange all or substantially all of the property and assets
of the corporation, including its good will and its corporate franchises, upon
such terms and conditions and for such consideration, which may consist in whole
or in part of money or property including shares of stock in, and/or other
securities of, any other corporation or corporations, as its board of directors
shall deem expedient and for the best interests of the corporation.
8. Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws may provide. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the by-laws of the corporation. Elections of directors
need not be by written ballot unless the by-laws of the corporation shall so
provide.
9. The corporation reserves the right to amend, alter, change or repeal
any provision contained in this certificate of incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
WE, THE UNDERSIGNED, being each of the incorporators hereinbefore
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, do make this certificate, hereby
declar-
6
<PAGE> 7
ing and certifying that this is our act and deed and the facts herein stated are
true, and accordingly have hereunto set our hands this 1st day of September,
1972.
/s/ Authorized Signatory
----------------------------
/s/ Authorized Signatory
----------------------------
/s/ Authorized Signatory
----------------------------
<PAGE> 8
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
MARRIOTT IN-FLITE SERVICES GUAM, INC., a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY.
FIRST: That the Board of Directors of said corporation, by the
unanimous written consent of its members, filed with the minutes of the board,
adopted a resolution proposing and declaring advisable the following amendment
to the Certificate of Incorporation of said corporation:
RESOLVED, that the Certificate of Incorporation of MARRIOTT IN-FLITE
SERVICES GUAM, INC. be amended by changing the Article thereof numbered
"1." so that, as amended, said Article shall be and read as follows:
"1. The name of the corporation is
MARRIOTT AIRPORT PROPERTIES, INC.".
SECOND: That in lieu of a meeting and vote of stockholders, the
stockholders have given unanimous written consent to said amendment in
accordance with the provisions of section 228 of The General Corporation Law of
the State of Delaware.
THIRD: That the aforesaid amendment was duly adopted in accordance with
the applicable provisions of Sections 242 and 228 of The General Corporation Law
of the State of Delaware.
<PAGE> 9
IN WITNESS WHEREOF, said MARRIOTT IN-FLITE SERVICES GUAM, INC. has
caused this certificate to be signed by Woodrow D. Marriott, its President, and
attested by Robert B. Morris, its Secretary, this 31st day of July, 1975.
MARRIOTT IN-FLITE SERVICES
GUAM, INC.
By /s/ Woodrow D. Marriott
------------------------------
Woodrow D. Marriott, President
ATTEST:
By /s/ Robert B. Morris
-----------------------------
Robert B. Morris, Secretary
- 2 -
<PAGE> 10
CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED OFFICE
AND OF REGISTERED AGENT
It is hereby certified that:
1. The name of the corporation (hereinafter called the "corporation")
is
MARRIOTT AIRPORT PROPERTIES, INC.
2. The registered office of the corporation within the State of
Delaware is hereby changed to 229 South State Street, City of Dover 19901,
County of Kent.
3. The registered agent of the corporation within the State of Delaware
is hereby changed to The Prentice-Hall Corporation System, Inc., the business
office of which is identical with the registered office of the corporation as
hereby changed.
4. The corporation has authorized the changes hereinbefore set forth by
resolution of its Board of Directors.
Signed on Dec 4, 1978.
/s/ Authorized Signatory
----------------------------
Vice-President
Attest:
/s/ Authorized Signatory
- ---------------------------
Secretary
<PAGE> 11
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
MARRIOTT AIRPORT PROPERTIES, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "corporation")
is
MARRIOTT AIRPORT PROPERTIES, INC.
2. The certificate of incorporation of the corporation is hereby
amended by adding a new Article NINTH and renumbering former Article NINTH as
Article TENTH so that as amended, said Articles shall be and read as follows:
NINTH. No director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived an improper personal
benefit.
TENTH. The corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate of incorporation, in
the manner now or hereafter prescribed by statute, and all rights
conferred upon stockholders herein are granted subject to this
reservation.
3. The amendments of the certificate of incorporation herein certified
have been duly adopted in accordance with the provisions of Sections 228 and 242
of the General Corporation Law of the State of Delaware.
Signed and attested to on August 20, 1986.
/s/ Richard E. Marriott
------------------------------
Richard E. Marriott, President
[CORPORATE SEAL]
Attest:
/s/ Shirley J. Evans
- ---------------------------
Shirley J. Evans, Secretary
<PAGE> 12
CERTIFICATE OF CHANGE OF REGISTERED AGENT
AND
REGISTERED OFFICE
MARRIOTT AIRPORT PROPERTIES, INC., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
The present registered agent of the corporation is The Prentice-Hall
Corporation System, Inc. and the present registered office of the corporation is
in the county of Kent.
The Board of Directors of MARRIOTT AIRPORT PROPERTIES, INC. adopted the
following resolution on the 21st day of February, 1990.
Resolved, that the registered office of MARRIOTT AIRPORT PROPERTIES,
INC. in the state of Delaware be and it hereby is changed to Corporation Trust
Center, 1209 Orange Street, in the City of Wilmington, County of New Castle, and
the authorization of the present registered agent of this corporation be and the
same is hereby withdrawn, and THE CORPORATION TRUST COMPANY, shall be and is
hereby constituted and appointed the registered agent of this corporation at the
address of its registered office.
IN WITNESS WHEREOF, Marriott Airport Properties, Inc. has caused this
statement to be signed by Gary L. Theurer, its Vice President and attested by
John C. Carr, its Secretary this 21st day of February, 1990.
By /s/ Gary L. Theurer
---------------------
Vice President
ATTEST:
By /s/ John C. Carr
------------------
Secretary
<PAGE> 13
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
Marriott Airport Properties, Inc., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
- - First: That at a meeting of the Board of Directors of Marriott Airport
Properties, Inc., resolutions were duly adopted setting forth a
proposed amendment of the Certificate of Incorporation of said
corporation, declaring said amendment to be advisable and calling a
meeting of the stockholders of said corporation for consideration
thereof. The resolution setting forth the proposed amendment is as
follows:
RESOLVED, that the Certificate of Incorporation of this corporation be
amended by changing the Article thereof numbered "1. "so that, as
amended, said Article shall be and read as follows:
"The name of the corporation is Caterair Airport Properties, Inc."
- - Second: That thereafter, pursuant to resolution of its Board of
Directors, a special meeting of the stockholders of said corporation
was duly called and held, upon notice in accordance with Section 222 of
the General Corporation Law of the State of Delaware at which meeting
the necessary number of shares as required by statute were voted in
favor of the amendment.
- - Third: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State
of Delaware.
- - Fourth: That the capital of said corporation shall not be reduced under
or by reason of said amendment.
IN WITNESS WHEREOF, said Marriott Airport Properties, Inc., has caused this
certificate to be signed by Gary L. Theurer, its Vice President, and Jennifer G.
Lovelace, its Assistant Secretary, this 13th day of March, 1990.
By: /s/ Gary L. Theurer
---------------------
Vice President
ATTEST: /s/ Jennifer G. Lovelace
--------------------------
Assistant Secretary
<PAGE> 1
EXHIBIT 3.54
AMENDED AND RESTATED BY-LAWS
of
CATERAIR AIRPORT PROPERTIES, INC.
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be called
by resolution of the Board or by the president and shall be called by the
president or secretary upon the written request (stating the purpose or purposes
of the meeting) of a majority of the directors then in office or the holders of
a majority of the outstanding shares entitled to vote. Only business related to
the purposes set forth in the notice of the meeting may be transacted at a
special meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be held
in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each meeting
of stockholders shall be given to each stockholder entitled to vote at the
meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If mailed, notice shall be considered
given when mailed to a stockholder at his address on the corporation's records.
The attendance of any stockholder at a meeting, without protesting at the
beginning of the meeting that the meeting is not lawfully called or convened,
shall constitute a waiver of notice by such stockholder.
1.5 Quorum. At any meeting of stockholders, the presence in person or by
proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum, a majority in voting interest of those present or, if no stockholders
are present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are announced at the meeting at
which the adjournment is taken except that, if adjournment is for
<PAGE> 2
more than thirty days or if, after the adjournment, a new record date is fixed
for the meeting, notice of the adjourned meeting shall be given pursuant to
Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to one
vote for every share registered in his name. Corporate action to be taken by
stockholder vote, other than including the election of directors, shall be
authorized by a majority of the votes cast at a meeting of stockholders, except
as otherwise provided by law or by Section 1.8 of these by-laws. Voting need not
be by ballot unless requested by a stockholder at the meeting or ordered by the
chairman of the meeting; however, all elections of directors shall be by written
ballot, unless otherwise provided in the certificate of incorporation. Each
stockholder entitled to vote at any meeting of stockholders or to express
consent to or dissent from corporate action in writing without a meeting may
authorize another person to act for him by proxy. Every proxy must be signed by
the stockholder or his attorney-in-fact. No proxy shall be valid after three
years from its date unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of any
meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in his name. For a period of not less than 10 days prior to
the meeting, the list shall be available during ordinary business hours for
inspection by any stockholder for any purpose germane to the meeting. During
this period, the list shall be kept either (a) at a place within the city where
the meeting is to be held, if that place shall have been specified in the notice
of the meeting, or (b) if not so specified, at the place where the meeting is to
be held. The list shall also be available for inspection by stockholders at the
time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or permitted
to be taken at any meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting. Prompt notice of the taking of any such action shall be
given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business of
the corporation shall be managed by the Board, which shall consist of one or
more directors. The number of directors may be changed by resolution of a
majority of the Board or by the stockholders, but no decrease may shorten the
term of any incumbent director. Directors shall be elected at each annual
meeting of stockholders and shall hold office until the next annual meeting of
stockholders and until the election and qualification of their respective
successors, subject to the provisions of Section 2.9.
2
<PAGE> 3
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
except as provided in Section 2.10 of these by-laws. Action of the Board shall
be authorized by the vote of a majority of the directors present at the time of
the vote if there is a quorum, unless otherwise provided by law or these
by-laws. In the absence of a quorum a majority of the directors present may
adjourn any meeting from time to time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by the
president or by any of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place of
each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
2.8 Participation in Board or Committee Meetings by Conference Telephone.
Any or all members of the Board or of any committee of the Board may participate
in a meeting of the Board or of the committee by means of a conference telephone
or similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.
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<PAGE> 4
2.9 Resignation and Removal of Directors. Any director may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the Board
determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority of
the entire Board, may designate an Executive Committee of one or more directors
which shall have all the powers and authority of the Board, except as otherwise
provided in the resolution, section 141(c) of the Delaware General Corporation
Law, or any other applicable law. The members of the Executive Committee shall
serve at the pleasure of the Board. All action of the Executive Committee shall
be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall be
the president, one or more vice presidents (including an executive vice
president, if the Board so determines), a secretary and a treasurer. Any two or
more offices may be held by the same person. The Board
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<PAGE> 5
may require any officer, agent or employee to give security for the faithful
performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 The President. The president shall be the chief executive officer of
the corporation and shall preside at all meetings of the Board and of the
stockholders. Subject to the control of the Board, he shall have general
supervision over the business of the corporation and shall have such other
powers and duties as presidents of corporations usually have or as the Board
assigns to him.
4.7 Vice President. Each vice president shall have such powers and duties
as the Board or the president assigns to him.
4.8 The Treasurer. The treasurer shall be the chief financial officer of
the corporation and shall be in charge of the corporation's books and accounts.
Subject to the control of the Board, he shall have such other powers and duties
as the Board or the president assigns to him.
4.9 The Secretary. The secretary shall be the secretary of, and keep the
minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the
5
<PAGE> 6
secretary from any meeting, the minutes shall be kept by the person appointed
for that purpose by the presiding officer.
4.10 Salaries. The Board may fix the officers' salaries, if any, or it may
authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the president or a vice president and by the secretary or an assistant
secretary, or the treasurer or an assistant treasurer, and shall be sealed with
the corporation's seal or a facsimile of the seal. Any or all of the signatures
on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other corporations
which are held by the corporation may be represented and voted by the president
or a vice president of this corporation or by proxy or proxies appointed by one
of them. The Board may, however, appoint some other person to vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders.
6
<PAGE> 7
* * * * * *
As adopted by the Board of Directors of the
Corporation on August 20, 1997.
7
<PAGE> 1
EXHIBIT 3.55
CERTIFICATE OF INCORPORATION
OF
CATERAIR ST. THOMAS HOLDINGS CORPORATION
FIRST: The name of the Corporation is:
CATERAIR ST. THOMAS HOLDINGS CORPORATION (hereinafter called
the "Corporation").
SECOND: The address of its registered office in the State of Delaware
is Corporation Trust Center, 1209 Orange Street, Wilmington, DE 19801, County of
New Castle. The name of its registered agent at such address is The Corporation
Trust Company.
THIRD: The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful acts or activities for which corporations may
be organized under the General Corporation Law of Delaware.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is one hundred (100) shares of Common stock; all one
class and without par value.
FIFTH: The name and mailing address of the Incorporator is as follows:
NAME MAILING ADDRESS
Jennifer G. Lovelace 7811 Montrose Road
Potomac, Maryland 20854
SIXTH: The powers of the Incorporator shall terminate upon the filing
of this Certificate of Incorporation, and the following persons, having the
indicated mailing address, shall serve as the directors of the Corporation until
the first annual meeting of the stockholders of the Corporation or until their
successor or successors are elected and qualify:
NAME MAILING ADDRESS
Daniel J. Altobello 7811 Montrose Road
Potomac, Maryland 20854
Angelo D. Bizzarro 7811 Montrose Road
Potomac, Maryland 20854
Gary L. Theurer 7811 Montrose Road
Potomac, Maryland 20854
<PAGE> 2
SEVENTH: The corporation is to have perpetual existence.
EIGHTH: The number of directors of the Corporation shall be such number
as from time to time shall be fixed by, or in the manner provided in, the bylaws
of the Corporation. Unless and except to the extent that the bylaws of the
Corporation shall otherwise require, the election of directors of the
Corporation need not be by written ballot.
NINTH: In furtherance and not in limitation of the powers conferred by
the laws of the State of Delaware, the Board of Directors of the Corporation is
expressly authorized and empowered to adopt, amend and repeal the bylaws of the
Corporation.
TENTH: No director of the Corporation shall be liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, provided that nothing contained in this Article Tenth shall
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware Corporation
Law, or (iv) for any transaction from which the director derived an improper
impersonal benefit.
ELEVENTH: The corporation reserves the right at any time, and from time
to time, to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation, and other provisions authorized by the laws of the
State of Delaware at the time in force may be added or inserted, in the manner
now or hereafter prescribed by law; and all rights, preferences and privileges
of whatsoever nature conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this Certificate of Incorporation in its present
form or as hereunder amended are granted subject to the rights reserved in this
Article Eleventh.
IN WITNESS WHEREOF, the undersigned, being the Incorporator hereinabove
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, hereby certifies that the facts
hereinabove stated are truly set forth, and accordingly, I have hereunto set my
hand this 9th day of November, 1992.
/s/ Jennifer G. Lovelace
------------------------
Jennifer G. Lovelace
<PAGE> 1
EXHIBIT 3.56
AMENDED AND RESTATED BY-LAWS
of
CATERAIR ST. THOMAS HOLDINGS CORPORATION
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be called
by resolution of the Board or by the president and shall be called by the
president or secretary upon the written request (stating the purpose or purposes
of the meeting) of a majority of the directors then in office or the holders of
a majority of the outstanding shares entitled to vote. Only business related to
the purposes set forth in the notice of the meeting may be transacted at a
special meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be held
in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each meeting
of stockholders shall be given to each stockholder entitled to vote at the
meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If mailed, notice shall be considered
given when mailed to a stockholder at his address on the corporation's records.
The attendance of any stockholder at a meeting, without protesting at the
beginning of the meeting that the meeting is not lawfully called or convened,
shall constitute a waiver of notice by such stockholder.
1.5 Quorum. At any meeting of stockholders, the presence in person or by
proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum, a majority in voting interest of those present or, if no stockholders
are present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are announced at the meeting at
which the adjournment is taken except that, if adjournment is for
<PAGE> 2
more than thirty days or if, after the adjournment, a new record date is fixed
for the meeting, notice of the adjourned meeting shall be given pursuant to
Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to one
vote for every share registered in his name. Corporate action to be taken by
stockholder vote, other than including the election of directors, shall be
authorized by a majority of the votes cast at a meeting of stockholders, except
as otherwise provided by law or by Section 1.8 of these by-laws. Voting need not
be by ballot unless requested by a stockholder at the meeting or ordered by the
chairman of the meeting; however, all elections of directors shall be by written
ballot, unless otherwise provided in the certificate of incorporation. Each
stockholder entitled to vote at any meeting of stockholders or to express
consent to or dissent from corporate action in writing without a meeting may
authorize another person to act for him by proxy. Every proxy must be signed by
the stockholder or his attorney-in-fact. No proxy shall be valid after three
years from its date unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of any
meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in his name. For a period of not less than 10 days prior to
the meeting, the list shall be available during ordinary business hours for
inspection by any stockholder for any purpose germane to the meeting. During
this period, the list shall be kept either (a) at a place within the city where
the meeting is to be held, if that place shall have been specified in the notice
of the meeting, or (b) if not so specified, at the place where the meeting is to
be held. The list shall also be available for inspection by stockholders at the
time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or permitted
to be taken at any meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting. Prompt notice of the taking of any such action shall be
given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business of
the corporation shall be managed by the Board, which shall consist of one or
more directors. The number of directors may be changed by resolution of a
majority of the Board or by the stockholders, but no decrease may shorten the
term of any incumbent director. Directors shall be elected at each annual
meeting of stockholders and shall hold office until the next annual meeting
of stockholders and until the election and qualification of their respective
successors, subject to the provisions of Section 2.9.
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<PAGE> 3
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
except as provided in Section 2.10 of these by-laws. Action of the Board shall
be authorized by the vote of a majority of the directors present at the time of
the vote if there is a quorum, unless otherwise provided by law or these
by-laws. In the absence of a quorum a majority of the directors present may
adjourn any meeting from time to time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by the
president or by any of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place of
each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
2.8 Participation in Board or Committee Meetings by Conference Telephone.
Any or all members of the Board or of any committee of the Board may participate
in a meeting of the Board or of the committee by means of a conference telephone
or similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.
3
<PAGE> 4
2.9 Resignation and Removal of Directors. Any director may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the Board
determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority of
the entire Board, may designate an Executive Committee of one or more directors
which shall have all the powers and authority of the Board, except as otherwise
provided in the resolution, section 141(c) of the Delaware General Corporation
Law, or any other applicable law. The members of the Executive Committee shall
serve at the pleasure of the Board. All action of the Executive Committee shall
be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall be
the president, one or more vice presidents (including an executive vice
president, if the Board so determines), a secretary and a treasurer. Any two or
more offices may be held by the same person. The Board
4
<PAGE> 5
may require any officer, agent or employee to give security for the faithful
performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 The President. The president shall be the chief executive officer of
the corporation and shall preside at all meetings of the Board and of the
stockholders. Subject to the control of the Board, he shall have general
supervision over the business of the corporation and shall have such other
powers and duties as presidents of corporations usually have or as the Board
assigns to him.
4.7 Vice President. Each vice president shall have such powers and duties
as the Board or the president assigns to him.
4.8 The Treasurer. The treasurer shall be the chief financial officer of
the corporation and shall be in charge of the corporation's books and accounts.
Subject to the control of the Board, he shall have such other powers and duties
as the Board or the president assigns to him.
4.9 The Secretary. The secretary shall be the secretary of, and keep the
minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the
5
<PAGE> 6
secretary from any meeting, the minutes shall be kept by the person appointed
for that purpose by the presiding officer.
4.10 Salaries. The Board may fix the officers' salaries, if any, or it may
authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the president or a vice president and by the secretary or an assistant
secretary, or the treasurer or an assistant treasurer, and shall be sealed with
the corporation's seal or a facsimile of the seal. Any or all of the signatures
on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other corporations
which are held by the corporation may be represented and voted by the president
or a vice president of this corporation or by proxy or proxies appointed by one
of them. The Board may, however, appoint some other person to vote the shares.
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders.
6
<PAGE> 7
* * * * * *
As adopted by the Board of Directors of the
Corporation on August 20, 1997.
7
<PAGE> 1
EXHIBIT 3.57
CERTIFICATE OF INCORPORATION
OF
MARRIOTT ARGENTINE AIRLINE CATERING, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title B of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified, and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:
FIRST: The name of the corporation (hereinafter called the
"corporation") is MARRIOTT ARGENTINE AIRLINE CATERING, INC.
SECOND: The address, including street, number, city, and county, of the
registered office of the corporation in the State of Delaware is 32 Loockerman
Square, Suite L-100 City of Dover, County of Kent; and the name of the
registered agent of the corporation in the State of Delaware at such address is
The Prentice-Hall Corporation System, Inc.
THIRD: The nature of the business and of the purposes to be conducted
and promoted by the corporation, which shall be in addition to the authority of
the corporation to conduct any lawful business, to promote any lawful purpose,
and to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware, is as
follows:
To carry on and conduct a general food and beverage business;
to operate in connection therewith facilities for the manufacture,
productions, processing, storage, distribution, and sale of foods and
beverages and any other related items; to sell at wholesale and retail;
to operate such facilities on its own account, under management
contracts with others, or under franchise, or in any other legitimate
capacity; to engage in the business of providing and promoting
entertainments, amusements, and other means of
<PAGE> 2
recreation.
To carry on and conduct a general hotel business; to operate in
connection therewith hotels, motels, inns, taverns, and other places of lodging
of every kind and description; and to provide and operate facilities necessary
or desirable in connection therewith; and to operate such facilities on its own
account, under management contracts with others, or under franchises, or in any
other legitimate capacity.
To acquire, by purchase, exchange, lease, franchise, license, or any
other lawful manner, and to build, own, operate, manage, sell, lease, mortgage,
or otherwise dispose of, the facilities and properties which are, or may be,
required in the conduct of such general food and beverage business and hotel
business and all other businesses related thereto, also to purchase, acquire,
own hold, use, lease (either as lessor or lessee), rent sublet, grant, sell,
exchange, subdivide, mortgage, encumber, deed in trust, manage, improve,
develop, maintain, construct, operate and generally deal in, any and all real
estate, improved and unimproved, stores, office buildings, apartment houses,
shopping centers, commercial buildings, restaurants, hotels, garages,
warehouses, manufacturing plants, and other buildings of any kind or
description, and any and all other property of every kind or description, real,
personal, and mixed, and any interest or right therein, wheresoever situated.
To manufacture, purchase, or acquire in any lawful manner, and to hold,
own, mortgage, pledge, sell, lease, rent, transfer, or in any manner dispose of,
and to deal and trade in, goods, wares, merchandise, including equipment,
furniture and fixtures, and property of any and every class and description.
To acquire the good will, business, rights and property, franchises,
and assets of every kind, with or without undertaking the whole or any part of
the liabilities, of any person, firm, association, or corporation; and to
acquire any property or business as a going concern or otherwise by (i) purchase
of the assets thereof wholly or in part, (ii) by acquisition of the shares or
any part thereof, or (iii) in any other manner; and to pay for the same in cash,
the stock of this corporation, bonds, or otherwise; to hold, maintain and
operate, or in any manner dispose of
<PAGE> 3
the whole or any part of the good will, business, rights, and property so
acquired; and to conduct in any lawful manner the whole or any part of any
business so acquired, and to exercise all the powers necessary or convenient in
and about the conduct and management of such business.
To apply for, purchase, or in any manner to acquire, and to hold, own,
use and operate, and to sell, assign, transfer, or in any manner dispose of, and
to grant licenses, franchises, or other rights in respect of, and in any
manner deal with, any and all rights, trade and service marks, systems,
inventions, improvements, and processes used in connection with or secured under
letters patent or copy-rights of the United States or other countries, or
otherwise, and to work, operate, or develop the same, and to carry on any
business, manufacturing or otherwise, which may directly or indirectly
effectuate these objects or any of them.
To guarantee, purchase, hold, sell, assign, transfer, mortgage, pledge,
or otherwise dispose of the shares of the capital stock of, or any bonds,
securities, or evidences of indebtedness created by any other corporation or
corporations of this State or any other state, country, nation, or government
and while owner of said stock, to exercise all the rights, powers, and
privileges of ownership, including the right to vote thereon, to the same extent
as natural persons might or could do, and to promote or to aid in any manner,
financially or otherwise, any corporation of which any shares of stock, bonds,
notes, debentures, or other securities or evidences of indebtedness are held
directly or indirectly by this corporation, and for this purpose to guarantee
the contracts, dividends, shares, bonds, notes, debentures, and other
obligations of such other corporations.
To issue bonds, debentures, or obligations from time to time for any of
the objects or purposes of the corporation and to secure the same by mortgage,
pledge, deed of trust, or otherwise, including, but without limitation, bonds,
debentures, and other obligations convertible into other securities of the
corporation.
To act as a general partner, limited partner, or joint venturer of a
partnership or joint venture that proposes to conduct a business that the
corporation
<PAGE> 4
would engage in singly.
To conduct business in any of the States, territories,
colonies, or dependencies of the United States, in the District of
Columbia, and in any and all foreign countries, to have one or more
offices therein, and therein to hold, purchase, mortgage, and convey
real and personal property, without limit as to the amount.
To do any or all of the things herein set forth to the same
extent as a natural person might or could do and in any part of the
world, as principals, agents, contractors, trustees, or otherwise, and
either alone or in company with others.
To purchase, hold, and reissue any of the shares of its
capital stock.
To exercise all powers enumerated in the General Corporation
Law of Delaware; and, in addition, to exercise all powers granted by
any other law or by this certificate of incorporation, together with
any powers incidental thereto, so far as such powers are necessary or
convenient to the conduct, promotion or attainment of the business or
purposes set forth herein.
FOURTH: The total number of shares of stock which the corporation shall
have authority to issue is One Hundred (100), all of which are without par
value. All such shares are of one class and are shares of Common Stock.
FIFTH: The name and the mailing address of the incorporator are as
follows:
NAME MAILING ADDRESS
Gloria M. Barry 1025 Vermont Avenue N.W.
Washington, D.C. 20005
SIXTH: The corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any
<PAGE> 5
creditor or stockholder thereof or on the application of any receiver or
receivers appointed for this corporation under Section 291 of Title 8 of the
Delaware Code or on the application of trustees in dissolution or of any
receiver or receivers appointed for this corporation under Section 279 of Title
8 of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation, as the
case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three fourths in value of the creditors or class
of creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
EIGHTH: For the management of the business and for the conduct of the
affairs of the corporation, and in further definition, limitation, and
regulation of the powers of the corporation and of its directors and of its
stockholders or any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the
affairs of the corporation shall be vested in its Board of Directors.
The number of directors which shall constitute the whole Board of
Directors shall be fixed by, or in the manner provided in, the Bylaws.
The phrase "whole Board" and the phrase "total number of directors"
shall be deemed to have the same meaning, to wit, the total number of
directors which the corporation would have if there were no vacancies.
No election of directors need be by written ballot.
2. After the original or other Bylaws of the corporation have
been adopted, amended, or repealed, as the case may be, in accordance
with the provisions of Section 109 of the General Corporation Law of
the State of Delaware, and, after the corporation has
<PAGE> 6
received any payment for any of its stock, the power to adopt, amend,
or repeal the Bylaws of the corporation may be exercised by the Board
of Directors of the corporation; provided, however, that any provision
for the classification of directors of the corporation for staggered
terms pursuant to the provisions of subsection (d) of Section 141 of
the General Corporation Law of the State of Delaware shall be set forth
in an initial Bylaw or in a Bylaw adopted by the stockholders entitled
to vote of the corporation unless provisions for such classification
shall be set forth in this certificate of incorporation.
3. Whenever the corporation shall be authorized to issue only
one class of stock, each outstanding share shall entitle the holder
thereof to notice of, and the right to vote at, any meeting of
stockholders. Whenever the corporation shall be authorized to issue
more than one class of stock, no outstanding share of any class of
stock which is denied voting power under the provisions of the
certificate of incorporation shall entitle the holder thereof to the
right to vote at any meeting of stockholders except as the provisions
of paragraph (2) of subsection (b) of Section 242 of the General
Corporation Law of the State of Delaware shall otherwise require;
provided, that no share of any such class which is otherwise denied
voting power shall entitle the holder thereof to vote upon the increase
or decrease in the number of authorized shares of said class.
NINTH: The personal liability of the directors of the corporation is
hereby eliminated to the fullest extent permitted by paragraph (7) of subsection
(b) of Section 102 of the General Corporation Law of the State of Delaware, as
the same may be amended and supplemented.
TENTH: The corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented, indemnify any and all persons whom it shall
have power to indemnify under said section from and against any and all of the
expenses, liabilities, or other matters
<PAGE> 7
referred to in or covered by said section, and the indemnification provided for
herein shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any Bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer, employee, or
agent and shall inure to the benefit of the heirs, executors, and administrators
of such a person.
ELEVENTH: From time to time any of the provisions of this certificate
of incorporation may be amended, altered, or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the corporation by this
certificate of incorporation are granted subject to the provisions of this
Article ELEVENTH.
Signed on June 15, 1990.
/s/ Gloria M. Barry
-------------------
Incorporator
<PAGE> 8
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
MARRIOTT ARGENTINE AIRLINE CATERING, INC.
The undersigned, President of Marriott Argentine Airline Catering, Inc.
(the "Corporation"), in order to amend the Certificate of Incorporation of the
Corporation, hereby certifies as follows:
FIRST: The name of the Corporation is: Marriott Argentine
Airline Catering, Inc.
SECOND: The Corporation hereby amends its Certificate of
Incorporation as follows:
Paragraph 1 of the Certificate of Incorporation,
relating to the corporate title of the Corporation,
is hereby amended to read as follows:
"1. The name of the corporation (hereinafter
called the "Corporation") is SKY CHEFS
ARGENTINE, INC."
THIRD: The amendment effected herein was authorized by the
consent, in writing, setting forth the action so
taken, signed by the holder of all of the issued and
outstanding shares entitled to vote thereon pursuant
to Sections 228 and 242 of the General Corporation
Law of the State of Delaware.
IN WITNESS WHEREOF, the undersigned affirms that the statements made herein are
true under the penalties of perjury this 14 day of October, 1996.
/s/ Patrick W. Tolbert
----------------------
Patrick W. Tolbert
President
<PAGE> 1
EXHIBIT 3.58
AMENDED AND RESTATED BY-LAWS
of
SKY CHEFS ARGENTINE INC.
1. MEETINGS OF STOCKHOLDERS.
1.1 Annual Meeting. The annual meeting of stockholders shall be held on
the third Tuesday of April in each year, or as soon thereafter as practicable,
and shall be held at a place and time determined by the board of directors (the
"Board").
1.2 Special Meetings. Special meetings of the stockholders may be called
by resolution of the Board or by the president and shall be called by the
president or secretary upon the written request (stating the purpose or purposes
of the meeting) of a majority of the directors then in office or the holders of
a majority of the outstanding shares entitled to vote. Only business related to
the purposes set forth in the notice of the meeting may be transacted at a
special meeting.
1.3 Place and Time of Meetings. Meetings of the stockholders may be held
in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting.
1.4 Notice of Meetings; Waiver of Notice. Written notice of each meeting
of stockholders shall be given to each stockholder entitled to vote at the
meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 1.5 of these by-laws or by law. Each notice of a meeting shall be
given, personally or by mail, not less than 10 nor more than 60 days before the
meeting and shall state the time and place of the meeting, and unless it is the
annual meeting, shall state at whose direction or request the meeting is called
and the purposes for which it is called. If mailed, notice shall be considered
given when mailed to a stockholder at his address on the corporation's records.
The attendance of any stockholder at a meeting, without protesting at the
beginning of the meeting that the meeting is not lawfully called or convened,
shall constitute a waiver of notice by such stockholder.
1.5 Quorum. At any meeting of stockholders, the presence in person or by
proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum, a majority in voting interest of those present or, if no stockholders
are present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are
<PAGE> 2
announced at the meeting at which the adjournment is taken except that, if
adjournment is for more than thirty days or if, after the adjournment, a new
record date is fixed for the meeting, notice of the adjourned meeting shall be
given pursuant to Section 1.4.
1.6 Voting; Proxies. Each stockholder of record shall be entitled to one
vote for every share registered in his name. Corporate action to be taken by
stockholder vote, other than including the election of directors, shall be
authorized by a majority of the votes cast at a meeting of stockholders, except
as otherwise provided by law or by Section 1.8 of these by-laws. Voting need not
be by ballot unless requested by a stockholder at the meeting or ordered by the
chairman of the meeting; however, all elections of directors shall be by written
ballot, unless otherwise provided in the certificate of incorporation. Each
stockholder entitled to vote at any meeting of stockholders or to express
consent to or dissent from corporate action in writing without a meeting may
authorize another person to act for him by proxy. Every proxy must be signed by
the stockholder or his attorney-in-fact. No proxy shall be valid after three
years from its date unless it provides otherwise.
1.7 List of Stockholders. Not less than 10 days prior to the date of any
meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in his name. For a period of not less than 10 days prior to
the meeting, the list shall be available during ordinary business hours for
inspection by any stockholder for any purpose germane to the meeting. During
this period, the list shall be kept either (a) at a place within the city where
the meeting is to be held, if that place shall have been specified in the notice
of the meeting, or (b) if not so specified, at the place where the meeting is to
be held. The list shall also be available for inspection by stockholders at the
time and place of the meeting.
1.8 Action by Consent Without a Meeting. Any action required or permitted
to be taken at any meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting. Prompt notice of the taking of any such action shall be
given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 Number, Qualification, Election and Term of Directors. The business of
the corporation shall be managed by the Board, which shall consist of one or
more directors. The number of directors may be changed by resolution of a
majority of the Board or by the stockholders, but no decrease may shorten the
term of any incumbent director. Directors shall be elected at each annual
meeting of stockholders and shall hold office until the next annual meeting
2
<PAGE> 3
of stockholders and until the election and qualification of their respective
successors, subject to the provisions of Section 2.9.
2.2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any meeting,
except as provided in Section 2.10 of these by-laws. Action of the Board shall
be authorized by the vote of a majority of the directors present at the time of
the vote if there is a quorum, unless otherwise provided by law or these
by-laws. In the absence of a quorum a majority of the directors present may
adjourn any meeting from time to time until a quorum is present.
2.3 Place of Meetings. Meetings of the Board may be held in or outside
Delaware.
2.4 Annual and Regular Meetings. Annual meetings of the Board, for the
election of officers and consideration of other matters, shall be held either
(a) without notice immediately after the annual meeting of stockholders and at
the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these by-laws. Regular
meetings of the Board may be held without notice at such times and places as the
Board determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
2.5 Special Meetings. Special meetings of the Board may be called by the
president or by any of the directors.
2.6 Notice of Meetings; Waiver of Notice. Notice of the time and place of
each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
2.7 Board or Committee Action Without a Meeting. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
2.8 Participation in Board or Committee Meetings by Conference Telephone.
Any or all members of the Board or of any committee of the Board may participate
in a meeting of the
3
<PAGE> 4
Board or of the committee by means of a conference telephone or similar
communications equipment allowing all persons participating in the meeting to
hear each other at the same time. Participation by such means shall constitute
presence in person at the meeting.
2.9 Resignation and Removal of Directors. Any director may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 Vacancies. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 Compensation. Directors shall receive such compensation as the Board
determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
serving the corporation, its affiliates or subsidiaries in other capacities.
3. COMMITTEES.
3.1 Executive Committee. The Board, by resolution adopted by a majority of
the entire Board, may designate an Executive Committee of one or more directors
which shall have all the powers and authority of the Board, except as otherwise
provided in the resolution, section 141(c) of the Delaware General Corporation
Law, or any other applicable law. The members of the Executive Committee shall
serve at the pleasure of the Board. All action of the Executive Committee shall
be reported to the Board at its next meeting.
3.2 Other Committees. The Board, by resolution adopted by a majority of
the entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.3 Rules Applicable to Committees. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure and
shall meet as provided by those rules or by resolutions of the Board.
4
<PAGE> 5
4. OFFICERS.
4.1 Number; Security. The executive officers of the corporation shall be
the president, one or more vice presidents (including an executive vice
president, if the Board so determines), a secretary and a treasurer. Any two or
more offices may be held by the same person. The Board may require any officer,
agent or employee to give security for the faithful performance of his duties.
4.2 Election; Term of Office. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
4.3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers. Any officer may resign at any
time by delivering his resignation in writing to the president or secretary of
the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer appointed by the Board or appointed
by an executive officer or by a committee may be removed by the Board either
with or without cause, and in the case of an officer appointed by an executive
officer or by a committee, by the officer or committee who appointed him or by
the president.
4.5 Vacancies. A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 4.2 and 4.3 of these by-laws for
election or appointment to the office.
4.6 The President. The president shall be the chief executive officer of
the corporation and shall preside at all meetings of the Board and of the
stockholders. Subject to the control of the Board, he shall have general
supervision over the business of the corporation and shall have such other
powers and duties as presidents of corporations usually have or as the Board
assigns to him.
4.7 Vice President. Each vice president shall have such powers and duties
as the Board or the president assigns to him.
4.8 The Treasurer. The treasurer shall be the chief financial officer of
the corporation and shall be in charge of the corporation's books and accounts.
Subject to the control of the Board, he shall have such other powers and duties
as the Board or the president assigns to him.
5
<PAGE> 6
4.9 The Secretary. The secretary shall be the secretary of, and keep
the minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have such
powers and duties as the Board or the president assigns to him. In the absence
of the secretary from any meeting, the minutes shall be kept by the person
appointed for that purpose by the presiding officer.
4.10 Salaries. The Board may fix the officers' salaries, if any, or it may
authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 Certificates. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be signed
by the president or a vice president and by the secretary or an assistant
secretary, or the treasurer or an assistant treasurer, and shall be sealed with
the corporation's seal or a facsimile of the seal. Any or all of the signatures
on the certificate may be a facsimile.
5.2 Transfers. Shares shall be transferable only on the corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.
5.3 Determination of Stockholders of Record. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or less than 10 days
before the date of the meeting or more than 60 days before any other action.
6. MISCELLANEOUS.
6.1 Seal. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which it was incorporated.
6.2 Fiscal Year. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 Voting of Shares in Other Corporations. Shares in other corporations
which are held by the corporation may be represented and voted by the president
or a vice president of this corporation or by proxy or proxies appointed by one
of them. The Board may, however, appoint some other person to vote the shares.
6
<PAGE> 7
6.4 Amendments. By-laws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any by-law adopted by the
Board may be amended or repealed by the stockholders.
* * * * * *
As adopted by the Board of Directors of the
Corporation on August 20, 1997.
7
<PAGE> 1
EXHIBIT 4.1
================================================================================
INDENTURE
Dated as of August 15, 1997
Among
SC INTERNATIONAL SERVICES, INC., as Issuer,
SKY CHEFS, INC., CATERAIR INTERNATIONAL, INC. (II),
CATERAIR INTERNATIONAL CORPORATION and
the Additional Guarantors named herein,
as Guarantors,
and
THE BANK OF NEW YORK, as Trustee
$300,000,000
9 1/4% Senior Subordinated Notes due 2007, Series A
and
9 1/4% Senior Subordinated Notes due 2007, Series B
================================================================================
<PAGE> 2
[CROSS-REFERENCE TABLE]
TIA Indenture
Section Section
310 (a)(1)......................................... 7.10
(a)(2)......................................... 7.10
(a)(3)......................................... N.A.
(a)(4)......................................... N.A.
(a)(5)......................................... N.A.
(b)............................................ 7.08; 7.10; 13.02
(c)............................................ N.A.
311 (a)............................................ 7.11
(b)............................................ 7.11
(c)............................................ N.A.
312 (a)............................................ 2.05
(b)............................................ 13.03
(c)............................................ 13.03
313 (a)............................................ 7.06
(b)(1)......................................... N.A.
(b)(2)......................................... 7.06
(c)............................................ 7.06; 13.02
(d)............................................ 7.06
314 (a)............................................ 4.06; 4.08; 13.02
(b)............................................ N.A.
(c)(1)......................................... 13.04
(c)(2)......................................... 13.04
(c)(3)......................................... N.A.
(d)............................................ N.A.
(e)............................................ 13.05
(f)............................................ N.A
315 (a)............................................ 7.01(b)
(b)............................................ 7.05; 13.02
(c)............................................ 7.01(a)
(d)............................................ 7.01(c)
(e)............................................ 6.11
316 (a)(last sentence)............................. 2.09
(a)(1)(A)...................................... 6.05
(a)(1)(B)...................................... 6.04
(a)(2)......................................... N.A.
(b)............................................ 6.07
317 (a)(1)......................................... 6.08
(a)(2)......................................... 6.09
(b)............................................ 2.04
318 (a)............................................ 13.01
(c)............................................ 13.01
- --------------------
N.A means Not Applicable
<PAGE> 3
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE> 4
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.............................................2
SECTION 1.02. Incorporation by Reference of TIA......................33
SECTION 1.03. Rules of Construction..................................33
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating........................................34
SECTION 2.02. Execution and Authentication...........................35
SECTION 2.03. Registrar and Paying Agent.............................37
SECTION 2.04. Paying Agent To Hold Assets in Trust...................37
SECTION 2.05. Holder Lists...........................................38
SECTION 2.06. Transfer and Exchange..................................38
SECTION 2.07. Replacement Notes......................................39
SECTION 2.08. Outstanding Notes......................................39
SECTION 2.09. Treasury Notes.........................................40
SECTION 2.10. Temporary Notes........................................40
SECTION 2.11. Cancellation...........................................40
SECTION 2.12. Defaulted Interest.....................................41
SECTION 2.13. CUSIP Number...........................................41
SECTION 2.14. Deposit of Moneys......................................41
SECTION 2.15. Restrictive Legends....................................41
SECTION 2.16. Book-Entry Provisions for Global Note..................44
SECTION 2.17. Special Transfer Provisions............................45
SECTION 2.18. Additional Interest Under Registration
Rights Agreement....................................48
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.....................................49
SECTION 3.02. Selection of Notes To Be Redeemed......................49
SECTION 3.03. Notice of Redemption...................................49
SECTION 3.04. Effect of Notice of Redemption.........................50
SECTION 3.05. Deposit of Redemption Price............................51
SECTION 3.06. Notes Redeemed in Part.................................51
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Page
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.......................................51
SECTION 4.02. Maintenance of Office or Agency........................51
SECTION 4.03. Corporate Existence....................................52
SECTION 4.04. Payment of Taxes and Other Claims......................52
SECTION 4.05. Maintenance of Properties and Insurance................53
SECTION 4.06. Compliance Certificate; Notice of Default..............53
SECTION 4.07. Compliance with Laws...................................55
SECTION 4.08. Reports................................................55
SECTION 4.09. Waiver of Stay, Extension or Usury Laws................56
SECTION 4.10. Limitation on Restricted Payments......................56
SECTION 4.11. Limitation on Transactions with Affiliates.............60
SECTION 4.12. Limitation on Incurrence of Additional
Indebtedness........................................61
SECTION 4.13. Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries.................62
SECTION 4.14. Prohibition on Incurrence of Senior
Subordinated Debt...................................64
SECTION 4.15. Change of Control......................................64
SECTION 4.16. Limitation on Asset Sales..............................66
SECTION 4.17. Limitation on Preferred Stock of
Subsidiaries........................................72
SECTION 4.18. Limitation on Liens....................................72
SECTION 4.19. Guarantees of Certain Indebtedness.....................73
SECTION 4.20. Conduct of Business of the Issuer and Its
Restricted Subsidiaries.............................74
SECTION 4.21. Conduct of Business of Caterair........................74
SECTION 4.22. Guarantor Capital Stock................................74
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Issuer May Merge, etc.............................75
SECTION 5.02. Successor Corporation Substituted......................76
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<PAGE> 6
Page
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default......................................76
SECTION 6.02. Acceleration...........................................78
SECTION 6.03. Other Remedies.........................................79
SECTION 6.04. Waiver of Past Defaults................................80
SECTION 6.05. Control by Majority....................................80
SECTION 6.06. Limitation on Suits....................................80
SECTION 6.07. Rights of Holders To Receive Payment...................81
SECTION 6.08. Collection Suit by Trustee.............................81
SECTION 6.09. Trustee May File Proofs of Claim.......................81
SECTION 6.10. Priorities.............................................82
SECTION 6.11. Undertaking for Costs..................................82
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee......................................83
SECTION 7.02. Rights of Trustee......................................84
SECTION 7.03. Individual Rights of Trustee...........................86
SECTION 7.04. Trustee's Disclaimer...................................86
SECTION 7.05. Notice of Default......................................86
SECTION 7.06. Reports by Trustee to Holders..........................86
SECTION 7.07. Compensation and Indemnity.............................87
SECTION 7.08. Replacement of Trustee.................................88
SECTION 7.09. Successor Trustee by Merger, etc.......................89
SECTION 7.10. Eligibility; Disqualification..........................89
SECTION 7.11. Preferential Collection of Claims Against
the Issuer..........................................90
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Issuer's Obligations................90
SECTION 8.02. Acknowledgment of Discharge by Trustee.................92
SECTION 8.03. Application of Trust Money.............................92
SECTION 8.04. Repayment to the Issuer................................92
SECTION 8.05. Reinstatement..........................................93
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<PAGE> 7
Page
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.............................93
SECTION 9.02. With Consent of Holders................................94
SECTION 9.03. Compliance with TIA....................................96
SECTION 9.04. Revocation and Effect of Consents......................96
SECTION 9.05. Notation on or Exchange of Notes.......................97
SECTION 9.06. Trustee To Sign Amendments, etc........................97
ARTICLE TEN
SUBORDINATION OF NOTES
SECTION 10.01. Notes Subordinated to Senior Debt......................97
SECTION 10.02. No Payment on Notes in Certain Circumstances...........98
SECTION 10.03. Payment Over of Proceeds upon Dissolution,
etc.................................................99
SECTION 10.04. Payments May Be Paid Prior to Dissolution.............101
SECTION 10.05. Subrogation...........................................101
SECTION 10.06. Obligations of the Issuer Unconditional...............102
SECTION 10.07. Notice to Trustee.....................................102
SECTION 10.08. Reliance on Judicial Order or Certificate of
Liquidating Agent..................................103
SECTION 10.09. Trustee's Relation to Senior Debt.....................104
SECTION 10.10. Subordination Rights Not Impaired by Acts or
Omissions of the Issuer or Holders of
Senior Debt........................................104
SECTION 10.11. Holders Authorize Trustee To Effectuate
Subordination of Notes.............................105
SECTION 10.12. This Article Ten Not To Prevent Events of
Default............................................106
ARTICLE ELEVEN
GUARANTEES OF THE NOTES
SECTION 11.01. Guarantees............................................106
SECTION 11.02. Execution and Delivery of the Guarantees..............108
SECTION 11.03. Additional Guarantors.................................109
SECTION 11.04. Limitation of Guarantors' Liability...................109
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<PAGE> 8
Page
SECTION 11.05. Guarantors May Consolidate, etc., on Certain
Terms; Release from Guarantee......................110
SECTION 11.06. Contribution..........................................111
SECTION 11.07. Waiver of Subrogation.................................111
ARTICLE TWELVE
SUBORDINATION OF GUARANTEES
SECTION 12.01. Guarantee Obligations Subordinated to
Guarantor Senior Debt..............................112
SECTION 12.02. No Payment on Guarantees in Certain
Circumstances......................................112
SECTION 12.03. Payment Over of Proceeds upon Dissolution,
etc................................................114
SECTION 12.04. Payments May Be Paid Prior to Dissolution.............116
SECTION 12.05. Subrogation...........................................116
SECTION 12.06. Guarantee Provisions Solely To Define
Relative Rights....................................117
SECTION 12.07. Trustee To Effectuate Subordination of
Obligations Under the Guarantees...................118
SECTION 12.08. No Waiver of Guarantee Subordination
Provisions.........................................118
SECTION 12.09. Guarantors To Give Notice to Trustee..................119
SECTION 12.10. Reliance on Judicial Order or Certificate of
Liquidating Agent Regarding Dissolution,
etc., of Guarantors................................120
SECTION 12.11. No Suspension of Remedies.............................121
SECTION 12.12. Trustee's Relation to Guarantor Senior Debt...........121
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA Controls..........................................122
SECTION 13.02. Notices...............................................122
SECTION 13.03. Communications by Holders with Other Holders..........123
SECTION 13.04. Certificate and Opinion as to Conditions
Precedent..........................................123
SECTION 13.05. Statements Required in Certificate or
Opinion............................................124
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Page
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.............124
SECTION 13.07. Legal Holidays........................................124
SECTION 13.08. Governing Law.........................................124
SECTION 13.09. No Adverse Interpretation of Other
Agreements.........................................125
SECTION 13.10. No Recourse Against Others............................125
SECTION 13.11. Successors............................................125
SECTION 13.12. Duplicate Originals...................................125
SECTION 13.13. Severability..........................................125
Signatures..............................................................126
Exhibit A - Form of Series A Note.......................................A-1
Exhibit B - Form of Series B Note.......................................B-1
Exhibit C - Form of Certificate To Be Delivered in Connection
with Transfers to Non-QIB Accredited Investors...........C-1
Exhibit D - Form of Certificate To Be Delivered in Connection
with Transfers Pursuant to Regulation S..................D-1
Note: This Table of Contents shall not, for any purpose, be deemed to be part
of the Indenture.
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<PAGE> 10
INDENTURE, dated as of August 15, 1997, among SC INTERNATIONAL
SERVICES, INC., a Delaware corporation (the "Issuer"), SKY CHEFS, INC., a
Delaware corporation ("Sky Chefs"), CATERAIR INTERNATIONAL, INC. (II), a
Delaware corporation ("CII"), CATERAIR INTERNATIONAL CORPORATION, a Delaware
corporation ("Caterair"), Caterair International Transition Corporation, a
Delaware corporation, Onex Ohio Acceptance Corporation, a Delaware corporation,
Onex Ohio Finance Corp., a Delaware corporation, Onex Ohio Finance Corp. II, a
Delaware corporation, Onex Ohio Equity Corp., a Delaware corporation, Onex Ohio
Equity Corp. II, a Delaware corporation, Onex Ohio Credit Corp., a Delaware
corporation, Onex Ohio Credit Corp. II, a Delaware corporation, Onex Ohio
Capital Corp., a Delaware corporation, Onex Ohio Capital Corp. II, a Delaware
corporation, Onex Ohio Fiscal Corp., a Delaware corporation, Onex Ohio Fiscal
Corp. II, a Delaware corporation, Onex Ohio Funds Corp., a Delaware corporation,
Onex Ohio Funds Corp. II, a Delaware corporation, Arlington Services, Inc., a
Delaware corporation, Arlington Services Holding Corporation, a Delaware
corporation, Sky Chefs International Corp., a Delaware corporation, Bethesda
Services, Inc, a Delaware corporation, Caterair New Zealand Limited (formerly
known as Bethesda Services Holding Corporation), a Delaware corporation, JFK
Caterers, Inc., a Delaware corporation, Caterair Consulting Services
Corporation, a Delaware corporation, Western Aire Chef, Inc., a Delaware
corporation, Caterair Airport Properties, Inc, a Delaware corporation, Caterair
St. Thomas Holding Corporation, a Delaware corporation, and Sky Chefs Argentine,
Inc., a Delaware corporation (each of the foregoing a "Guarantor"), and THE BANK
OF NEW YORK, a New York banking corporation, as trustee (the "Trustee").
The Issuer has duly authorized the creation of an issue of 9 1/4%
Senior Subordinated Notes due 2007, Series A (the "Initial Notes") and 9 1/4%
Senior Subordinated Notes due 2007, Series B to be issued in exchange for the
Initial Notes pursuant to the Registration Rights Agreement (as defined herein)
(the "Exchange Notes" and, together with the Private Exchange Notes (as defined
herein) and the Initial Notes, the "Notes") and, to provide therefor, the Issuer
has duly authorized the execution and delivery of this Indenture. The Notes will
be guaranteed on a senior subordinated basis by the Guarantors. All things
necessary to make the Notes, when duly issued and executed by the Issuer, and
authenticated and delivered hereunder, the valid obligations of the Issuer, and
to make this Indenture a valid and binding agreement of the Issuer, have been
done.
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Each party hereto agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the holders of the Notes.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acceleration Notice" has the meaning provided in Section 6.02.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of
the Issuer or a Subsidiary of Caterair, as the case may be, or at the time it
merges or consolidates with the Issuer or any Subsidiary of the Issuer or
Caterair or any Subsidiary of Caterair, as the case may be, or assumed in
connection with the acquisition of assets from such Person and not incurred by
such Person in connection with, or in anticipation or contemplation of, such
Person becoming a Restricted Subsidiary of the Issuer or a Subsidiary of
Caterair, as the case may be, or such acquisition, merger or consolidation.
"Adjusted Net Assets" of a Guarantor at any date means the lesser of
the amount by which (x) the fair value of the property of such Guarantor exceeds
the total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date), but excluding liabilities under its
Guarantee, of such Guarantor at such date and (y) the present fair salable value
of the assets of such Guarantor at such date exceeds the amount that will be
required to pay the probable liability of such Guarantor on its debts (after
giving effect to all other fixed and contingent liabilities incurred or assumed
on such date and after giving effect to any collection from any Subsidiary of
such Guarantor in respect of the obligations of such Subsidiary under the
Guarantee of such Guarantor), excluding Subordinated Indebtedness and debt in
respect of its Guarantee as they become absolute and matured.
"Affiliate" means a Person who directly or indirectly through one or
more intermediaries controls, or is controlled
<PAGE> 12
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by, or is under common control with, another Person. The term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Affiliate Transaction" has the meaning provided in Section 4.11.
"Agent" means any Registrar, Paying Agent or Co-Registrar.
"Agent Members" has the meaning provided in Section 2.16.
"Airline Catering Joint Venture" means any joint venture, partnership,
limited liability company or other Person engaged in the business of providing
airline catering services.
"Asset Acquisition" means (a) an Investment by the Issuer or any
Restricted Subsidiary of the Issuer in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Issuer or a Subsidiary of any
Restricted Subsidiary of the Issuer, or shall be merged with or into the Issuer
or any Restricted Subsidiary of the Issuer, or (b) the acquisition by the Issuer
or any Restricted Subsidiary of the Issuer of the assets of any Person which
constitute all or substantially all of the assets of such Person, any division
or line of business of such Person or any other properties or assets of such
Person other than in the ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than pursuant to operating leases of real or personal
property entered into in the ordinary course of business), assignment or other
transfer for value by the Issuer or any Restricted Subsidiary of the Issuer
(including any Sale and Leaseback Transaction) to any Person other than the
Issuer or a Restricted Subsidiary of the Issuer of (a) any Capital Stock of any
Restricted Subsidiary of the Issuer or (b) any other property or assets of the
Issuer or any Restricted Subsidiary of the Issuer other than in the ordinary
course of business; provided, however, that an Asset Sale shall not include (i)
a transaction or series of related transactions for which the Issuer or its
Restricted Subsidiaries receive aggregate consideration of less than $1 million,
(ii) the sale or discount, in each case without recourse (other than recourse
for breach of a representation or warranty), of accounts re-
<PAGE> 13
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ceivable arising in the ordinary course of business, but only in connection with
the compromise or collection thereof, (iii) the factoring or securitization of
accounts receivable arising in the ordinary course of business, (iv) the sale,
lease, conveyance, disposition or other transfer of all or substantially all of
the assets of the Issuer as permitted under Section 5.01 and (v) the sale or
other disposition in the ordinary course of business of equipment or materials
which, in the reasonable judgment of such Person, are obsolete, worn out or
otherwise no longer useful in the conduct of such Person's business.
"Australian Assets" means any of the shares of Caterair Airport
Services Pty Limited owned by Caterair Australia Pty Limited which Qantas Flight
Catering Holdings Limited has the option to acquire pursuant to the exercise of
the call options respectively described in clauses 19A, 19B and 19C of the
Restated Shareholders Deed made on December 18, 1996 among Caterair Airport
Services Pty Limited, Caterair Australia Pty Limited, CII, OFSI, Qantas Airways
Limited and Qantas Flight Catering Holdings Limited.
"Authenticating Agent" has the meaning provided in Section 2.02.
"Authorized Officer" means, with respect to any Person, each of the
Chairman of the Board, the Chief Executive Officer, the President, the Chief
Financial Officer, the Treasurer or the Secretary of such Person, or any other
officer designated as an Authorized Officer by the Board of Directors in a
writing delivered to the Trustee.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Blockage Period" has the meaning provided in Section 10.02.
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person.
<PAGE> 14
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"Business Day" means a day that is not a Legal Holiday.
"Capitalized Lease Obligation" means, as to any Person, the obligations
of such Person under a lease that are required for financial reporting purposes
to be classified and accounted for as capital lease obligations under GAAP and,
for purposes of this definition, the amount of such obligations at any date
shall be the capitalized amount of such obligations at such date, determined in
accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated) of corporate stock, including each class of common stock
and Preferred Stock of such Person and (ii) with respect to any Person that is
not a corporation, any and all partnership or other equity interests of such
Person.
"Cash Equivalents" means (i) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation or Moody's Investors
Service, Inc.; (iii) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from Standard & Poor's Corporation or at least P-1 from Moody's
Investors Service, Inc.; (iv) time deposits, certificates of deposit or bankers'
acceptances (or, with respect to foreign banks, similar instruments) maturing
within one year from the date of acquisition thereof issued by any bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia or any U.S. branch of a foreign bank having at the date
of acquisition thereof combined capital and surplus of not less than $200
million; provided that instruments issued by banks not having one of the two
highest ratings obtainable from either Standard & Poor's Corporation or Moody's
Investors Services, Inc. shall not constitute "Cash Equivalents" for purposes of
the subordination provisions of this Indenture; (v) repurchase obligations with
a term of not more than seven days for underlying securities of the types
de-
<PAGE> 15
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scribed in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; (vi) except for purposes of the
subordination provisions of this Indenture, investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (v) above; and (vii) overnight deposits and
demand deposits maintained in the ordinary course of business.
"Caterair" has the meaning provided in the preamble.
"Caterair Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than pursuant to operating leases of real or
personal property entered into in the ordinary course of business), assignment
or other transfer for value by Caterair or any Subsidiary of Caterair (including
any Sale and Leaseback Transaction) to any Person other than Caterair or a
Wholly Owned Subsidiary of Caterair of (a) any Capital Stock of any Subsidiary
of Caterair or (b) any other property or assets of Caterair or any Subsidiary of
Caterair other than in the ordinary course of business; provided, however, that
Caterair Asset Sale shall not include (i) a transaction or series of related
transactions for which Caterair or its Subsidiaries receive aggregate
consideration of less than $1 million, (ii) the sale or discount, in each case
without recourse (other than recourse for breach of a representation or
warranty), of accounts receivable arising in the ordinary course of business,
but only in connection with the compromise or collection thereof, (iii) the
factoring or securitization of accounts receivable arising in the ordinary
course of business, (iv) the sale or other disposition in the ordinary course of
business of equipment or materials which, in the reasonable judgment of such
Person, are obsolete, worn out or otherwise no longer useful in the conduct of
such Person's business and (v) the sale of assets to the Issuer or any
Restricted Subsidiary of the Issuer in connection with the exercise of the
purchase options for the Caterair Leased Property pursuant to the Caterair Lease
and the Caterair Licensed Property pursuant to the Caterair License.
"Caterair Holdings" means Caterair Holdings Corporation, a Delaware
corporation.
"Caterair Lease" means collectively the lease and sublease agreements
pursuant to which the Caterair Leased Property is leased to the Issuer or
Subsidiaries of the Issuer.
"Caterair Leased Property" means (i) the property and assets listed on
Schedule 2.2(k) to the Master Agreement and
<PAGE> 16
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(ii) all other property and assets acquired by Caterair and substantially
contemporaneously with such acquisition leased by Caterair to the Issuer or
Subsidiaries of the Issuer.
"Caterair License" means, collectively, the license agreements pursuant
to which the Caterair Licensed Property is licensed to the Issuer or
Subsidiaries of the Issuer.
"Caterair Licensed Property" means (i) the property and assets listed
on Schedule 2.2(o) to the Master Agreement and (ii) all other property and
assets acquired by Caterair and substantially contemporaneously with such
acquisition licensed by Caterair to the Issuer or Subsidiaries of the Issuer.
"Caterair Net Proceeds Offer" has the meaning provided in Section 4.15.
"Caterair Net Proceeds Offer Amount" has the meaning provided in
Section 4.15.
"Caterair Net Proceeds Offer Trigger Date" has the meaning provided in
Section 4.15.
"Caterair Promissory Note" means the 8% Pay-in-Kind Promissory Note due
2001 of Caterair.
"Caterair Restricted Payment" has the meaning provided in Section 4.10.
"Caterair Tax Sharing Agreement" means the Income Tax Sharing Agreement
dated December 15, 1989, among Marriott Corporation, Caterair Holdings and
Caterair.
"Certificated Securities" means Notes in definitive registered form.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Issuer or OFSI, as the case may be, to any Person or group of
related Persons for purposes of Section 13(d) of the Exchange Act (a "Group")
(whether or not otherwise in compliance with the provisions of this Indenture),
other than a Permitted Holder or Holders; or (ii) if the Permitted Holders do
not own, directly or indirectly, beneficially (as defined in Rules 13d-3 and
13d-5 under the Exchange Act) or of record, shares representing more than 50% of
the aggregate ordinary voting power
<PAGE> 17
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represented by the issued and outstanding Capital Stock of the Issuer or OFSI,
as the case may be, (A) any Person or Group, other than a Permitted Holder or
Holders, shall become the owner, directly or indirectly, beneficially (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act) or of record, of shares
representing more than 50% of the aggregate ordinary voting power represented by
the issued and outstanding Capital Stock of the Issuer or OFSI, as the case may
be, or (B) the replacement of a majority of the Board of Directors of either the
Issuer or OFSI, as the case may be, over a two-year period from the directors
who constituted the Board of Directors of such Person at the beginning of such
period, and such replacement shall not have been approved by a vote of at least
a majority of the Board of Directors of such Person then still in office who
either were members of the Board of Directors of such Person at the beginning of
such period or whose election as a member of the Board of Directors of such
Person was previously so approved.
"Change of Control Date" has the meaning provided in Section 4.15.
"Change of Control Offer" has the meaning provided in Section 4.15.
"Change of Control Payment Date" has the meaning provided in Section
4.15.
"CII" has the meaning provided in the preamble.
"Consolidated Amortization Expense" means, with respect to any Person
for any period, the consolidated amortization expense of such Person for such
period, determined on a consolidated basis for such Person and its Restricted
Subsidiaries (and, in the case of the Issuer, Caterair and its Subsidiaries) in
conformity with GAAP.
"Consolidated Depreciation Expense" means, with respect to any Person
for any period, the consolidated depreciation expense of such Person for such
period, determined on a consolidated basis for such Person and its Restricted
Subsidiaries (and, in the case of the Issuer, Caterair and its Subsidiaries) in
conformity with GAAP.
"Consolidated EBITDA" means, with respect to any Person for any period,
the sum, without duplication, of (i) Consolidated Net Income, (ii) to the extent
Consolidated Net Income has been reduced thereby, all income taxes of such
<PAGE> 18
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Person and its Restricted Subsidiaries (and, in the case of the Issuer, Caterair
and its Subsidiaries) paid or accrued in conformity with GAAP for such period
(other than income taxes attributable to extraordinary or nonrecurring gains or
losses), (iii) Consolidated Interest Expense, (iv) Consolidated Amortization
Expense, (v) Consolidated Depreciation Expense and (vi) Consolidated Non-cash
Charges.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of
such Person for the Four Quarter Period. In addition to and without limitation
of the foregoing, for purposes of this definition, "Consolidated EBITDA" and
"Consolidated Fixed Charges" shall be calculated after giving effect on a pro
forma basis for the period of such calculation to (i) the incurrence or
repayment of any Indebtedness (excluding the incurrence of Indebtedness under
any revolving credit facility and including repayment of Indebtedness under any
revolving credit facility only to the extent that such repayment effects a
permanent reduction in the availability thereunder) of such Person or any of its
Restricted Subsidiaries (and, in the case of the Issuer, Caterair and its
Subsidiaries, other than Indebtedness between the Issuer or any Subsidiary of
the Issuer and Caterair or any Subsidiary of Caterair) (and the application of
the proceeds thereof) giving rise to the need to make such calculation and any
incurrence or repayment of other Indebtedness (and the application of the
proceeds thereof) at any time subsequent to the first day of the Four Quarter
Period and on or prior to the Transaction Date, as if such incurrence or
repayment, as the case may be (and the application of the proceeds thereof),
occurred on the first day of the Four Quarter Period and (ii) any Asset Sales or
Asset Acquisitions (including, without limitation, any Asset Acquisition giving
rise to the need to make such calculation as a result of such Person or one of
its Restricted Subsidiaries (including any Person who becomes a Restricted
Subsidiary as a result of the Asset Acquisition) incurring, assuming or
otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA (including any pro forma expense and cost reductions
calculated on a basis consistent with Regulation S-X under the Securities Act)
attributable to the assets which are the subject of the Asset Acquisition or
Asset Sale during the Four Quarter Period) occurring during the Four Quarter
Period or at any time subsequent to the last day of the
<PAGE> 19
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Four Quarter Period and on or prior to the Transaction Date, as if such Asset
Sale or Asset Acquisition (including the incurrence, assumption or liability for
any such Indebtedness or Acquired Indebtedness) occurred on the first day of the
Four Quarter Period. If such Person or any of its Restricted Subsidiaries
directly or indirectly guarantees Indebtedness of a third Person, the preceding
sentence shall give effect to the incurrence of such guaranteed Indebtedness as
if such Person or any Restricted Subsidiary of such Person had directly incurred
or otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating
"Consolidated Fixed Charges" for purposes of determining the denominator (but
not the numerator) of this "Consolidated Fixed Charge Coverage Ratio," (1)
interest on outstanding Indebtedness determined on a fluctuating basis as of the
Transaction Date and which will continue to be so determined thereafter shall be
deemed to have accrued at a fixed rate per annum equal to the rate of interest
on such Indebtedness in effect on the Transaction Date; (2) if interest on any
Indebtedness actually incurred on the Transaction Date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate in
effect on the Transaction Date will be deemed to have been in effect during the
Four Quarter Period; (3) notwithstanding clause (1) above, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest is
covered by agreements relating to Interest Swap Obligations, shall be deemed to
accrue at the rate per annum (not in excess of the maximum possible rate if such
agreement is an interest rate cap, interest rate collar or similar agreement)
resulting after giving effect to the operation of such agreements; and (4) the
permanent retirement of any Indebtedness during the Four Quarter Period or at
any time subsequent to the last day of the Four Quarter Period and on or prior
to the Transaction Date shall be given effect as if it occurred at the beginning
of such Four Quarter Period.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense
(including amortization or write-off of debt issuance costs), plus (ii) the
product of (x) the amount of all dividend payments on any series of Preferred
Stock of such Person (other than dividends paid in common stock) paid, accrued
or scheduled to be paid or accrued during such period and (y) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current effective consolidated federal, state and local tax rate of such Person
expressed as a decimal.
<PAGE> 20
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"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum, without duplication, of (i) the aggregate of all cash and
non-cash interest expense with respect to all outstanding Indebtedness of such
Person and its Restricted Subsidiaries (and, in the case of the Issuer, Caterair
and its Subsidiaries), including the net costs associated with Interest Swap
Obligations and capitalized interest, for such period determined on a
consolidated basis in conformity with GAAP; and (ii) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by such Person and its Restricted Subsidiaries (and, in the case of the
Issuer, Caterair and its Subsidiaries) during such period as determined on a
consolidated basis in accordance with GAAP. In addition, in calculating the
Consolidated Interest Expense of the Issuer, interest expense with respect to
Indebtedness between the Issuer or any Subsidiary of the Issuer and Caterair or
any Subsidiary of Caterair shall be excluded therefrom.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate net income (or loss) of such Person and its Subsidiaries
(and, in the case of the Issuer, Caterair) for such period on a consolidated
basis, determined in accordance with GAAP; provided that there shall be excluded
therefrom (a) gains and losses from Asset Sales (without regard to the $1
million limitation set forth in the definition thereof) and Caterair Asset Sales
(without regard to the $1 million limitation set forth in the definition
thereof) or abandonments or reserves relating thereto and the related tax
effects, (b) items classified as extraordinary or nonrecurring gains and losses,
and the related tax effects according to GAAP, (c) the net income (or loss) of
any Person acquired in a pooling of interests transaction accrued prior to the
date it becomes a Subsidiary of such first Person or is merged or consolidated
with such first Person or any Subsidiary of such first Person, (d) the net
income of any Subsidiary of such Person to the extent that the declaration of
dividends or similar distributions by that Subsidiary of that income is
restricted by contract, operation of law or otherwise, (e) the net loss of any
Person, other than a Restricted Subsidiary of such first Person and (f) the net
income of any Person, other than a Restricted Subsidiary of such first Person,
in which such first Person has an equity interest, except to the extent of cash
dividends or distributions paid to such first Person or a Restricted Subsidiary
of such first Person. Notwithstanding the foregoing, in calculating the
Consolidated Net Income of the Issuer, (i) charges incurred by the Issuer in
connection with the consummation of the transactions contemplated by the Master
<PAGE> 21
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Agreement (including, without limitation, (A) severance payments and other
employee costs and (B) external consulting services primarily associated with
the implementation of labor savings programs) shall not be deducted therefrom,
(ii) the goodwill and the increases in amortization and depreciation resulting
from the consummation of the transactions contemplated by the Master Agreement
shall not be deducted therefrom and (iii) interest payments or accruals on the
Caterair Promissory Note shall not be taken into account.
"Consolidated Non-cash Charges" means, with respect to any Person for
any period, the aggregate depreciation, amortization and other non-cash expenses
of such Person and its Restricted Subsidiaries (and, in the case of the Issuer,
Caterair and its Subsidiaries) reducing Consolidated Net Income of such Person
and its Restricted Subsidiaries (and, in the case of the Issuer, Caterair and
its Subsidiaries) for such period, determined on a consolidated basis in
conformity with GAAP (excluding any such charges constituting an extraordinary
item or loss or any such charge which requires an accrual of or a reserve for
cash charges for any future period).
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement to which the Issuer or any
Restricted Subsidiary of the Issuer or Caterair or any Subsidiary of Caterair,
as the case may be, is a party designed to protect the Issuer or any Restricted
Subsidiary of the Issuer or Caterair or any Subsidiary of Caterair, as the case
may be, against fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Default Notice" shall have the meaning provided in Section 10.02.
"Depository" means the DTC.
"Designated Guarantor Senior Debt" means (i) Indebtedness incurred or
guaranteed by a Guarantor under or in respect of the Senior Bank Financing and
(ii) any other Indebtedness constituting Guarantor Senior Debt which, at the
time of
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determination, has an aggregate principal amount of at least $10 million and is
specifically designated in the instrument evidencing such Guarantor Senior Debt
as "Designated Guarantor Senior Debt" by the applicable Guarantor.
"Designated Senior Debt" means (i) Indebtedness under or in respect of
the Senior Bank Financing and (ii) any other Indebtedness constituting Senior
Debt which, at the time of determination, has an aggregate principal amount of
at least $10 million and is specifically designated in the instrument evidencing
such Senior Debt as "Designated Senior Debt" by the Issuer.
"Discharged" has the meaning provided in Section 8.01.
"Disqualified Capital Stock" means any Capital Stock which, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event (other than an event
which would constitute a Change of Control), matures (excluding any maturity as
the result of an optional redemption by the issuer thereof) or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the sole option of the holder thereof (except, in each case, upon the
occurrence of a Change of Control), in whole or in part, on or prior to the
final maturity date of the Notes.
"DTC" means The Depository Trust Company.
"Event of Default" has the meaning provided in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute or statutes thereto.
"Exchange Notes" has the meaning provided in the preamble to this
Indenture.
"Exchange Offer" means the registration by the Issuer and the
Guarantors under the Securities Act pursuant to a registration statement of the
offer by the Issuer and the Guarantors to each Holder of the Initial Notes held
by such Holder for the Exchange Notes in an aggregate principal amount equal to
the aggregate principal amount of the Initial Notes held by such Holder, all in
accordance with the terms and conditions of the Registration Rights Agreement.
<PAGE> 23
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"Funding Guarantor" has the meaning provided in Section 11.06.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the date of this Indenture, including,
without limitation, those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved by
a significant segment of the accounting profession.
"Global Note" has the meaning provided in Section 2.01.
"Guarantees" means the guarantees of the Notes on a senior subordinated
basis by the Guarantors pursuant to Article Eleven hereof.
"Guarantor Blockage Period" has the meaning provided in Section 12.02.
"Guarantor Default Notice" has the meaning provided in Section 12.02.
"Guarantor Senior Debt" means the principal of, premium, if any, and
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law)
on, and all other obligations with respect to, any Indebtedness of a Guarantor,
whether outstanding on the Issue Date or thereafter created, incurred or
assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Guarantees. Without limiting the generality of the foregoing,
"Guarantor Senior Debt" shall also include the principal of, premium, if any,
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law)
on, and all other amounts owing in respect of, (x) all monetary obligations of
every nature of a Guarantor under the Senior Bank Financing, including, without
limitation, (a) obligations to pay principal and interest, reimbursement
obligations under letters of credit, fees,
<PAGE> 24
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expenses and indemnities and (b) guarantees by a Guarantor of Obligations under
the Senior Bank Financing where the direct borrower is the Issuer or a
Subsidiary of the Issuer, (y) all Interest Swap Obligations and (z) all
obligations under Currency Agreements, in each case whether outstanding on the
Issue Date or thereafter incurred. Notwithstanding the foregoing, Guarantor
Senior Debt shall not include (i) any Indebtedness, if the instrument creating
or evidencing the same or the assumption or guarantee thereof expressly provides
that such Indebtedness shall not be senior in right of payment to the
Guarantees, (ii) any Indebtedness of a Guarantor to a Subsidiary of such
Guarantor, (iii) Indebtedness to, or guaranteed on behalf of, any director,
officer or employee of a Guarantor or any Subsidiary of a Guarantor (including,
without limitation, amounts owed for compensation), (iv) Indebtedness to trade
creditors and other amounts incurred in connection with obtaining goods,
materials or services, (v) Indebtedness represented by Disqualified Capital
Stock, (vi) any liability for federal, state, local or other taxes owed or owing
by a Guarantor, (vii) that portion of any Indebtedness incurred in violation of
the provisions set forth in Section 4.12 (but, as to any such obligation, no
such violation shall be deemed to exist for purposes of this clause (vii) if the
holder(s) of such obligation or their representative and the Trustee shall have
received an Officers' Certificate of the Issuer to the effect that the
incurrence of such Indebtedness does not (or, in the case of revolving credit
Indebtedness, that the incurrence of the entire committed amount thereof at the
date on which the initial borrowing thereunder is made) would not violate such
provisions of this Indenture), and (viii) any Indebtedness which is, by its
express terms, subordinated in right of payment to any other Indebtedness of a
Guarantor.
"Guarantors" means (i) each Guarantor named in the preamble, (ii) each
Restricted Subsidiary of the Issuer or Subsidiary of Caterair which becomes a
guarantor of the Notes in compliance with the provisions set forth under Section
4.19 and (iii) each Restricted Subsidiary of the Issuer or Subsidiary of
Caterair executing a supplemental indenture in which such Restricted Subsidiary
or Subsidiary, as the case may be, agrees to be bound by the terms of the Notes
and this Indenture.
"Holder" means a holder of Notes.
"Indebtedness" means with respect to any Person, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
<PAGE> 25
-16-
(iii) all Capitalized Lease Obligations of such Person, (iv) all obligations of
such Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all obligations under any title retention
agreement (but excluding trade accounts payable and accrued expenses arising in
the ordinary course of business), (v) all obligations for the reimbursement of
any obligor on any letter of credit, banker's acceptance or similar credit
transaction, (vi) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (i) through (v) above and clause (viii)
below, (vii) all obligations of any other Person of the type referred to in
clauses (i) through (vi) which are secured by any lien on any property or asset
of such Person, the amount of such obligation being deemed to be the amount of
the obligation so secured, (viii) all obligations under currency agreements and
interest swap agreements of such Person, and (ix) all Disqualified Capital Stock
issued by such Person with the amount of Indebtedness represented by such
Disqualified Capital Stock being equal to the greater of its voluntary or
involuntary liquidation preference and its maximum fixed repurchase price, but
excluding accrued dividends, if any. For purposes hereof, the "maximum fixed
repurchase price" of any Disqualified Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant to
this Indenture, and if such price is based upon, or measured by, the fair market
value of such Disqualified Capital Stock, such fair market value shall be
determined reasonably and in good faith by the Board of Directors of the issuer
of such Disqualified Capital Stock. The amount of Indebtedness of any Person at
any date shall be the outstanding principal amount of all unconditional
obligations described above, as such amount would be reflected on a balance
sheet prepared in conformity with GAAP, and the maximum liability at such date
of such Person for any contingent obligations described above.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"Initial Notes" has the meaning provided in the preamble to this
Indenture.
"Initial Purchasers" means BT Securities Corporation, J.P. Morgan
Securities Inc., Credit Suisse First Boston Corpo-
<PAGE> 26
-17-
ration, Goldman, Sachs & Co., Smith Barney Inc. and Bankers Trust International
PLC.
"Institutional Accredited Investor" means an institution that is an
accredited investor as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"interest" when used with respect to any Note means the amount of all
interest accruing on such Note, including any applicable defaulted interest
pursuant to Section 2.12 and any Additional Interest pursuant to the
Registration Rights Agreement.
"Interest Payment Date" means the stated maturity of an installment of
interest on the Notes.
"Interest Swap Obligations" means the obligations of any Person,
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount.
"Investment" means, with respect to any Person any direct or indirect
loan or other extension of credit (including, without limitation, a guarantee)
or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness issued
by, any Person. "Investment" shall exclude extensions of trade credit by the
Issuer and its Restricted Subsidiaries and Caterair and its Subsidiaries on
commercially reasonable terms in accordance with normal trade practices of the
Issuer and its Restricted Subsidiaries or Caterair and its Subsidiaries, as the
case may be. In no event shall this definition of "Investment" include payments
by the Issuer to a trust established in connection with a Voluntary Employees'
Beneficiary Association (as referred to in Section 501(c)(9) of the Internal
Revenue Code of 1986). For the purposes of Section 4.10, (i) an "Investment"
shall include and be valued at the fair market value of the net assets of any
Restricted Subsidiary of the
<PAGE> 27
-18-
Issuer at the time that such Restricted Subsidiary is designated an Unrestricted
Subsidiary of the Issuer and shall exclude the fair market value of the net
assets of any Unrestricted Subsidiary of the Issuer at the time that such
Unrestricted Subsidiary is designated a Restricted Subsidiary of the Issuer and
(ii) the amount of any Investment shall be the original cost of such Investment
plus the cost of all additional Investments by the Issuer or any Restricted
Subsidiary of the Issuer or Caterair or any Subsidiary of Caterair, as the case
may be, without any adjustments for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such Investment, reduced by
the payment of dividends or distributions (including tax sharing payments) in
connection with such Investment or any other amounts received in respect of such
Investment, to the extent constituting a return on capital in conformity with
GAAP.
"Issue Date" means the date of original issuance of the Notes.
"Issuer" means SC International Services, Inc.
"Legal Holiday" has the meaning provided in Section 10.07.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest but excluding operating leases of real
or personal property).
"LSG/Lufthansa" means LSG Lufthansa Service GmbH, a company organized
under the laws of the Federal Republic of Germany.
"Lufthansa" means Deutsche Lufthansa AG, an Aktiengesellschaft
organized under the laws of the Federal Republic of Germany.
"Maturity Date" means September 1, 2007.
"Net Cash Proceeds" means, (i) with respect to any Asset Sale or
Caterair Asset Sale, as the case may be, the proceeds in the form of cash or
Cash Equivalents including payments in respect of deferred payment obligations
when received in the form of cash or Cash Equivalents (other than the portion of
any such deferred payment constituting interest) received by the Issuer or any
Restricted Subsidiary of the Issuer or Caterair or any Subsidiary of Caterair,
as the case may be, from such Asset Sale or Caterair Asset Sale, as the case may
be, net
<PAGE> 28
-19-
of (a) out-of-pocket expenses and fees relating to such Asset Sale or Caterair
Asset Sale, as the case may be (including, without limitation, legal, accounting
and investment banking fees and sales commissions), (b) any and all taxes paid
or payable after taking into account any reduction in consolidated tax liability
due to available tax credits or deductions and any tax sharing arrangements, (c)
repayment of Indebtedness that is required to be repaid in connection with such
Asset Sale or Caterair Asset Sale, as the case may be, (d) any portion of cash
proceeds which the Issuer or Caterair, as the case may be, determines in good
faith should be reserved for post-closing adjustments or indemnities, it being
understood and agreed that on the day that all such post-closing adjustments or
indemnities have been determined, the amount (if any) by which the reserved
amount in respect of such Asset Sale or Caterair Asset Sale, as the case may be,
exceeds the actual post-closing adjustments or indemnities payable by the Issuer
or any Restricted Subsidiary of the Issuer or Caterair or any Subsidiary of
Caterair, as the case may be, shall constitute Net Cash Proceeds on such date or
(ii) with respect to the sale of Capital Stock by any Person not constituting an
Asset Sale or Caterair Asset Sale, as the case may be, the aggregate net cash
proceeds received by such Person after payment of expenses, commissions and
other similar charges incurred in connection therewith.
"Net Proceeds Offer" has the meaning set forth in Section 4.16.
"Net Proceeds Offer Amount" has the meaning set forth in Section 4.16.
"Net Proceeds Offer Trigger Date" has the meaning set forth in Section
4.16.
"Non-Significant Subsidiary" of any Person means any Restricted
Subsidiary of such Person which at the time of determination is not a
Significant Subsidiary of such Person.
"Non-U.S. Person" means a Person who is not a U.S. Person as defined in
Regulation S.
"Notes" has the meaning provided in the preamble to this Indenture.
"Obligations" means all obligations for, or guaranteeing the payment
of, principal, premium, interest, penalties, fees, indemnifications,
reimbursements, damages and other li-
<PAGE> 29
-20-
abilities payable under the documentation governing any Indebtedness, without
duplication.
"Offering Memorandum" means the Offering Memorandum, dated August 22,
1997, pursuant to which the Initial Notes were offered and any supplement
thereto.
"Officers' Certificate" means a certificate signed by two officers of
the Issuer.
"OFSI" means Onex Food Services, Inc., a Delaware corporation.
"OFSI Tax Sharing Agreement" means the Tax Sharing Agreement, dated the
Issue Date, among OFSI, the Issuer, Sky Chefs and CII.
"Oncap" means Oncap Holdings Corp., an Ontario corporation.
"Onex" means Onex Corporation, an Ontario corporation.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of Sections
13.04 and 13.05, as they relate to the giving of an Opinion of Counsel.
"Paying Agent" has the meaning provided in Section 2.03.
"Permitted Holder" means (i) Lufthansa, (ii) LSG/Lufthansa, (iii)
Gerald W. Schwartz, (iv) Onex and/or (v) Oncap.
"Permitted Indebtedness" means, without duplication, (i) the Notes,
(ii) the Guarantees, (iii) Indebtedness incurred pursuant to the Senior Bank
Financing, the aggregate outstanding principal amount of which shall not at any
time exceed the sum of the aggregate commitments pursuant to the Senior Bank
Financing as in effect on the Issue Date (A) less the amount of all mandatory
principal payments actually made in respect of the term loan thereunder and (B)
reduced by any required repayments (which are accompanied by a corresponding
permanent commitment reduction) thereunder actually effected in satisfaction of
the application of the Net Cash Proceeds requirement described under Section
4.16, (iv) other Indebtedness of the Issuer, Caterair and their respective
Subsidiaries outstanding on
<PAGE> 30
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the Issue Date, (v) Interest Swap Obligations covering Indebtedness of the
Issuer, Caterair or any of their respective Subsidiaries; provided that any
Indebtedness to which any such Interest Swap Obligations correspond is otherwise
permitted to be incurred under this Indenture; provided, further, that such
Interest Swap Obligations are entered into, in the judgment of the Issuer or
Caterair, as the case may be, to protect the Issuer or any Subsidiary of the
Issuer or Caterair or any Subsidiary of Caterair, as the case may be, from
fluctuations in interest rates on their respective outstanding Indebtedness,
(vi) Indebtedness under Currency Agreements, (vii) (A) intercompany Indebtedness
owed by the Issuer to any Wholly Owned Restricted Subsidiary of the Issuer or by
any Restricted Subsidiary of the Issuer to the Issuer or any Wholly Owned
Restricted Subsidiary of the Issuer, (B) intercompany Indebtedness owed by
Caterair to any Wholly Owned Subsidiary of Caterair or by any Subsidiary of
Caterair to Caterair or any Wholly Owned Subsidiary of Caterair and (C)
Indebtedness between the Issuer or any Wholly Owned Restricted Subsidiary of the
Issuer, on the one hand, and Caterair or any Wholly Owned Subsidiary of
Caterair, on the other hand, (viii) Acquired Indebtedness to the extent the
Issuer could have incurred such Indebtedness in accordance with Section 4.12,
(ix) (A) performance bonds, completion guarantees and similar obligations
(exclusive of obligations for the payment of borrowed money), (B) guarantees
pursuant to Section 4.19 and (C)(1) guarantees by the Issuer or any Wholly Owned
Restricted Subsidiary of the Issuer of Indebtedness of Caterair or any Wholly
Owned Subsidiary of Caterair, (2) guarantees by Caterair or any Wholly Owned
Subsidiary of Caterair of Indebtedness of the Issuer or any Wholly Owned
Restricted Subsidiary of the Issuer, (3) guarantees by the Issuer and its Wholly
Owned Restricted Subsidiaries of each other's Indebtedness and (4) guarantees by
Caterair and its Wholly Owned Subsidiaries of each other's Indebtedness;
provided that in the case of each guarantee of Indebtedness pursuant to clause
(C)(1), (C)(2), (C)(3) or (C)(4), such Indebtedness is incurred in accordance
with the provisions of this Indenture, (x) in addition to Capitalized Lease
Obligations permitted under any other clause of this definition, purchase money
Indebtedness and Indebtedness evidenced by Capitalized Lease Obligations not to
exceed an aggregate of $10 million at any one time outstanding, (xi) any
refinancing, modification, replacement, renewal, restatement, refunding,
deferral, extension, substitution, supplement, reissuance or resale of existing
or future Indebtedness, including Capitalized Lease Obligations incurred after
the repayment of all or a portion of the Capitalized Lease Obligations
outstanding as of the Issue Date so long as the aggregate amount of Capitalized
Lease Obli-
<PAGE> 31
-22-
gations incurred and outstanding at any time pursuant to clause (iv) above and
this clause (xi) does not exceed the amount of Capitalized Lease Obligations
outstanding on the Issue Date, and any additional Indebtedness incurred to pay
premiums required by the instruments governing such existing or future
Indebtedness as in effect at the time of issuance thereof ("Required Premiums")
and fees in connection therewith; provided that any such event shall not (1)
result in an increase in the aggregate principal amount of Permitted
Indebtedness (except to the extent such increase is a result of a simultaneous
incurrence of additional Indebtedness (A) to pay Required Premiums and related
fees or (B) otherwise permitted to be incurred under this Indenture) of the
Issuer, Caterair and their respective Subsidiaries and (2) create Indebtedness
with a Weighted Average Life to Maturity at the time such Indebtedness is
incurred that is less than the Weighted Average Life to Maturity at such time of
the Indebtedness being refinanced, modified, replaced, renewed, restated,
refunded, deferred, extended, substituted, supplemented, reissued or resold
(except that this subclause (2) will not apply in the event the Indebtedness
being refinanced, modified, replaced, renewed, restated, refunded, deferred,
extended, substituted, supplemented, reissued or resold was originally incurred
in reliance upon clause (iii), (xi) or (xiii) of this definition), (xii)
Indebtedness incurred in connection with the exercise of the purchase options
for the Caterair Leased Property pursuant to the Caterair Lease and the Caterair
Licensed Property pursuant to the Caterair License; provided that any payment
made to Caterair in connection with the exercise of such options is used by
Caterair to prepay Guarantor Senior Debt or, if there is no Guarantor Senior
Debt outstanding, to prepay Senior Debt and/or to repay the Caterair Promissory
Note; provided that if Caterair elects to repay the Caterair Promissory Note,
the Issuer immediately uses the proceeds received from such repayment to prepay
Senior Debt, and (xiii) additional Indebtedness of the Issuer, Caterair and
Restricted Subsidiaries of the Issuer in an aggregate principal amount not to
exceed $75 million at any one time outstanding (which amount may, but need not,
be incurred in whole or in part under the Senior Bank Financing).
"Permitted Investments" means (i) (A) Investments by the Issuer or any
Restricted Subsidiary of the Issuer in, or for the benefit of, any Restricted
Subsidiary of the Issuer (whether existing on the Issue Date or created
thereafter and including Investments in any Person, if after giving effect to
such Investment, such Person would be a Restricted Subsidiary of the Issuer) and
Investments in, or for the benefit of, the Issuer by any Restricted Subsidiary
of the Issuer and (B) In-
<PAGE> 32
-23-
vestments by Caterair in, or for the benefit of, any Wholly Owned Subsidiary of
Caterair and Investments in, or for the benefit of, Caterair by any Subsidiary
of Caterair, (ii) cash and Cash Equivalents, (iii) Investments existing on the
Issue Date, except for Investments in Restricted Subsidiaries of the Issuer,
which shall be governed by clause (i)(A) above, (iv) Investments in securities
of trade creditors or customers received pursuant to any plan of reorganization
or similar arrangement upon the bankruptcy or insolvency of such trade creditors
or customers, (v) loans and advances by the Issuer and its Subsidiaries to their
respective employees (A) the proceeds of which are used to purchase common stock
of OFSI and which proceeds are contributed by OFSI to the Issuer (which
contribution shall not be included as a capital contribution for purposes of
clause (iii)(z) of the first paragraph of Section 4.10) or (B) in the ordinary
course of business, which loans or advances do not exceed $3 million at any one
time outstanding, (vi) the Guarantees, (vii) any Investment that qualifies as
Permitted Indebtedness, (viii) Investments by the Issuer or any Restricted
Subsidiary of the Issuer in Unrestricted Subsidiaries of the Issuer or in other
Persons in an amount not to exceed $30 million at any one time outstanding, (ix)
(A) Investments by the Issuer or any Restricted Subsidiary of the Issuer in
Caterair or any Wholly Owned Subsidiary of Caterair and (B) Investments by
Caterair or any Subsidiary of Caterair in the Issuer or any Restricted
Subsidiary of the Issuer, (x) Investments received by the Issuer or any
Restricted Subsidiary of the Issuer or Caterair or any Subsidiary of Caterair,
as the case may be, as consideration for asset sales, including Asset Sales or
Caterair Asset Sales; provided that in the case of an Asset Sale or Caterair
Asset Sale, such Asset Sale or Caterair Asset Sale is effected in compliance
with Section 4.16 and (xi) in addition to Investments permitted under clause
(viii) above, Investments in Unrestricted Subsidiaries that are engaged in the
business of providing airline catering services and Airline Catering Joint
Ventures in an aggregate amount not to exceed $50 million at any one time
outstanding.
"Permitted Liens" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Issuer or its Restricted Subsidiaries or
Caterair or its Subsidiaries, as the case may be, shall have set aside on
its books such reserves as may be required in conformity with GAAP;
<PAGE> 33
-24-
(ii) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business, as well as deposits to secure
each of the foregoing, for sums not yet delinquent more than 60 days or
being contested in good faith, if such reserve or other appropriate
provision, if any, as shall be required by GAAP for financial reporting
purposes shall have been made in respect thereof;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, including any Lien securing letters of
credit issued in the ordinary course of business consistent with past
practice in connection therewith, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(iv) judgment Liens not giving rise to an Event of Default;
(v) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Issuer and
its Restricted Subsidiaries, taken as a whole, or of Caterair and its
Subsidiaries, taken as a whole, as the case may be;
(vi) any interest or title of a lessor under any Capitalized Lease
Obligation and precautionary filings made for informational purposes in
connection with true leases, consignments and similar arrangements;
(vii) purchase money Liens to finance property or assets of the Issuer
or any Restricted Subsidiary of the Issuer or Caterair or any Subsidiary of
Caterair, as the case may be, acquired in the ordinary course of business;
provided, however, that (A) the related purchase money Indebtedness shall
not exceed the cost of such property or assets and shall not be secured by
any property or assets of the Issuer or any Restricted Subsidiary of the
Issuer or Caterair or any Subsidiary of Caterair, as the case may be, other
than the property and assets so acquired and
<PAGE> 34
-25-
(B) the Lien securing such Indebtedness shall be created within 90 days
of such acquisition;
(viii) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment, or storage of such inventory or other
goods;
(ix) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(x) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual, or warranty requirements of the Issuer
or any Restricted Subsidiary of the Issuer or Caterair or any Subsidiary of
Caterair, as the case may be, including rights of offset and set-off;
(xi) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under this
Indenture;
(xii) Liens securing Indebtedness under Currency Agreements;
(xiii) Liens existing on the Issue Date, together with any Liens
securing Indebtedness incurred in reliance on clause (xi) of the definition
of Permitted Indebtedness; provided that the Liens securing the refinancing
Indebtedness shall not extend to property other than that pledged under the
Liens securing the Indebtedness being refinanced;
(xiv) Liens securing Indebtedness incurred in reliance on clause (xiii)
of the definition of Permitted Indebtedness;
(xv) Liens in favor of the Trustee to secure the Issuer's payment
obligations to the Trustee; and
(xvi) non-consensual Liens which do not individually or in the
aggregate materially detract from the value or transferability of the
property or assets of the Issuer, any Restricted Subsidiary of the Issuer,
Caterair or any
<PAGE> 35
-26-
Subsidiary of Caterair, or materially impair the use of any such
property or assets in the operation of the respective businesses of the
Issuer, any Restricted Subsidiary of the Issuer, Caterair or any Subsidiary
of Caterair.
"Person" means an individual, partnership, corporation, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.
"Physical Notes" has the meaning provided in Section 2.01.
"Plan of Liquidation" means, with respect to any Person, a plan that
provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously, in phases or
otherwise) (i) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of such Person otherwise than as an entirety or
substantially as an entirety and (ii) the distribution of all or substantially
all of the proceeds of such sale, lease, conveyance or other disposition and all
or substantially all of the remaining assets of such person to holders of
Capital Stock of such Person.
"Preferred Stock" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
"principal" of any Indebtedness (including the Notes) means the
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"Private Exchange Notes" has the meaning set forth in the Registration
Rights Agreement.
"Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth in Section 2.15.
"Proceeds Purchase Date" has the meaning provided in Section 4.16.
"Productive Assets" means assets of a kind used or usable in the
businesses of the Issuer and its Restricted Subsidiaries or Caterair and its
Subsidiaries, as the case may be, or similar, ancillary, complementary or
related to such businesses, as conducted on the date of the relevant Asset Sale
or Caterair Asset Sale, as the case may be, including, without
<PAGE> 36
-27-
limitation, equity interests and other assets the acquisition of which would
constitute a "Permitted Investment" under clause (i)(A) of the definition
thereof.
"pro forma" means, with respect to any calculation made or required to
be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act.
"Public Equity Offering" means an underwritten public offering of
Qualified Capital Stock of OFSI or the Issuer pursuant to a registration
statement filed with the Commission in accordance with the Securities Act;
provided that in the event of a Public Equity Offering by OFSI, OFSI contributes
to the capital of the Issuer net cash proceeds of such Public Equity Offering in
an amount sufficient to redeem the Notes called for redemption in accordance
with the terms thereof.
"Qualified Capital Stock" means any stock that is not Disqualified
Capital Stock.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Redemption Date," when used with respect to any Note to be redeemed,
means the date fixed for such redemption pursuant to this Indenture and the
Notes.
"redemption price," when used with respect to any Note to be redeemed,
means the price fixed for such redemption, including principal and premium, if
any, pursuant to this Indenture and the Notes.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of August 28, 1997, by and among the Issuer, the Guarantors
and the Initial Purchasers.
"Regulation S" means Regulation S under the Securities Act.
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Debt; provided that if, and
for so long as, any Designated Senior Debt lacks such a representative, then the
Representative for such Designated Senior Debt shall at all times constitute the
holders of a majority in outstanding principal amount of such Designated Senior
Debt in respect of any Designated Senior Debt.
<PAGE> 37
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"Restricted Payment" shall have the meaning set forth in Section 4.10.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided, however, that the Trustee shall be
entitled to request and conclusively rely on an Opinion of Counsel with respect
to whether any Note constitutes a Restricted Security.
"Restricted Subsidiary" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary of
such Person.
"Rule 144A" means Rule 144A promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Issuer or a Restricted Subsidiary of the Issuer or
Caterair or a Subsidiary of Caterair, as the case may be, of any property,
whether owned by the Issuer or a Restricted Subsidiary of the Issuer or Caterair
or a Subsidiary of Caterair, as the case may be, at the Issue Date or later
acquired, which has been or is to be sold or transferred by the Issuer or a
Restricted Subsidiary of the Issuer or Caterair or a Subsidiary of Caterair, as
the case may be, to such Person or to any other Person from whom funds have been
or are to be advanced by such Person on the security of such Property.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Senior Bank Financing" means the Term Loan Agreement dated as of the
Issue Date, among each of SCIS and Caterair, as borrowers, the guarantors
thereunder, the lenders party thereto from time to time in their capacities as
lenders thereunder, and Morgan Guaranty Trust Company of New York, as
administrative agent, J.P. Morgan Securities Inc. and Bankers Trust Company, as
co-arrangers, and Bankers Trust Company, as syndication agent, and the Revolving
Credit Facility, dated as of the Issue Date, among the Issuer, as borrower, the
guarantors
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thereunder, the lenders party thereto from time to time in their capacities as
lenders thereunder and Morgan Guaranty Trust Company of New York, as
administrative agent, J.P. Morgan Securities Inc. and Bankers Trust Company, as
co-arrangers, and Bankers Trust Company, as syndication agent, together, in each
case, with the related documents thereto (including, without limitation, any
guarantee agreements and security documents), in each case as such agreements
may be amended (including any amendment and restatement thereof), supplemented
or otherwise modified from time to time, including any agreement extending the
maturity of, increasing the total commitment under, refinancing, replacing or
otherwise restructuring (including adding Restricted Subsidiaries of the Issuer
and Subsidiaries of Caterair as additional borrowers or guarantors thereunder)
all or any portion of the Indebtedness under any such agreement or any successor
or replacement agreement to any thereof and whether by the same or any other
syndication agent, documentation agent, administrative agent, lender or group of
lenders.
"Senior Debt" means the principal of, premium, if any, and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on, and
all other obligations with respect to, any Indebtedness of the Issuer, whether
outstanding on the Issue Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Notes. Without limiting the generality of the foregoing, "Senior Debt" shall
also include the principal of, premium, if any, interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on, and all other amounts
owing in respect of, (x) all monetary obligations of every nature of the Issuer
under the Senior Bank Financing, including, without limitation, (a) obligations
to pay principal and interest, reimbursement obligations under letters of
credit, fees, expenses and indemnities and (b) guarantees by the Issuer of
Obligations under the Senior Bank Financing where the direct borrower is
Caterair or a Subsidiary of the Issuer, (y) all Interest Swap Obligations and
(z) all obligations under Currency Agreements, in each case whether outstanding
on the Issue Date or thereafter incurred. Notwithstanding the foregoing, Senior
Debt shall not include (i) any Indebtedness, if the instrument creating or
evidencing
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the same or the assumption or guarantee thereof expressly provides that such
Indebtedness shall not be senior in right of payment to the Notes, (ii) any
Indebtedness of the Issuer to a Subsidiary of the Issuer, (iii) Indebtedness to,
or guaranteed on behalf of, any director, officer or employee of the Issuer or
any Subsidiary of the Issuer (including, without limitation, amounts owed for
compensation), (iv) Indebtedness to trade creditors and other amounts incurred
in connection with obtaining goods, materials or services, (v) Indebtedness
represented by Disqualified Capital Stock, (vi) any liability for federal,
state, local or other taxes owed or owing by the Issuer, (vii) that portion of
any Indebtedness incurred in violation of the provisions of this Indenture set
forth under Section 4.12 (but, as to any such obligation, no such violation
shall be deemed to exist for purposes of this clause (vii) if the holder(s) of
such obligation or their representative and the Trustee shall have received an
Officers' Certificate of the Issuer to the effect that the incurrence of such
Indebtedness does not (or, in the case of revolving credit Indebtedness, that
the incurrence of the entire committed amount thereof at the date on which the
initial borrowing thereunder is made) would not violate such provisions of this
Indenture); and (viii) any Indebtedness which is, by its express terms,
subordinated in right of payment to any other Indebtedness of the Issuer.
"Significant Subsidiary" means, as of any date of determination, for
any Person, each Subsidiary of such Person (or, in the case of the Issuer, each
Restricted Subsidiary of the Issuer) which (i) for the most recent fiscal year
of such Person accounted for more than 10% of consolidated revenues or 10% of
Consolidated EBITDA of such Person or (ii) as at the end of such fiscal year,
was the owner of more than 10% of the consolidated assets of such Person.
"Sky Chefs" has the meaning provided in the preamble.
"Subordinated Indebtedness" means, with respect to any Guarantor,
Indebtedness of such Guarantor which is subordinated in right of payment to the
Guarantee of such Guarantor.
"Subsidiary", with respect to any Person, means (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii) any
other Person of which at least a majority of the vot-
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ing interest under ordinary circumstances is at the time, directly or
indirectly, owned by such Person.
"Subsidiary Guarantors" means each of the Guarantors except for
Caterair and any Subsidiary of Caterair and any other Restricted Subsidiary of
the Issuer which becomes a Guarantor of the Notes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb), as amended, as in effect on the date of this Indenture, except as
otherwise provided in Section 9.03.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer this Indenture, or in the case of a
successor trustee, an officer assigned to the department, division or group
performing the corporate trust work of such successor and assigned to administer
this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Unrestricted Notes" means one or more Notes that are not required to
bear the Private Placement Legend in the form set forth in Section 2.15,
including, without limitation, the Exchange Notes.
"Unrestricted Subsidiary" of any Person means (i) any Subsidiary of
such Person that at the time of determination shall be or continue to be
designated an Unrestricted Subsidiary by the Board of Directors of such Person
in the manner provided below and (ii) any Subsidiary of an Unrestricted
Subsidiary. The Board of Directors of the Issuer may designate any Subsidiary of
the Issuer (including any newly acquired or newly formed Subsidiary), other than
a Subsidiary Guarantor, to be an Unrestricted Subsidiary of the Issuer unless
such Subsidiary of the Issuer owns any Capital Stock of, or owns or holds any
Lien on any property of, the Issuer or any other Subsidiary of the Issuer that
is not a Subsidiary of the Subsidiary to be so designated; provided that (x) the
Issuer certifies to the Trustee that such designation complies with Section 4.10
and (y) each Subsidiary of the Issuer to be so designated and each of its
Subsidiaries has not at the time of designation, and does not thereafter,
create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable with respect to any
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Indebtedness pursuant to which the lender has recourse to any of the assets of
the Issuer or any of its Restricted Subsidiaries. Notwithstanding the foregoing,
the Issuer or a Restricted Subsidiary of the Issuer may guarantee Indebtedness
of an Unrestricted Subsidiary of the Issuer if such guarantee is made in
accordance with Section 4.10. The Board of Directors of the Issuer may designate
any Unrestricted Subsidiary of the Issuer to be a Restricted Subsidiary of the
Issuer only if (x) immediately after giving effect to such designation, the
Issuer is able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.12 and (y) immediately
before and immediately after giving effect to such designation, no Default or
Event of Default shall have occurred and be continuing. Any such designation by
the Board of Directors of the Issuer shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations of, and
obligations guaranteed by, the United States of America for the payment of which
the full faith and credit of the United States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person means any Restricted
Subsidiary of such Person of which all the outstanding voting securities (other
than directors' qualifying shares) are owned by such Person or any Wholly Owned
Restricted Subsidiary of such Person.
"Wholly Owned Subsidiary" of any Person means any Subsidiary of such
Person of which all the outstanding voting
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securities (other than directors' qualifying shares) are owned by such Person or
any Wholly Owned Subsidiary of such Person.
SECTION 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture securities holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuer or any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP as in effect on the Issue Date;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular; and
(5) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision.
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ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating.
The Initial Notes and the Trustee's certificate of authentication
relating thereto shall be substantially in the form of Exhibit A hereto. The
Exchange Notes and the Trustee's certificate of authentication relating thereto
shall be substantially in the form of Exhibit B hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
depository rule or usage. The Issuer and the Trustee shall approve the form of
the Notes and any notation, legend or endorsement on them. If required, the
Notes may bear the appropriate legend regarding any original issue discount for
federal income tax purposes. Each Note shall be dated the date of its issuance
and shall show the date of its authentication. Subject to Section 4.19, each
Note shall have an executed Guarantee from each of the Guarantors endorsed
thereon substantially in the form included in Exhibit A and Exhibit B hereto.
The terms and provisions contained in the Notes, annexed hereto as
Exhibits A and B, shall constitute, and are hereby expressly made, a part of
this Indenture and, to the extent applicable, the Issuer, the Guarantors and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A, Notes offered and sold
to institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act) and Notes offered and sold in reliance on
Regulation S shall be issued initially in the form of one or more permanent
global Notes in registered form, substantially in the form set forth in Exhibit
A (the "Global Note"), deposited with the Trustee, as custodian for the
Depository, duly executed by the Issuer (and having an executed Guarantee
endorsed thereon) and authenticated by the Trustee as hereinafter provided and
shall bear the legend set forth in Section 2.15. The aggregate principal amount
of the Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depository,
as hereinafter provided.
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Notes issued in exchange for interests in a Global Note pursuant to
Section 2.16 may be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in Exhibit A (the "Physical
Notes"). All Notes offered and sold in reliance on Regulation S shall remain in
the form of a Global Note until the consummation of the Exchange Offer pursuant
to the Registration Rights Agreement; provided, however, that all of the time
periods specified in the Registration Rights Agreement to be complied with by
the Issuer have been so complied with.
SECTION 2.02. Execution and Authentication.
Two Officers, or an Officer and a Secretary or an Assistant Secretary,
of the Issuer shall sign, or one Officer shall sign and one Officer, a Secretary
or an Assistant Secretary (each of whom shall, in each case, have been duly
authorized by all requisite corporate actions) shall attest to, the Notes by
manual or facsimile signature. The endorsement of the Guarantee by each
Guarantor shall be executed by an Officer, a Secretary, an Assistant Secretary
or another authorized signatory of such Guarantor.
If an Officer, Secretary or Assistant Secretary whose signature is on a
Note or a Guarantee was an Officer, Secretary or Assistant Secretary at the time
of such execution but no longer holds that office or position at the time the
Trustee authenticates the Note, the Note shall nevertheless be valid.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue in
the aggregate principal amount not to exceed $300,000,000, (ii) Private Exchange
Notes from time to time only in exchange for a like principal amount of Initial
Notes and (iii) Unrestricted Notes from time to time only (x) in exchange for a
like principal amount of Initial Notes or (y) in an aggregate principal amount
of not more than the excess of $300,000,000 over the sum of the aggregate
principal amount of (A) Initial Notes then outstanding, (B) Private Exchange
Notes then outstanding and (C) Unrestricted Notes issued in accordance with
(iii)(x) above, in each case upon a written order of the Issuer in the form of
an Officers' Certificate of the Issuer. Each such written order shall specify
the amount of Notes to be authenticated and the date on which the Notes are
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to be authenticated, whether the Notes are to be Initial Notes, Private Exchange
Notes or Unrestricted Notes and whether the Notes are to be issued as Physical
Notes or Global Notes. In addition, with respect to authentication pursuant to
clauses (ii) or (iii) of the first sentence of this paragraph, the first such
written order from the Issuer shall be accompanied by an Opinion of Counsel of
the Issuer in a form reasonably satisfactory to the Trustee stating that the
issuance of the Private Exchange Notes or the Unrestricted Notes, as the case
may be, does not give rise to an Event of Default, complies with this Indenture
and has been duly authorized by the Issuer. The aggregate principal amount of
Notes outstanding at any time may not exceed $300,000,000, except as provided in
Sections 2.07 and 2.08.
In the event that the Issuer shall issue and the Trustee shall
authenticate any Notes issued under this Indenture subsequent to the Issue Date
pursuant to clauses (i) and (iii) of the first sentence of the immediately
preceding paragraph, the Issuer shall use its reasonable best efforts to obtain
the same "CUSIP" number for such Notes as is printed on the Notes outstanding at
such time; provided, however, that if any series of Notes issued under this
Indenture subsequent to the Issue Date is determined, pursuant to an Opinion of
Counsel of the Issuer in a form reasonably satisfactory to the Trustee, to be a
different class of security than the Notes outstanding at such time for federal
income tax purposes, the Issuer may obtain a "CUSIP" number for such Notes that
is different than the "CUSIP" number printed on the Notes then outstanding.
Notwithstanding the foregoing, all Notes issued under this Indenture shall vote
and consent together on all matters as one class and no series of Notes will
have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Issuer to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Issuer or with any Affiliate of the Issuer.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof.
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SECTION 2.03. Registrar and Paying Agent.
The Issuer shall maintain an office or agency (which shall be located
in the Borough of Manhattan in the City of New York, State of New York), where
(a) Notes may be presented or surrendered for registration of transfer or for
exchange ("Registrar"), (b) Notes may be presented or surrendered for payment
("Paying Agent") and (c) notices and demands to or upon the Issuer in respect of
the Notes and this Indenture may be served. The Registrar shall keep a register
of the Notes and of their transfer and exchange. The Issuer, upon notice to the
Trustee, may have one or more co-Registrars and one or more additional paying
agents reasonably acceptable to the Trustee. The term "Paying Agent" includes
any additional paying agent.
The Issuer shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. The Issuer shall notify the Trustee, in advance, of the name and
address of any such Agent. If the Issuer fails to maintain a Registrar or Paying
Agent, the Trustee shall act as such.
The Issuer initially appoints the Trustee as Registrar and Paying Agent
until such time as the Trustee has resigned or a successor has been appointed.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Issuer shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all assets held by the Paying Agent for the payment
of principal of, or interest on, the Notes (whether such assets have been
distributed to it by the Issuer or any other obligor on the Notes), and shall
notify the Trustee of any default by the Issuer (or any other obligor on the
Notes) in making any such payment. The Issuer at any time may require a Paying
Agent to distribute all assets held by it to the Trustee and account for any
assets disbursed and the Trustee may at any time during the continuance of any
payment Default, upon written request to a Paying Agent, require such Paying
Agent to distribute all assets held by it to the Trustee and to account for any
assets distributed. Upon distribution to the Trustee of all assets that shall
have been delivered by the Issuer to the Paying Agent and the completion of any
accounting required to be made
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hereunder, the Paying Agent shall have no further liability for such assets.
SECTION 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders. If the Trustee is not the Registrar, the Issuer shall furnish to
the Trustee five (5) Business Days before each Interest Payment Date and at such
other times as the Trustee may request in writing a list as of the applicable
Record Date and in such form as the Trustee may reasonably require of the names
and addresses of the Holders, which list may be conclusively relied upon by the
Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to Sections 2.16 and 2.17, when Notes are presented to the
Registrar or a co-Registrar with a request to register the transfer of such
Notes or to exchange such Notes for an equal principal amount of Notes of other
authorized denominations, the Registrar or co-Registrar shall register the
transfer or make the exchange as requested if its requirements for such
transaction are met; provided, however, that the Notes presented or surrendered
for registration of transfer or exchange shall be duly endorsed or accompanied
by a written instrument of transfer in form satisfactory to the Issuer, the
Trustee and the Registrar or co-Registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing. To permit registration of transfers
and exchanges, the Issuer shall execute and the Trustee shall authenticate Notes
and each of the Guarantors shall execute a Guarantee thereon at the Registrar's
or co-Registrar's request. No service charge shall be made for any registration
of transfer or exchange, but the Issuer may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchanges or transfers pursuant to Sections 2.10, 3.04, 4.15, 4.16
or 9.05, in which event the Issuer shall be responsible for the payment of such
taxes).
The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the opening
of business 15 days before the mailing of a notice of redemption of Notes and
ending at the close of business on the day of such mailing and (ii) selected for
redemption in whole or in part pursuant to
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Article Three, except the unredeemed portion of any Note being redeemed in part.
Any Holder of a beneficial interest in a Global Note shall, by
acceptance of such Global Note, agree that transfers of beneficial interests in
such Global Notes may be effected only through a book entry system maintained by
the Holder of such Global Note (or its agent), and that ownership of a
beneficial interest in the Note shall be required to be reflected in a book
entry system.
SECTION 2.07. Replacement Notes.
If a mutilated Note is surrendered to the Trustee or if the Holder of a
Note claims that the Note has been lost, destroyed or wrongfully taken, the
Issuer shall issue and the Trustee shall authenticate a replacement Note and
each of the Guarantors shall execute a Guarantee thereon if the Trustee's
requirements are met. Such Holder must provide an indemnity bond or other
indemnity, sufficient in the reasonable judgment of the Issuer, the Guarantors
and the Trustee, to protect the Issuer, the Guarantors, the Trustee or any Agent
from any loss which any of them may suffer if a Note is replaced. Every
replacement Note shall constitute an additional obligation of the Issuer and the
Guarantors.
SECTION 2.08. Outstanding Notes.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding. Subject
to Section 2.09, Note does not cease to be outstanding because the Issuer or any
of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a
bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender of
such Note and replacement thereof pursuant to Section 2.07.
If on a Redemption Date or the Maturity Date the Paying Agent holds
U.S. Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal and interest due on the Notes payable on that date and is not
prohibited from paying such money to the Holders thereof pursuant to the terms
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of this Indenture, then on and after that date such Notes cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice, and for
purposes of determining the amount of Notes outstanding at the time of a
redemption made in accordance with paragraph 6(b) of the Notes, Notes owned by
the Issuer or an Affiliate of the Issuer shall be considered as though they are
not outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any direction, waiver or consent, only Notes
which the Trustee actually knows are so owned shall be so considered. The Issuer
shall notify the Trustee, in writing, when it or any of its Affiliates
repurchases or otherwise acquires Notes, of the aggregate principal amount of
such Notes so repurchased or otherwise acquired.
SECTION 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Issuer may prepare
and the Trustee shall authenticate temporary Notes upon receipt of a written
order of the Issuer in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Issuer considers appropriate for temporary Notes. Without unreasonable
delay, the Issuer shall prepare and execute, and the Trustee shall authenticate
upon receipt of a written order of the Issuer pursuant to Section 2.02,
definitive Notes in exchange for temporary Notes.
SECTION 2.11. Cancellation.
The Issuer at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee or,
at the direction of the Trustee, the Registrar or the Paying Agent, and no one
else, shall cancel and, at the written direction of the Issuer, shall dispose of
(but shall not be required to destroy) all Notes surrendered for transfer,
exchange, payment or cancellation. Subject to Section 2.07, the Issuer may not
issue new Notes to replace Notes that the Issuer has paid or delivered to
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the Trustee for cancellation. If the Issuer shall acquire any of the Notes, such
acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Notes unless and until the same are surrendered
to the Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest.
If the Issuer defaults in a payment of interest on the Notes, it shall
pay the defaulted interest, plus (to the extent lawful) any interest payable on
the defaulted interest to the Persons who are Holders on a subsequent special
record date, which date shall be the fifteenth day next preceding the date fixed
by the Issuer for the payment of defaulted interest or the next succeeding
Business Day if such date is not a Business Day. At least 15 days before the
subsequent special record date, the Issuer shall mail to each Holder, with a
copy to the Trustee, a notice that states the subsequent special record date,
the payment date and the amount of defaulted interest, and interest payable on
such defaulted interest, if any, to be paid.
SECTION 2.13. CUSIP Number.
The Issuer in issuing the Notes may use a "CUSIP" number, and if so,
the Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders; provided that no representation is hereby deemed to be
made by the Trustee as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Notes, and that reliance may be placed only on
the other identification numbers printed on the Notes. The Issuer shall promptly
notify the Trustee of any change in the CUSIP numbers.
SECTION 2.14. Deposit of Moneys.
Prior to each Interest Payment Date and Maturity Date, the Issuer shall
have deposited with the Paying Agent in immediately available funds money
sufficient to make cash payments, if any, due on such Interest Payment Date or
Maturity Date, as the case may be, in a timely manner which permits the Paying
Agent to remit payment to the Holders on such Interest Payment Date or Maturity
Date, as the case may be.
SECTION 2.15. Restrictive Legends.
Each Global Note and Physical Note that constitutes a Restricted
Security or is sold in compliance with Regulation S
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shall bear the following legend (the "Private Placement Legend") on the face
thereof until after the second anniversary of the later of the Issue Date and
the last date on which the Issuer or any Affiliate of the Issuer was the owner
of such Note (or any predecessor security) (or such shorter period of time as
permitted by Rule 144(k) under the Securities Act or any successor provision
thereunder) (or such longer period of time as may be required under the
Securities Act or applicable state securities laws in the opinion of counsel for
the Issuer, unless otherwise agreed by the Issuer and the Holder thereof):
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3),
OR (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT
A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 903 OR 904 UNDER THE SECURITIES ACT, (2) AGREES THAT IT
WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS NOTE RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE ISSUER THEREOF OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S.
BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR
THIS NOTE), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
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LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THIS NOTE, IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
Each Global Note shall also bear the following legend on the face
thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.17 OF THE INDENTURE.
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SECTION 2.16. Book-Entry Provisions for Global Note.
(a) The Global Notes initially shall (i) be registered in the name of
the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
the penultimate and last paragraphs of Section 2.15.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Note, and the Depository may be treated by the Issuer, the Trustee and
any Agent of the Issuer or the Trustee as the absolute owner of such Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Issuer, the Trustee or any Agent of the Issuer or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a Holder of any Note.
(b) Transfers of a Global Note shall be limited to transfers in whole,
but not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in a Global Note may be transferred or exchanged
for Physical Notes in accordance with the rules and procedures of the Depository
and the provisions of Section 2.17. In addition, Physical Notes shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a Global Note if (i) the Depository notifies the Issuer that it is unwilling
or unable to continue as Depository for the Global Notes and a successor
depositary is not appointed by the Issuer within 90 days of such notice or (ii)
an Event of Default has occurred and is continuing and the Registrar has
received a written request from the Depository to issue Physical Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in a Global Note to beneficial owners pursuant to paragraph
(b), the Registrar shall (if one or more Physical Notes are to be issued)
reflect on its books and records the date and a decrease in the principal amount
of such Global Note in an amount equal to the principal amount of the beneficial
interest in the Global Note to be transferred, and the Issuer shall execute, the
Guarantors shall execute Guarantees on, and the Trustee shall authenticate and
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make available for delivery, one or more Physical Notes of like tenor and
amount.
(d) In connection with the transfer of an entire Global Note to
beneficial owners pursuant to paragraph (b), such Global Note shall be deemed to
be surrendered to the Trustee for cancellation, and the Issuer shall execute,
the Guarantors shall execute Guarantees on and the Trustee shall authenticate
and make available for delivery, to each beneficial owner identified by the
Depository in exchange for its beneficial interest in the Global Note, an equal
aggregate principal amount of Physical Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Security delivered in
exchange for an interest in a Global Note pursuant to paragraph (b) or (c)
shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of Section
2.17, bear the legend regarding transfer restrictions applicable to the Physical
Notes set forth in Section 2.15.
(f) The Holder of a Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
SECTION 2.17. Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors and
Non-U.S. Persons. The following provisions shall apply with respect to the
registration of any proposed transfer of a Note constituting a Restricted
Security to any Institutional Accredited Investor which is not a QIB or to any
Non-U.S. Person:
(i) the Registrar shall register the transfer of any Note constituting
a Restricted Security, whether or not such Note bears the Private Placement
Legend, if (x) the requested transfer is after the second anniversary of the
Issue Date (provided, however, that neither the Issuer nor any Affiliate of
the Issuer has held any beneficial interest in such Note, or portion
thereof, at any time on or prior to the second anniversary of the Issue
Date) or (y) (1) in the case of a transfer to an Institutional Accredited
Investor which is not a QIB (excluding Non-U.S. Persons), the proposed
transferee has delivered to the Registrar a certificate substantially in the
form of Exhibit C hereto and any legal opinions and certifications
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required thereby or (2) in the case of a transfer to a Non-U.S. Person, the
proposed transferor has delivered to the Registrar a certificate
substantially in the form of Exhibit D hereto and such other information
that the Trustee may reasonably request in order to confirm that such
transaction is being made pursuant to an exemption from or in a transaction
not subject to the registration requirements of the Securities Act; and
(ii) if the proposed transferor is an Agent Member holding a beneficial
interest in the Global Note, upon receipt by the Registrar of (x) the
certificate, if any, required by paragraph (i) above and (y) written
instructions given in accordance with the Depository's and the Registrar's
procedures,
whereupon (a) the Registrar shall reflect on its books and records the date and
(if the transfer does not involve a transfer of outstanding Physical Notes) a
decrease in the principal amount of such Global Note in an amount equal to the
principal amount of the beneficial interest in the Global Note to be
transferred, and (b) the Issuer shall execute, the Guarantors shall execute the
Guarantees on and the Trustee shall authenticate and make available for delivery
one or more Physical Notes of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Note constituting a
Restricted Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer is being
made by a proposed transferor who has checked the box provided for on the
form of Note stating, or has otherwise advised the Issuer and the Registrar
in writing, that the sale has been made in compliance with the provisions of
Rule 144A to a transferee who has signed the certification provided for on
the form of Note stating, or has otherwise advised the Issuer and the
Registrar in writing, that it is purchasing the Note for its own account or
an account with respect to which it exercises sole investment discretion and
that it and any such account is a QIB within the meaning of Rule 144A, and
is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Issuer as
it has requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is re-
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lying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Notes to be
transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in a Global Note, upon receipt by the Registrar of
written instructions given in accordance with the Depository's and the
Registrar's procedures, the Registrar shall reflect on its books and records
the date and an increase in the principal amount of such Global Note in an
amount equal to the principal amount of the Physical Notes to be
transferred, and the Trustee shall cancel the Physical Notes so transferred.
(c) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar shall deliver only Notes that bear the Private Placement Legend
unless (i) the requested transfer is after the second anniversary of the Issue
Date (provided, however, that neither the Issuer nor any Affiliate of the Issuer
has held any beneficial interest in such Note, or portion thereof, at any time
prior to or on the second anniversary of the Issue Date), or (ii) there is
delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the
Issuer and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act.
(d) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.16 or this Section 2.17.
The Issuer shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time during the
Registrar's normal business hours upon the giving of reasonable written notice
to the Registrar.
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The Trustee shall not be liable for any transfer, exchange or
assignment of a Note by a Holder in violation of any provision of this Indenture
and/or applicable United States federal or state securities law.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Agent Members or
beneficial owners of interests in any Global Note) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by terms of,
this Indenture, and to examine the same to determine substantial compliance as
to form with the express requirements hereof.
(e) Transfers of Notes Held by Affiliates. Any certificate (i)
evidencing a Note that has been transferred to an Affiliate of an Issuer within
two years after the Issue Date, as evidenced by a notation on the Assignment
Form for such transfer or in the representation letter delivered in respect
thereof or (ii) evidencing a Note that has been acquired from an Affiliate of
the Issuer (other than by an Affiliate of the Issuer) in a transaction or a
chain of transactions not involving any public offering, shall, until two years
after the last date on which either the Issuer or any Affiliate of the Issuer
was an owner of such Note, in each case, bear a legend in substantially the form
set forth in Section 2.15 hereof, unless otherwise agreed by the Issuer (with
written notice thereof to the Trustee).
SECTION 2.18. Additional Interest Under
Registration Rights Agreement.
Under certain circumstances, the Issuer shall be obligated to pay
Additional Interest to the Holders, all as set forth in Section 4 of the
Registration Rights Agreement. The terms thereof are hereby incorporated herein
by reference. Notwithstanding such incorporation by reference, the Trustee shall
have no duties or obligations under the Registration Rights Agreement. The
Issuer shall notify the Trustee if any Additional Interest is payable on the
Notes.
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ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Issuer elects to redeem Notes pursuant to Paragraph 6(a) or 6(b)
of the Notes, it shall notify the Trustee and the Paying Agent in writing of the
Redemption Date and the principal amount of the Notes to be redeemed and whether
it wants the Trustee to give notice of redemption to the Holders (at the
Issuer's expense) at least 60 days (unless a shorter notice period shall be
satisfactory to the Trustee) but not more than 90 days before the Redemption
Date. Any such notice may be cancelled at any time prior to notice of such
redemption being mailed to any Holder and shall thereby be void and of no
effect.
SECTION 3.02. Selection of Notes To Be Redeemed.
If fewer than all of the Notes are to be redeemed, selection of the
Notes or portions thereof for redemption shall be made by the Trustee by lot,
pro rata or in such manner as it shall deem appropriate and fair and in such
manner as complies with any applicable legal requirements; provided, however,
that if a partial redemption is made with the proceeds of a Public Equity
Offering, selection is made with the proceeds of a Public Equity Offering,
selection of the Notes or portions thereof for redemption shall be made by the
Trustee only on a pro rata basis, unless such method is otherwise prohibited.
The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption and shall promptly notify the Issuer in writing
of the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount thereof to be redeemed. Notes in
denominations of $1,000 may be redeemed only in whole. The Trustee may select
for redemption portions (equal to $1,000 or any integral multiple thereof) of
the principal of Notes that have denominations larger than $1,000. Provisions of
this Indenture that apply to Notes called for redemption also apply to portions
of Notes called for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date,
the Issuer shall mail or cause to be mailed at
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the last address for such Holder then shown on the registry books a notice of
redemption by first class mail, postage prepaid, to each Holder whose Notes are
to be redeemed, with a copy to the Trustee. At the Issuer's request, the Trustee
shall give the notice of redemption in the Issuer's name and at the Issuer's
expense. Each notice of redemption shall identify the Notes to be redeemed
(including the CUSIP number, if any) and shall state:
(1) the Redemption Date;
(2) the redemption price and the amount of accrued interest, if any, to
be paid (the "Redemption Price");
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price;
(5) that, unless the Issuer defaults in making the redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
Redemption Date, and the only remaining right of the Holders of such Notes
is to receive payment of the Redemption Price upon surrender to the Paying
Agent of the Notes redeemed;
(6) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the Redemption Date and
upon surrender of such Note, a new Note or Notes in the aggregate principal
amount equal to the unredeemed portion thereof will be issued; and
(7) if fewer than all the Notes are to be redeemed, the identification
of the particular Notes (or portion thereof) to be redeemed, as well as the
aggregate principal amount of Notes to be redeemed and the aggregate
principal amount of Notes to be outstanding after such partial redemption.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03,
Notes called for redemption become due and payable on the Redemption Date and at
the Redemption Price. Upon surrender to the Trustee or Paying Agent, such Notes
called for redemption shall be paid at the Redemption Price.
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SECTION 3.05. Deposit of Redemption Price.
Before the Redemption Date, the Issuer shall deposit with the Paying
Agent U.S. Legal Tender sufficient to pay the Redemption Price of all Notes to
be redeemed on that date. The Paying Agent shall promptly return to the Issuer
any U.S. Legal Tender so deposited which is not required for that purpose,
except with respect to monies owed as obligations to the Trustee pursuant to
Article Seven.
On and after any Redemption Date, interest will cease to accrue on the
Notes or parts thereof called for redemption as long as the Issuer has deposited
with the Paying Agent funds in satisfaction of the Redemption Price in
compliance with the preceding paragraph.
SECTION 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is to be redeemed in part, the Trustee
shall authenticate for the Holder a new Note or Notes equal in principal amount
to the unredeemed portion of the Note surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.
The Issuer shall pay the principal of and interest on the Notes on the
dates and in the manner provided in the Notes. An installment of principal of or
interest on the Notes shall be considered paid on the date it is due if the
Trustee or Paying Agent holds on that date U.S. Legal Tender designated for and
sufficient to pay the installment. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months.
SECTION 4.02. Maintenance of Office or Agency.
The Issuer shall maintain the office or agency required under Section
2.03. The Issuer shall give prior notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Issuer
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presenta-
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tions, surrenders, notices and demands may be made or served at the address of
the Trustee set forth in Section 13.02.
SECTION 4.03. Corporate Existence.
Except as otherwise permitted by Article Four, Article Five or Section
11.05, the Issuer, Caterair and each other Guarantor that is a Significant
Subsidiary of the Issuer or Caterair shall do or cause to be done all things
reasonably necessary to preserve and keep in full force and effect their
respective corporate or other existence and the corporate or other existence of
each of their respective Significant Subsidiaries in accordance with the
respective organizational documents of each such Significant Subsidiary and the
material rights (charter and statutory) and franchises of the Issuer or
Caterair, as the case may be, and each of their respective Significant
Subsidiaries; provided, however, that the Issuer and Caterair shall not be
required to preserve, with respect to themselves, any material right or
franchise and, with respect to any of their respective Significant Subsidiaries,
any such existence, material right or franchise, if the Board of Directors of
the Issuer, Caterair or such Significant Subsidiary, as the case may be, shall
determine that the preservation thereof is no longer reasonably necessary or
desirable in the conduct of the business of the Issuer, Caterair or any such
Significant Subsidiary.
SECTION 4.04. Payment of Taxes and Other Claims.
Each of the Issuer and Caterair shall pay or discharge or cause to be
paid or discharged, before the same shall become delinquent, (i) all material
taxes, assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon it or any of
its Subsidiaries or properties of it or any of its Subsidiaries and (ii) all
material lawful claims for labor, materials, supplies and services that, if
unpaid, might by law become a Lien upon the property of it or any of its
Subsidiaries; provided, however, that there shall not be required to be paid or
discharged any such tax, assessment, claim or charge, the amount, applicability
or validity of which is being contested in good faith by appropriate proceedings
and for which adequate provision has been made or where the failure to effect
such payment or discharge is not adverse in any material respect to the Holders.
<PAGE> 62
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SECTION 4.05. Maintenance of Properties and Insurance.
(a) Each of the Issuer and Caterair shall, and shall cause each of its
Significant Subsidiaries to, maintain its material properties in normal
condition (subject to ordinary wear and tear) and make all reasonably necessary
repairs, renewals or replacements thereto as in the judgment of the Issuer or
Caterair, as the case may be, may be reasonably necessary to the conduct of the
business of the Issuer and its Significant Subsidiaries or Caterair and its
Significant Subsidiaries, as the case may be; provided, however, that nothing in
this Section 4.05 shall prevent the Issuer or any of its Significant
Subsidiaries or Caterair or any of its Significant Subsidiaries, as the case may
be, from discontinuing the operation and maintenance of any of its properties,
if such properties are, in the reasonable and good faith judgment of the Board
of Directors of such Person, no longer reasonably necessary in the conduct of
their respective businesses.
(b) Each of the Issuer and Caterair shall provide or cause to be
provided, for itself and each of its Subsidiaries, insurance (including
appropriate self-insurance) against loss or damage of the kinds that, in the
reasonable, good faith opinion of the Issuer or Caterair, as the case may be,
are reasonably adequate and appropriate for the conduct of the business of the
Issuer and its Subsidiaries or Caterair and its Subsidiaries, as the case may
be.
SECTION 4.06. Compliance Certificate; Notice of Default.
(a) The Issuer shall deliver to the Trustee, within 120 days after the
end of the Issuer's fiscal year, an Officers' Certificate (signed by the
principal executive officer, principal financial officer or principal accounting
officer) stating that a review of its activities and the activities of its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether it has
kept, observed, performed and fulfilled its obligations under this Indenture and
further stating, as to each such Officer signing such certificate, that to the
best of his knowledge the Issuer during such preceding fiscal year has kept,
observed, performed and fulfilled each and every such obligation and no Default
or Event of Default occurred during such year and at the date of such
certificate there is no Default or Event of Default that has occurred and is
continuing or, if such signers do know of such Default or Event of Default, the
certificate shall describe the Default or Event of Default and its status with
particularity. The Offi-
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cers' Certificate shall also notify the Trustee should the Issuer elect to
change the manner in which it fixes its fiscal year end.
(b) Caterair shall deliver to the Trustee, within 120 days after the
end of Caterair's fiscal year, an Officers' Certificate (signed by the principal
executive officer, principal financial officer or principal accounting officer)
stating that a review of its activities and the activities of its Subsidiaries
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether it has kept, observed,
performed and fulfilled its obligations under this Indenture and further
stating, as to each such Officer signing such certificate, that to the best of
his knowledge Caterair during such preceding fiscal year has kept, observed,
performed and fulfilled each and every such obligation and no Default or Event
of Default occurred during such year and at the date of such certificate there
is no Default or Event of Default that has occurred and is continuing or, if
such signers do know of such Default or Event of Default, the certificate shall
describe the Default or Event of Default and its status with particularity. The
Officers' Certificate shall also notify the Trustee should Caterair elect to
change the manner in which it fixes its fiscal year end.
(c) The copy of the annual report on Form 10-K of the Issuer as filed
with the SEC or the annual financial statements delivered to the Trustee
pursuant to Section 4.08 shall be accompanied by a written report of the
Issuer's independent accountants that in conducting their audit of the financial
statements which are a part of such annual report or such annual financial
statements nothing has come to their attention that would lead them to believe
that the Issuer has violated any provisions of Article Four, Five or Six of this
Indenture insofar as they relate to accounting matters or, if any such violation
has occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(d) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Indenture or the Notes, the Issuer shall
deliver to the Trustee by registered or certified mail or by facsimile
transmission followed by hard copy by registered or certified mail an Officers'
Certificate specifying such event, notice or
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other action within five Business Days of its actual knowledge of such
occurrence.
SECTION 4.07. Compliance with Laws.
The Issuer and each Guarantor shall comply, and shall cause each of
their respective Subsidiaries to comply, with all applicable statutes, rules,
regulations, orders and restrictions of the United States of America and each
other country in which the Issuer or any Guarantor conducts business, all states
and municipalities thereof, and of any governmental department, commission,
board, regulatory authority, bureau, agency and instrumentality of the
foregoing, in respect of the conduct of their respective businesses and the
ownership of their respective properties, except for such noncompliances as are
not in the aggregate reasonably likely to have a material adverse effect on the
financial condition or results of operations of the Issuer and its Subsidiaries,
taken as a whole.
SECTION 4.08. Reports.
The Issuer will deliver to the Trustee within 15 days after the filing
of the same with the SEC, copies of the quarterly and annual reports and of the
information, documents and other reports, if any, which the Issuer is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.
Notwithstanding that the Issuer may not be subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act, the Issuer will provide the Trustee,
Holders and Qualified Institutional Buyers (as defined in Rule 144A under the
Securities Act) which request such information from the Issuer and indicate a
bona fide interest in purchasing Notes with consolidated financial statements of
the Issuer and a related "Management's Discussion and Analysis of Financial
Condition and Results of Operations" comparable to those which would have been
required to appear in quarterly or annual reports of the Issuer and, to holders
of Transfer Restricted Notes any other information set forth in Rule 144A(d)(4)
or any successor provision under the Act. In addition, the Issuer will provide
the Trustee and Holders with unaudited combined financial data of the Issuer and
the Guarantors, substantially in the form provided under the caption "Summary --
Summary Unaudited Pro Forma Financial Data" (excluding the information under the
caption "Operating Statistics") in the Offering Memorandum, for each fiscal year
of the Issuer and for the first three fiscal quarters of each fiscal year of the
Issuer. Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall
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not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates). The Issuer will also
comply with the other provisions of TIA Section 314(a).
SECTION 4.09. Waiver of Stay, Extension or Usury Laws.
The Issuer covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Issuer from paying all or any
portion of the principal of or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
obligations or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Issuer hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 4.10. Limitation on Restricted Payments.
The Issuer shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, (a) declare or pay any
dividend or make any distribution (other than dividends or distributions payable
in Qualified Capital Stock of the Issuer) on or in respect of shares of the
Issuer's Capital Stock to holders of such Capital Stock, (b) purchase, redeem or
otherwise acquire or retire for value any Capital Stock of the Issuer or any
warrants, rights or options to purchase or acquire shares of any class of such
Capital Stock, other than the exchange of such Capital Stock or any warrants,
rights or options to acquire shares of any class of such Capital Stock for
Qualified Capital Stock of the Issuer or warrants, rights or options to acquire
such Qualified Capital Stock, (c) make any principal payment on, purchase,
defease, redeem, prepay, decrease or otherwise acquire or retire for value,
prior to any scheduled final maturity, scheduled repayment or scheduled sinking
fund payment, any Indebtedness of the Issuer or its Restricted Subsidiaries that
is subordinate or junior in right of payment to the Notes, or (d) make any
Investment (other than Permitted Investments) (each of the foregoing actions set
forth in clauses (a), (b), (c) and (d) being referred to as a "Restricted
Payment"), if at the time of such
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Restricted Payment or immediately after giving effect thereto, (i) a Default or
an Event of Default shall have occurred and be continuing, (ii) the Issuer is
not able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.12, or (iii) the aggregate
amount of Restricted Payments made subsequent to the Issue Date (the amount
expended for such purposes, if other than in cash, being the fair market value
of such property as determined by the Board of Directors of the Issuer in good
faith) shall exceed the sum of: (x) 50% of the cumulative Consolidated Net
Income (or if cumulative Consolidated Net Income shall be a loss, minus 100% of
such loss) of the Issuer earned subsequent to the Issue Date and on or prior to
the date the Restricted Payment occurs (the "Reference Date") (treating such
period as a single accounting period); plus (y) 100% of the aggregate Net Cash
Proceeds received by the Issuer from any Person (other than a Subsidiary of the
Issuer) from the issuance and sale subsequent to the Issue Date and on or prior
to the Reference Date of Qualified Capital Stock of the Issuer (including
proceeds from the issuance and sale of any securities of the Issuer convertible
into or exchangeable for Qualified Capital Stock of the Issuer to the extent
such securities are so converted or exchanged and including any additional
proceeds received by the Issuer upon such conversion or exchange); plus (z)
without duplication of any amounts included in clause (iii)(y) above, 100% of
the aggregate Net Cash Proceeds received by the Issuer as capital contributions
subsequent to the Issue Date and on or prior to the Reference Date.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit: (1) the payment of any dividend
or the consummation of any irrevocable redemption within 60 days after the date
of declaration of such dividend or notice of such redemption if the dividend or
payment of the redemption price, as the case may be, would have been permitted
on the date of declaration or notice; (2) the acquisition of any shares of
Capital Stock of the Issuer or warrants, options or other rights to acquire
Capital Stock of the Issuer, either (i) solely in exchange for shares of
Qualified Capital Stock of the Issuer or warrants, options or other rights to
acquire such Qualified Capital Stock, or (ii) through the application of the net
proceeds of a substantially concurrent sale for cash (other than to a Subsidiary
of the Issuer) of shares of Qualified Capital Stock of the Issuer or warrants,
options or other rights to acquire such Qualified Capital Stock; (3) the
acquisition of Indebtedness of the Issuer that is subordinate or junior in right
of payment to the Notes, either (i) solely in exchange for shares of Qualified
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Capital Stock of the Issuer or warrants, options or other rights to acquire such
Qualified Capital Stock or for Indebtedness of the Issuer which is subordinate
or junior in right of payment to the Notes, at least to the extent that the
Indebtedness being acquired is subordinated to the Notes, and has a Weighted
Average Life to Maturity no less than that of the Indebtedness being acquired or
(ii) through the application of the net proceeds of a substantially concurrent
sale for cash (other than to a Subsidiary of the Issuer) of shares of Qualified
Capital Stock of the Issuer or warrants, options or other rights to acquire such
Qualified Capital Stock or Indebtedness of the Issuer which is subordinate or
junior in right of payment to the Notes, at least to the extent that the
Indebtedness being acquired is subordinated to the Notes, and has a Weighted
Average Life to Maturity no less than that of the Indebtedness being refinanced;
(4) payments by the Issuer to OFSI to enable OFSI to pay a dividend to
LSG/Lufthansa (or a Subsidiary thereof), in an aggregate amount not to exceed
$2.5 million in any 12-month period; provided that any unused portion of such
amount may be carried over to any subsequent 12-month period; (5) payments by
the Issuer to OFSI on or after January 1, 1997 to enable OFSI to pay dividends
to stockholders of OFSI other than LSG/Lufthansa (or a Subsidiary thereof), in
an amount not to exceed $6 million in any 12-month period; provided that any
unused portion of such amount may be carried over to any subsequent 12-month
period; (6) payments by the Issuer or any of its Subsidiaries to OFSI pursuant
to the OFSI Tax Sharing Agreement; (7) payments by the Issuer to OFSI sufficient
to enable OFSI to (i) pay franchise taxes and other fees and expenses necessary
to maintain its corporate existence, (ii) pay reasonable fees to its directors
and (iii) perform accounting, legal, corporate reporting and administrative
functions in the ordinary course of business, other than those functions which
are related exclusively to OFSI's investments in Persons other than the Issuer
and Subsidiaries of the Issuer; (8) payments by the Issuer or any of its
Subsidiaries to OFSI in an aggregate amount not to exceed $6 million in any
12-month period, the proceeds of which are used by OFSI to repurchase
outstanding shares of OFSI's common stock from current or former employees or
directors of the Issuer or any of its Subsidiaries (A) following the death,
disability or termination of any such person or (B) pursuant to one or more
written plans approved by the Board of Directors of OFSI; and (9) payments by
the Issuer or any of its Subsidiaries to OFSI, the proceeds of which are used by
OFSI to fund payments under a plan implemented to compensate management of the
Issuer and its Subsidiaries based on the value of OFSI's common stock; provided,
however, that in the case of clauses (4), (5) and (8)(B), no Default or Event of
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Default shall have occurred or be continuing at the time of such payment or as a
result thereof. In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date in accordance with clause (iii) of the immediately
preceding paragraph, (x) 100% of each of the payments described in clauses (1),
(4) and (5) above (to the extent such expenditure is in the form of cash) and
(y) 50% of the payments described in clauses (8)(A) and (8)(B) above (to the
extent such expenditure is in the form of cash), other than amounts paid to the
Issuer or a Subsidiary of the Issuer by OFSI or such employee in satisfaction of
loans or advances made by the Issuer or such Subsidiary pursuant to clause (v)
(A) of the definition of "Permitted Investments" (which shall not be included in
such calculation or in the calculation of payments made pursuant to clause (8)),
shall be included in such calculation.
Caterair shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, (a) declare or pay any dividend or make
any distribution on or in respect of shares of Caterair's Capital Stock to
holders of such Capital Stock, (b) purchase, redeem or otherwise acquire or
retire for value any Capital Stock of Caterair or any warrants, rights or
options to purchase or acquire shares of any class of such Capital Stock, (c)
make any principal payment on, purchase, defease, redeem, prepay, decrease or
otherwise acquire or retire for value, prior to any scheduled final maturity,
scheduled repayment or scheduling sinking fund payment, any Indebtedness of
Caterair or its Subsidiaries that is subordinate or junior in right of payment
to the Notes, or (d) make any Investment (other than Permitted Investments)
(each of the foregoing actions set forth in clauses (a), (b), (c) and (d) being
referred to as a "Caterair Restricted Payment").
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit: (1) the payment of any dividend
within 30 days after the date of declaration of such dividend if the dividend
would have been permitted on the date of declaration; (2) payments by Caterair
to Caterair Holdings sufficient to enable Caterair Holdings to (i) pay franchise
taxes and other fees and expenses necessary to maintain its corporate existence,
(ii) pay reasonable fees to its directors and (iii) perform accounting, legal,
corporate reporting and administrative functions in the ordinary course of
business; (3) payments by Caterair or any of its Subsidiaries to Caterair
Holdings pursuant to the Caterair Tax Sharing Agreement; and (4) payments by
Caterair or any Subsidiary of Caterair to the Issuer or any Restricted
Subsidiary of the Issuer.
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SECTION 4.11. Limitation on Transactions with Affiliates.
The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates (an "Affiliate
Transaction"), other than (x) Affiliate Transactions permitted under the
paragraph below and (y) Affiliate Transactions on terms that are no less
favorable than those that might reasonably have been obtained in a comparable
transaction at such time on an arm's-length basis from a Person that is not an
Affiliate; provided, however, that for a transaction or series of related
transactions with an aggregate value of $5 million or more (i) such
determination shall be made in good faith by a majority of the disinterested
members of the Board of the Directors of the Issuer or (ii) the Board of
Directors of the Issuer shall have received an opinion from a nationally
recognized investment banking firm that such Affiliate Transaction is on terms
no less favorable than those that might reasonably have been obtained in a
comparable transaction at such time on an arm's-length basis from a Person that
is not an Affiliate; and provided, further, that for a transaction or series of
related transactions with an aggregate value of $10 million or more, the Board
of Directors of the Issuer shall have received an opinion from a nationally
recognized investment banking firm that such Affiliate Transaction is on terms
no less favorable than those that might reasonably have been obtained in a
comparable transaction at such time on an arm's-length basis from a Person that
is not an Affiliate.
The restrictions set forth in the preceding paragraph shall not apply
to (1) reasonable fees and compensation paid to and indemnity provided on behalf
of, officers, directors, employees or consultants of the Issuer or any
Subsidiary of the Issuer as determined in good faith by the Issuer's Board of
Directors or senior management; (2) transactions between or among the Issuer or
any Restricted Subsidiary of the Issuer, on the one hand, and any Subsidiary of
the Issuer or other Person controlled (as such term is defined in the definition
of "Affiliate") by the Issuer, on the other hand, so long as no portion of the
remaining interest in such Subsidiary or other Person is owned by a Person who
controls (as such term is defined in the definition of "Affiliate") the Issuer,
or between or among such Subsidiaries and Persons, provided such transactions
are not otherwise prohibited by this Indenture; (3) any agreement as in effect
as of the Issue Date or any amendment
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thereto or any transaction contemplated thereby (including pursuant to any
amendment thereto) in any replacement agreement thereto so long as any such
amendment or replacement agreement is not more disadvantageous to the Holders in
any material respect than the original agreement as in effect on the Issue Date;
(4) transactions between the Issuer or any Restricted Subsidiary of the Issuer,
on the one hand, and Caterair or any Subsidiary of Caterair, on the other hand;
and (5) Restricted Payments permitted by this Indenture.
Caterair will not, and will not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction or series
of related transactions (including, without limitation, the purchase, sale,
lease or exchange of any property or the rendering of any service) with, or for
the benefit of, any of its Affiliates.
The restrictions set forth in the preceding paragraph shall not apply
to (1) transactions between Caterair or any Subsidiary of Caterair, on the one
hand, and the Issuer or any Restricted Subsidiary of the Issuer, on the other
hand; (2) transactions between or among Caterair or any Subsidiary of Caterair,
on the one hand, and any Subsidiary of Caterair or other Person controlled (as
such term is defined in the definition of "Affiliate") by Caterair, on the other
hand, so long as no portion of the remaining interest in such Subsidiary or
other Person is owned by a Person who controls (as such term is defined in the
definition of "Affiliate") Caterair, or between or among such Subsidiaries and
Persons, provided such transactions are not otherwise prohibited by this
Indenture; (3) reasonable fees and compensation paid to and indemnity provided
on behalf of, officers, directors, employees or consultants of Caterair or any
Subsidiary of Caterair as determined in good faith by Caterair's Board of
Directors or senior management; (4) any agreement as in effect as of the Issue
Date or any amendment thereto or any transaction contemplated thereby (including
pursuant to any amendment thereto) in any replacement agreement thereto so long
as any such amendment or replacement agreement is not more disadvantageous to
the Holders in any material respect than the original agreement as in effect on
the Issue Date; and (5) Caterair Restricted Payments permitted by this
Indenture.
SECTION 4.12. Limitation on Incurrence of Additional Indebtedness.
The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, and Caterair shall not, and shall
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not permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume, guarantee, acquire, become liable, contingently or otherwise, with
respect to, or otherwise become responsible for payment of (collectively,
"incur") any Indebtedness (other than Permitted Indebtedness); provided,
however, that if no Default or Event of Default shall have occurred and be
continuing at the time or as a consequence of the incurrence of any such
Indebtedness, the Issuer, Caterair or any Restricted Subsidiary of the Issuer
may incur Indebtedness if on the date of the incurrence of such Indebtedness,
after giving effect to the incurrence thereof, the Consolidated Fixed Charge
Coverage Ratio of the Issuer is greater than 2.00 to 1.0.
SECTION 4.13. Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries.
The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary of the Issuer to (a) pay dividends or make any other
distributions on or in respect of its Capital Stock; (b) make loans or advances
to or pay any Indebtedness or other obligation owed to the Issuer or any other
Restricted Subsidiary of the Issuer; or (c) transfer any of its property or
assets to the Issuer or any other Restricted Subsidiary of the Issuer, except
for such encumbrances or restrictions existing under or by reason of: (1)
applicable law; (2) this Indenture; (3) customary non-assignment provisions of
any contract or any lease entered into in the ordinary course of business; (4)
any agreement or instrument governing Acquired Indebtedness, which encumbrance
or restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person or the properties or assets of the Person so
acquired; (5) any agreement existing on the Issue Date (including, without
limitation, the Senior Bank Financing); (6) in the case of clause (c) above, (A)
restrictions on the transfer of assets subject to any Lien permitted under this
Indenture imposed by the holder of such Lien and (B) restrictions on the
transfer of assets imposed by any agreement, lease or permit entered into or
obtained in the ordinary course of business in connection with the operation of
flight kitchens; (7) (A) restrictions imposed by any agreement to sell assets
permitted under this Indenture to any Person pending the closing of such sale,
(B) any agreement or instrument governing Capital Stock of any Person that is
acquired or (C) any joint venture, stockholder or similar agreements; (8)
encumbrances and restrictions imposed by any agreement or instrument governing
Indebtedness (including any
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collateral or related documents) of any Restricted Subsidiary of the Issuer
conducting substantially all of its business outside the United States;
provided, however, that such Restricted Subsidiaries of the Issuer, in the
aggregate, did not account for more than 10% of Consolidated EBITDA of the
Issuer (after giving pro forma effect to inclusion of any additional Restricted
Subsidiary proposing to enter into such an agreement or instrument) during the
four full fiscal quarter period ending immediately prior to the date of
determination thereof; or (9) an agreement effecting an amendment, refinancing,
replacement or substitution of Indebtedness issued, assumed or incurred pursuant
to an agreement referred to in clause (2), (4) or (5) above or any other
agreement evidencing Indebtedness permitted under this Indenture; provided,
however, that the provisions relating to such encumbrance or restriction
contained in any such amendment, refinancing, replacement or substitution
agreement or any such other agreement are not less favorable to the Issuer in
any material respect as determined by the Board of Directors of the Issuer than
the provisions relating to such encumbrance or restriction contained in
agreements referred to in such clause (2), (4) or (5).
Caterair shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or permit to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary of
Caterair to (a) pay dividends or make any other distributions on or in respect
of its Capital Stock; (b) make loans or advances or to pay any Indebtedness or
other obligation owed to Caterair or any other Subsidiary of Caterair; or (c)
transfer any of its property or assets to Caterair or any other Subsidiary of
Caterair, except for such encumbrances or restrictions existing under or by
reason of: (1) applicable law; (2) this Indenture; (3) customary non-assignment
provisions of any contract or any lease entered into in the ordinary course of
business; (4) any agreement or instrument governing Acquired Indebtedness, which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person or the properties or assets of the
Person so acquired; (5) any agreement existing on the Issue Date (including,
without limitation, the Senior Bank Financing); (6) in the case of clause (c)
above, (A) restrictions on the transfer of assets subject to any Lien permitted
under this Indenture imposed by the holder of such Lien and (B) restrictions on
the transfer of assets imposed by any agreement, lease or permit entered into or
obtained in the ordinary course of business in connection with the operation of
flight kitchens; (7) restrictions imposed by any agreement to sell assets
permitted under this Indenture to
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any Person pending the closing of such sale; or (8) an agreement effecting an
amendment, a refinancing, replacement or substitution of Indebtedness issued,
assumed or incurred pursuant to an agreement referred to in clause (2), (4) or
(5) above; provided, however, that the provisions relating to such encumbrance
or restriction contained in any such amendment, refinancing, replacement or
substitution agreement are not less favorable to Caterair in any material
respect as determined by the Board of Directors of Caterair than the provisions
relating to such encumbrance or restriction contained in agreements referred to
in such clause (2), (4) or (5).
SECTION 4.14. Prohibition on Incurrence of
Senior Subordinated Debt.
Neither the Issuer nor any Guarantor will, directly or indirectly,
incur any Indebtedness (including Acquired Indebtedness) that is senior in right
of payment to the Notes or its Guarantee, as the case may be, and expressly
subordinate in right of payment to any other Indebtedness of the Issuer or such
Guarantor, as the case may be.
SECTION 4.15. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder can require
the Issuer to repurchase all or a portion of such Holder's Notes pursuant to the
offer described in paragraph (b) below (the "Change of Control Offer"), at a
purchase price equal to 101% of the principal amount thereof plus accrued
interest, if any, to the date of repurchase. Prior to the mailing of the notice
referred to below, but in any event within 30 days following the date on which a
Change of Control occurs, the Issuer covenants to (i) repay in full all
Indebtedness under the Senior Bank Financing (and terminate all commitments
thereunder) and all such other Senior Debt the terms of which require repayment
upon a Change of Control or Change of Control Offer and terminate the
commitments of each holder of such other Senior Debt that has accepted such
offer or (ii) obtain the requisite consents under the Senior Bank Financing and
all such other Senior Debt to permit the repurchase of the Notes as provided
below. The Issuer shall first comply with the covenant in the immediately
preceding sentence before it shall be required to repurchase Notes pursuant to
the provisions described in this Section 4.15; provided that the Issuer's
failure to comply with such covenant resulting in a failure to mail the notice
referred to below shall constitute an Event of Default under Section 6.01(3) and
not under Section 6.01(2).
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(b) Within 30 days following the date upon which a Change of Control
occurs (the "Change of Control Date"), the Issuer shall send, by first class
mail, a notice to each Holder of Notes, with a copy to the Trustee, which notice
shall govern the terms of the Change of Control Offer. The notice to the Holders
shall contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Change of Control Offer. Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Notes validly tendered and not withdrawn will be
accepted for payment;
(2) the repurchase price (including the amount of accrued interest, if
any) and the repurchase date (which shall be no earlier than 30 days nor
later than 45 days from the date such notice is mailed, other than as may be
required by law) (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Issuer defaults in making payment therefor, any
Note accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Note purchased pursuant to a Change
of Control Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Paying Agent at the address specified in the notice prior
to the close of business on the third Business Day prior to the Change of
Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to the Change
of Control Payment Date, a facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Notes the Holder
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Note purchased;
(7) that Holders whose Notes are purchased only in part will be issued
new Notes in a principal amount equal to the unpurchased portion of the
Notes surrendered; and
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(8) the circumstances and relevant facts regarding such Change of
Control.
(c) On or before the Change of Control Payment Date, the Issuer shall
(i) accept for payment Notes or portions thereof (in integral multiples of
$1,000) validly tendered pursuant to the Change of Control Offer, (ii) deposit
with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price of
all Notes so tendered and (iii) deliver to the Trustee Notes so accepted
together with an Officers' Certificate stating the Notes or portions thereof
being purchased by the Issuer. The Paying Agent shall promptly mail to the
Holders of Notes so accepted payment in an amount equal to the purchase price
out of the funds deposited with the Paying Agent in accordance with the
preceding sentence. The Trustee shall promptly authenticate and mail to such
Holders new Notes equal in principal amount to any unpurchased portion of the
Notes surrendered. Upon the payment of the purchase price for the Notes accepted
for purchase, the Trustee shall return the Notes purchased to the Issuer for
cancellation. Any amounts remaining after the purchase of Notes pursuant to a
Change of Control Offer shall be returned by the Trustee to the Issuer.
(d) The Issuer will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other Notes laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes pursuant to a Change of Control Offer. To the extent the
provisions of any such rule conflict with the provisions of this Indenture
relating to a Change of Control Offer, the Issuer shall comply with the
provisions of such rule and be deemed not to have breached its obligations
relating to such Change of Control Offer by virtue thereof.
SECTION 4.16. Limitation on Asset Sales.
(a) The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) other than with respect to
the Australian Assets, the Issuer or the applicable Restricted Subsidiary, as
the case may be, receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets sold or otherwise disposed of (as
determined in good faith by the Issuer's Board of Directors); (ii) at least 75%
of the consideration received by the Issuer or such Restricted Subsidiary, as
the case may be, from such Asset Sale shall be cash or Cash Equivalents and is
received at the time of such disposition; and (iii) upon the consummation of an
Asset Sale, the Issuer shall apply, or
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cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to
such Asset Sale within 365 days of receipt thereof either (A) to prepay (or, in
the case of letters of credit or Eurodollar loans under the Senior Bank
Financing, cash collateralize) any Senior Debt or Guarantor Senior Debt or, in
the case of any Senior Debt or Guarantor Senior Debt under any revolving credit
facility, effect a permanent reduction in the availability under such revolving
credit facility, (B) to reinvest in Productive Assets, or (C) a combination of
prepayment, reduction and investment permitted by the foregoing clauses (iii)(A)
and (iii)(B). On the 366th day after an Asset Sale or such earlier date, if any,
as the Board of Directors of the Issuer or of such Restricted Subsidiary
determines not to apply the Net Cash Proceeds relating to such Asset Sale as set
forth in clauses (iii)(A), (iii)(B) and/or (iii)(C) of the next preceding
sentence (each, a "Net Proceeds Offer Trigger Date"), such aggregate amount of
Net Cash Proceeds which have not been applied on or before such Net Proceeds
Offer Trigger Date as permitted in clauses (iii)(A), (iii)(B) and/or (iii)(C) of
the next preceding sentence (each, a "Net Proceeds Offer Amount") shall be
applied by the Issuer or such Restricted Subsidiary to make an offer to
repurchase (the "Net Proceeds Offer") on a date not less than 30 nor more than
45 days following the applicable Net Proceeds Offer Trigger Date, from all
Holders on a pro rata basis that amount of Notes equal to the excess, if any, of
(x) the Net Proceeds Offer Amount over (y) the amount of any such Net Cash
Proceeds required to be used by the Issuer or such Restricted Subsidiary to
repurchase any senior subordinated Indebtedness of the Issuer outstanding on the
Issue Date (other than Indebtedness evidenced by the Notes) at a price equal to
100% of the principal amount of the Notes to be repurchased, plus accrued
interest to the date of repurchase; provided, however, that if at any time any
non-cash consideration received by the Issuer or any Restricted Subsidiary of
the Issuer, as the case may be, in connection with any Asset Sale is converted
into or sold or otherwise disposed of for cash, then such conversion or
disposition shall be deemed to constitute an Asset Sale hereunder and the Net
Cash Proceeds thereof shall be applied in accordance with this Section 4.16.
(b) Notwithstanding Section 4.16(a), if a Net Proceeds Offer Amount is
less than $10 million, the application of the Net Cash Proceeds constituting
such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until
such time as such Net Proceeds Offer Amount plus the aggregate amount of all Net
Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date
relating to such initial Net Proceeds Offer Amount from all Asset Sales by the
Issuer and its
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Restricted Subsidiaries aggregates at least $10 million, at which time the
Issuer or such Restricted Subsidiary shall apply all Net Cash Proceeds
constituting all Net Proceeds Offer Amounts that have been so deferred to make a
Net Proceeds Offer (the first date the aggregate of all such deferred Net
Proceeds Offer Amounts is equal to $10 million or more shall be deemed to be a
"Net Proceeds Offer Trigger Date").
(c) Notwithstanding Sections 4.16(a) and (b) the two immediately
preceding paragraphs, the Issuer and its Restricted Subsidiaries will be
permitted to consummate an Asset Sale without complying with Sections (a) and
(b) of this Section 4.16 to the extent (i) at least 75% of the consideration for
such Asset Sale constitutes Productive Assets and (ii) such Asset Sale is for
fair market value (as determined in good faith by the Board of Directors of the
Issuer); provided that the Net Cash Proceeds, if any, received by the Issuer or
any of its Restricted Subsidiaries in connection with any Asset Sale permitted
to be consummated under this Section 4.16(c) shall constitute Net Cash Proceeds
subject to the provisions of Sections (a) and (b) of this Section 4.16.
(d) Caterair shall not, and shall not permit any of its Subsidiaries
to, consummate a Caterair Asset Sale unless (i) Caterair or the applicable
Subsidiary, as the case may be, receives consideration at the time of such
Caterair Asset Sale at least equal to the fair market value of the assets sold
or otherwise disposed of (as determined in good faith by Caterair's Board of
Directors); (ii) at least 75% of the consideration received by Caterair or such
Subsidiary, as the case may be, from such Caterair Asset Sale shall be cash or
Cash Equivalents and is received at the time of such disposition; and (iii) upon
the consummation of a Caterair Asset Sale, Caterair shall apply, or cause such
Subsidiary to apply, the Net Cash Proceeds relating to such Caterair Asset Sale
within 365 days of receipt thereof either (A) to prepay any Guarantor Senior
Debt or, in the case of any Guarantor Senior Debt under any revolving credit
facility, effect a permanent reduction in the availability under such revolving
credit facility, or, if there is no Guarantor Senior Debt outstanding, to prepay
Senior Debt or, in the case of any Senior Debt under any revolving credit
facility, effect a permanent reduction in the availability under such revolving
credit facility, (B) to repay the Caterair Promissory Note; provided that the
Issuer treats the proceeds received from such repayment as proceeds of an Asset
Sale by the Issuer in compliance with Section 4.16(a) of this Indenture, (C) to
reinvest in Productive Assets, or (D) a combination of prepayment, repayment,
reduction and investment permit-
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ted by the foregoing clauses (iii)(A), (iii)(B) and (iii)(C). On the 366th day
after a Caterair Asset Sale or such earlier date, if any, as the Board of
Directors of Caterair or of such Subsidiary determines not to apply the Net Cash
Proceeds relating to such Caterair Asset Sale as set forth in clause (iii) of
the next preceding sentence (each, a "Caterair Net Proceeds Offer Trigger
Date"), such aggregate amount of Net Cash Proceeds which have not been applied
on or before such Caterair Net Proceeds Offer Trigger Date as permitted in
clauses (iii)(A), (iii)(B), (iii)(C) and/or (iii)(D) of the next preceding
sentence (each, a "Caterair Net Proceeds Offer Amount") shall be applied by
Caterair or such Subsidiary to make an offer to repurchase (the "Caterair Net
Proceeds Offer") on a date not less than 30 nor more than 45 days following the
applicable Caterair Net Proceeds Offer Trigger Date, from all Holders on a pro
rata basis that amount of Notes equal to the excess, if any, of (x) the Caterair
Net Proceeds Offer Amount over (y) the amount of any such Net Cash Proceeds
required to be used by Caterair to repurchase any senior subordinated
Indebtedness of the Issuer outstanding on the Issue Date (other than the
Indebtedness evidenced by the Notes) at a price equal to 100% of the principal
amount of the Notes to be repurchased, plus accrued interest to the date of
repurchase; provided, however, that if at any time any non-cash consideration
received by Caterair or any Subsidiary of Caterair, as the case may be, in
connection with any Caterair Asset Sale is converted into or sold or otherwise
disposed of for cash, then such conversion or disposition shall be deemed to
constitute a Caterair Asset Sale hereunder and the Net Cash Proceeds thereof
shall be applied in accordance with this Section 4.16. Caterair shall not resell
or otherwise dispose of any Notes repurchased pursuant to a Caterair Net
Proceeds Offer, other than to the Issuer for cancellation.
(e) Subject to the deferral right set forth in Section 4.16(b), the
Issuer or Caterair, as applicable, shall mail a notice of each Net Proceeds
Offer or Caterair Net Proceeds Offer, as the case may be, to the record Holders
as shown on the register of Holders within 25 days following the Net Proceeds
Offer Trigger Date or Caterair Net Proceeds Offer Trigger Date, as the case may
be, with a copy to the Trustee. The notice shall contain all instructions and
materials necessary to enable such Holders to tender Notes pursuant to the Net
Proceeds Offer or Caterair Net Proceeds Offer, as the case may be, and shall
state the following terms:
(1) that the Net Proceeds Offer or Caterair Net Proceeds Offer, as the
case may be, is being made pursuant to Section 4.16 of this Indenture and
that Holders of Notes
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may elect to tender their Notes in whole or in part in integral
multiples of $1,000 and that all Notes validly tendered will be accepted for
payment; provided, however, that if the aggregate principal amount of Notes
tendered in a Net Proceeds Offer or Caterair Net Proceeds Offer, as the case
may be, plus accrued interest at the expiration of such offer exceeds the
aggregate amount of the Net Proceeds Offer or Caterair Net Proceeds Offer,
as the case may be, the Issuer or Caterair, as the case may be, shall select
the Notes to be purchased on a pro rata basis (based upon the principal
amount tendered);
(2) the purchase price (including the amount of accrued interest) and
the purchase date (which shall be no earlier than 30 days nor later than 45
days from the date such notice is mailed, other than as may be required by
law) (the "Proceeds Purchase Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that (a) in the case of a Net Proceeds Offer, unless the Issuer
defaults in making payment therefor, any Note accepted for payment pursuant
to the Net Proceeds Offer shall cease to accrue interest after the Proceeds
Purchase Date, or (b) in the case of a Caterair Net Proceeds Offer, unless
Caterair defaults in making payment therefor, any Note accepted for payment
pursuant to the Caterair Net Proceeds Offer shall be deemed to be
transferred to Caterair on the Proceeds Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to a Net
Proceeds Offer or Caterair Net Proceeds Offer, as the case may be, will be
required to surrender the Note, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Note completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the
Business Day prior to the Proceeds Purchase Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to the
Proceeds Purchase Date, a facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Notes the Holder delivered
for purchase and a statement that such Holder is withdrawing his election to
have such Note purchased;
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(7) that Holders whose Notes are purchased only in part will be issued
new Notes in a principal amount equal to the unpurchased portion of the
Notes surrendered; and
(8) the circumstances and relevant facts regarding such Net Proceeds
Offer or Caterair Net Proceeds Offer, as the case may be.
(f) Upon receiving notice of the Net Proceeds Offer or Caterair Net
Proceeds Offer, as the case may be, Holders may elect to tender their Notes in
whole or in part in integral multiples of $1,000 in exchange for cash. To the
extent Holders properly tender Notes in an amount exceeding the Net Proceeds
Offer Amount or Caterair Net Proceeds Offer Amount, as the case may be, Notes of
tendering Holders will be repurchased on a pro rata basis (based on amounts
tendered). A Net Proceeds Offer or Caterair Net Proceeds Offer, as the case may
be, shall remain open for a period of 20 business days or such longer period as
may be required by law.
(g) On or before the Proceeds Purchase Date, the Issuer or Caterair, as
the case may be, shall (i) accept for payment Notes or portions thereof validly
tendered pursuant to the Net Proceeds Offer or Caterair Net Proceeds Offer, as
the case may be, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient
to pay the purchase price of all Notes so tendered and (iii) deliver to the
Trustee Notes so accepted together with an Officers' Certificate stating the
Notes or portions thereof being purchased by the Issuer or Caterair, as the case
may be. The Paying Agent shall promptly mail to the Holders of Notes so accepted
payment in an amount equal to the purchase price out of funds deposited with the
Paying Agent in accordance with the preceding sentence. The Trustee shall
promptly authenticate and mail to such Holders new Notes equal in principal
amount to any unpurchased portion of the Notes surrendered. Upon payment of the
purchase price for the Notes accepted for purchase, the Trustee shall, (i) in
the case of a Net Proceeds Offer, return the Notes purchased to the Issuer for
cancellation, or (ii) in the case of a Caterair Net Proceeds Offer, (A) send the
Notes purchased to Caterair and (B) instruct the Registrar that such Notes shall
be transferred to Caterair pursuant to Section 2.06. Any Notes not so accepted
shall be promptly mailed by the Issuer or Caterair, as the case may be, to the
Holder thereof.
(h) If the aggregate principal amount of Notes validly tendered
pursuant to any Net Proceeds Offer or Caterair Net Proceeds Offer is less than
the amount of Net Cash Proceeds
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subject to such Net Proceeds Offer or Caterair Net Proceeds Offer, the Issuer or
Caterair, as the case may be, may use any remaining portion of such Net Cash
Proceeds not required to fund the repurchase of tendered Notes for purposes
otherwise permitted by this Indenture. Upon the consummation of any Net Proceeds
Offer or Caterair Net Proceeds Offer, as the case may be, the amount of Net Cash
Proceeds subject to any future Net Proceeds Offer or Caterair Net Proceeds
Offer, as the case may be, from the Asset Sales or Caterair Asset Sales, as the
case may be, giving rise to such Net Cash Proceeds shall be deemed to be zero.
(i) The Issuer or Caterair, as the case may be, shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of Notes pursuant to a Net Proceeds
Offer or Caterair Net Proceeds Offer, as the case may be. To the extent that the
provisions of any securities laws or regulations conflict with this Section
4.16, the Issuer or Caterair, as the case may be, shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.16 by virtue thereof.
SECTION 4.17. Limitation on Preferred Stock of
Subsidiaries.
The Issuer shall not permit any of its Restricted Subsidiaries to issue
any Preferred Stock to any Person or permit any Person to own any Preferred
Stock of a Restricted Subsidiary of the Issuer, unless the Issuer's percentage
interest in the Preferred Stock of such Restricted Subsidiary is equal to or
greater than the Issuer's percentage interest in the common equity of such
Restricted Subsidiary.
Caterair shall not permit any of its Subsidiaries to issue any
Preferred Stock (other than to the Issuer, a Wholly Owned Restricted Subsidiary
of the Issuer, Caterair or a Wholly Owned Subsidiary of Caterair) or permit any
Person (other than the Issuer, a Wholly Owned Restricted Subsidiary of the
Issuer, Caterair or a Wholly Owned Subsidiary of Caterair) to own any Preferred
Stock of any Subsidiary of Caterair.
SECTION 4.18. Limitation on Liens.
The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to
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exist any Liens of any kind against or upon any of its property or assets, or
any proceeds therefrom, except for (A) Liens securing Senior Debt and/or
Guarantor Senior Debt and (B) Permitted Liens, unless (i) in the case of Liens
securing Indebtedness that is expressly subordinate or junior in right of
payment to the Notes, the Notes are secured by a Lien on such property, assets
or proceeds that is senior in priority to such Liens and (ii) in all other
cases, the Notes are equally and ratably secured.
Caterair shall not, and shall not permit any of its Subsidiaries to
create, incur, assume or suffer to exist any Liens of any kind against or upon
any of its property or assets, or any proceeds therefrom, except for (i)
Permitted Liens, (ii) Liens securing Senior Debt and/or Guarantor Senior Debt
and (iii) Liens in favor of the Issuer or any Restricted Subsidiary of the
Issuer.
SECTION 4.19. Guarantees of Certain Indebtedness.
The Issuer shall not permit any of its domestic Restricted
Subsidiaries, directly or indirectly, to incur, guarantee or secure through the
granting of Liens the payment of any Indebtedness under the Senior Bank
Financing or any refunding or refinancing thereof, in each case unless such
Restricted Subsidiary, the Issuer and the Trustee execute and deliver a
supplemental indenture evidencing such Restricted Subsidiary's Guarantee, such
Guarantee to be a senior subordinated unsecured obligation of such Restricted
Subsidiary. Neither the Issuer nor any such Guarantor shall be required to make
a notation on the Notes or the Guarantees to reflect any such subsequent
Guarantee. Nothing in this covenant shall be construed to permit any Restricted
Subsidiary of the Issuer to incur Indebtedness otherwise prohibited by Section
4.12.
Caterair shall not permit any of its domestic Subsidiaries, directly or
indirectly, to incur, guarantee or secure through the granting of Liens the
payment of any Indebtedness under the Senior Bank Financing or any refunding or
refinancing thereof, in each case unless such Subsidiary, the Issuer and the
Trustee execute and deliver a supplemental indenture evidencing such
Subsidiary's Guarantee, such Guarantee to be a senior subordinated unsecured
obligation of such Subsidiary. Neither the Issuer nor any such Guarantor shall
be required to make a notation on the Notes or the Guarantees to reflect any
such subsequent Guarantee. Nothing in this covenant shall be construed to permit
any Subsidiary of Caterair to incur Indebtedness otherwise prohibited by Section
4.12.
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SECTION 4.20. Conduct of Business of the Issuer
and Its Restricted Subsidiaries.
The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any business other than (i) the businesses in which
the Issuer, Caterair and their respective Subsidiaries and joint ventures are
engaged on the Issue Date; (ii) the businesses of (A) producing, distributing,
selling or delivering, or providing management or other services with respect
to, meals or other food products, (B) providing catering services, (C) providing
goods or services to Persons engaged in providing transportation services,
including, but not limited to, Persons engaged in the airline or other passenger
transportation business, or (D) providing goods or services to or at,
transportation terminals and other facilities, including, but not limited to,
airports, train stations, bus stations or roadside service facilities
(including, but not limited to, providing goods or services to any Person who
conducts operations at any such facility); or (iii) any business which is
determined in good faith by the Issuer's board of directors to be similar,
ancillary, complimentary or related to, or an extension of, any business
described in clause (i) or (ii) above.
SECTION 4.21. Conduct of Business of Caterair.
So long as any Caterair Lease or Caterair License that is in effect on
the Issue Date remains in effect, Caterair shall not, and shall not permit any
of its Subsidiaries to, engage in any business other than the leasing of the
Caterair Leased Property pursuant to the Caterair Lease and the licensing of the
Caterair Licensed Property pursuant to the Caterair License; provided, however,
that Caterair may continue to operate certain of its flight kitchens if Caterair
has not received as of the Issue Date the requisite consents to lease such
flight kitchens to the Issuer or a Subsidiary of the Issuer.
SECTION 4.22. Guarantor Capital Stock.
The Issuer or a Subsidiary Guarantor will own all of the Capital Stock
of each Guarantor (other than Caterair).
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ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Issuer May Merge, etc.
(a) The Issuer shall not, in a single transaction or a series of
related transactions, consolidate with or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets to, another Person or Persons or adopt a Plan of Liquidation unless:
(i) either (A) the Issuer shall be the survivor of such merger or
consolidation or (B) the surviving or transferee Person is a corporation,
partnership or trust organized and existing under the laws of the United
States, any state thereof or the District of Columbia and such surviving or
transferee Person shall expressly assume all the obligations of the Issuer
under the Notes and this Indenture pursuant to a supplemental indenture;
(ii) except in the case of a transaction between the Issuer and a
Guarantor, immediately after giving effect to such transaction (on a pro
forma basis, including any Indebtedness incurred or anticipated to be
incurred in connection with such transaction), the Issuer or the surviving
Person is able to incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) in compliance with Section 4.12;
(iii) immediately before and immediately after giving effect to such
transaction (including any Indebtedness incurred or anticipated to be
incurred in connection with the transaction), no Default or Event of Default
shall have occurred and be continuing; and
(iv) the Issuer has delivered to the Trustee an Officers' Certificate
and Opinion of Counsel, each stating that such consolidation, merger or
transfer complies with this Indenture, that the surviving or transferee
Person agrees pursuant to a supplemental indenture to be bound thereby, and
that all conditions precedent in this Indenture relating to such transaction
have been satisfied.
(b) For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction
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or series of related transactions) of all or substantially all of the properties
and assets of one or more Subsidiaries of the Issuer, the Capital Stock of which
constitutes all or substantially all of the properties and assets of the Issuer,
shall be deemed to be the transfer of all or substantially all of the properties
and assets of the Issuer.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Issuer or any adoption of a Plan of
Liquidation by the Issuer in accordance with Section 5.01, the surviving or
transferee Person shall succeed to, and be substituted for, and may exercise
every right and power of, the Issuer under this Indenture with the same effect
as if such surviving or transferee Person had been named as the Issuer herein;
provided, however, that solely for purposes of computing amounts described in
clause (iii) of the first paragraph of Section 4.10, any such surviving or
transferee Person shall only be deemed to have succeeded to and be substituted
for the Issuer with respect to periods subsequent to the effective time of such
merger, consolidation or transfer of assets.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
Each of the following shall be an "Event of Default":
(1) the failure to pay interest on any Notes when the same becomes due
and payable and the default continues for a period of 30 days (whether or
not such payment shall be prohibited by Article Ten);
(2) the failure to pay the principal on any Notes, when such principal
becomes due and payable, at maturity, upon redemption or otherwise
(including the failure to make a payment to repurchase Notes tendered
pursuant to a Change of Control Offer or a Net Proceeds Offer or a Caterair
Net Proceeds Offer) (whether or not such payment shall be prohibited by
Article Ten);
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(3) a default in the observance or performance of any other covenant or
agreement contained in this Indenture which default continues for a period
of 45 days after the Issuer receives written notice specifying the default
(and demanding that such default be remedied) from the Trustee or the
Holders of at least 25% of the outstanding principal amount of the Notes;
(4) the failure to pay at final stated maturity (giving effect to any
extensions thereof) the principal amount of any Indebtedness of (A) the
Issuer, (B) Caterair, (C) any Significant Subsidiary of the Issuer or
Caterair or (D) any combination of two or more Non-Significant Subsidiaries
of the Issuer which at the time of determination own on a combined basis
more than 10% of the consolidated assets of the Issuer (determined on a
basis consistent with the definition of "Significant Subsidiary") and such
failure continues for a period of 20 days or more, or the acceleration of
the final stated maturity of any such Indebtedness (which acceleration is
not rescinded, annulled or otherwise cured within 20 days of receipt by the
Issuer, Caterair, such Significant Subsidiary or such Non-Significant
Subsidiaries, as the case may be, of notice of any such acceleration) if, in
either case, the aggregate principal amount of such Indebtedness, together
with the principal amount of any other such Indebtedness in default for
failure to pay principal at final stated maturity or which has been
accelerated, in each case with respect to which the 20-day period described
above has passed, aggregates $15 million or more at any time;
(5) one or more judgments in an aggregate amount in excess of $15
million (which are not paid or covered by third-party insurance by
financially sound insurers that have not disclaimed coverage) shall have
been rendered against the Issuer, Caterair or any Significant Subsidiary of
the Issuer or Caterair and such judgments remain undischarged, unpaid or
unstayed for a period of 60 days after such judgment or judgments become
final and non-appealable;
(6) except as permitted by this Indenture, the Guarantee of Caterair or
of a Significant Subsidiary of the Issuer or Caterair shall be held in any
judicial proceeding to be unenforceable or invalid and such holding has
become final and non-appealable or the Guarantee of Caterair or of a
Significant Subsidiary of the Issuer or Cat-
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erair shall cease for any other reason to be in full force and effect;
(7) the Issuer, Caterair or any Significant Subsidiary of the Issuer or
Caterair (A) commences a voluntary case or proceeding under any Bankruptcy
Law with respect to itself, (B) consents to the entry of a judgment, decree
or order for relief against it in an involuntary case or proceeding under
any Bankruptcy Law, (C) consents to the appointment of a Custodian of it or
for substantially all of its property, (D) consents to or acquiesces in the
institution of a bankruptcy or an insolvency proceeding against it or (E)
makes a general assignment for the benefit of its creditors; or
(8) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Issuer, Caterair or any Significant
Subsidiary of the Issuer or Caterair in an involuntary case or proceeding
under any Bankruptcy Law, which shall (A) approve as properly filed a
petition seeking reorganization, arrangement, adjustment or composition in
respect of the Issuer, Caterair or any Significant Subsidiary of the Issuer
or Caterair, (B) appoint a Custodian of the Issuer, Caterair or any
Significant Subsidiary of the Issuer or Caterair or for substantially all of
its property or (C) order the winding-up or liquidation of its affairs; and
such judgment, decree or order shall remain unstayed and in effect for a
period of 60 consecutive days.
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
paragraph 7 or 8 of Section 6.01 with respect to the Issuer) occurs and is
continuing and has not been waived pursuant to Section 6.04, the Trustee may, by
notice to the Issuer, or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding, by written notice to the Issuer and the
Trustee, and the Trustee shall, upon the request of such Holders, declare the
aggregate principal amount of the Notes outstanding, together with accrued but
unpaid interest, if any, on all Notes to be due and payable by notice in writing
to the Issuer and the Trustee specifying the respective Event of Default and
that it is a "notice of acceleration" (the "Acceleration Notice"), and the same
(i) shall become immediately due and payable or (ii) if there are any amounts
outstanding under the Senior Bank Financing, shall become due and payable upon
the first to occur of an acceleration under the
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Senior Bank Financing or 5 Business Days after receipt by the Issuer and the
Representative under the Senior Bank Financing of such Acceleration Notice
(unless all Events of Default specified in such Acceleration Notice have been
cured or waived). If an Event of Default specified in paragraph 7 or 8 of
Section 6.01 occurs and is continuing with respect to the Issuer, all unpaid
principal and accrued interest on the Notes then outstanding shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder. The Holders of a majority in principal
amount of the Notes then outstanding (by notice to the Trustee) may rescind and
cancel a declaration of acceleration and its consequences if (i) the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction, (ii) all existing Events of Default have been cured or waived,
except non-payment of the principal or interest on the Notes which have become
due solely by such declaration of acceleration, (iii) to the extent the payment
of such interest is lawful, interest (at the same rate as specified in the
Notes) on overdue installments of interest and overdue payments of principal,
which has become due otherwise than by such declaration of acceleration, has
been paid, (iv) the Issuer has paid the Trustee its reasonable compensation and
reimbursed the Trustee for its expenses, disbursements and advances and (v) in
the event of the cure or waiver of a Default or Event of Default of the type
described in paragraphs 7 and 8 of Section 6.01, the Trustee shall have received
an Officers' Certificate and an Opinion of Counsel that such Default or Event of
Default has been cured or waived and the Trustee shall be entitled to
conclusively rely upon such Officer's Certificate and Opinion of Counsel. No
such rescission shall affect any subsequent Default or impair any right
consequent thereto.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment of
principal of or interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy
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is exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
Subject to Sections 6.07 and 9.02, the Holders of a majority in
principal amount of the outstanding Notes by notice to the Trustee may waive an
existing Default or Event of Default and its consequences, except a Default in
the payment of principal of or interest on any Note as specified in paragraphs 1
and 2 of Section 6.01.
SECTION 6.05. Control by Majority.
The Holders of a majority in principal amount of the outstanding Notes
may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
it, including, without limitation, any remedies provided for in Section 6.03.
Subject to Section 7.01, however, the Trustee may, in its discretion, refuse to
follow any direction that conflicts with any law or this Indenture, that the
Trustee determines may be unduly prejudicial to the rights of another Holder, or
that may involve the Trustee in personal liability; provided that the Trustee
may take any other action deemed proper by the Trustee, in its discretion, which
is not inconsistent with such direction.
SECTION 6.06. Limitation on Suits.
A Holder may not pursue any remedy with respect to this Indenture or
the Notes unless:
(1) the Holder gives to the Trustee notice of a continuing Event of
Default;
(2) Holders of at least 25% in principal amount of the outstanding
Notes make a written request to the Trustee to pursue the remedy;
(3) such Holders offer to the Trustee indemnity or Note against any
loss, liability or expense to be incurred in compliance with such request
which is reasonably satisfactory to the Trustee;
(4) the Trustee does not comply with the request within 45 days after
receipt of the request and the offer of satisfactory indemnity or Note; and
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(5) during such 45-day period the Holders of a majority in principal
amount of the outstanding Notes do not give the Trustee a direction which,
in the opinion of the Trustee, is inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on a Note, on or after
the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest specified in
paragraphs (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Issuer or any other obligor on the Notes for the whole amount of principal and
accrued interest remaining unpaid, together with interest on overdue principal
and, to the extent that payment of such interest is lawful, interest on overdue
installments of interest at the rate set forth in the Notes and such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Issuer or any other
obligor upon the Notes, any of their respective creditors or any of their
respective property, and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Holder to make such pay-
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ments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, taxes, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.07. The Issuer's payment obligations under this
Section 6.09 shall be secured in accordance with the provisions of Section 7.07.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money pursuant to this Article Six, it
shall pay out the money in the following order:
First: to the Trustee for amounts due under Sections 6.09 and 7.07;
Second: if the Holders are forced to proceed against the Issuer
directly without the Trustee, to Holders for their collection costs;
Third: to Holders for amounts due and unpaid on the Notes for principal
and interest, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Notes for principal and interest,
respectively; and
Fourth: to the Issuer or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior notice to the Issuer, may fix a record date and
payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
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court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07, or a suit by a Holder or Holders of more than
10% in principal amount of the outstanding Notes.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise thereof as a
prudent person would exercise or use under the circumstances in the conduct of
its own affairs.
(b) Except during the continuance of a Default or an Event of Default:
(1) The Trustee need perform only those duties as are specifically set
forth in this Indenture or the TIA and no duties, covenants,
responsibilities or obligations shall be implied in this Indenture that are
adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates (including Officers'
Certificates) or opinions (including Opinions of Counsel) furnished to the
Trustee and conforming to the requirements of this Indenture. However, as to
any certificates or opinions which are required by any provision of this
Indenture to be delivered or provided to the Trustee, the Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for
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its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.02, 6.04 or 6.05.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree in writing with the Issuer.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
(g) In the absence of bad faith, negligence or wilful misconduct on the
part of the Trustee, the Trustee shall not be responsible for the application of
any money by any Paying Agent other than the Trustee.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
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(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require an Officers' Certificate or an Opinion of
Counsel, which shall conform to Sections 13.04 and 13.05. The Trustee shall
not be liable for and shall be fully protected in respect of any action it
takes or omits to take in good faith in reliance on such Officers'
Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent or attorney
appointed with due care.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate (including any
Officers' Certificate), statement, instrument, opinion (including any
Opinion of Counsel), notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as
it may see fit and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled, upon reasonable notice to
the Issuer, to examine the books, records, and premises of the Issuer,
personally or by agent or attorney.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders of the Notes pursuant to the provisions of
this Indenture, unless such Holders shall have offered to the Trustee
reasonable Note or indemnity against the costs, expenses and liabilities
which may be incurred by it in compliance with such request, order or
direction.
(g) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and
protection from liability with respect to any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
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SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Issuer, Caterair, any
Subsidiary of the Issuer or Caterair, or their respective Affiliates, with the
same rights it would have if it were not Trustee. Any Agent may do the same with
like rights. However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Notes, and it shall not be accountable for the Issuer's
use of the proceeds from the Notes, and it shall not be responsible for any
statement of the Issuer in this Indenture or the Notes other than the Trustee's
certificate of authentication.
SECTION 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Holder notice of the
uncured Default or Event of Default within 90 days after such Default or Event
of Default occurs. Except in the case of a Default or an Event of Default in
payment of principal of, or interest on, any Note, including an accelerated
payment and the failure to make payment on the Change of Control Payment Date
pursuant to a Change of Control Offer or on the Proceeds Purchase Date pursuant
to a Net Proceeds Offer or Caterair Net Proceeds Offer, as the case may be, and,
except in the case of a failure to comply with Article Five, the Trustee may
withhold the notice if and so long as its Board of Directors, the executive
committee of its Board of Directors or a committee of its directors and/or Trust
Officers in good faith determines that withholding the notice is in the interest
of the Holders. The Trustee shall not be deemed to have knowledge of a Default
or Event of Default other than (i) any Event of Default occurring pursuant to
Section 6.01(1), 6.01(2) or 4.01; or (ii) any Default or Event of Default of
which a Trust Officer shall have received written notification or obtained
actual knowledge.
SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after May 15 of each year beginning with May 15, 1998,
the Trustee shall, to the extent that any of the events described in TIA Section
313(a) occurred within the previ-
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ous twelve months, but not otherwise, mail to each Holder a brief report dated
as of such date that complies with TIA Section 313(a). The Trustee also shall
comply with TIA Sections 313(b) and 313(c).
A copy of each report at the time of its mailing to Holders shall be
mailed to the Issuer and filed with the SEC and each stock exchange, if any, on
which the Notes are listed.
The Issuer shall promptly notify the Trustee if the Notes become listed
on any stock exchange and the Trustee shall comply with TIA Section 313(d).
SECTION 7.07. Compensation and Indemnity.
The Issuer shall pay to the Trustee in its capacity as such from time
to time such compensation as may be agreed upon in writing by the Issuer and the
Trustee. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Issuer shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses, disbursements
and advances incurred or made by it in connection with the performance of its
duties and the discharge of its obligations under this Indenture. Such expenses
shall include the reasonable fees and expenses of the Trustee's agents and
counsel.
The Issuer shall indemnify the Trustee and its agents, employees,
officers, stockholders and directors for, and hold them harmless against, any
loss, liability, damage, claim or expense incurred by them except for such
actions to the extent caused by any negligence, bad faith or willful misconduct
on their part, arising out of or in connection with the acceptance or
administration of this trust including the reasonable costs and expenses of
defending themselves against any claim or liability in connection with the
exercise or performance of any of their rights, powers or duties hereunder. The
Trustee shall notify the Issuer promptly of any claim asserted against the
Trustee for which it may seek indemnity. The Issuer shall defend the claim and
the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Issuer shall pay the reasonable fees and expenses of such
counsel. The Issuer need not pay for any settlement made without its written
consent. The Issuer need not reimburse any expense or indemnify against any loss
or liability to the extent incurred by the Trustee through its negligence, bad
faith or willful misconduct.
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To secure the Issuer's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(7) or (8) occurs, such expenses and the
compensation for such services shall be paid to the extent allowed under any
Bankruptcy Law.
The provisions of this Section 7.07 shall survive the termination of
this Indenture.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Issuer. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee by
so notifying the Issuer and the Trustee and may appoint a successor trustee. The
Issuer may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuer shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Issuer.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. Promptly after that, the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
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If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the
Holders of at least 10% in principal amount of the outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Issuer's obligations under Section 7.07 shall continue for the benefit
of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; provided that such
corporation shall be otherwise qualified and eligible under this Article Seven.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA Sections 310(a)(1) and 310(a)(2). The Trustee (or in
the case of a corporation included in a bank holding company system, the related
bank holding company) shall have a combined capital and surplus of at least
$100,000,000 as set forth in its most recent published annual report of
condition. In addition, if the Trustee is a corporation included in a bank
holding company system, the Trustee, independently of such bank holding company,
shall meet the capital requirements of TIA Section 310(a)(2). The Trustee shall
comply with TIA Section 310(b); provided, however, that there shall be excluded
from the operation of TIA Section 310(b)(1) any indenture or indentures under
which other Notes, or certificates of interest or participation in other Notes,
of the Issuer are outstanding, if the requirements for such exclusion set forth
in TIA Section 310(b)(1) are met. The provisions of TIA Section 310 shall apply
to the Issuer and any other obligor of the Notes.
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SECTION 7.11. Preferential Collection of
Claims Against the Issuer.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein. The provisions of TIA Section 311 shall apply to the Issuer and any
other obligor of the Notes.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Issuer's Obligations.
This Indenture shall cease to be of further effect and the obligations
of the Issuer under the Notes and this Indenture and the obligations of the
Guarantors under the Guarantees and this Indenture shall terminate (except that
the Issuer's obligations under Section 7.07 and the Trustee's and the Paying
Agent's obligations under Sections 8.04 and 8.05 shall survive the effect of
this Article Eight) when (i) all outstanding Notes theretofore authenticated
have been delivered to the Trustee for cancellation and the Issuer has paid or
caused to be paid all sums payable by it hereunder or (ii) the Issuer has called
for redemption pursuant to this Indenture and the Notes all of the Notes under
arrangements satisfactory to the Trustee, the amounts described in Section
8.01(a) below have been deposited, the conditions in clauses (i) and (ii) of the
proviso in Section 8.01(a) have been satisfied and the Officers' Certificate and
Opinion of Counsel described in Section 8.01(e) have been delivered.
In addition, this Indenture shall cease to be of further effect as to
all outstanding Notes if:
(a) the Issuer irrevocably deposits, or causes to be deposited, with
the Trustee, in trust for the benefit of the Holders pursuant to an irrevocable
trust and Note agreement in form and substance reasonably satisfactory to the
Trustee (i) U.S. Legal Tender, (ii) U.S. Government Obligations or (iii) a
combination thereof, in an amount sufficient after payment of all federal, state
and local taxes or other charges or assessments in respect thereof payable by
the Trustee, which through the payment of interest and principal will provide,
not later
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than one day before the due date of payment in respect of the Notes, U.S. Legal
Tender in an amount which, in the opinion of a nationally recognized firm of
independent certified public accountants expressed in a written certification
thereof (in form and substance reasonably satisfactory to the Trustee) delivered
to the Trustee, is sufficient to pay the principal of, premium, if any, and
interest on the Notes then outstanding on the dates on which any such payments
are due and payable in accordance with the terms of this Indenture and of the
Notes; provided that (i) the trustee of the irrevocable trust shall have been
irrevocably instructed to pay such money or the proceeds of such U.S. Government
Obligations to the Trustee and (ii) the Trustee shall have been irrevocably
instructed to apply such money or the proceeds of such U.S. Government
Obligations to the payment of said principal and interest with respect to the
Notes;
(b) no Default or Event of Default shall have occurred or be continuing
on the date of such deposit and such deposit will not result in a Default or
Event of Default under this Indenture or a breach or violation of, or constitute
a default under, any other instrument to which the Issuer or any Subsidiary of
the Issuer is a party or by which it or its property is bound;
(c) the Issuer shall have delivered to the Trustee an Opinion of
Counsel from independent counsel reasonably satisfactory to the Trustee or a tax
ruling from the Internal Revenue Service to the effect that the holders will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit and defeasance and will be subject to federal income tax in the
same amounts and in the same manner and at the same times as would have been the
case if such deposit and defeasance had not occurred;
(d) the Issuer shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit, such money
or the proceeds of such U.S. Government Obligations will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally; and
(e) the Issuer has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each in form and substance reasonably satisfactory to
the Trustee, each stating that all conditions precedent relating to the
satisfaction and discharge of this Indenture have been complied with.
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Notwithstanding the foregoing paragraph, the Issuer's and the
Guarantors' respective obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06 and
2.12, Article Three and Sections 4.01, 4.02, 4.03, 7.07, 7.08, 8.04 and 8.05
shall survive until the Notes are no longer outstanding. Thereafter, the
Issuer's obligations in Section 7.07 and the Trustee's and the Paying Agent's
obligations under Sections 8.04 and 8.05 shall survive.
SECTION 8.02. Acknowledgment of Discharge by Trustee.
Subject to Section 8.05, after (i) the conditions of Section 8.01, have
been satisfied and (ii) the Issuer has delivered to the Trustee an Opinion of
Counsel, stating that all conditions precedent referred to in clause (i) above
relating to the satisfaction and discharge of this Indenture have been complied
with, the Trustee upon written request of the Issuer shall acknowledge in
writing the discharge of the Issuer's and the Guarantor's respective obligations
under this Indenture except for those surviving obligations specified in this
Article Eight.
SECTION 8.03. Application of Trust Money.
The Trustee shall hold in trust U.S. Legal Tender or U.S. Government
Obligations deposited with it pursuant to Section 8.01. It shall apply the
deposited U.S. Legal Tender or U.S. Government Obligations through the Paying
Agent and in accordance with this Indenture to the payment of principal and
accrued and unpaid interest on the Notes.
The Issuer shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Obligations deposited pursuant to Section 8.01 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of outstanding Notes.
SECTION 8.04. Repayment to the Issuer.
The Trustee and the Paying Agent shall promptly pay to the Issuer any
excess U.S. Legal Tender or U.S. Government Obligations held by them for the
payment of principal or interest that remains unclaimed for one year; provided,
however, that the Trustee or such Paying Agent may, at the expense of the
Issuer, cause to be published once in a newspaper of general circulation in the
City of New York or mailed to each Holder, notice that such money remain
unclaimed and that, after
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a date specified therein, which shall not be less than 30 days from the date of
such publication or mailing, any unclaimed balance of such money then remaining
will be repaid to the Issuer. After payment to the Issuer, Holders entitled to
such money must look to the Issuer for payment as general creditors unless an
applicable abandoned property law designates another Person and all liability of
the Trustee and Paying Agent with respect to such money shall cease.
SECTION 8.05. Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender
or U.S. Government Obligations by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Issuer's and the
Guarantors' respective obligations under this Indenture, the Notes and the
Guarantees shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.01 until such time as the Trustee or Paying Agent is
permitted to apply all such U.S. Legal Tender or U.S. Government Obligations in
accordance with Section 8.01; provided, however, that if the Issuer has made any
payment of interest on or principal of any Notes because of the reinstatement of
its obligations, the Issuer shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the U.S. Legal Tender or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Issuer and the Guarantors, when authorized by a Board Resolution,
and the Trustee, together, may amend or supplement this Indenture or the Notes
without notice to or consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency; provided that such
amendment or supplement does not, in the opinion of the Trustee, adversely
affect the rights of any of the Holders in any material respect;
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(2) to comply with Article Five and Section 11.05 of this Indenture;
(3) to provide for uncertificated Notes in addition to or in place of
certificated Notes; or
(4) to make any other change that does not adversely affect in any
material respect the rights of any Holder hereunder;
provided that the Issuer has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 9.01.
SECTION 9.02. With Consent of Holders.
Subject to Section 6.07, the Issuer and the Guarantors, when authorized
by a Board Resolution, and the Trustee, together, with the written consent of
the Holder or Holders of at least a majority in principal amount of the
outstanding Notes may amend or supplement this Indenture or the Notes, without
notice to any other Holders. Subject to Sections 6.04 and 6.07, the Holder or
Holders of a majority in aggregate principal amount of the outstanding Notes may
waive compliance by the Issuer or the Guarantors with any provision of this
Indenture, the Notes or the Guarantees without notice to any other Holders.
(a) No amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, shall, directly or indirectly, without the consent of each Holder
of each Note affected thereby:
(1) reduce the amount of Notes whose Holders must consent to an
amendment;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including defaulted interest, on any Notes;
(3) reduce the principal of or change or have the effect of changing
the fixed maturity of any Notes, or, except with respect to the matters
described in clause (b)(1) below, change the date on which any Notes may be
subject to redemption or repurchase, or reduce the redemption or repurchase
price therefor;
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(4) make any Notes payable in money other than that stated in the
Notes;
(5) make any change in provisions of this Indenture protecting the
right of each Holder of a Note to receive payment of principal of and
interest on such Note on or after the due date thereof or to bring suit to
enforce such payment, or permitting Holders of a majority in principal
amount of a class of Notes to waive Defaults or Events of Default (other
than Defaults or Events of Default with respect to the payment of principal
of or interest on the Notes); or
(6) modify the provisions of Article Ten or Twelve of this Indenture to
adversely affect the Holders of Notes.
(b) No amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, shall directly or indirectly, without the consent of the Holders
of at least 75% in aggregate principal amount of the then outstanding Notes
issued under this Indenture, (1) amend, change or modify the obligation of (A)
the Issuer to make and consummate a Change of Control Offer in the event of a
Change of Control that has been consummated or make and consummate a Net
Proceeds Offer with respect to any Asset Sale that has been consummated or
modify any of the provisions or definitions with respect thereto or (B) Caterair
to make and consummate a Caterair Net Proceeds Offer with respect to any
Caterair Asset Sale that has been consummated or modify any of the provisions or
definitions with respect thereto; or (2) release Caterair or any other Guarantor
which is a Significant Subsidiary of the Issuer or Caterair from any of its
obligations under its Guarantee or this Indenture other than in accordance with
the terms of such Guarantee and this Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective (as provided in Section 9.04), the Issuer shall mail to the
Holders affected thereby a notice briefly describing the amendment, supplement
or waiver.
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SECTION 9.03. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect.
No amendment of this Indenture shall adversely affect the rights of any
holder of Senior Debt under Article Ten or Guarantor Senior Debt under Article
Twelve without the consent of such holder.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to his Note or portion of his Note by notice to the
Trustee or the Issuer received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Notes have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver (at which time such amendment, supplement or
waiver shall become effective).
The Issuer may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to revoke any consent previously
given, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 120 days after
such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (1)
through (6) of Section 9.02(a), in which case, the amendment, supplement or
waiver shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note; provided that any such waiver shall not impair or
affect the right of any
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Holder to receive payment of principal of and interest on a Note, on or after
the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates without the
consent of such Holder.
SECTION 9.05. Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of the Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Issuer or the Trustee so
determines, the Issuer in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms.
SECTION 9.06. Trustee To Sign Amendments, etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to and adopted in accordance with this Article Nine;
provided that the Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver which affects the Trustee's own rights, duties
or immunities under this Indenture. The Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel and an
Officers' Certificate each stating that the execution of any amendment,
supplement or waiver authorized pursuant to this Article Nine is authorized or
permitted by this Indenture. Such Opinion of Counsel shall not be an expense of
the Trustee.
ARTICLE TEN
SUBORDINATION OF NOTES
SECTION 10.01. Notes Subordinated to Senior Debt.
The Issuer covenants and agrees and the Trustee and each Holder of the
Notes, by its acceptance thereof, likewise covenants and agrees, that all Notes
shall be issued subject to the provisions of this Article Ten; and the Trustee
and each Person holding any Note, whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees that the payment of all
Obligations on the Notes by the Issuer shall, to the extent and in the manner
herein set forth, be
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subordinated and junior in right of payment to the prior payment in full in cash
or Cash Equivalents (or such payment shall be duly provided for to the
satisfaction of the holders of the Senior Debt) of all Obligations on the Senior
Debt; that the subordination is for the benefit of, and shall be enforceable
directly by, the holders of Senior Debt, and that each holder of Senior Debt
whether now outstanding or hereafter created, incurred, assumed or guaranteed
shall be deemed to have acquired Senior Debt in reliance upon the covenants and
provisions contained in this Indenture and the Notes.
SECTION 10.02. No Payment on Notes in Certain
Circumstances.
(a) If any default occurs and is continuing in the payment when due,
whether at maturity, upon any redemption, by declaration or otherwise, of any
principal of, interest on, unpaid drawings for letters of credit issued in
respect of, or regularly accruing fees with respect to, any Senior Debt
(including for this purpose any such default in payment by Caterair or any other
borrower with respect to the Senior Bank Financing which is a Subsidiary of the
Issuer with respect to its Obligations with respect to the Senior Bank Financing
or any Interest Swap Obligations related thereto), no payment of any kind or
character shall be made by or on behalf of the Issuer or any other Person on its
or their behalf with respect to any Obligations on the Notes or to acquire any
of the Notes for cash or property or otherwise. In addition, if any other event
of default occurs and is continuing with respect to any Designated Senior Debt,
as such event of default is defined in the instrument creating or evidencing
such Designated Senior Debt, permitting the holders of such Designated Senior
Debt then outstanding to accelerate the maturity thereof and if the
Representative for the respective issue of Designated Senior Debt gives written
notice of the event of default to the Trustee (a "Default Notice"), then, unless
and until all events of default have been cured or waived or have ceased to
exist or the Trustee receives notice from the Representative for the respective
issue of Designated Senior Debt terminating the Blockage Period (as defined
below), during the 180 days after the delivery of such Default Notice (the
"Blockage Period"), neither the Issuer nor any other Person on its behalf shall
(x) make any payment of any kind or character with respect to any Obligations on
the Notes or (y) acquire any of the Notes for cash or property or otherwise.
Notwithstanding anything herein to the contrary, in no event will a Blockage
Period extend beyond 180 days from the date such Blockage Period was commenced
and only one such Blockage Period may be commenced within any 360 consecutive
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days. No event of default which existed or was continuing on the date of the
commencement of any Blockage Period with respect to the Designated Senior Debt
shall be, or be made, the basis for commencement of a second Blockage Period by
the Representative of such Designated Senior Debt whether or not within a period
of 360 consecutive days, unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days (it being acknowledged
that any subsequent action, or any breach of any financial covenants for a
period commencing after the date of commencement of such Blockage Period that,
in either case, would give rise to an event of default pursuant to any provision
under which an event of default previously existed or was continuing shall
constitute a new event of default for this purpose).
(b) In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee or any Holder when such payment is prohibited by
Section 10.02(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior Debt (pro rata to such
holders on the basis of the respective amount of Senior Debt held by such
holders) or their respective Representatives, as their respective interests may
appear. The Trustee shall be entitled to rely on information regarding amounts
then due and owing on the Senior Debt, if any, received from the holders of
Senior Debt (or their Representatives) or, if such information is not received
from such holders or their Representatives, from the Issuer and only amounts
included in the information provided to the Trustee shall be paid to the holders
of Senior Debt.
(c) Nothing contained in this Article Ten shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Section 6.02 or to pursue any rights or remedies
hereunder; provided that all Senior Debt thereafter due or declared to be due
shall first be paid in full in cash or Cash Equivalents before the Holders are
entitled to receive any payment with respect to Obligations on the Notes.
SECTION 10.03. Payment Over of Proceeds upon
Dissolution, etc.
(a) Upon any payment or distribution of assets of the Issuer of any
kind or character, whether in cash, property or securities, to creditors upon
any total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshalling of assets of the Issuer
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or in a bankruptcy, reorganization, insolvency, receivership or other similar
proceeding relating to the Issuer or its property, whether voluntary or
involuntary, all Obligations due or to become due upon all Senior Debt shall
first be paid in full in cash or Cash Equivalents (or such payment duly provided
for to the satisfaction of the holders of the Senior Debt) before any payment or
distribution of any kind or character is made on account of any Obligations on
the Notes, or for the acquisition of any of the Notes for cash or property or
otherwise. Upon any such dissolution, winding-up, liquidation, reorganization,
receivership or similar proceeding, any payment or distribution of assets of the
Issuer of any kind or character, whether in cash, property or securities, to
which the Holders of the Notes or the Trustee under this Indenture would be
entitled, except for the provisions hereof, shall be paid by the Issuer or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders of the Notes or by the
Trustee under this Indenture if received by them, directly to the holders of
Senior Debt (pro rata to such holders on the basis of the respective amounts of
Senior Debt held by such holders) or their respective Representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Senior
Debt may have been issued, as their respective interests may appear, for
application to the payment of Senior Debt remaining unpaid until all such Senior
Debt has been paid in full in cash or Cash Equivalents after giving effect to
any concurrent payment, distribution or provision therefor to or for the holders
of Senior Debt.
(b) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Issuer of any kind or character, whether in cash,
property or securities, shall be received by any Holder when such payment or
distribution is prohibited by Section 10.03(a), such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Senior Debt (pro rata to such holders on the basis of the
respective amount of Senior Debt held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of Senior Debt remaining
unpaid until all such Senior Debt has been paid in full in cash or Cash
Equivalents, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Senior Debt.
(c) To the extent any payment of Senior Debt (whether by or on behalf
of the Issuer, as proceeds of security
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or enforcement of any right of setoff or otherwise) is declared to be fraudulent
or preferential, set aside or required to be paid to any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then, if such payment is recovered by, or paid over to, such receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar Person, the Senior
Debt or part thereof originally intended to be satisfied shall be deemed to be
reinstated and outstanding as if such payment had not occurred.
(d) The consolidation of the Issuer with, or the merger of the Issuer
with or into, another corporation or the liquidation or dissolution of the
Issuer following the conveyance or transfer of all or substantially all of its
assets to another corporation upon the terms and conditions provided in Article
Five and as long as permitted under the terms of the Senior Debt shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of this Section 10.03 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, assume the Issuer's obligations
hereunder in accordance with Article Five.
SECTION 10.04. Payments May Be Paid Prior to Dissolution.
Subject to Sections 10.02(b) and 10.03(b), nothing contained in this
Article Ten or elsewhere in this Indenture shall prevent (i) the Issuer, except
under the conditions described in Sections 10.02 and 10.03, from making payments
at any time for the purpose of making payments of principal of and interest on
the Notes, or from depositing with the Trustee any moneys for such payments, or
(ii) in the absence of actual knowledge by the Trustee that a given payment
would be prohibited by Section 10.02 or 10.03, the application by the Trustee of
any moneys deposited with it for the purpose of making such payments of
principal of, and interest on, the Notes to the Holders entitled thereto unless
at least two Business Days prior to the date upon which such payment would
otherwise become due and payable, the Trustee shall have actually received the
written notice provided for in the second sentence of Section 10.02(a) or in
Section 10.07. The Issuer shall give prompt written notice to the Trustee of any
dissolution, winding-up, liquidation or reorganization of the Issuer.
SECTION 10.05. Subrogation.
Subject to the payment in full in cash or Cash Equivalents of all
Senior Debt, the Holders of the Notes shall
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be subrogated to the rights of the holders of Senior Debt to receive payments or
distributions of cash, property or securities of the Issuer applicable to the
Senior Debt until the Notes shall be paid in full; and, for the purposes of such
subrogation, no such payments or distributions to the holders of the Senior Debt
by or on behalf of the Issuer or by or on behalf of the Holders by virtue of
this Article Ten which otherwise would have been made to the Holders shall, as
between the Issuer and the Holders of the Notes, be deemed to be a payment by
the Issuer to or on account of the Senior Debt, it being understood that the
provisions of this Article Ten are and are intended solely for the purpose of
defining the relative rights of the Holders of the Notes, on the one hand, and
the holders of the Senior Debt, on the other hand.
SECTION 10.06. Obligations of the Issuer Unconditional.
Nothing contained in this Article Ten or elsewhere in this Indenture or
in the Notes is intended to or shall impair, as among the Issuer, its creditors
other than the holders of Senior Debt, and the Holders of the Notes, the
obligation of the Issuer, which is absolute and unconditional, to pay to the
Holders of the Notes the principal of and any interest on the Notes as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the Notes and
creditors of the Issuer other than the holders of the Senior Debt, nor shall
anything herein or therein prevent the Holder of any Note or the Trustee on its
behalf from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, of the holders of
Senior Debt in respect of cash, property or securities of the Issuer received
upon the exercise of any such remedy.
SECTION 10.07. Notice to Trustee.
The Issuer shall give prompt written notice to the Trustee of any fact
known to the Issuer which would prohibit the making of any payment to or by the
Trustee in respect of the Notes pursuant to the provisions of this Article Ten.
Regardless of anything to the contrary contained in this Article Ten or
elsewhere in this Indenture, the Trustee shall not be charged with knowledge of
the existence of any default or event of default with respect to any Senior Debt
or of any other facts which would prohibit the making of any payment to or by
the Trustee unless and until the Trust Officer of the Trustee shall have
received notice in writing from the Issuer, or from a holder of Senior Debt or a
Representative therefor, and,
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prior to the receipt of any such written notice, the Trustee shall be entitled
to assume (in the absence of actual knowledge to the contrary) that no such
facts exist; provided, however, that if a Trust Officer of the Trustee shall not
have received, at least two Business Days prior to the date upon which by the
terms hereof any such money may become payable for any purpose, the notice with
respect to such money provided for in this Section 10.07, then, anything herein
contained to the contrary notwithstanding, but otherwise subject to the
provisions of Sections 10.02(b) and 10.03(b), the Trustee shall have full power
and authority to receive such money and to apply the same to the purpose for
which such money was received and shall not be affected by any notice to the
contrary which may be received by it within two Business Days prior to such
date.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior Debt
(or a trustee or agent on behalf of such holder) to establish that such notice
has been given by a holder of Senior Debt (or a trustee or agent on behalf of
any such holder). In the event that the Trustee determines in good faith that
any evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article Ten, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amounts of Senior Debt held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article Ten, and if such evidence is not furnished the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
SECTION 10.08. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of the Issuer referred to in
this Article Ten, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders of the Notes shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which bankruptcy,
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or upon a certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent or other person making such payment or distribution, delivered to
the Trustee or the Holders of the Notes, for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Debt and other Indebtedness of the Is-
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suer, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
Ten.
SECTION 10.09. Trustee's Relation to Senior Debt.
The Trustee and any agent of the Issuer or the Trustee shall be
entitled to all the rights set forth in this Article Ten with respect to any
Senior Debt which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Senior Debt and nothing in
this Indenture shall deprive the Trustee or any such agent of any of its rights
as such holder.
Nothing in this Article Ten shall apply to claims of, or payments to,
the Trustee in its capacity as such under or pursuant to Section 7.07.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its duties, covenants, responsibilities and
obligations as are specifically set forth in this Article Ten, and no implied
duties, covenants, responsibilities or obligations with respect to the holders
of Senior Debt shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Debt and shall not be liable to any such holders if the Trustee shall in good
faith mistakenly pay over or distribute to Holders of Notes or to the Issuer or
to any other Person cash, property or securities to which any holders of Senior
Debt shall be entitled by virtue of this Article Ten or otherwise.
Whenever a distribution is to be made or a notice given to holders or
owners of Senior Debt, the distribution may be made and the notice may be given
to their Representative, if any.
SECTION 10.10. Subordination Rights Not Impaired by
Acts or Omissions of the Issuer or
Holders of Senior Debt.
No right of any present or future holders of any Senior Debt to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Issuer or by any act or
failure to act, in good faith, by any such holder, or by any noncompliance by
the Issuer with the terms of this Indenture, re-
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gardless of any knowledge thereof which any such holder may have or otherwise be
charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee, without incurring responsibility to the
Trustee or the Holders of the Notes and without impairing or releasing the
subordination provided in this Article Ten or the obligations hereunder of the
Holders of the Notes to the holders of the Senior Debt, do any one or more of
the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Debt, or otherwise amend or
supplement in any manner Senior Debt, or any instrument evidencing the same or
any agreement under which Senior Debt is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Debt; (iii) release any Person liable in any manner for the
payment or collection of Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Issuer and any other Person.
SECTION 10.11. Holders Authorize Trustee To
Effectuate Subordination of Notes.
Each Holder of a Note by its acceptance of such Note authorizes and
expressly directs the Trustee on such Holder's behalf to take such action as may
be necessary or appropriate to effectuate, as between the holders of Senior Debt
and the Holders of Notes, the subordination provided in this Article Ten, and
appoints the Trustee such Holder's attorney-in-fact to act for and on behalf of
each such Holder of Notes for such purposes, including, in the event of any
dissolution, winding-up, liquidation or reorganization of the Issuer (whether in
bankruptcy, insolvency, receivership, reorganization or similar proceedings or
upon an assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of the Issuer, the filing of a claim for
the unpaid balance of its Notes and accrued interest in the form required in
those proceedings.
If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of Senior Debt or their
Representative are or is hereby authorized to have the right to file and are or
is hereby authorized to file an appropriate claim for and on behalf of the
Holders of said Notes. Nothing herein contained
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shall be deemed to authorize the Trustee or the holders of Senior Debt or their
Representative to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee or the holders of Senior Debt or their Representative to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 10.12. This Article Ten Not To Prevent Events
of Default.
The failure to make a payment on account of principal of or interest on
the Notes by reason of any provision of this Article Ten will not be construed
as preventing the occurrence of an Event of Default.
ARTICLE ELEVEN
GUARANTEES OF THE NOTES
SECTION 11.01. Guarantees.
Subject to the provisions of this Article Eleven, each Guarantor hereby
jointly and severally unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes or the obligations of the Issuer or any of the other Guarantors to the
Holders or the Trustee hereunder or thereunder, that: (a) the principal of and
interest on the Notes will be duly and punctually paid in full when due, whether
at maturity, by acceleration or otherwise, and interest on the overdue principal
and (to the extent permitted by law) interest, if any, on the Notes and all
other Obligations on the Notes will be promptly paid in full or performed, all
in accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
Obligations on the Notes, the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
final stated maturity, by acceleration or otherwise. Failing payment when due of
any amount so guaranteed, for whatever reason, each Guarantor will be obligated
to pay the same immediately. An Event of Default under this Indenture or the
Notes shall constitute an event of default under the Guarantees, and shall
entitle the Holders of
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Notes to accelerate the obligations of the Guarantors hereunder in the same
manner and to the same extent as the Obligations of the Issuer on the Notes.
Each of the Guarantors hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, any release of any other Guarantor, the
recovery of any judgment against the Issuer, any action to enforce the same,
whether or not a Guarantee is affixed to any particular Note, or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a Guarantor. Each of the Guarantors hereby waives the benefit of
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Issuer, any right to require a
proceeding first against the Issuer, protest, notice and all demands whatsoever
and covenants that its Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes, this Indenture and the
Guarantees. If any Holder or the Trustee is required by any court or otherwise
to return to the Issuer or to any Guarantor, or any custodian, trustee,
liquidator or other similar official acting in relation to the Issuer or such
Guarantor, any amount paid by the Issuer or such Guarantor to the Trustee or
such Holder, the Guarantees, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor further agrees that, as
between it, on the one hand, and the Holders of Notes and the Trustee, on the
other hand, (a) subject to this Article Eleven, the maturity of the obligations
guaranteed hereby may be accelerated as provided in Section 6.02 for the
purposes of the Guarantees, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (b) in the event of any acceleration of such obligations
as provided in Section 6.02, such obligations (whether or not due and payable)
shall forthwith become due and payable by the Guarantors for the purpose of the
Guarantees.
The Guarantees shall remain in full force and effect and continue to be
effective should any petition be filed by or against the Issuer for liquidation
or reorganization, should the Issuer become insolvent or make an assignment for
the benefit of creditors or should a receiver or trustee be appointed for all or
any significant part of the Issuer's assets, and shall, to the fullest extent
permitted by law, continue to be effective or be reinstated, as the case may be,
if at any time
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payment and performance of the Notes are, pursuant to applicable law, rescinded
or reduced in amount, or must otherwise be restored or returned by any obligee
on the Notes, whether as a "voidable preference," "fraudulent transfer" or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Notes shall, to the fullest extent permitted by law, be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.
No stockholder, officer, director, employee or incorporator, past,
present or future, of any Guarantor, as such, shall have any personal liability
under the Guarantees by reason of his, her or its status as such stockholder,
officer, director, employee or incorporator.
The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under the Guarantees.
Each Guarantor, and by its acceptance hereof each Holder, hereby
confirms that it is the intention of all such parties that in no event shall any
Guarantor's obligations under its Guarantee be subject to avoidance under any
applicable fraudulent conveyance or similar law of any relevant jurisdiction.
Therefore, in the event that the Guarantees would, but for this sentence, be
subject to avoidance, then the liability of the Guarantors under the Guarantees
shall be reduced to the extent necessary such that such Guarantees shall not be
subject to avoidance under the applicable fraudulent conveyance or similar law.
Subject to the preceding limitation on liability, the Guarantee of each
Guarantor constitutes a guarantee of payment in full when due and not merely a
guarantee of collectability.
SECTION 11.02. Execution and Delivery of the Guarantees.
To further evidence the Guarantees set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Guarantees, substantially in the
form included in Exhibit A hereto, shall be endorsed on each Note authenticated
and delivered by the Trustee. The validity and enforceability of any Guarantee
shall not be affected by the fact that it is not affixed to any particular Note.
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Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or a
Note no longer holds that office at the time the Trustee authenticates such Note
or at any time thereafter, such Guarantor's Guarantee of such Note shall be
valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantees set forth in
this Indenture on behalf of the Guarantors.
SECTION 11.03. Additional Guarantors.
Any Person may become a Guarantor by executing and delivering to the
Trustee (a) a supplemental indenture in form and substance satisfactory to the
Trustee, which subjects such Person to the provisions of this Indenture as a
Guarantor, and (b) an Opinion of Counsel to the effect that such supplemental
indenture has been duly authorized and executed by such Person and constitutes
the legal, valid, binding and enforceable obligation of such Person (subject to
such customary exceptions concerning fraudulent conveyance laws, creditors'
rights and equitable principles as may be acceptable to the Trustee in its
discretion).
SECTION 11.04. Limitation of Guarantors' Liability.
The obligations of each Guarantor are limited to the maximum amount as
will, after giving effect to all other contingent and fixed liabilities of such
Guarantor (other than liabilities of such Guarantor under Indebtedness which
constitutes Subordinated Indebtedness with respect to its Guarantee) and after
giving effect to any collections from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under its
Guarantee or pursuant to Section 11.06, result in the obligations of such
Guarantor under such Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under federal or state law. Each Guarantor that makes a
payment or distribution under a Guarantee shall be entitled to a contribution
from each other Guarantor in a pro rata amount based on the Adjusted Net Assets
of each Guarantor.
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SECTION 11.05. Guarantors May Consolidate, etc., on
Certain Terms; Release from Guarantee.
(a) Each Guarantor may consolidate with or merge into or sell all or
substantially all of its assets to the Issuer or another Guarantor (other than
Caterair) without limitation. Each Guarantor may consolidate with or merge into
or sell all or substantially all of its assets to a corporation other than the
Issuer or another Guarantor (whether or not affiliated with such Guarantor, but
subject to the provisions of Section 11.05(b)); provided that (a) (i) such
transaction is treated as an Asset Sale or Caterair Asset Sale, as the case may
be, for purposes of Section 4.16 hereof or (ii) if the surviving corporation is
not such Guarantor, the surviving corporation agrees to assume such Guarantor's
obligations under its Guarantee and all of its obligations under this Indenture
and (b) such transaction does not (i) violate any covenants set forth in Article
Four or Article Five of this Indenture or (ii) result in a Default or Event of
Default under Article Six of this Indenture immediately thereafter that is
continuing.
(b) Upon (i) the release by the lenders under the Senior Bank
Financing, related documents and future refinancings thereof of all guarantees
of a Guarantor (other than Caterair) and all Liens on the property and assets of
such Guarantor relating to such Indebtedness, or (ii) the sale or disposition
(whether by merger, stock purchase, asset sale or otherwise) of a Guarantor (or
substantially all of its assets) to an entity which is not a Subsidiary of the
Issuer or Caterair (which sale or disposition is otherwise in compliance with
this Indenture), such Guarantor shall be deemed released from all of its
obligations under its Guarantee; provided, however, that any such termination
shall occur only to the extent that all obligations of such Guarantor under the
Senior Bank Financing and all of its guarantees of, and under all of its pledges
of assets or other security interests which secure, such Indebtedness of the
Issuer shall also terminate upon such release, sale or transfer.
(c) The Trustee shall, at the Issuer's expense, deliver an appropriate
instrument evidencing such release upon receipt of a request by the Issuer
accompanied by an Officers' Certificate certifying as to the compliance with
this Section 11.05. Any Guarantor not so released remains liable for the full
amount of principal of and interest on the Notes as provided in this Article
Eleven.
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SECTION 11.06. Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under its
Guarantee, such Funding Guarantor shall be entitled, so long as the exercise of
such right does not impair the rights of the Holders under the Guarantees, to a
contribution from all other Guarantors in a pro rata amount based on the
Adjusted Net Assets of each Guarantor (including the Funding Guarantor) for all
payments, damages and expenses incurred by that Funding Guarantor in discharging
the Issuer's obligations with respect to the Notes or any other Guarantor's
obligations with respect to the Guarantees; provided that such Funding
Guarantor's contribution right with respect to any such Guarantor shall be
subordinated in right of payment to such Guarantor's Guarantor Senior Debt on
the same basis as its Guarantee is subordinated to Guarantor Senior Debt
pursuant to Article Twelve.
SECTION 11.07. Waiver of Subrogation.
Each Guarantor hereby irrevocably waives any claim or other rights
which it may now or hereafter acquire against the Issuer that arise from the
existence, payment, performance or enforcement of such Guarantor's obligations
under the Guarantees and this Indenture, including, without limitation, any
right of subrogation, reimbursement, exoneration, indemnification, and any right
to participate in any claim or remedy of any Holder of Notes against the Issuer,
whether or not such claim, remedy or right arises in equity, or under contract,
statute or common law, including, without limitation, the right to take or
receive from the Issuer, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security on account of such claim or
other rights. If any amount shall be paid to any Guarantor in violation of the
preceding sentence and the Notes shall not have been paid in full, such amount
shall have been deemed to have been paid to such Guarantor for the benefit of,
and held in trust for the benefit of, the Holders of the Notes, and shall,
subject to the provisions of Article Twelve, forthwith be paid to the Trustee
for the benefit of such Holders to be credited and applied upon the Notes,
whether matured or unmatured, in accordance with the terms of this Indenture.
Each Guarantor acknowledges that it will receive direct or indirect benefits
from the financing arrangements contemplated by this Indenture and that the
waiver set forth in this Section 11.07 is knowingly made in contemplation of
such benefits.
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ARTICLE TWELVE
SUBORDINATION OF GUARANTEES
SECTION 12.01. Guarantee Obligations Subordinated
to Guarantor Senior Debt.
Each Guarantor covenants and agrees and the Trustee and each Holder of
the Notes, by its acceptance thereof, likewise covenants and agrees, that all
Guarantees shall be issued subject to the provisions of this Article Twelve; and
the Trustee and each Person holding any Guarantee, whether upon original issue
or upon transfer, assignment or exchange thereof, accepts and agrees that the
payment of all Obligations on the Notes pursuant to the Guarantees made by or on
behalf of any Guarantor shall, to the extent and in the manner herein set forth,
be subordinated and junior in right of payment to the prior payment in full in
cash or Cash Equivalents (or such payment shall be duly provided for to the
satisfaction of the holders of the Guarantor Senior Debt of such Guarantor) of
all existing and future Obligations on the Guarantor Senior Debt of such
Guarantor; that the subordination is for the benefit of, and shall be
enforceable directly by, the holders of Guarantor Senior Debt of such Guarantor,
and that each holder of Guarantor Senior Debt of such Guarantor whether now
outstanding or hereafter created, incurred, assumed or guaranteed shall be
deemed to have acquired Guarantor Senior Debt of such Guarantor in reliance upon
the covenants and provisions contained in this Indenture and the Guarantees.
This Section 12.01 and the following Sections 12.02 through 12.15 of
this Article Twelve shall constitute a continuing offer to all Persons who, in
reliance upon such provisions, become holders of, or continue to hold Guarantor
Senior Debt of any Guarantor and, to the extent set forth in Section 12.02,
holders of Designated Guarantor Senior Debt; and such provisions are made for
the benefit of the holders of Guarantor Senior Debt of each Guarantor and, to
the extent set forth in 12.02, holders of Designated Guarantor Senior Debt; and
such holders (to such extent) are made obligees hereunder and they or each of
them may enforce such provisions.
SECTION 12.02. No Payment on Guarantees in Certain
Circumstances.
(a) If any default occurs and is continuing in the payment when due,
whether at maturity, upon any redemption, by
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declaration or otherwise, of any principal of, interest on, unpaid drawings for
letters of credit issued in respect of, or regularly accruing fees with respect
to, Guarantor Senior Debt of any Guarantor, no payment of any kind or character
shall be made by or on behalf of such Guarantor or any other Person on behalf of
such Guarantor with respect to any Obligations of such Guarantor on the Notes or
under the Guarantee of such Guarantor or to acquire any of the Notes for cash or
property or otherwise. In addition, if any other event of default occurs and is
continuing with respect to Designated Guarantor Senior Debt of any Guarantor, as
such event of default is defined in the instrument creating or evidencing such
Designated Guarantor Senior Debt, permitting the holders of such Designated
Guarantor Senior Debt then outstanding to accelerate the maturity thereof and if
the Representative for the respective issue of Designated Guarantor Senior Debt
gives written notice of the event of default to the Trustee (a "Guarantor
Default Notice"), then, unless and until all events of default have been cured
or waived or have ceased to exist or the Trustee receives notice from the
Representative for the respective issue of Designated Guarantor Senior Debt
terminating the Guarantor Blockage Period (as defined below), during the 180
days after the delivery of such Guarantor Default Notice (the "Guarantor
Blockage Period"), neither such Guarantor nor any other Person on behalf of such
Guarantor shall (x) make any payment of any kind or character with respect to
any Obligations of such Guarantor on the Notes or under the Guarantee of such
Guarantor or (y) acquire any of the Notes for cash or property or otherwise.
Notwithstanding anything herein to the contrary, in no event will a Guarantor
Blockage Period extend beyond 180 days from the date such Guarantor Blockage
Period was commenced and only one such Guarantor Blockage Period with respect to
such Guarantor may be commenced within any 360 consecutive days. No event of
default which existed or was continuing on the date of the commencement of any
Guarantor Blockage Period with respect to the Designated Guarantor Senior Debt
shall be, or be made, the basis for commencement of a second Guarantor Blockage
Period by the Representative of such Designated Guarantor Senior Debt whether or
not within a period of 360 consecutive days, unless such event of default shall
have been cured or waived for a period of not less than 90 consecutive days (it
being acknowledged that any subsequent action, or any breach of any financial
covenants for a period commencing after the date of commencement of such
Guarantor Blockage Period that, in either case, would give rise to an event of
default pursuant to any provision under which an event of default previously
existed or was continuing shall constitute a new event of default for this
purpose).
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(b) In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee or any Holder of a Guarantee when such payment is
prohibited by Section 12.02(a), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of such
Guarantor Senior Debt (pro rata to such holders on the basis of the respective
amount of such Guarantor Senior Debt held by such holders) or their respective
Representatives, as their respective interests may appear. The Trustee shall be
entitled to rely on information regarding amounts then due and owing on such
Guarantor Senior Debt, if any, received from the holders of such Guarantor
Senior Debt (or their Representatives) or, if such information is not received
from such holders or their Representatives, from the Issuer or the Guarantors
and only amounts included in the information provided to the Trustee shall be
paid to the holders of such Guarantor Senior Debt.
(c) Nothing contained in this Article Twelve shall limit the right of
the Trustee or the Holders of Notes to take any action to accelerate the
maturity of the Notes pursuant to Section 6.02 or to pursue any rights or
remedies hereunder; provided that all Guarantor Senior Debt thereafter due or
declared to be due shall first be paid in full in cash or Cash Equivalents
before the Holders are entitled to receive any payment with respect to
Obligations on the Guarantees.
SECTION 12.03. Payment Over of Proceeds upon
Dissolution, etc.
(a) Upon any payment or distribution of assets of any Guarantor of any
kind or character, whether in cash, property or securities, to creditors upon
any liquidation, dissolution, winding-up, reorganization, assignment for the
benefit of creditors or marshalling of assets of any Guarantor or in a
bankruptcy, reorganization, insolvency, receivership or other similar proceeding
relating to any Guarantor or its property, whether voluntary or involuntary, all
Obligations due or to become due upon all Guarantor Senior Debt of such
Guarantor shall first be paid in full in cash or Cash Equivalents (or such
payment duly provided for to the satisfaction of the holders of the Guarantor
Senior Debt of such Guarantor) before any payment or distribution of any kind or
acter is made on account of any Obligations of such Guarantor on its Guarantee,
or for the acquisition of any of the Notes for cash or property or otherwise.
Upon any such dissolution, winding-up, liquidation, reorganization, receivership
or similar proceeding, any payment or distribution of assets of any Guarantor of
any kind or char-
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acter, whether in cash, property or securities, to which the Holders of the
Guarantees or the Trustee under this Indenture would be entitled, except for the
provisions hereof, shall be paid by such Guarantor or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders of the Guarantees or by the Trustee under this
Indenture if received by them, directly to the holders of Guarantor Senior Debt
of such Guarantor (pro rata to such holders on the basis of the respective
amounts of such Guarantor Senior Debt held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Guarantor Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of such
Guarantor Senior Debt remaining unpaid until all such Guarantor Senior Debt has
been paid in full in cash or Cash Equivalents after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
such Guarantor Senior Debt.
(b) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of any Guarantor of any kind or character, whether in
cash, property or securities, shall be received by any Holder when such payment
or distribution is prohibited by Section 12.03(a), such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Guarantor Senior Debt of such Guarantor (pro rata to such
holders on the basis of the respective amount of such Guarantor Senior Debt held
by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Guarantor Senior Debt
may have been issued, as their respective interests may appear, for application
to the payment of such Guarantor Senior Debt remaining unpaid until all such
Guarantor Senior Debt has been paid in full in cash or Cash Equivalents, after
giving effect to any concurrent payment, distribution or provision therefor to
or for the holders of such Guarantor Senior Debt.
(c) To the extent any payment of Guarantor Senior Debt (whether by or
on behalf of any Guarantor, as proceeds of security or enforcement of any right
of setoff or otherwise) is declared to be fraudulent or preferential, set aside
or required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then, if such payment is
recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating
trustee,
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agent or other similar Person, the Guarantor Senior Debt or part thereof
originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred.
(d) The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another corporation or the liquidation or dissolution of
any Guarantor following the conveyance or transfer of all or substantially all
of its assets, to another corporation which complies with the terms and
conditions provided in Section 11.05 and which does not violate any other
Obligation of such Guarantor under this Indenture or Guarantee of such Guarantor
and as long as permitted under the terms of the Guarantor Senior Debt of such
Guarantor shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 12.03 if such other corporation
shall, as a part of such consolidation, merger, conveyance or transfer, assume
such Guarantor's obligations hereunder in accordance with Section 11.05.
SECTION 12.04. Payments May Be Paid Prior to Dissolution.
Subject to Sections 12.02(b) and 12.03(b), nothing contained in this
Article Twelve or elsewhere in this Indenture shall prevent (i) a Guarantor,
except under the conditions described in Sections 12.02 and 12.03, from making
payments at any time for the purpose of making payments of principal of and
interest on the Notes, or from depositing with the Trustee any moneys for such
payments, or (ii) in the absence of actual knowledge by the Trustee that a given
payment would be prohibited by Section 12.02 and 12.03, the application by the
Trustee of any moneys deposited with it for the purpose of making such payments
of principal of, and interest on, the Notes to the Holders entitled thereto
unless at least two Business Days prior to the date upon which such payment
would otherwise become due and payable, the Trustee shall have actually received
the written notice provided for in the second sentence of Section 12.02(a) or in
Section 12.09. A Guarantor shall give prompt written notice to the Trustee of
any dissolution, winding-up, liquidation or reorganization of such Guarantor.
SECTION 12.05. Subrogation.
Subject to the payment in full in cash or Cash Equivalents of all
Guarantor Senior Debt of a Guarantor, the Holders of the Guarantees shall be
subrogated to the rights of the holders of such Guarantor Senior Debt to
receive payments or distributions of cash, property or securities of such Guar-
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antor applicable to the Guarantor Senior Debt of a Guarantor until the Notes
shall be paid in full; and, for the purposes of such subrogation, no such
payments or distributions to the holders of such Guarantor Senior Debt by or on
behalf of such Guarantor or by or on behalf of the Holders of the Guarantees by
virtue of this Article Twelve which otherwise would have been made to such
Holders of the Guarantees shall, as between such Guarantor and the Holders of
the Guarantees, be deemed to be a payment by such Guarantor to or on account of
the Guarantor Senior Debt of a Guarantor.
SECTION 12.06. Guarantee Provisions Solely To Define
Relative Rights.
The subordination provisions of this Article Twelve are and are
intended solely for the purpose of defining the relative rights of the Holders
of the Notes on the one hand and the holders of Guarantor Senior Debt of each
Guarantor and, to the extent set forth in Section 12.02, holders of Designated
Guarantor Senior Debt of each Guarantor, on the other hand. Nothing contained in
this Article Twelve or elsewhere in this Indenture or in the Notes is intended
to or shall (a) impair, as among any Guarantor, its creditors other than holders
of its Guarantor Senior Debt and the Holders of the Notes, the obligation of
such Guarantor, which is absolute and unconditional, to make payments to the
Holders in respect of its obligations under its Guarantee as and when the same
shall become due and payable in accordance with their terms; or (b) affect the
relative rights against such Guarantor of the Holders of the Notes and creditors
of such Guarantor other than the holders of the Guarantor Senior Debt of such
Guarantor; or (c) prevent the Trustee or the Holder of any Note from exercising
all remedies otherwise permitted by applicable law upon a Default or an Event of
Default under this Indenture, subject to the rights, if any, under the
subordination provisions of this Article Twelve of the holders of Guarantor
Senior Debt of such Guarantor hereunder and, to the extent set forth in Section
12.02, holders of Designated Guarantor Senior Debt of such Guarantor (1) in any
case, proceeding, dissolution, liquidation or other winding-up, assignment for
the benefit of creditors or other marshalling of assets and liabilities of such
Guarantor referred to in Section 12.03, to receive, pursuant to and in
accordance with such Section, cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder, or (2) under the conditions specified
in Section 12.02, to prevent any payment prohibited by such Section or enforce
their rights pursuant to Section 12.02(c).
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The failure by any Guarantor to make a payment in respect of its
obligations under its Guarantee by reason of any provision of this Article
Twelve shall not be construed as preventing the occurrence of a Default or an
Event of Default hereunder.
SECTION 12.07. Trustee To Effectuate Subordination
of Obligations Under the Guarantees.
Each Holder of a Note by its acceptance of such Note authorizes and
expressly directs the Trustee to take on behalf of such Holder of Notes such
action as may be necessary or appropriate to effectuate as between the holders
of Guarantor Senior Debt and Holders of Notes, the subordination provided in
this Article Twelve, and appoints the Trustee its attorney-in-fact to act for it
and on its behalf for such purposes, including, in the event of any dissolution,
winding-up, liquidation or reorganization of any Guarantor (whether in
bankruptcy, insolvency, receivership, reorganization or similar proceedings or
upon an assignment for the benefit of creditors or, otherwise) tending towards
liquidation of the business and assets of such Guarantor, the filing of a claim
for the unpaid balance of its Guarantee and accrued interest in the form
required in those proceedings.
If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Guarantor Senior Debt
or their Representative are or is hereby authorized to have the right to file
and are or is hereby authorized to file an appropriate claim for and on behalf
of the Holders of said Notes. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Guarantor Senior Debt or their
Representative to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee or the holders of Guarantor Senior Debt or their Representative to vote
in respect of the claim of any Holder in any such proceeding.
SECTION 12.08. No Waiver of Guarantee Subordination
Provisions.
No right of any present or future holder of any Guarantor Senior Debt
of any Guarantor to enforce subordination as provided herein shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
the Issuer
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or such Guarantor or by any act or failure to act, in good faith, by any such
holder, or by any non-compliance by the Issuer or such Guarantor with the terms
of this Indenture, regardless of any knowledge thereof any such holder may have
or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Guarantor Senior Debt of any Guarantor may, at any time and from
time to time, without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders of the Notes and without impairing
or releasing the subordination provided in this Article Twelve or the
obligations hereunder of the Holders of the Guarantees to the holders of such
Guarantor Senior Debt, do any one or more of the following: (1) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, such Guarantor Senior Debt or any Senior Debt as to which such Guarantor
Senior Debt relates, or otherwise amend or supplement in any manner such
Guarantor Senior Debt or any Senior Debt to which such Guarantor Senior Debt
relates; (2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Guarantor Senior Debt or any
Senior Debt as to which such Guarantor Senior Debt relates; (3) release any
person liable in any manner for the collection or payment of such Guarantor
Senior Debt or any Senior Debt as to which such Guarantor Senior Debt relates;
and (4) exercise or refrain from exercising any rights against such Guarantor
and any other Person.
SECTION 12.09. Guarantors To Give Notice to Trustee.
The Issuer and each Guarantor shall give prompt written notice to the
Trustee of any fact known to the Issuer or such Guarantor which would prohibit
the making of any payment to or by the Trustee in respect of the Notes pursuant
to the provisions of this Article Twelve. Notwithstanding the subordination
provisions of this Article Twelve or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any default or
event of default with respect to any Guarantor Senior Debt or of any other facts
which would prohibit the making of any payment to or by the Trustee unless and
until the Trustee shall have received notice in writing from the Issuer, such
Guarantor or from a holder of Guarantor Senior Debt or a Representative
therefor, and, prior to the receipt of any such written notice, the Trustee
shall be entitled to assume (in the absence of actual knowledge to the contrary)
that no such facts exist; provided, however, that if a Trust Officer of the
Trustee shall not have received, at
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least two Business Days prior to the date upon which by the terms hereof any
such money may become payable for any purpose, the notice with respect to such
money provided for in this Section 12.09, then, anything herein contained to the
contrary notwithstanding, but otherwise subject to the provisions of Sections
12.02(b) and 12.03(b), the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within two Business Days prior to such date.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Guarantor
Senior Debt (or a trustee or agent on behalf of such holder) to establish that
such notice has been given by a holder of Guarantor Senior Debt (or a trustee or
agent on behalf of any such holder). In the event that the Trustee determines in
good faith that any evidence is required with respect to the right of any Person
as a holder of Guarantor Senior Debt of any Guarantor to participate in any
payment or distribution pursuant to this Article Twelve, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Guarantor Senior Debt of such Guarantor held by such Person,
the extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
this Article Twelve, and if such evidence is not furnished the Trustee may defer
any payment to such Person pending judicial determination as to the right of
such Person to receive such payment.
SECTION 12.10. Reliance on Judicial Order or Certificate
of Liquidating Agent Regarding Dissolution,
etc., of Guarantors.
Upon any payment or distribution of assets of a Guarantor referred to
in this Article Twelve, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such bankruptcy,
liquidation or reorganization, dissolution, winding-up proceedings are pending,
or upon a certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent or other person making such payment or distribution, delivered to
the Trustee or to the Holders of the Guarantees, for the purpose of ascertaining
the Persons entitled to participate in such payment or distribution, the holders
of Guarantor Senior Debt of such Guarantor and other Indebtedness of such
Guarantor, the amount
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thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article Twelve.
SECTION 12.11. No Suspension of Remedies.
Nothing contained in this Article Twelve shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Article Six or to pursue any rights or remedies hereunder
or under applicable law, subject to the rights, if any, under this Article
Twelve of the holders, from time to time, of Guarantor Senior Debt of the
Guarantors.
SECTION 12.12. Trustee's Relation to Guarantor
Senior Debt.
The Trustee and any agent of the Trustee shall be entitled to all the
rights set forth in this Article Twelve with respect to any Guarantor Senior
Debt which may at any time be held by it in its individual or any other capacity
to the same extent as any other holder of such Guarantor Senior Debt and nothing
in this Indenture shall deprive the Trustee or any such agent of any of its
rights as such holder.
With respect to the holders of Guarantor Senior Debt, the Trustee
undertakes to perform or to observe only such of its duties, covenants,
responsibilities and obligations as are specifically set forth in this Article
Twelve, and no implied covenants or obligations with respect to the holders of
Guarantor Senior Debt shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary or other duty to the holders of
Guarantor Senior Debt and shall not be liable to any such holders if the Trustee
shall in good faith mistakenly pay over or distribute to Holders of Notes or to
the Issuer or to any other Person cash, property or securities to which any
holders of Senior Debt shall be entitled by virtue of this Article Twelve or
otherwise.
Whenever a distribution is to be made or a notice given to holders or
owners of Guarantor Senior Debt, the distribution may be made and the notice may
be given to their Representative, if any.
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ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
SECTION 13.02. Notices.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to the Issuer or any of the Guarantors:
c/o SC International Services, Inc.
524 East Lamar
Arlington, Texas 76011
Attention: Chief Financial Officer
with a copy to:
Kaye Scholer, Fierman, Hays & Handler
425 Park Avenue
New York, New York 10022-3598
Attention: Joel I. Greenberg, Esq.
if to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Each of the Issuer, the Guarantors and the Trustee by written notice to
each other such Person may designate additional or different addresses for
notices to such Person. Any notice or communication to the Issuer, the
Guarantors or the Trustee shall be deemed to have been given or made as of the
date so delivered if personally delivered; when receipt is acknowledged, if
faxed; and five (5) calendar days after mailing
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if sent by registered or certified mail, postage prepaid (except that a notice
of change of address shall not be deemed to have been given until actually
received by the addressee).
Any notice or communication mailed to a Holder shall be mailed to him
by first class mail or other equivalent means at his address as it appears on
the registration books of the Registrar and shall be sufficiently given to him
if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
SECTION 13.03. Communications by Holders with Other
Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Issuer, the Guarantors, the Trustee, the Registrar and any other Person shall
have the protection of TIA Section 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Issuer to the Trustee to take
any action under this Indenture, other than with respect to the authentication
of the Notes for original issuance on the Issue Date, the Issuer shall furnish
to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to the
Trustee, stating that, in the opinion of the signers, all conditions
precedent to be performed by the Issuer, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent to be performed by the Issuer, if any,
provided for in this Indenture relating to the proposed action have been
complied with.
<PAGE> 133
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SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture, other than the Officers' Certificate
required by Section 4.06, shall include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is reasonably necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Holders. The Paying Agent
or Registrar may make reasonable rules for its functions.
SECTION 13.07. Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment is
a Saturday, a Sunday or a day on which banking institutions in New York, New
York or at such place of payment are not required to be open. If a payment date
is a Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
SECTION 13.08. Governing Law.
THIS INDENTURE, THE NOTES AND THE GUARANTEES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED
<PAGE> 134
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WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
SECTION 13.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Issuer or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 13.10. No Recourse Against Others.
A past, present or future director, officer, employee, stockholder or
incorporator, as such, of the Issuer shall not have any liability for any
obligations of the Issuer under the Notes or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their creations.
Each Holder by accepting a Note waives and releases all such liability. Such
waiver and release are part of the consideration for the issuance of the Notes.
SECTION 13.11. Successors.
All agreements of the Issuer in this Indenture and the Notes shall bind
its successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 13.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
SECTION 13.13. Severability.
In case any one or more of the provisions in this Indenture or in the
Notes shall be held invalid, illegal or unenforceable, in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions shall not in any way be affected
or impaired thereby, it being intended that all of the provisions hereof shall
be enforceable to the full extent permitted by law.
<PAGE> 135
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
Issuer:
SC INTERNATIONAL SERVICES, INC.
By: /s/ Patrick W. Tolbert
---------------------------------
Name: Patrick W. Tolbert
Title: Executive Vice President
and Chief Financial and
Administrative Officer
Guarantors:
SKY CHEFS, INC.
By: /s/ Thomas J. Lee
-----------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
CATERAIR INTERNATIONAL,
INC. (II)
By: /s/ Thomas J. Lee
-------------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
CATERAIR INTERNATIONAL,
CORPORATION
By: /s/ Thomas J. Lee
---------------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
<PAGE> 136
CATERAIR INTERNATIONAL
TRANSITION CORPORATION
ONEX OHIO ACCEPTANCE CORPORATION
ONEX OHIO FINANCE CORP.
ONEX OHIO FINANCE CORP. II
ONEX OHIO EQUITY CORP.
ONEX OHIO EQUITY CORP. II
ONEX OHIO CREDIT CORP.
ONEX OHIO CREDIT CORP. II
ONEX OHIO CAPITAL CORP.
ONEX OHIO CAPITAL CORP. II
ONEX OHIO FISCAL CORP.
ONEX OHIO FISCAL CORP. II
ONEX OHIO FUNDS CORP.
ONEX OHIO FUNDS CORP. II
ARLINGTON SERVICES, INC.
ARLINGTON SERVICES HOLDING
CORPORATION
SKY CHEFS INTERNATIONAL CORP.
BETHESDA SERVICES, INC
CATERAIR NEW ZEALAND LIMITED
(FORMERLY KNOWN AS BETHESDA
SERVICES HOLDING CORPORATION)
JFK CATERERS, INC.
CATERAIR CONSULTING SERVICES
CORPORATION
WESTERN AIRE CHEF, INC.
CATERAIR AIRPORT PROPERTIES, INC.
CATERAIR ST. THOMAS HOLDING
CORPORATION
SKY CHEFS ARGENTINE, INC.
By: /s/ Thomas J. Lee
-------------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
<PAGE> 137
Trustee:
THE BANK OF NEW YORK, as Trustee
By: /s/ Walter N. Gitlin
---------------------------------
Name: Walter N. Gitlin
Title: Vice President
<PAGE> 138
[FORM OF SERIES A NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES
ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR 904 UNDER
THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS NOTE RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)
TO THE ISSUER THEREOF OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF
BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS NOTE),
(D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE
904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS NOTE WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS NOTE, IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSI-
<PAGE> 139
TORY, OR BY ANY SUCH NOMINEE OF THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE
OF SUCH SUCCESSOR DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.17 OF THE INDENTURE.
<PAGE> 140
EXHIBIT A
[Form of Series A Note]
SC INTERNATIONAL SERVICES, INC.
9 1/4% SENIOR SUBORDINATED NOTE DUE 2007, SERIES A
CUSIP No. 784005AB6 (144A)
U8067MAA9 (Reg.S)
No. $
SC INTERNATIONAL SERVICES, INC., a Delaware corporation (the "Issuer"),
for value received, promises to pay to Cede & Co. or registered assigns, the
principal sum of Dollars, on September 1, 2007
Interest Payment Dates: March 1 and September 1
Record Dates: February 15 and August 15
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
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<PAGE> 141
IN WITNESS WHEREOF, the Issuer has caused this 9 1/4% Senior
Subordinated Note due 2007 to be signed manually or by facsimile by its duly
authorized officers.
SC INTERNATIONAL SERVICES, INC.
By: __________________________
Name:
Title:
By: __________________________
Name:
Title:
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<PAGE> 142
Trustee's Certificate of Authentication
This is one of the 9 1/4% Senior Subordinated Notes due 2007 referred
to in the within-mentioned Indenture.
Dated: August 28, 1997
THE BANK OF NEW YORK, as Trustee
By:________________________________
Authorized Signatory
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<PAGE> 143
(REVERSE OF NOTE)
9 1/4% SENIOR SUBORDINATED NOTE DUE 2007, SERIES A
1. Interest. SC INTERNATIONAL SERVICES, INC., a Delaware
corporation (the "Issuer"), promises to pay interest on the principal amount of
this Note at the rate per annum shown above. Interest on the Notes will accrue
from the most recent date on which interest has been paid or, if no interest has
been paid, from August 28, 1997. The Issuer will pay interest semi-annually in
arrears on each Interest Payment Date, commencing March 1, 1998. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
The Issuer shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes to the extent lawful.
2. Method of Payment. The Issuer shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Issuer shall pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Issuer
may pay principal and interest by its check payable in such U.S. Legal Tender.
The Issuer may deliver any such interest payment to the Paying Agent or to a
Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, The Bank of New York
(the "Trustee") will act as Paying Agent and Registrar. The Issuer may change
any Paying Agent, Registrar or co-Registrar without notice to the Holders. The
Issuer or any of its Subsidiaries may, subject to certain exceptions, act as
Registrar or co-Registrar.
4. Indenture and Guarantees. The Issuer issued the Notes under an
Indenture, dated as of August 15, 1997 (the "Indenture"), among the Issuer, each
of the Guarantors named therein and the Trustee. This Note is one of a duly
authorized issue of Notes of the Issuer designated as its 9 1/4% Senior
Subordinated Notes due 2007 (the "Initial Notes"). The Notes are limited (except
as otherwise provided in the Indenture) in aggregate principal amount to
$300,000,000, which may be issued under the Indenture. The Notes include the
Initial Notes, the
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<PAGE> 144
Private Exchange Notes (as defined in the Indenture) and the Unrestricted Notes,
as defined below, issued in exchange for the Initial Notes pursuant to the
Indenture. The Initial Notes, the Private Exchange Notes and the Unrestricted
Notes are treated as a single class of securities under the Indenture.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date
of the Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and the TIA for a statement of them. The Notes are senior subordinated unsecured
obligations of the Issuer. Payment on each Note is guaranteed on a senior
subordinated basis, jointly and severally, by the Guarantors pursuant to Article
Eleven of the Indenture.
5. Subordination. The Notes are subordinated in right of payment,
in the manner and to the extent set forth in the Indenture, to the prior payment
in full in cash or Cash Equivalents of all Senior Debt, whether outstanding on
the date of the Indenture or thereafter created, incurred, assumed or
guaranteed. To the extent and in the manner provided in the Indenture, Senior
Debt must be paid before any payment may be made to any Holder of this Note.
Each Holder by his acceptance hereof agrees to be bound by such provisions and
authorizes and expressly directs the Trustee, on his behalf, to take such action
as may be necessary or appropriate to effectuate the subordination provided for
in the Indenture and appoints the Trustee his attorney-in-fact for such
purposes.
6. (a) Optional Redemption. The Notes will be redeemable, at the
Issuer's option, in whole at any time or in part from time to time, on and after
September 1, 2002, upon not less than 30 nor more than 60 days' notice, at the
following redemption prices (expressed as percentages of the principal amount
thereof) (payable in cash) if redeemed during the twelve-month period commencing
on September 1 of the year set forth below, plus, in each case, accrued and
unpaid interest thereon, if any, to the date of redemption:
YEAR PERCENTAGE
---- ----------
2002 ..................................... 104.635%
2003 ..................................... 103.476%
2004 ..................................... 102.318%
2005 ..................................... 101.159%
2006 and thereafter ...................... 100.000%
(b) Optional Redemption Upon Public Equity Offerings. At any time or
from time to time, on or prior to Septem-
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<PAGE> 145
ber 1, 2000, the Issuer may, at its option, use the net cash proceeds of one or
more Public Equity Offerings to redeem in the aggregate up to $105 million in
principal amount of the Notes at a redemption price of 109.25% of the principal
amount thereof (payable in cash) plus accrued interest and Additional Interest,
if any, to the date of redemption; provided that (i) at least $195 million in
principal amount of the Notes remains outstanding immediately after any such
redemption and (ii) such redemption is effected not more than 60 days after the
consummation of such Public Equity Offering.
7. Notice of Redemption. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at such Holder's registered address. Notes in
denominations larger than $1,000 may be redeemed in part.
8. Change of Control Offer. In the event of a Change of Control,
upon the satisfaction of the conditions set forth in the Indenture, the Issuer
shall be required to offer to repurchase all of the then outstanding Notes
pursuant to a Change of Control Offer at a purchase price equal to 101% of the
principal amount thereof, plus accrued interest to the date of repurchase.
Holders of Notes which are the subject of such an offer to repurchase shall
receive an offer to repurchase and may elect to have such Notes repurchased in
accordance with the provisions of the Indenture pursuant to and in accordance
with the terms of the Indenture.
9. Limitation on Disposition of Assets. Under certain
circumstances the Issuer and Caterair are required to apply the net proceeds
from Asset Sales or Caterair Asset Sales, as the case may be, to offer to
repurchase Notes at a price equal to 100% of the aggregate principal amount
thereof, plus accrued interest to the date of repurchase.
10. Registration Rights. Pursuant to the Registration Rights
Agreement among the Issuer, the Guarantors and the Initial Purchasers, the
Issuer and the Guarantors will be obligated to consummate the Exchange Offer
pursuant to which the Holder of this Note shall have the right to exchange this
Series A Note for a 9 1/4% Senior Subordinated Note due 2007, Series B, of the
Issuer (an "Unrestricted Note"), which has been registered under the Securities
Act, in like principal amount and having terms identical in all material
respects as the Initial Notes. The Holders of the Initial Notes shall be
entitled to receive certain additional interest payments in the event such
Exchange Offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
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<PAGE> 146
11. Denominations; Transfer; Exchange. The Notes are in registered
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Notes during a period beginning 15 days before the mailing of a
redemption notice for any Notes or portions thereof selected for redemption.
12. Persons Deemed Owners. The registered Holder of a Note shall
be treated as the owner of it for all purposes.
13. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for one year, the Trustee and the Paying Agent will
pay the money back to the Issuer. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
14. Discharge Prior to Redemption or Maturity. If the Issuer at
any time deposits with the Trustee U.S. Legal Tender or U.S. Government
Obligations sufficient to pay the principal of and interest on the Notes to
redemption or maturity and complies with the other provisions of the Indenture
relating thereto, the Issuer will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes).
15. Amendment; Supplement; Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the written
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding, and any existing Default or Event of Default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in aggregate principal amount of the Notes then
outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Notes in addition
to or in place of certificated Notes, or comply with Article Five or Article
Eleven of the Indenture or make any other change that does not adversely affect
in any material respect the rights of any Holder of a Note.
16. Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Issuer and its Restricted Subsidiaries and
Caterair and its Subsidiaries to,
A-7
<PAGE> 147
among other things, incur additional Indebtedness, make payments in respect of
its Capital Stock or certain Indebtedness, enter into transactions with
Affiliates, create dividend or other payment restrictions affecting Subsidiaries
and merge or consolidate with any other Person, sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its assets or adopt a
plan of liquidation. Such limitations are subject to a number of important
qualifications and exceptions. The Issuer and Caterair must annually report to
the Trustee on compliance with such limitations.
17. Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
18. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Holders of Notes may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Notes unless it has been offered indemnity or security reasonably satisfactory
to it. The Indenture permits, subject to certain limitations therein provided,
Holders of a majority in aggregate principal amount of the Notes then
outstanding to direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Notes notice of any continuing Default or
Event of Default (except a Default in payment of principal or interest) if it
determines in good faith that withholding notice is in their interest.
19. Trustee Dealings with Issuer. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Issuer, Caterair, Subsidiaries of the
Issuer and Caterair, or their respective Affiliates as if it were not the
Trustee.
20. No Recourse Against Others. No past, present or future
stockholder, director, officer, employee or incorporator, as such, of the Issuer
shall have any liability for any obligation of the Issuer under the Notes or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder of a Note by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
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<PAGE> 148
21. Authentication. This Note shall not be valid until the
Trustee or authenticating agent manually signs the certificate of
authentication on this Note.
22. Governing Law. The laws of the State of New York shall govern
this Note and the Indenture, without regard to principles of conflict of laws.
23. Abbreviations and Defined Terms. Customary abbreviations may
be used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
24. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Note Identification Procedures, the Issuer has caused CUSIP
numbers to be printed on the Notes as a convenience to the Holders of the Notes.
No representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
25. Indenture. Each Holder, by accepting a Note, agrees to be
bound by all of the terms and provisions of the Indenture, as the same may be
amended from time to time. Capitalized terms used herein and not defined herein
have the meanings ascribed thereto in the Indenture.
The Issuer will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: SC International Services, Inc., 524 East
Lamar, Arlington, Texas 76011.
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<PAGE> 149
[FORM OF NOTATION ON NOTE RELATING TO GUARANTEES]
SENIOR SUBORDINATED GUARANTEES
The Guarantors (as defined in the Indenture (the "Indenture") referred
to in the Note upon which this notation is endorsed and each hereinafter
referred to as a "Guarantor") have unconditionally guaranteed on a senior
subordinated basis (such guarantee by each Guarantor being referred to herein as
the "Guarantee") (i) the due and punctual payment of the principal of and
interest on the Notes, whether at maturity, by acceleration or otherwise, the
due and punctual payment of interest on the overdue principal and interest, if
any, on the Notes, to the extent lawful, and the due and punctual performance of
all other Obligations of the Issuer to the Holders or the Trustee all in
accordance with the terms set forth in Articles Eleven and Twelve of the
Indenture and (ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of each Guarantor to the Holders of Notes and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth and
are expressly subordinated and subject in right of payment to the prior payment
in full in cash or Cash Equivalents of all Guarantor Senior Debt of such
Guarantor, to the extent and in the manner provided, in Articles Eleven and
Twelve of the Indenture, and reference is hereby made to such Indenture for the
precise terms of the Guarantee therein made.
No past, present or future stockholder, director, officer, employee or
incorporator, as such, of any of the Guarantors shall have any liability for any
obligation of the Guarantors under this Guarantee or the Indenture or for any
claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder of a Note by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Guarantees.
The Guarantees shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which the Guarantees are
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized signatories.
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<PAGE> 150
GUARANTORS:
SKY CHEFS, INC.
By:
--------------------------------
Name:
Title:
CATERAIR INTERNATIONAL, INC. (II)
By:
--------------------------------
Name:
Title:
CATERAIR INTERNATIONAL
CORPORATION
By:
--------------------------------
Name:
Title:
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<PAGE> 151
CATERAIR INTERNATIONAL
TRANSITION CORPORATION
ONEX OHIO ACCEPTANCE CORPORATION
ONEX OHIO FINANCE CORP.
ONEX OHIO FINANCE CORP. II
ONEX OHIO EQUITY CORP.
ONEX OHIO EQUITY CORP. II
ONEX OHIO CREDIT CORP.
ONEX OHIO CREDIT CORP. II
ONEX OHIO CAPITAL CORP.
ONEX OHIO CAPITAL CORP. II
ONEX OHIO FISCAL CORP.
ONEX OHIO FISCAL CORP. II
ONEX OHIO FUNDS CORP.
ONEX OHIO FUNDS CORP. II
ARLINGTON SERVICES, INC.
ARLINGTON SERVICES HOLDING
CORPORATION
SKY CHEFS INTERNATIONAL CORP.
BETHESDA SERVICES, INC
CATERAIR NEW ZEALAND LIMITED
(FORMERLY KNOWN AS BETHESDA
SERVICES HOLDING CORPORATION)
JFK CATERERS, INC.
CATERAIR CONSULTING SERVICES
CORPORATION
WESTERN AIRE CHEF, INC.
CATERAIR AIRPORT PROPERTIES, INC.
CATERAIR ST. THOMAS HOLDING
CORPORATION
SKY CHEFS ARGENTINE, INC.
By:
--------------------------------------
Name:
Title:
A-12
<PAGE> 152
[FORM OF ASSIGNMENT]
I or we assign to
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
_______________________________
________________________________________________________________________________
(please print or type name and address)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting
and appointing
________________________________________________________________________________
attorney to transfer the Note on the books of the Issuer with full power of
substitution in the premises.
Dated:___________________ _________________________________
NOTICE: The signature on this
assignment must correspond with the name
as it appears upon the face of the
within Note in every particular without
alteration or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee: _________________________________
A-13
<PAGE> 153
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Issuer or Caterair, as
the case may be, pursuant to Section 4.15 or 4.16 of the Indenture, check the
appropriate Box:
Section 4.15 [ ]
Section 4.16 [ ]
If you wish to have a portion of this Note purchased by the Issuer or
Caterair, as the case may be, pursuant to Section 4.15 or 4.16 of the Indenture,
state the amount you wish to have purchased:
US$____________
Date: _______________ Your Signature _______________________
(Sign exactly as your name
appears on the other side
of this Note)
Signature Guarantee: _______________________
A-14
<PAGE> 154
EXHIBIT B
[Form of Series B Note]
SC INTERNATIONAL SERVICES, INC.
9 1/4% SENIOR SUBORDINATED NOTE DUE 2007, SERIES B
CUSIP No. _________
No. $
SC INTERNATIONAL SERVICES, INC., a Delaware corporation (the "Issuer"),
for value received, promises to pay to Cede & Co. or registered assigns, the
principal sum of Dollars, on September 1, 2007
Interest Payment Dates: March 1 and September 1
Record Dates: February 15 and August 15
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
B-1
<PAGE> 155
IN WITNESS WHEREOF, the Issuer has caused this 9 1/4% Senior
Subordinated Note due 2007 to be signed manually or by facsimile by its duly
authorized officers.
SC INTERNATIONAL SERVICES, INC.
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
B-2
<PAGE> 156
Trustee's Certificate of Authentication
This is one of the 9 1/4% Senior Subordinated Notes due 2007 referred
to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK, as Trustee
By:
---------------------------------
Authorized Signatory
B-3
<PAGE> 157
(REVERSE OF NOTE)
9 1/4% SENIOR SUBORDINATED NOTE DUE 2007, SERIES B
1. Interest. SC INTERNATIONAL SERVICES, INC., a Delaware
corporation (the "Issuer"), promises to pay interest on the principal amount of
this Note at the rate per annum shown above. Interest on the Notes will accrue
from the most recent date on which interest has been paid or, if no interest has
been paid, from August 28, 1997. The Issuer will pay interest semi-annually in
arrears on each Interest Payment Date, commencing March 1, 1998. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
The Issuer shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes to the extent lawful.
2. Method of Payment. The Issuer shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Issuer shall pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Issuer
may pay principal and interest by its check payable in such U.S. Legal Tender.
The Issuer may deliver any such interest payment to the Paying Agent or to a
Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, The Bank of New York
(the "Trustee") will act as Paying Agent and Registrar. The Issuer may change
any Paying Agent, Registrar or co-Registrar without notice to the Holders. The
Issuer or any of its Subsidiaries may, subject to certain exceptions, act as
Registrar or co-Registrar.
4. Indenture and Guarantees. The Issuer issued the Notes under an
Indenture dated as of August 15, 1997 (the "Indenture"), among the Issuer, each
of the Guarantors named therein and the Trustee. This Note is one of a duly
authorized issue of Notes of the Issuer designated as its 9 1/4% Senior
Subordinated Notes due 2007, Series B (the "Unrestricted Notes"). The Notes are
limited (except as otherwise provided in the Indenture) in aggregate principal
amount to $300,000,000, which may be issued under the Indenture. The Notes
include the 9 1/4%
B-4
<PAGE> 158
Senior Subordinated Notes due 2007, Series A (the "Initial Notes"), the Private
Exchange Notes (as defined in the Indenture) and the Unrestricted Notes issued
in exchange for the Initial Notes pursuant to the Indenture. The Initial Notes,
the Private Exchange Notes and the Unrestricted Notes are treated as a single
class of securities under the Indenture. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture.
Notwithstanding anything to the contrary herein, the Notes are subject to all
such terms, and Holders of Notes are referred to the Indenture and the TIA for a
statement of them. The Notes are senior subordinated unsecured obligations of
the Issuer. Payment on each Note is guaranteed on a senior subordinated basis,
jointly and severally, by the Guarantors pursuant to Article Eleven of the
Indenture.
5. Subordination. The Notes are subordinated in right of payment,
in the manner and to the extent set forth in the Indenture, to the prior payment
in full in cash or Cash Equivalents of all Senior Debt, whether outstanding on
the date of the Indenture or thereafter created, incurred, assumed or
guaranteed. To the extent and in the manner provided in the Indenture, Senior
Debt must be paid before any payment may be made to any Holder of this Note.
Each Holder by his acceptance hereof agrees to be bound by such provisions and
authorizes and expressly directs the Trustee, on his behalf, to take such action
as may be necessary or appropriate to effectuate the subordination provided for
in the Indenture and appoints the Trustee his attorney-in-fact for such
purposes.
6. (a) Optional Redemption. The Notes will be redeemable, at the
Issuer's option, in whole at any time or in part from time to time, on and after
September 1, 2002, upon not less than 30 nor more than 60 days' notice, at the
following redemption prices (expressed as percentages of the principal amount
thereof) (payable in cash) if redeemed during the twelve-month period commencing
on September 1 of the year set forth below, plus, in each case, accrued and
unpaid interest thereon, if any, to the date of redemption:
YEAR PERCENTAGE
---- ----------
2002 ..................................... 104.635%
2003 ..................................... 103.476%
2004 ..................................... 102.318%
2005 ..................................... 101.159%
2006 and thereafter ...................... 100.000%
B-5
<PAGE> 159
(b) Optional Redemption Upon Public Equity Offerings. At any time
or from time to time, on or prior to September 1, 2000, the Issuer may, at its
option, use the net cash proceeds of one or more Public Equity Offerings to
redeem in the aggregate up to $105 million in principal amount of the Notes at a
redemption price of 109.25% of the principal amount thereof (payable in cash)
plus accrued interest and Additional Interest, if any, to the date of
redemption; provided that (i) at least $195 million in principal amount of the
Notes remains outstanding immediately after any such redemption and (ii) such
redemption is effected not more than 60 days after the consummation of such
Public Equity Offering.
7. Notice of Redemption. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at such Holder's registered address. Notes in
denominations larger than $1,000 may be redeemed in part.
8. Change of Control Offer. In the event of a Change of Control,
upon the satisfaction of the conditions set forth in the Indenture, the Issuer
shall be required to offer to repurchase all of the then outstanding Notes
pursuant to a Change of Control Offer at a purchase price equal to 101% of the
principal amount thereof, plus accrued interest to the date of repurchase.
Holders of Notes which are the subject of such an offer to repurchase shall
receive an offer to repurchase and may elect to have such Notes repurchased in
accordance with the provisions of the Indenture pursuant to and in accordance
with the terms of the Indenture.
9. Limitation on Disposition of Assets. Under certain
circumstances the Issuer and Caterair are required to apply the net proceeds
from Asset Sales or Caterair Asset Sales, as the case may be, to offer to
repurchase Notes at a price equal to 100% of the aggregate principal amount
thereof, plus accrued interest to the date of repurchase.
10. Denominations; Transfer; Exchange. The Notes are in registered
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Notes during a period beginning 15 days before the mailing of a
redemption notice for any Notes or portions thereof selected for redemption.
B-6
<PAGE> 160
11. Persons Deemed Owners. The registered Holder of a Note shall
be treated as the owner of it for all purposes.
12. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for one year, the Trustee and the Paying Agent will
pay the money back to the Issuer. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
13. Discharge Prior to Redemption or Maturity. If the Issuer at
any time deposits with the Trustee U.S. Legal Tender or U.S. Government
Obligations sufficient to pay the principal of and interest on the Notes to
redemption or maturity and complies with the other provisions of the Indenture
relating thereto, the Issuer will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes).
14. Amendment; Supplement; Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the written
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding, and any existing Default or Event of Default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in aggregate principal amount of the Notes then
outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Notes in addition
to or in place of certificated Notes, or comply with Article Five or Article
Eleven of the Indenture or make any other change that does not adversely affect
in any material respect the rights of any Holder of a Note.
15. Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Issuer and its Restricted Subsidiaries and
Caterair and its Subsidiaries to, among other things, incur additional
Indebtedness, make payments in respect of its Capital Stock or certain
Indebtedness, enter into transactions with Affiliates, create dividend or other
payment restrictions affecting Subsidiaries and merge or consolidate with any
other Person, sell, assign, transfer, lease, convey or otherwise dispose of all
or substantially all of its assets or adopt a plan of liquidation. Such
limitations are subject to a number of important qualifications and exceptions.
The Issuer and Caterair must annually report to the Trustee on compliance with
such limitations.
16. Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predeces-
B-7
<PAGE> 161
sor under the Notes and the Indenture, the predecessor will be released from
those obligations.
17. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Holders of Notes may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Notes unless it has been offered indemnity or security reasonably satisfactory
to it. The Indenture permits, subject to certain limitations therein provided,
Holders of a majority in aggregate principal amount of the Notes then
outstanding to direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Notes notice of any continuing Default or
Event of Default (except a Default in payment of principal or interest) if it
determines in good faith that withholding notice is in their interest.
18. Trustee Dealings with Issuer. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Issuer, Caterair, Subsidiaries of the
Issuer and Caterair, or their respective Affiliates as if it were not the
Trustee.
19. No Recourse Against Others. No past, present or future
stockholder, director, officer, employee or incorporator, as such, of the Issuer
shall have any liability for any obligation of the Issuer under the Notes or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder of a Note by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
20. Authentication. This Note shall not be valid until the Trustee
or authenticating agent manually signs the certificate of authentication on this
Note.
21. Governing Law. The laws of the State of New York shall govern
this Note and the Indenture, without regard to principles of conflict of laws.
22. Abbreviations and Defined Terms. Customary abbreviations may
be used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
B-8
<PAGE> 162
23. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Note Identification Procedures, the Issuer has caused CUSIP
numbers to be printed on the Notes as a convenience to the Holders of the Notes.
No representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
24. Indenture. Each Holder, by accepting a Note, agrees to be
bound by all of the terms and provisions of the Indenture, as the same may be
amended from time to time. Capitalized terms used herein and not defined herein
have the meanings ascribed thereto in the Indenture.
The Issuer will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: SC International Services, Inc., 524 East
Lamar, Arlington, Texas 76011.
B-9
<PAGE> 163
[FORM OF NOTATION ON NOTE RELATING TO GUARANTEES]
SENIOR SUBORDINATED GUARANTEES
The Guarantors (as defined in the Indenture (the "Indenture") referred
to in the Note upon which this notation is endorsed and each hereinafter
referred to as a "Guarantor") have unconditionally guaranteed on a senior
subordinated basis (such guarantee by each Guarantor being referred to herein as
the "Guarantee") (i) the due and punctual payment of the principal of and
interest on the Notes, whether at maturity, by acceleration or otherwise, the
due and punctual payment of interest on the overdue principal and interest, if
any, on the Notes, to the extent lawful, and the due and punctual performance of
all other Obligations of the Issuer to the Holders or the Trustee all in
accordance with the terms set forth in Articles Eleven and Twelve of the
Indenture and (ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of each Guarantor to the Holders of Notes and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth and
are expressly subordinated and subject in right of payment to the prior payment
in full in cash or Cash Equivalents of all Guarantor Senior Debt of such
Guarantor, to the extent and in the manner provided, in Articles Eleven and
Twelve of the Indenture, and reference is hereby made to such Indenture for the
precise terms of the Guarantee therein made.
No past, present or future stockholder, director, officer, employee or
incorporator, as such, of any of the Guarantors shall have any liability for any
obligation of the Guarantors under this Guarantee or the Indenture or for any
claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder of a Note by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Guarantees.
The Guarantees shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which the Guarantees are
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized signatories.
B-10
<PAGE> 164
GUARANTORS:
SKY CHEFS, INC.
By:
--------------------------------
Name:
Title:
CATERAIR INTERNATIONAL, INC. (II)
By:
--------------------------------
Name:
Title:
CATERAIR INTERNATIONAL
CORPORATION
By:
--------------------------------
Name:
Title:
B-11
<PAGE> 165
CATERAIR INTERNATIONAL
TRANSITION CORPORATION
ONEX OHIO ACCEPTANCE CORPORATION
ONEX OHIO FINANCE CORP.
ONEX OHIO FINANCE CORP. II
ONEX OHIO EQUITY CORP.
ONEX OHIO EQUITY CORP. II
ONEX OHIO CREDIT CORP.
ONEX OHIO CREDIT CORP. II
ONEX OHIO CAPITAL CORP.
ONEX OHIO CAPITAL CORP. II
ONEX OHIO FISCAL CORP.
ONEX OHIO FISCAL CORP. II
ONEX OHIO FUNDS CORP.
ONEX OHIO FUNDS CORP. II
ARLINGTON SERVICES, INC.
ARLINGTON SERVICES HOLDING
CORPORATION
SKY CHEFS INTERNATIONAL CORP.
BETHESDA SERVICES, INC
CATERAIR NEW ZEALAND LIMITED
(FORMERLY KNOWN AS BETHESDA
SERVICES HOLDING CORPORATION)
JFK CATERERS, INC.
CATERAIR CONSULTING SERVICES
CORPORATION
WESTERN AIRE CHEF, INC.
CATERAIR AIRPORT PROPERTIES, INC.
CATERAIR ST. THOMAS HOLDING
CORPORATION
SKY CHEFS ARGENTINE, INC.
By:
------------------------------------
Name:
Title:
B-12
<PAGE> 166
[FORM OF ASSIGNMENT]
I or we assign to
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
__________________________________
________________________________________________________________________________
(please print or type name and address)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting
and appointing
________________________________________________________________________________
attorney to transfer the Note on the books of the Issuer with full power of
substitution in the premises.
Dated:___________________ _________________________________
NOTICE: The signature on this
assignment must correspond with the name
as it appears upon the face of the
within Note in every particular without
alteration or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee: _________________________________
B-13
<PAGE> 167
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Issuer or Caterair, as
the case may be, pursuant to Section 4.15 or 4.16 of the Indenture, check the
appropriate Box:
Section 4.15 [ ]
Section 4.16 [ ]
If you wish to have a portion of this Note purchased by the Issuer or
Caterair, as the case may be, pursuant to Section 4.15 or 4.16 of the Indenture,
state the amount you wish to have purchased:
US$____________
Date: _______________ Your Signature _______________________
(Sign exactly as your name
appears on the other side
of this Note)
Signature Guarantee: _______________________
B-14
<PAGE> 168
EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
The Bank of New York
101 Barclay Street
Floor 21 West
New York, NY 10286
Attention: Corporate Trust Trustee
Administration
Re: SC International Services,Inc. -
9 1/4 Senior Subordinated Notes due 2007
Ladies and Gentlemen:
In connection with our proposed purchase of 9 1/4% Senior
Subordinated Notes due 2007 (the "Notes") of SC International Services, Inc., a
Delaware corporation (the "Issuer"), we confirm that:
1. We have received a copy of the Offering Memorandum (the
"Offering Memorandum"), dated August 22, 1997, relating to the Notes
and such other information as we deem necessary in order to make our
investment decision. We acknowledge that we have read and agreed to the
matters stated on pages (i)-(ii) of the Offering Memorandum and in the
section entitled "Transfer Restrictions" of such Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the
Indenture relating to the Notes (the "Indenture") as described in the
Offering Memorandum and the undersigned agrees to be bound by, and not
to resell, pledge or otherwise transfer the Notes except in compliance
with, such restrictions and conditions under the Securities Act of
1933, as amended (the "Securities Act"), and all applicable State
securities laws.
3. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes may not be
offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except as permitted in the following sentence.
We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated,
C-1
<PAGE> 169
that if we should sell or otherwise transfer any Notes, we will do so
only (i) to the Issuer or any subsidiary thereof, (ii) inside the
United States in accordance with Rule 144A under the Securities Act to
a "qualified institutional buyer" (as defined in Rule 144A promulgated
under the Securities Act), (iii) inside the United States to an
institutional "accredited investor" (as defined below) that, prior to
such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to the Trustee (as defined in the Indenture), a signed
letter containing certain representations and agreements relating to
the restrictions on transfer of the Notes (the form of which letter can
be obtained from the Trustee), (iv) outside the United States in
accordance with Rule 904 of Regulation S promulgated under the
Securities Act to non-U.S. persons, (v) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if
available), or (vi) pursuant to an effective registration statement
under the Securities Act, and we further agree to provide to any person
purchasing any of the Notes from us a notice advising such purchaser
that resales of the Notes are restricted as stated herein.
4. We are not acquiring the Notes for or on behalf of, and
will not transfer the Notes to, any pension or welfare plan (as defined
in Section 3 of the Employee Retirement Income Security Act of 1974),
except as permitted in the section entitled "Transfer Restrictions" of
the Offering Memorandum.
5. We understand that, on any proposed resale of any Notes, we
will be required to furnish to the Trustee and the Issuer such
certification, legal opinions and other information as the Trustee and
the Issuer may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. We further understand that
the Notes purchased by us will bear a legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our
investment in the Notes, and we and any accounts for which we are
acting are each able to bear the economic risk of our or their
investment, as the case may be.
7. We are acquiring the Notes purchased by us for our account
or for one or more accounts (each of which
C-2
<PAGE> 170
is an institutional "accredited investor") as to each of which we
exercise sole investment discretion.
C-3
<PAGE> 171
You, the Issuer, the Trustee and others are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
By:
---------------------------------
Name:
Title:
C-4
<PAGE> 172
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
The Bank of New York
101 Barclay Street
Floor 21 West
New York, NY 10286
Attention: Corporate Trust Trustee
Administration
Re: SC International Services, Inc. (the "Issuer")
9 1/4% Senior Subordinated Notes due 2007 (the
"Notes")
Ladies and Gentlemen:
In connection with our proposed sale of [$ ] aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States, or (b) the transaction was executed in, on or through
the facilities of a designated off-shore securities market and neither
we nor any person acting on our behalf knows that the transaction has
been pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer
restrictions applicable to the Notes.
D-1
<PAGE> 173
You, the Issuer and counsel for the Issuer are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
--------------------------------
Authorized Signature
D-2
<PAGE> 1
EXHIBIT 5
[KAYE,SCHOLER,FIERMAN,HAYS & HANDLER, LLP LETTERHEAD]
October 9, 1997
SC International Services, Inc.
525 East Lamar Boulevard
Arlington, Texas 76011
The Parties Identified on
Schedule A hereto
Ladies and Gentlemen:
We refer to SC International Services, Inc.'s (the "ISSUER") and the
parties' identified on Schedule A hereto (the "GUARANTORS") offer to exchange
$1,000 principal amount of 9 1/4% Senior Subordinated Notes due 2007, Series B,
of the Issuer (the "EXCHANGE NOTES") (together with the related Guarantees of
the Guarantors), for each $1,000 principal amount of the outstanding
unregistered 9 1/4% Senior Subordinated Notes due 2007, Series A, of the Issuer
(the "PRIVATE NOTES") (together with the related Guarantees of the Guarantors),
which Exchange Notes (and the related Guarantees of the Guarantors) are the
subject of the Registration Statement on Form S-4, to which this opinion is an
Exhibit, filed with the Securities and Exchange Commission (the "COMMISSION")
under the Securities Act of 1933, as amended (the "ACT") on the date hereof (the
"REGISTRATION STATEMENT").
In connection herewith, we have examined the Registration Statement as
filed on the date hereof, the Indenture, dated as of the August 15, 1997, among
the Issuer, the Guarantors and The Bank of New York, as trustee (the
"INDENTURE"), and the Private Notes (and the related guarantees of the
Guarantors included therewith) (the Indenture, the Exchange Notes and the
related Guarantees of the Exchange Notes of the Guarantors are collectively
referred to herein as the "DOCUMENTS"), together with such corporate records,
certificates and other documents, and such questions of law, as we have
considered necessary or appropriate for the purposes of this opinion.
On the basis of the foregoing examination, we advise you that, upon the
(i) Registration Statement becoming effective under the Act, and (ii)
qualification of the Indenture under the Trust Indenture Act of 1939, as
amended, in our opinion:
(1) The Exchange Notes will have been duly authorized and will
constitute valid and binding obligations of the Issuer,
subject to
<PAGE> 2
SC International Services, Inc. 2 October 9, 1997
and the Parties Identified on
Schedule A hereto
applicable bankruptcy, insolvency, reorganization and similar
laws affecting creditors' rights generally and general
principles of equity (regardless of whether such principles
are considered in a proceeding in equity or at law).
(2) The Guarantee of the Exchange Notes by each Guarantor will
have been duly authorized and will constitute a valid and
binding obligation of such Guarantor, subject to applicable
bankruptcy, insolvency, reorganization and similar laws
affecting creditors' rights generally and general principles
of equity (regardless of whether such principles are
considered in a proceeding in equity or at action at law).
The foregoing opinion is limited to the laws of the State of New York
and the General Corporation Law of the State of Delaware.
The foregoing opinions are subject to the qualification that the
enforceability of certain rights, remedies and waivers provided in the
Documents may be unavailable or limited by certain laws and judicial decisions.
In respect of such qualification, however, we are of the opinion that such laws
and judicial decisions do not, subject to the other exceptions and limitations
contained in this letter, make the remedies generally afforded by the Documents
inadequate to permit enforcement of the indebtedness arising thereunder. We note
that the provisions of any Document that permit any person thereunder to take
action or make determinations, or to benefit from indemnities and similar
undertakings of the Issuer or any Guarantor, may be subject to a requirement
that such action be taken or such determinations be made, and that any action or
inaction by such person which may give rise to a request for payment under such
an undertaking be taken or not taken, on a reasonable basis and in good faith.
We consent to the filing of this opinion with the Commission as an
Exhibit to the Registration Statement and to the use of our name under the
caption "Legal Matters" in the Prospectus included therein. Our opinion is
rendered solely for your information in connection with the foregoing, and may
not be relied upon by any other person or for any other purpose without our
prior written consent. In giving this opinion, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Act or the Rules and Regulations of the Commission.
Very truly yours,
/S/ KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP
<PAGE> 3
SCHEDULE A
Caterair International Corporation
Sky Chefs, Inc.
Caterair International Transition Corporation
Onex Ohio Acceptance Corporation
Onex Ohio Finance Corp.
Onex Ohio Finance Corp. II
Onex Ohio Equity Corp.
Onex Ohio Equity Corp. II
Onex Ohio Credit Corp.
Onex Ohio Credit Corp. II
Onex Ohio Capital Corp.
Onex Ohio Capital Corp. II
Onex Ohio Fiscal Corp.
Onex Ohio Fiscal Corp. II
Onex Ohio Funds Corp.
Onex Ohio Funds Corp. II
Sky Chefs International Corp.
JFK Caterers, Inc.
Caterair Consulting Services Corporation
Western Aire Chef, Inc.
Caterair Airport Properties, Inc.
Caterair St. Thomas Holdings Corporation
Sky Chefs Argentine, Inc.
c/o SC International Services, Inc.
524 East Lamar Blvd.
Arlington, Texas 76011
Caterair International, Inc. (II)
6550 Rock Spring Drive
Bethesda, Maryland 20817
Arlington Services, Inc.
Arlington Services Holding Corporation
Bethesda Services, Inc.
Caterair New Zealand Limited
300 Delaware Avenue
Third Floor, Suite 315
Wilmington, Delaware 19801
<PAGE> 1
EXHIBIT 8.1
[KAYE,SCHOLER,FIERMAN,HAYS & HANDLER, LLP LETTERHEAD]
August 28, 1997
SC International Services, Inc.
524 East Lamar Boulevard
Arlington, Texas 76011-3999
Ladies and Gentlemen:
Reference is made to our letter, dated September 20, 1995 (the "1995
OPINION LETTER"), a copy of which is attached hereto, in which we opined that it
was more likely than not that the Lease and License (as such terms are defined
in the 1995 Opinion Letter) will be treated as a true lease and license for
federal income tax purposes and not as conditional purchase arrangements.
Capitalized terms used herein and not otherwise defined have the meanings
ascribed to them in the 1995 Opinion Letter.
Pursuant to your request, this letter supplements the 1995 Opinion
Letter and considers whether there have been any changes in the applicable law
or, to our knowledge, in the facts relating to the activities of OFSI, SCIS, Sky
Chefs, CII, Holdings or Caterair since the date of the 1995 Opinion Letter that
would cause us to alter the opinion expressed therein. Specifically, you have
asked us to consider whether the terms of the arrangements by which SCIS
proposes to issue $300,000,000 aggregate principal amount of 9.25% Senior
Subordinated Notes due 2007 (the "NOTES"), and by which Caterair and SCIS
propose to incur $250,000,000 aggregate
<PAGE> 2
KAYE,SCHOLER,FIERMAN,HAYS & HANDLER, LLP
SC International Services, Inc. 2 August 28, 1997
principal amount of term loan debt, would cause us to alter the opinion provided
in the 1995 Opinion Letter.
In connection with this letter, we have examined (i) the Preliminary
Offering Memorandum, dated August 7, 1997, with respect to the Notes, (ii) the
Indenture, dated as of September 15, 1995, between SCIS, as issuer, CII, Sky
Chefs and Caterair, as guarantors, and The Bank of New York, as trustee,
relating to SCIS' $125,000,000 principal amount of Senior Subordinated Notes due
2005, (iii) the Credit Agreement, dated as of September 29, 1995 and amended and
restated as of August 28, 1997, among SCIS, OFSI, Holdings, Caterair, the
lenders party thereto from time to time in their capacities as lenders
thereunder, Morgan Guaranty Trust Company of New York, as administrative agent,
J.P. Morgan Securities Inc. and Bankers Trust Company, as co-arrangers, Bankers
Trust Company, as syndication agent and The Bank of New York, as co-agent and
(iv) the Term Loan Agreement, dated as of August 28, 1997, among Caterair, SCIS,
the lenders party thereto from time to time in their capacities as lenders
thereunder, Morgan Guaranty Trust Company of New York, as administrative agent,
J.P. Morgan Securities Inc. and Bankers Trust Company, as co-arrangers, and
Bankers Trust Company, as syndication agent, and such other documents that we
considered relevant. We have also reviewed relevant provisions of the Code,
United States Treasury Department regulations issued thereunder, and relevant
judicial decisions and Internal Revenue Service rulings.
Based upon our review of the foregoing, we advise you that we are not
aware of any change in the applicable law or in the facts relating to the
activities of OFSI, SCIS, Sky Chefs,
<PAGE> 3
KAYE,SCHOLER,FIERMAN,HAYS & HANDLER, LLP
SC International Services, Inc. 3 August 28, 1997
CII, Holdings or Caterair since the date of the 1995 Opinion Letter that would
cause us to alter the opinion expressed therein.
We express no opinion concerning federal income tax or other tax
matters relating to the transactions described in the 1995 Opinion Letter or to
the transactions occurring in 1997 that were considered herein except as
expressly set forth above. Our conclusion is based upon current income tax laws
and on current authoritative interpretations, all of which are subject to change
at any time. Any such changes could affect the continuing validity of our advice
contained herein.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an Exhibit to SCIS' Registration Statement on Form S-4
relating to its 9 1/4% Senior Subordinated Notes due 2007 and to the use of our
name under the caption "Legal Matters" in the Prospectus included therein. In
giving this opinion, we do not thereby admit that we are within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the Rules and Regulations of the Securities and Exchange
Commission.
Very truly yours,
/S/ KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP
<PAGE> 4
[KAYE, SCHOLER, FIERMAN, HAYS & HANDLER LETTERHEAD]
September 20, 1995
SC International Services, Inc.
524 East Lamar
Arlington, TX 76011
Gentlemen:
You have asked us for our opinion as to the treatment for federal
income tax purposes of the transactions described below (the "Transactions")
pursuant to which Sky Chefs, Inc., a Delaware corporation ("Sky Chefs"), and
Caterair International, Inc. (II), a Delaware corporation ("CII"), will acquire
the use of, and the right to purchase, certain assets of Caterair International
Corporation, a Delaware corporation ("Caterair").
In connection with this opinion, we have examined the Master Agreement,
dated as of April 26, 1995 (the "Master Agreement"), among Onex Food Services,
Inc., a Delaware corporation ("OFSI"), Caterair, Caterair Holdings Corporation,
a Delaware corporation ("Holdings") and various subsidiaries of OFSI; the Form
of Lease (the "Lease"); the Form of License Agreement (the "License"); the Form
of Purchase Agreement (the "Purchase Agreement"); the Form of Exchange
Agreement; and such other documents that we consider relevant. We have also
reviewed the relevant provisions of the Internal Revenue Code of 1986, as
amended ("Code"), United States Treasury Department regulations issued
thereunder, and relevant judicial decisions and Internal Revenue Service
rulings. In providing our opinion we have assumed that the facts of the
relevant transactions are as summarized below.
STRUCTURE OF THE TRANSACTIONS
CII and Sky Chefs are both wholly-owned subsidiaries of SC
International Services, Inc., a Delaware corporation ("SCIS").
<PAGE> 5
Kaye, Scholer, Fierman, Hays & Handler
SC International
Services, Inc. -2- September 20, 1995
SCIS is a wholly-owned subsidiary of OFSI. Caterair is a wholly-owned
subsidiary of Holdings. Caterair is in the business of catering in-flight meals
for a number of different domestic United States and foreign airlines. The
assets employed by Caterair in its in-flight catering business that will be
leased to CII and Sky Chefs are not limited in use to a particular user, nor
are a significant number of them limited in their use to the business of
in-flight catering. Prior to the closing of the Transactions, Sky Chefs will be
in a similar business in competition with Caterair.
Pursuant to the Purchase Agreement, CII and Sky Chefs will purchase (i)
the tradename of Caterair (ii) the stock of Caterair's subsidiaries, which
operate in-flight catering businesses in jurisdictions outside the United
States (or are holding companies the subsidiaries of which operate such
businesses), and (iii) certain working capital and other liquid operating
assets of Caterair. A designee of OFSI will also purchase a portion of the
debentures of Holdings, currently outstanding, with an original face amount of
approximately $40 million, which call for payments of interest in kind and
which are payable in the year 2001.
Under the Lease, CII and Sky Chefs will lease for a period of six years
all of the fixed assets used by Caterair in its business. The property being
leased by Caterair to CII and Sky Chefs consists in large part of property
located on or affixed to premises (the "Realty") that Caterair leases for use
in its business. In most of these cases, the Realty will be subleased by
Caterair to Sky Chefs and CII for a six-year period and Sky Chefs and CII will
have the right to extend the sublease for the remainder of the term of the
lease that Caterair holds. The rent due under the subleases of the Realty will
equal the rent paid by Caterair under its lease agreements. In some limited
cases, however, the relevant landlord has not granted a consent that, under the
relevant lease, is required to enable Caterair to sublet the Realty in
question. In such cases, Caterair will assign its rights as lessee of the
Realty to CII and Sky Chefs. Caterair will also grant to Sky Chefs and CII the
right to reconvey those leasehold rights to Caterair in the event
<PAGE> 6
KAYE, SCHOLER, FIERMAN, HAYS & HANDLER
SC International
Services, Inc. -3- September 20, 1995
that CII and Sky Chefs do not exercise their option to purchase the leased
assets at the end of the Lease, thereby effecting a return of those assets, and
the Realty on which they are located or affixed, to Caterair at the end of the
Lease. The fixed assets, however, will be subject to the Lease regardless of
whether the relevant Realty is subleased to CII and Sky Chefs or Caterair's
leasehold rights thereto are assigned to them.
Under the License, CII and Sky Chefs will license, for a period of six
years, all of Caterair's customer lists and existing customer contracts. Rent
and royalty payments under the Lease and License will be in amounts that,
according to appraisals prepared by Coopers & Lybrand, L.L.P., whose valuation
experts have acted as appraisers in connection with these transactions, will
equal the fair market rates for such leases and licenses.
Pursuant to the Lease and License, CII and Sky Chefs will have the
option to purchase the assets that are the subject of those agreements at any
time during, and at the end of, the six-year terms thereof. Under the Lease,
the purchase option price is a fixed amount at the end of each year of the
Lease. Each fixed purchase price is the current estimate of what the fair
market value of the assets will be at the time of exercise. Under the License,
the amount of the purchase option price will be determined by applying a
formula designed by Coopers & Lybrand, L.L.P. This formula will entail, in
part, the calculation of the discounted value, as of the date of the exercise
of the purchase option, of projected royalty payments that otherwise would be
payable for the use of the licensed assets.
In connection with the Lease, License and purchase transaction,
Caterair will refinance its existing indebtedness, after reduction for payment
to the holders thereof of all proceeds of the sale of the assets listed above,
with new loans. Caterair's obligations to repay these new obligations will be
secured by a pledge of the payments due under the Lease and License. In
addition, CII, Sky Chefs and certain other affiliates of Sky Chefs will
guarantee repayment of those loans.
<PAGE> 7
KAYE, SCHOLER, FIERMAN, HAYS & HANDLER
SC International
Services, Inc. -4- September 20, 1995
SCIS will also lend funds to Caterair to facilitate the refinancing. It is
expected, and we have assumed for purposes of this opinion, that, after
Caterair's use of its income under the License and Lease to pay amounts due
with respect to this indebtedness, the amount left due to third parties and to
SCIS under these debt obligations will be approximately $57 million and the
fair market value of the assets remaining in Caterair's hands will be
approximately $63 million. Accordingly, CII and Sky Chefs would have to pay
approximately $6 million, in addition to the amount of debts owed to or
guaranteed by CII and Sky Chefs, to exercise their option to acquire those
assets. Holdings is expected to be indebted to a designee of OFSI under its
existing outstanding debentures, in an amount that exceeds such projected $6
million payment.
In addition, Holdings will be recapitalized through the issuance to its
existing shareholders of two new classes of stock: Class B voting common stock,
representing 9.99 percent of the liquidation value of Holdings, and Class A
nonvoting common stock, representing 90.01 percent of the liquidation value of
Holdings. OFSI will acquire 40 percent of the Class B voting common stock of
Holdings, an affiliate of OFSI will acquire 11 percent of the Class B voting
common stock of Holdings, and another affiliate of OFSI will acquire 25 percent
of the Class A nonvoting common stock of Holdings, in exchange for approximately
6 percent of the outstanding stock of OFSI.
DISCUSSION AND ANALYSIS
A. Case Law
The determination of whether a transaction should be treated, for
federal income tax purposes, as a sale or as a lease is governed by the
intention of the parties and the legal effects and economics of their
relationship. See, e.g., Oesterreich v. Commissioner, 226 F.2d 798, 55-2 U.S.
Tax Cas. (CCH) Paragraph 9733 (9th Cir. 1955); see also, M&W Gear Co. v.
Commissioner, 446 F.2d 841, 71-2 U.S. Tax Cas. (CCH) Paragraph 9555 (7th Cir.
1971); Haggard v.
<PAGE> 8
KAYE, SCHOLER, FIERMAN, HAYS & HANDLER
SC International
Services, Inc. -5- September 20, 1995
Commissioner, 241 F.2d 288, 57-1 U.S. Tax Cas. (CCH) Paragraph 9230 (9th Cir.
1956); Lester v. Commissioner, 32 T.C. 711 (1959); Benton v. Commissioner, 197
F.2d 745, 52-1 U.S. Tax Cas. (CCH) Paragraph 9367 (5th Cir. 1952); Rev. Rul.
55-540, 1955-2 C.B. 39. In analyzing that relationship, the courts have
considered a number of objective factors, focussing on the relationship between
the economic terms of the obligations of the parties and the fair market values
of the rights conveyed. Frito-Lay, Inc. v. United States, 209 F. Supp. 886,
62-2 U.S. Tax Cas. (CCH) Paragraph 9809 at p. 86,256 (N.D. Ga. 1962). Factors
indicating an intent to enter into a sale and purchase transaction include the
following:
1. Portions of the periodic payments are made specifically
applicable to equity to be acquired by the lessee.
2. The lessee will acquire title to the property upon
payment of a stated amount of "rentals" that, under the contract, the
lessee is required to make.
3. The total amount that the lessee is required to pay for
a relatively short period of use constitutes an inordinately large
proportion of the total sum required to be paid to secure the transfer
of title to the property.
4. The agreed "rental" payments materially exceed the
current fair rental value of the property. This may be indicative that
the payments include an element other than compensation for the use of
the property.
5. The property may be acquired under a purchase option at
a price that is nominal in relation to the value of the property at the
time when the option may be exercised, as determined at the time of
entering into
<PAGE> 9
KAYE, SCHOLER, FIERMAN, HAYS & HANDLER
SC International
Services, Inc. -6- September 20, 1995
the original agreement, or that is a relatively small amount when
compared with the total payments that are required to be made under the
lease and the option agreement.
6. Some portion of the periodic payments is specifically
designated as interest or is otherwise readily recognizable as the
equivalent of interest.
Universal Drilling Co., Inc. v. United States, 412 F. Supp. 1231, at 1235, 76-1
U.S. Tax Cas. (CCH) Paragraph 9230 (E.D. La. 1976).
It is apparent from the case law that considerable emphasis is placed
on a comparison of the purchase option price and the expected fair market value
of the property at the time of the exercise of the purchase option; American
Realty Trust v. United States, 498 F.2d 1194, 74-2 U.S. Tax Cas. (CCH)
Paragraph 9528 (4th Cir. 1974); Universal Drilling, supra, 412 F. Supp. at
1237; M&W Gear Co., supra; Oesterreich, supra; Gem, Inc. v. United States, 192
F. Supp. 841, 61-1 U.S. Tax Cas. (CCH) Paragraph 9361 (N.D. Miss. 1961); Belz
Investment Co. v. Commissioner, 72 T.C. 1209 (1969); Northwest Acceptance Corp.
v. Commissioner, 58 T.C. 836 (1962); Keeling v. Commissioner, T.C. Memo
1971-224, 30 T.C.M. (CCH) 954 (1971); Cal-Maine Foods, Inc. v. Commissioner,
T.C. Memo 1977-89, 36 T.C.M. (CCH) 383 (1977).
In connection with this analysis, it should be noted that, although
Caterair will be obligated to repay to SCIS an amount equal to a substantial
portion of the projected value of the assets that Caterair will own at the end
of the terms of the Lease and License, it is expected that such value will
exceed the amount of the debt to SCIS by an amount that is at least equal to 10
percent of such projected value. Accordingly, Caterair will continue to have a
stake in the value of its assets, because Sky Chefs and CII could choose not to
exercise their purchase options, in which case Caterair would be left with any
value of those assets in excess of the amount owed to SCIS.
<PAGE> 10
KAYE, SCHOLER, FIERMAN, HAYS & HANDLER
SC International
Services, Inc. - 7 - September 20, 1995
It has been represented to us, and we assume for purposes of this
opinion, that the option prices under the Lease and the License reflect the
parties' good faith estimate of the expected fair market values of the
properties subject to those agreements at the time of exercise, that there is a
significant possibility that the purchase options will not be exercised, and
that the rent and royalty payments under the Lease and the License reflect the
parties' good faith estimates of the fair market rental and royalty values for
the properties subject to those agreements.
B. Leasing Guidelines
The Internal Revenue Service has published guidelines for determining,
for advance ruling purposes, whether leveraged lease transactions are leases
for federal income tax purposes. These guidelines are set forth in Revenue
Procedure 75-21, 1975-1 C.B. 715, as further delineated in Revenue Procedure
75-28, 1975-1 C.B. 752, and as modified in Revenue Procedure 76-30, 1976-2 C.B.
647, and Revenue Procedure 79-48, 1979-2 C.B. 529. The standards set forth in
these guidelines represent, in effect, safe harbors for qualification of a
transaction as a lease. An arrangement that does not meet all of these
guidelines may still be treated by the Internal Revenue Service or by the
courts as a lease even if the Service would not rule in advance that such
treatment would apply.
The Transactions reflect many indicia of true leases and licenses even
though they do not meet all of the requirements set forth in the Internal
Revenue Service's advance ruling guidelines. In particular, the guidelines
require that the parties expect that at the end of the lease term the property
will have a value equal to at least 20 percent of its original fair market
value and a remaining useful life equal to at least 20 percent of its original
useful life. Although these standards will not be met in this case, the
appraisals provided by Coopers & Lybrand, L.L.P. state, and we assume for
purposes of this opinion, that the assets subject to the Lease and License are
expected to have significant value and remaining useful life at the end of the
terms of those agreements.
<PAGE> 11
KAYE, SCHOLER, FIERMAN, HAYS & HANDLER
SC International
Services, Inc. -8- September 20, 1995
Under the guidelines, the Internal Revenue Service will not rule
favorably if the lessee (or an affiliate of the lessee) provides financing for
the lessor's purchase of the leased assets or guarantees the lessor's
indebtedness incurred to acquire the leased assets. Under this guideline, it is
likely that no ruling would be available for the Transactions because SCIS is
providing a loan to Caterair and SCIS and its affiliates are guaranteeing
Caterair's indebtedness to third parties. Nonetheless, these loans are expected
to be repaid fully out of rent and royalty payments under the Lease and License
on a basis that leaves Caterair with a real equity interest in the leased and
licensed assets, so a failure of the Transactions to meet the guidelines in this
respect should not adversely affect the treatment of these arrangements as a
true lease and license.
C. Acquisition of Holdings
Stock and Debt
The acquisition by OFSI of the stock of Holdings should have no effect
on the treatment of the Lease and License transactions. There exists no
authority that requires any change in the analysis of a lease or license
transaction due to a purchase of the equity of the lessor or licensor (or its
parent corporation) by the lessee. Indeed, in a number of circumstances
transactions between related parties have been respected as leases, despite the
relationship between the lessor and lessee, as long as payments among the
parties are at arm's length amounts. See, e.g., Tillotson v. Comm'r, 202 F.
Supp. 925 (D. Neb. 1962); Southern Ford Tractor Corp. v. Comm'r, 29 T.C. 833
(1958), acq. 1958-2 C.B. 7; Joseph N. Neel Co. v. Comm'r, 22 T.C. 1083 (1954),
acq. 1954-2 C.B. 5. Furthermore, although, through its ownership of the
existing Holdings debentures, a designee of OFSI would be entitled to an amount
that exceeds the projected residual value of the assets subject to the Lease
and License, such entitlement does not alter the nature of the transactions
between Sky Chefs and CII and Caterair. Accordingly, we do not believe that
OFSI's acquisition of Holding's stock or the acquisition of Holdings debentures
by a designee of OFSI should have any effect on the treatment of these
transactions as, in part, a true lease and license.
<PAGE> 12
KAYE, SCHOLER, FIERMAN, HAYS & HANDLER
SC International
Services, Inc. - 9 - September 20, 1995
CONCLUSION
Based on the foregoing, it is our opinion that it is more likely than
not that the Lease and License will be treated as a true lease and license for
federal income tax purposes and not as conditional purchase arrangements.
We express no opinion concerning federal income tax or any other tax
matters relating to the above-described transactions except as expressly set
forth above. Our opinion is based on current income tax laws and on current
authoritative interpretations, all of which are subject to change at any time.
Any such changes could affect the continuing validity of the opinion contained
herein.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an Exhibit to Amendment No. 1 to SCIS's Registration
Statement relating to its Senior Subordinated Notes Due 2005 and to the use of
our name under the caption "Legal Matters" in the Prospectus included therein.
In giving this opinion, we do not thereby admit that we are within the category
of persons whose consent is required under Section 7 of the Securities Act of
1933 or the Rules and Regulations of the Securities and Exchange Commission.
Very truly yours,
/s/ KAYE, SCHOLER, FIERMAN, HAYS & HANDLER
<PAGE> 1
EXHIBIT 8.2
[PRICE WATERHOUSE LLP LETTERHEAD]
August 28, 1997
Mr. Patrick Tolbert
Executive Vice-President & Chief Financial
and Administrative Officer
Onex Food Services, Inc.
524 East Lamar
Arlington, Texas 76011
Dear Mr. Tolbert:
OPINION ON THE TAX TREATMENT OF THE BUSINESS COMBINATION
OF CATERAIR AND ONEX FOOD SERVICES, INC. AND
SUBSEQUENT DEBT REFINANCING
You have requested our opinion regarding the federal tax consequences to Onex
Food Services, Inc. ("OFSI"), SC International Services, Inc.("SCIS"), Caterair
Holdings Corporation ("Holdings") and Caterair International Corporation
("Caterair") of certain aspects of the following transactions:
1. The business combination of OFSI and Caterair which was completed during
1995;
2. The refinancing of debt of SCIS and Caterair which is to be completed
during 1997.
ISSUES
Specifically, you have asked us to address the following issues:
1. Whether the lease of the Caterair domestic operating assets by Sky Chefs
and CII constitutes a valid operating lease for tax purposes;
2. Whether the accrued interest on the Host PIK note acquired by OFSI is
properly deductible by Holdings for federal tax purposes; and,
3. Whether the acquisition of the Caterair trade name and trademark is
subject to the anti-churning rules of Section 197.
CONCLUSIONS
Based on the facts, assumptions and representations contained herein, our
opinion is as follows:
1. The lease of the domestic operating assets of Caterair by Sky Chefs, Inc.
("Sky Chefs") and Caterair International Inc. ("CII") constitutes a valid
operating lease for tax purposes resulting in current deductions for lease
payments under the lease agreement. The lease
<PAGE> 2
Mr. Patrick Tolbert
Page 2 [LOGO]
August 28, 1997
may not meet all of the criteria in the Internal Revenue Service's
leveraged lease advanced ruling guidelines. However, it still constitutes
a valid operating lease for tax purposes.
2. Assuming the accrued interest was otherwise deductible under federal
income tax law, it is more likely than not that the accrued interest
payable on the Holdings PIK note is deductible by Holdings.
3. The anti-churning rules of IRC Section 197(d)(9) do not apply to the
acquisition by CII of the trademark and trade name from Caterair.
SCOPE
In connection with our opinion, we have reviewed the relevant provisions of the
Internal Revenue Code of 1986, as amended, United States Treasury Department
regulations issued thereunder, relevant judicial decisions, and Internal Revenue
Service rulings and procedures. We understand the facts to be as summarized
below. We have relied on the representations provided to us as summarized
herein.
BUSINESS COMBINATION STRUCTURE
The following is a summary of the relevant facts related to the business
combination based on information which you have furnished to us:
1. OFSI is a domestic corporation providing in-flight meal service to the
airline industry through its operating subsidiary, Sky Chefs. Onex
Corporation ("Onex"), a Canadian investment company, is the majority
shareholder of OFSI.
2. Caterair is a domestic corporation that, prior to the business
combination, provided in-flight meal service to the airline industry
worldwide through numerous subsidiaries and joint ventures. Caterair is a
wholly owned subsidiary of Holdings. Prior to the business combination,
Holdings was controlled by several shareholders including Carlyle Group
L.P. and Host-Marriott Corporation ("Host").
3. OFSI formed SCIS and CII to execute the business combination. SCIS and CII
are U.S. corporations. Sky Chefs and CII are wholly owned domestic
subsidiaries of SCIS.
4. Sky Chefs and CII purchased the net working capital of Caterair, including
receivables due from the foreign subsidiaries. Affiliates of CII and Sky
Chefs also purchased the stock of certain of Caterair's subsidiaries. An
affiliate of CII purchased the Caterair trade name. The purchase price of
the trade name and the foreign subsidiaries was equal to fair market value
as determined in a valuation report prepared by Coopers & Lybrand L.L.P.
5. Through a combination of lease, sublease, and royalty agreements with
Caterair, Sky Chefs and CII leased the domestic operating assets,
sub-leased real property, and licensed Caterair's customer lists and
customer contracts. The annual lease payments and license payments
represent fair market rates as determined in the valuation report prepared
by Coopers & Lybrand L.L.P.
6. The stated lease and license terms are six years. Sky Chefs and CII have
the option to purchase the leased and licensed assets at each annual
anniversary and at the end of the
<PAGE> 3
Mr. Patrick Tolbert
Page 3
August 28, 1997
lease term at the assets' estimated fair market value as determined in the
valuation report prepared by Coopers & Lybrand L.L.P.
7. From Host, OFSI received an unsecured PIK note due from Holdings in
exchange for a 5 percent equity interest in OFSI. The note is due in 2001
with interest payable quarterly at 16.25 percent in cash or by the
issuance of additional Holdings interest debentures. At acquisition, the
principal amount of the note was approximately $44 million and the
interest debentures totaled approximately $72 million. In December 1995,
the note and interest debentures were sold by OFSI to Renex Corporation, a
subsidiary of Onex.
8. SCIS loaned Caterair approximately $38 million in the form of a PIK note.
The loan will mature during 2001 and bears interest at the rate of 8
percent per annum.
9. Onex acquired 11 percent of the Class B voting common stock of Holdings
and OFSI acquired 40 percent. The combined 51 percent ownership represents
less than 50 percent of the value of Holdings.
10. At the time of the business combination, Caterair refinanced its
indebtedness by entering into new loan agreements. Caterair's obligation
to pay its refinanced debt was secured by a pledge of the payments due
under the lease and license agreements. SCIS and various of its
subsidiaries guaranteed repayment of the loans. Caterair is a guarantor of
the loans entered into by SCIS at the time of the business combination.
REFINANCING STRUCTURE
The following is a summary of the relevant facts related to the 1997 refinancing
transaction based on information which you have furnished to us:
1. Caterair will incur new debt in the amount of $160 million. The proceeds
of the new debt will be used to repay existing bank debt of approximately
$156 million.
2. The new debt will be a senior secured floating rate loan facility which
will have fixed periodic repayments of $400,000 per quarter and a balloon
payment due at the end of the term. The debt will carry a floating
interest rate which is expected to be lower than that of the existing bank
debt.
3. The new debt will mature in 2007. The current lease between Caterair and
Sky Chefs/CII expires September 30, 2001.
4. At the date the current lease expires:
a. SCIS may assume the debt or;
b. Sky Chefs/CII may exercise the purchase option or;
c. Caterair may extend the existing lease to Sky Chefs/CII or;
d. Caterair may lease the assets to a third party or;
e. Caterair may sell the assets and reinvest the proceeds in
productive assets of a kind used or usable in the business of
SCIS and its subsidiaries. These productive assets may be
leased to Sky Chefs/CII or a third party.
5. If Sky Chefs/CII chooses to exercise its option to purchase the assets
currently leased or licensed from Caterair, Sky Chefs/CII may assume the
debt of Caterair as part of the
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Mr. Patrick Tolbert
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August 28, 1997
purchase price of the assets. Sky Chefs/CII will not be required to assume
the debt of Caterair upon exercise of the purchase option. If Sky
Chefs/CII exercises the purchase option and does not assume the debt of
Caterair, Caterair will be required to repay the debt in full.
6. Repayment of the existing bank debt is guaranteed by SCIS and certain of
its subsidiaries. The new debt will also be guaranteed by SCIS and certain
of its subsidiaries.
7. There will be an additional $390 million of debt incurred by SCIS that
will be guaranteed by Caterair.
REPRESENTATIONS
The following representations have been made in connection with the
transactions:
1. There is no present plan or intention for an acceleration of the lease
term by means of a purchase of the leased assets prior to the end of the
stated lease term
2. The lease of the domestic assets of Caterair by Sky Chefs and CII is an
operating lease under the provisions of Generally Accepted Accounting
Principles and has been treated as such since inception of the lease and
will continue to be treated as such immediately after the refinancing
occurs.
3. The amount of annual lease payment does not materially exceed the fair
rental value of the underlying assets.
4. The purchase option at the end of the lease term is not a bargain purchase
option.
5. No part of any lease payments made under this transaction is specifically
designated as interest or is otherwise readily recognizable as the
equivalent of interest.
6. For purposes of determining the tax treatment of the lease, we are relying
on a valuation performed by Coopers & Lybrand L.L.P. of the leased assets
at lease inception and at lease end.
7. Valid business reasons exist for the lease structure.
8. Caterair is managed as a viable business with profit motives. As such,
management intends to manage the business such that Caterair's debt does
not exceed the fair market value of its assets.
9. The financial position of Caterair and Holdings is not materially
different than anticipated at September 19, 1995.
ANALYSIS OF LAW
Operating Lease v. Conditional Sale
Internal Revenue Code (IRC) Section 162(a) provides that a deduction is allowed
for all ordinary and necessary expenses incurred or paid during the taxable
year, including rental payments. In determining if a taxpayer is entitled to a
deduction for payments claimed to be
<PAGE> 5
Mr. Patrick Tolbert
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August 28, 1997
rentals, it is necessary to determine that the transaction is not in fact a
conditional sale. A conditional sale will occur if the taxpayer has acquired or
will acquire an equity interest in the leased assets.
The intent of the parties as well as the facts and circumstances of each
situation determine whether a transaction is a lease or a conditional sale.
Additionally, in Rev. Rul. 55-540, 1955-2 C.B. 39, the Internal Revenue Service
("the Service") has set forth six criteria which may generally be applied in
determining if a lease will be treated as a conditional sale.
A lease is generally treated as a conditional sale for tax purposes if any one
of six criteria set forth in the revenue ruling are met. The six criteria that
indicate a conditional sale and their applicability to the transactions in
question are as follows:
1. Portions of the periodic payments are made specifically applicable to an
equity [interest] to be acquired by the lessee.
No part of the lease payments will be applied to an equity ownership in
the leased assets. Sky Chefs/CII have the option to purchase the leased
assets at each annual anniversary and at the end of the lease term at the
assets' estimated fair market value as determined in the valuation report
prepared by Coopers & Lybrand L.L.P. at the inception of the lease. The
subsequent refinancing of debt during 1997 does not modify the terms of
the purchase option and does not cause the lease to violate this
criterion.
2. The lessee will acquire title upon the payment of a stated amount of
"rentals" which under the contract he is required to make.
If Sky Chefs/CII choose to acquire the assets, they must pay the option
price in addition to rental payments due through the option date. The
subsequent refinancing of debt during 1997 does not change this
requirement and does not cause the lease to violate this criterion.
3. The total amount which the lessee is required to pay for a relatively
short period of use constitutes an inordinately large proportion of the
total sum required to be paid to secure the transfer of the title.
The terms of the lease do not apply rental payments to an ownership
interest in the assets. Further, as discussed below, Sky Chefs/CII are not
economically compelled to purchase the assets. The subsequent refinancing
of debt during 1997 does not change this term and does not cause the lease
to violate this criterion.
4. The agreed "rental" payments materially exceed the current fair rental
value.
Based on a valuation prepared by Coopers & Lybrand L.L.P. at lease
inception the amount of the lease payments do not exceed the fair rental
value of the property. The amount of the annual rental payments are not
changed by the 1997 refinancing arrangement. The refinancing does not
cause the lease to violate this criterion.
<PAGE> 6
Mr. Patrick Tolbert
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August 28, 1997
5. The property may be acquired under a purchase option at a price which is
nominal in relation to the value of the property at the time when the
option may be exercised, as determined at the time of entering into the
original agreement, or which is a relatively small amount when compared
with the total payments which are required to be made.
Sky Chefs/CII have the option to purchase the leased assets at each annual
anniversary and at the end of the lease term at the assets' estimated fair
market value as determined in the valuation report prepared by Coopers &
Lybrand L.L.P. at the inception of the lease. The 1997 refinancing does
not modify the terms of the purchase option and does not cause the lease
to violate this criterion.
6. Some portion of the periodic payments is specifically designated as
interest or is otherwise readily recognizable as the equivalent of
interest.
The lease agreement as originally executed does not deem any portion of
the rental payments to be interest. The 1997 refinancing does not modify
this term and does not cause the lease to violate this criterion.
As noted above, several of the criteria of Rev. Rul. 55-540 hinge on whether the
lessee is economically compelled to exercise the purchase option. Such
compulsion might arise where the value of a lessor's note payable to the lessee
exceeds the fair market of the leased assets.
The terms of the existing debt require fixed periodic repayment. Under these
terms, the total Caterair debt at the end of the lease term (including balances
owed to SCIS and its subsidiaries and to third party lenders) is projected to be
amortized to an amount lower than the estimated fair market value of Caterair's
total assets at the end of the lease term. Thus, Caterair would continue to have
an economic equity interest in the value of its assets under the existing debt
arrangement. Further, Sky Chefs/CII would not be economically compelled to
exercise the purchase option to perfect SCIS's economic interest in the PIK
note.
The new debt will have fixed periodic repayments of $400,000 per quarter and a
balloon payment due at the end of the term. Therefore, it is possible that the
debt balance owed by Caterair could exceed the fair market value of the existing
lease assets at the end of the lease term. However, the terms of the new debt
will allow Caterair to use excess cash to purchase additional assets and lease
them to SCIS and its subsidiaries. Caterair is also allowed to lease or sell the
assets to a third party at the end of the lease term, or to extend the term of
the lease to Sky Chefs/CII. The terms of the new debt also permit principal
prepayment without penalty. Thus, Caterair has several alternatives to make an
economic profit as a leasing company and to generate sufficient cashflow to
service the debt. While the amortization of the debt balance is less certain
under the new debt arrangement, Caterair continues to have the capacity and
resources to operate its business in a manner that will allow it to adequately
service its debt and retain its economic equity interest in the assets.
As was the case with the existing bank debt, the new debt will be guaranteed by
SCIS and various of its subsidiaries. However, this guarantee does not
economically compel Sky Chefs/CII to exercise the purchase option at the end of
the lease term.
<PAGE> 7
Mr. Patrick Tolbert
Page 7
August 28, 1997
Leveraged Leases
Rev. Proc. 75-21, 1975-1 C.B. 715, sets forth guidelines that the Internal
Revenue Service will use for advance ruling purposes in determining whether a
leveraged lease transaction will be treated as a lease for federal income tax
purposes. An arrangement that does not meet all of the criteria of the revenue
procedure may still be treated as a lease. However, the Service would not issue
an advance ruling regarding the treatment.
According to Rev. Proc. 75-21, the Service will not give a favorable advance
ruling if the lessee or an affiliate of the lessee provides financing for the
lessor's purchase of the leased assets or guarantees indebtedness created in
connection with the acquisition of the property by the lessor. Since SCIS and
its subsidiaries are guaranteeing Caterair's indebtedness, and SCIS has made a
loan to Caterair, it is probable that the Service would not issue a favorable
advance ruling on the transaction.
The lease in question may not meet all of the criteria necessary for an advance
ruling. Nevertheless, it still constitutes an operating lease as reiterated in
our analysis of Rev. Rul. 55-540.
Accrual and Deduction of Interest Payment on Holdings Senior Debenture
In order to deduct interest expense on the accrual basis for tax purposes, both
the "all events" test and the "economic performance" test must be satisfied.
Even if the taxpayer meets the requirements of both tests, the taxpayer may not
deduct the interest expense if there is no reasonable expectation of payment on
the underlying obligation.
The all events test is defined in United States v. Anderson, 269 U.S. 422 (1926)
which provides that an accrual basis taxpayer is entitled to deduct an item as
an expense when all events have occurred which establish the fact of the
liability and the amount thereof can be determined with reasonable accuracy. The
interest due under the Holdings Senior Debenture meets the all events test. It
is an obligation with a fixed maturity date no later than 2001 and the amount
due is determinable based on the specified interest rate of 16.25 percent.
Regulation Section 1.461-4(e) provides that in the case of interest, economic
performance occurs as the interest cost economically accrues. Thus, economic
performance is met for the Holdings interest as it accrues.
Even if both of the above tests are met, a deduction for interest expense is
still not allowed if a taxpayer's financial condition is such that there is no
reasonable expectation that the amount will ever be paid. Case law has
consistently held that temporary insolvency will not prevent the accrual, while
abject insolvency will prevent an accrual.
In Zimmerman v. Commr., 130 F2d 1011 (CA-8, 1942), the Court overruled a
decision of the Board of Tax Appeal which disallowed a deduction for accrued
interest payable by a taxpayer in poor financial condition. The Court states
"where interest actually accrues on a debt of a taxpayer in a tax year, the
statute plainly says he may deduct it. That he has not intention or expectation
of paying it, but must go into bankruptcy as this taxpayer was obliged to do,
can not of itself justify denial of deduction." Further, Zimmerman held that the
"reasonable expectancy" standard which determines when interest income must be
accrued does not apply to the accrual of interest expense.
<PAGE> 8
Mr. Patrick Tolbert
Page 8
August 28, 1997
In Panhandle Refining Comp. v. Commr., 45 B.T.A. 651 (1941), an interest expense
deduction was allowed when Panhandle had liabilities greater than its assets,
but owned property of a value of several million dollars, was widely engaged in
business, and had a large income from producing and refining oil. The Court held
that although there was a strong contingency surrounding the payments, the mere
existence of the contingency did not in itself indicate that the debtor is not
entitled to accrue and deduct interest on its liabilities.
In Edward L. Cohen v. Commr., 21 T.C. 855 (1954), the Court allowed a deduction
for accrued interest by a taxpayer in poor financial condition. In reaching this
decision, the Court relied on the general rule "deductions for accrued interest
are proper where it can not be categorically said at the time these deductions
were claimed that the interest would not be paid, even though the course of
conduct of the parties indicated that the likelihood of payment of any part of
the disallowed portion was extremely doubtful."
Likewise, Rev. Rul. 70-367, 1970-2 C.B. 37, addresses the issue of whether a
company is entitled to deduct accrued interest when the financial condition of
the company is such that it is not reasonably expected that it will be able to
pay interest. In the ruling, the Service determined that interest on the debt of
a railroad company in bankruptcy was accruable and deductible until the debt was
extinguished by a plan of reorganization. This conclusion was reached even
though it was unlikely that the full amount would ever be paid.
Based on the above analysis, it is more likely than not that the accrued
interest on the Holdings Senior Debenture is deductible by Holdings. Our
conclusion is reached notwithstanding cases to the contrary in which the facts
are distinguishable (Continental Vending Machine Co., 77-1 USTC 9121 [D.C. NY,
1976], Guardian Investment Corp., 253 F.2d 326 [CA-5, 1958], Prudence Securities
Corp., 135 F. 2d 340 [CA-2, 1943]). While Holdings' financial condition may be
weak, it is not in abject insolvency. Holdings owns a subsidiary with a
continuing business with existing contracts. There is no legal contingency which
relieves Holdings of its liability to pay the interest. The subsequent sale by
OFSI of the Holdings Senior Debenture does not change the terms of the Holdings
Senior Debenture and does not impact Holdings' liability to pay the interest.
Section 267 requires the matching of deductions and income in the case of
transactions between related parties. In accordance with Section 267(a)(2), if
the taxpayer to whom a payment is made does not include such amount in income
until it is paid, the taxpayer for whom the amount is deductible cannot take the
deduction until it is paid. Section 267(a)(3) operates analogously where one of
the related parties is a foreign person.
Section 267(f) states that in determining if two corporations are related, the
controlled group definition of Section 1563(a) is applicable with "more than 50
percent" substituted for "more than 80 percent." Section 1563(a)(1), as adapted
by Section 267(f), requires that more than 50 percent of the voting power or
value of the parties be held by a common parent. Section 1563(e)(4) attributes
stock owned by a corporation from such corporation to its shareholders in a
ratio equal to the proportion of the value of such corporation's stock held by
the shareholder over the total value of stock such corporation has outstanding.
Onex owns 76.20 percent of OFSI and 11.00 percent of Holdings. OFSI owns 40.00
percent of Holdings. Thus, Onex is deemed to own 41.48 percent of Holdings
(30.48 percent through
<PAGE> 9
Mr. Patrick Tolbert
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August 28, 1997
OFSI and 11.00 percent directly). This total is less than 50 percent and is not
sufficient to comprise a controlled group for purposes of Section 267. Because
the percentage value of the Holdings stock is less than the voting power, the
value test will create a percentage less than 41 percent and has not been
computed.
Based on the above analysis, Holdings is not considered a member of the Onex
controlled group for purposes of Section 267. For purposes of Section 267,
Holdings is not treated as related to either OFSI or Renex Corporation, the
subsequent acquirer of the Holdings Senior Debenture. Thus, the rules of Section
267 do not apply and do not limit the deductibility of the Holdings interest
expense.
Section 197 Antichurning Rules
IRC Section 197(a) provides that a taxpayer will be entitled to an amortization
deduction with respect to any Section 197 intangible over a 15 year period.
Section 197 intangibles are generally defined as acquired intangible assets
including goodwill, going concern value, customer-based intangibles, covenant
not to compete, franchise, trademark and trade name. Prior to the amendment of
Section 197 in 1993, goodwill and going concern value were not amortizable
assets for federal income tax purposes.
The anti-churning rules of Section 197 disallow amortization of certain
intangibles acquired in related party transactions. Section 197(f)(9) provides
that a Section 197 intangible shall not include an acquired intangible that was
held or used at any time after July 25, 1991 by the taxpayer or a related person
for which depreciation or amortization would not be allowed except by operation
of amended Section 197. Thus, the anti-churning rules will not apply to a
related party transaction if the acquired intangible asset was amortizable under
prior law. For purposes of the anti-churning rules, a "related person" is
defined under Section 267(b), except that, in applying Section 267(b)(2), "20
percent" is substituted for "50 percent".
Section 197(f)(9)(A) states that, for purposes of the anti-churning rules,
deductions allowable under Section 1253 shall be treated as deductions allowable
for amortization without regard to Section 197 as currently enacted. As provided
by footnote 31 in the legislative history to the 1993 enactment of Section 197,
"amounts that are properly deductible pursuant to Section 1253 under present law
are to be treated for purposes of the anti-churning provisions as amounts for
which depreciation or amortization is allowed under present law." The reference
to present law Section 1253 would include Section 1253(d)(2) and (3), as in
effect prior to the 1993 changes to Section 1253.
Section 1253(d)(3), prior to its amendment in 1993, provides for an election by
the taxpayer to recover over 25 years the amount of any lump sum payment in
excess of $100,000 made with respect to a transfer of a franchise, trade name,
or trademark subject to Section 1253(a). Presumably, a taxpayer would make such
an election unless the amount charged to the capital account of the franchise,
trade name or trademark pursuant to Section 1253(d)(3) was recoverable over a
shorter period by proving a useful life for the franchise, trade name, or
trademark. Note that Congress repealed Section 167(r) in 1989 which, prior to
its repeal, disallowed any deduction or amortization with respect to trade name
or trademark expenditures, thereby allowing for amortization of such
expenditures if a value and useful life could be proven.
<PAGE> 10
Mr. Patrick Tolbert
Page 10
August 28, 1997
Section 1253(a) applies to transfers in which the transferor retains "any
significant power, right, or continuing interest" with respect to the
transferred property. In accordance with Section 1253(b)(2)(A), a significant
power, right, or continuing interest includes a right to disapprove any
assignment of such interest. In the proposed transaction, Caterair has the right
to prevent OFSI or any OFSI entity from assigning or otherwise transferring the
Caterair trade name and trademark. Thus, Caterair retains a significant power,
right, or continuing interest and Section 1253(a) applies to the proposed
transaction.
The trademark and trade name transferred under the proposed transaction are
subject to deductions allowable under Section 1253. Thus, the amounts paid for
Caterair's trade name and trademark are not subject to the anti-churning rules
and are amortizable under Section 197.
SUBSTANTIAL AUTHORITY
Providing the facts, assumptions, and representations contained herein are
correct, there is substantial authority, within the meaning of Section 6662 of
the Code for the conclusions.
CAVEATS AND LIMITATIONS
Our opinion is based on the facts, assumptions and representations as set forth
above. Such conclusions are null and void if these facts, assumptions or
representations are other than as stated.
Our opinion is based on our interpretation of the relevant provisions of the
Code and regulations, IRS rulings and pertinent court decisions and is not
binding upon the IRS, any other administrative body, or the courts. Our views
may be altered by subsequent judicial or regulatory actions and an assessment of
the impact any proposed legislation might have on our opinion. We are not
responsible for updating our opinion for changes in the law, unless otherwise
engaged to do so.
This opinion is limited solely to the Federal income tax consequences as
expressed above, and no opinion has been rendered with respect to state, local,
or foreign tax consequences. No opinion is expressed about the tax consequences
with respect to any other taxpayers that are not specifically covered by the
opinions expressed in this letter. Therefore, such taxpayers should consult with
their own tax advisers as to the potential tax risks involved. Our opinion is
rendered solely for your information in connection with the foregoing and may
not be relied upon by any other person other than BT Securities Corporation, J.
P. Morgan Securities Inc., Credit Suisse First Boston Corporation, Goldman,
Sachs & Co., Smith Barney Inc. and Bankers Trust International PLC
(collectively, the "Initial Purchasers"), as Initial Purchasers under the
Purchase Agreement dated as of August 22, 1997 by and among the Initial
Purchasers, SCIS, as issuer and Caterair and the other guarantors named therein
as guarantors (collectively, the "Guarantors") relating to the issuance and sale
to the Initial Purchasers of $300,000,000 of SCIS' 91/4% Senior Subordinated
Notes due 2007, guaranteed by the Guarantors, and the lenders under the Term
Loan Agreement among SCIS, Caterair, Bankers Trust Company, J. P. Morgan
Securities, Inc., and Morgan Guaranty Trust Company, who may expressly rely
thereon, or for any other purpose without our prior written consent.
<PAGE> 11
Mr. Patrick Tolbert
Page 11
August 28, 1997
CONSENT
We consent to the inclusion in this Registration Statement on Form S-4 of our
opinion dated August 28, 1997 on the tax issues related to the structure of this
transaction.
Sincerely,
/s/ Price Waterhouse LLP
- ------------------------
Price Waterhouse LLP
<PAGE> 1
EXHIBIT 10.1
SC INTERNATIONAL SERVICES, INC.
$300,000,000 9 1/4% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
August 22, 1997
BT Securities Corporation
J.P. Morgan Securities Inc.
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Smith Barney Inc.
Bankers Trust International PLC
c/o BT Securities Corporation
One Bankers Trust Plaza
New York, New York 10005
Ladies and Gentlemen:
SC International Services, Inc., a Delaware corporation (the
"Issuer"), Sky Chefs, Inc., a Delaware corporation ("Sky Chefs"), Caterair
International, Inc. (II), a Delaware corporation ("CII"), each of the other
wholly owned domestic subsidiaries of the Issuer identified on the signature
pages hereof (the "Additional Guarantors") and Caterair International
Corporation, a Delaware corporation ("Caterair"), hereby confirm their agreement
with you (the "Initial Purchasers"), as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Issuer proposes to issue and sell to the Initial Purchasers
$300,000,000 aggregate principal amount of its 9 1/4% Senior Subordinated Notes
due 2007 (the "Notes"). The Notes will be unconditionally guaranteed (the
"Guarantees") on a joint and several basis by each of Sky Chefs, CII, the
Additional Guarantors and Caterair (collectively, the "Guarantors"). The Notes
and the related Guarantees will be issued pursuant to an Indenture (the
"Indenture") by and among the Issuer, the Guarantors and The Bank of New York,
as trustee (the "Trustee"). The Notes and the related Guarantees are hereinafter
referred to collectively as the "Securities."
<PAGE> 2
-2-
The Securities are being issued and sold in connection with the
repayment and retirement of the Issuer's and Caterair's term loan indebtedness
under the Credit Agreement, dated as of September 29, 1995, among the Issuer,
Caterair, Caterair Holdings, Onex Food Services, Inc. and the lenders named
therein (the "Existing Credit Agreement"). The financing will consist of a
senior secured revolving credit agreement among the Issuer, certain other
parties and certain lenders (the "SCIS Credit Agreement") and a senior secured
credit agreement among Caterair, the Issuer, certain other parties and certain
lenders (the "Caterair Credit Agreement," and together with the SCIS Credit
Agreement, the "Senior Bank Financing").
The Securities will be offered and sold to you without being
registered under the Securities Act of 1933, as amended (the "Act"), in reliance
on exemptions therefrom.
In connection with the sale of the Securities, the Issuer has
prepared a preliminary offering memorandum, dated August 7, 1997 (the
"Preliminary Memorandum"), and a final offering memorandum, dated August 22,
1997 (the "Final Memorandum," the Preliminary Memorandum and the Final
Memorandum each herein being referred to as a "Memorandum"), setting forth or
including a description of the terms of the Securities, the terms of the
offering of the Securities, a description of the Issuer and any material
developments relating to the Issuer occurring after the date of the most recent
historical financial statements included therein.
The Issuer and the Guarantors understand that the Initial Purchasers
propose to make an offering of the Securities only on the terms and in the
manner set forth in the Final Memorandum and Section 8 hereof as soon as the
Initial Purchasers deem advisable after this Agreement has been executed and
delivered, to persons in the United States whom the Initial Purchasers
reasonably believe to be qualified institutional buyers ("Qualified
Institutional Buyers" or "QIBs") as defined in Rule 144A under the Act, as such
rule may be amended from time to time ("Rule 144A"), in transactions under Rule
144A, and outside the United States to certain persons in reliance on Regulation
S under the Act.
The Initial Purchasers and their direct and indirect transferees of
the Securities will be entitled to the benefits of the Registration Rights
Agreement (the "Registration Rights Agreement"), pursuant to which the Issuer
and the Guarantors have agreed, among other things, to file a registration
statement (the "Registration Statement") with the Securities and Ex-
<PAGE> 3
-3-
change Commission (the "Commission") registering the Exchange Notes (as defined
in the Registration Rights Agreement) under the Act. Sky Chefs, CII and the
Additional Guarantors are hereinafter referred to collectively as the
"Subsidiary Guarantors." The Purchase Agreement (this "Agreement"), the Notes,
the Guarantees, the Exchange Notes, the Indenture and the Registration Rights
Agreement are hereinafter referred to collectively as the "Operative Documents."
2. Representations and Warranties. The Issuer and the Guarantors,
jointly and severally, represent and warrant to and agree with each of the
Initial Purchasers that:
(a) Neither the Preliminary Memorandum as of the date thereof
nor the Final Memorandum nor any amendment or supplement thereto as of
the date thereof and at all times subsequent thereto up to the Closing
Date (as defined in Section 3 below) contained or contains any untrue
statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that
the representations and warranties set forth in this Section 2(a) do
not apply to statements or omissions made in reliance upon and in
conformity with information relating to any of the Initial Purchasers
furnished to the Issuer in writing by the Initial Purchasers expressly
for use in the Preliminary Memorandum, the Final Memorandum or any
amendment or supplement thereto.
(b) Each of the Issuer and its subsidiaries set forth under
the caption "Subsidiaries" on Schedule A hereto (the "Issuer
Subsidiaries") and each of Caterair and its subsidiaries set forth
under the caption "Subsidiaries" on Schedule A hereto (the "Caterair
Subsidiaries" and collectively with the Issuer Subsidiaries, the
"Subsidiaries" and each, a "Subsidiary") has been duly incorporated and
is validly existing in good standing as a corporation under the laws of
its jurisdiction of incorporation, with all requisite corporate power
and authority to own or lease its properties and conduct its businesses
as now conducted as described in the Final Memorandum, and is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions where the ownership or leasing of its
properties or the conduct of its businesses requires such
qualification, except where the failure to be so qualified would not
have a material adverse effect on the business, condition (financial or
<PAGE> 4
-4-
other) or results of operations of the Issuer, Caterair and the
Subsidiaries, taken as a whole (any such event, a "Material Adverse
Effect"); the Issuer and Caterair, respectively, had, as of June 30,
1997, the capitalization set forth under the caption "Historical" of
the Capitalization section of the Final Memorandum, and immediately
after the Closing Date will have the capitalization set forth under the
caption "Pro Forma" of the Capitalization section of the Final
Memorandum; none of the Issuer, Caterair or any of the Subsidiaries
owns, directly or indirectly, any of the capital stock or other equity
securities of any other person other than those persons set forth under
the caption "Joint Ventures" on Schedule A (the "Joint Ventures");
except as to the Joint Ventures, with respect to the Issuer, neither
the Issuer nor Caterair owns, directly or indirectly any capital stock
or other equity securities of any other person other than those persons
set forth under the caption "Subsidiaries" on Schedule A; the
outstanding shares of capital stock of the Issuer, Caterair and each of
the Subsidiaries and, to the knowledge of the Issuer, the Joint
Ventures have been duly authorized and validly issued, are fully paid
and nonassessable and were not issued in violation of any preemptive or
similar rights granted by such person; except as described in the Final
Memorandum or disclosed on Schedule A hereto, all of the outstanding
shares of capital stock of each of the Subsidiaries and, to the
knowledge of the Issuer, the Joint Ventures are owned beneficially by
the Issuer, Caterair or a Subsidiary, free and clear of all liens,
encumbrances, security interests, mortgages, pledges, charges or claims
other than those under the Existing Credit Agreement or the Senior Bank
Financing or with respect to certain foreign Subsidiaries, that are not
directly or indirectly wholly-owned Subsidiaries of the Issuer,
restrictions on transfer and other liens contained in their respective
organizational documents; and except as described in the Final
Memorandum, there are no outstanding rights, warrants or options to
acquire, or instruments convertible into or exchangeable for, any
capital stock or other equity interest in the Issuer, Caterair or any
of the Issuer Subsidiaries.
(c) Each of the Issuer, Caterair and the Subsidiary Guarantors
has all requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement. This Agreement has been
duly authorized, executed and delivered by the Issuer, Caterair and
each of the Subsidiary Guarantors.
<PAGE> 5
-5-
(d) Each of the Issuer, Caterair and the Guarantors has all
requisite corporate power and authority to execute, deliver and perform
its obligations under the Indenture, the Notes, the Exchange Notes, the
Private Exchange Notes and the Guarantees of Caterair and the
Subsidiary Guarantors. The Indenture meets the requirements for
qualification under the Trust Indenture Act of 1939, as amended (the
"TIA"). The Indenture has been duly authorized by the Issuer, Caterair
and each of the Subsidiary Guarantors and, when executed and delivered
by the Issuer, Caterair and each of the Subsidiary Guarantors (assuming
the due authorization, execution and delivery thereof by the Trustee),
will constitute a valid and legally binding agreement of the Issuer,
Caterair and each of the Subsidiary Guarantors, enforceable against
each of them in accordance with its terms, subject to (x) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (y) general principles of equity and the discretion of
the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding
at law or in equity) and except that a waiver of rights under any usury
laws may be unenforceable.
(e) The Notes, the Exchange Notes and the Private Exchange
Notes (as defined in the Registration Rights Agreement) have each been
duly and validly authorized by the Issuer and, when executed by the
Issuer and authenticated by the Trustee in accordance with the
provisions of the Indenture, and, in the case of the Notes, when
delivered to and paid for by the Initial Purchasers in accordance with
the terms of this Agreement, will have been duly executed, issued and
delivered and will constitute valid and legally binding obligations of
the Issuer, entitled to the benefits of the Indenture and enforceable
against the Issuer in accordance with their terms, subject to (x)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (y) general principles of equity and
the discretion of the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in a
proceeding at law or in equity) and except that a waiver of rights
under any usury laws may be unenforceable.
<PAGE> 6
-6-
(f) The Guarantees of Caterair and the Subsidiary Guarantors
endorsed on the Notes have been duly authorized by each of Caterair and
the Subsidiary Guarantors and, when executed and delivered by Caterair
and each of the Subsidiary Guarantors, will, upon the execution,
authentication and delivery of the Notes and payment therefor, be valid
and binding obligations of each of Caterair and the Subsidiary
Guarantors, enforceable against Caterair and such Subsidiary Guarantors
in accordance with their terms, subject to (x) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and
(y) general principles of equity and the discretion of the court before
which any proceeding therefor may be brought (regardless of whether
such enforcement is considered in a proceeding at law or in equity) and
except that a waiver of rights under any usury laws may be
unenforceable.
(g) Each of the Issuer, Caterair and the Subsidiary Guarantors
has all requisite corporate power and authority to execute, deliver and
perform its obligations under the Registration Rights Agreement. The
Registration Rights Agreement has been duly and validly authorized by
each of the Issuer, Caterair and the Subsidiary Guarantors and, when
executed and delivered by the Issuer, Caterair and each of the
Subsidiary Guarantors (assuming due authorization, execution and
delivery by the other parties thereto), will have been duly executed
and delivered and will constitute valid and legally binding agreement
of each of the Issuer, Caterair and the Subsidiary Guarantors,
enforceable against each of them in accordance with its terms, (A)
subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding
therefor may be brought (regardless of whether such enforcement is
considered in a proceeding in equity or at law) and (B) except that any
rights to indemnity or contribution thereunder may be limited by
federal and state securities laws and public policy considerations.
(h) Except as described in the Final Memorandum, no consent,
approval, authorization or order of any court or governmental agency or
body is required for the performance of this Agreement by the Issuer,
Caterair and the Subsidiary Guarantors or the consummation by them of
the
<PAGE> 7
-7-
other transactions contemplated under any of the Operative Documents,
except (i) such as have been obtained, (ii) such as may be required
under the Act, the TIA or state securities or "Blue Sky" laws in
connection with the transactions contemplated by the Registration
Rights Agreement, (iii) such as may be required under "Blue Sky" laws
in connection with the transactions contemplated by this Agreement or
(iv) where the failure to obtain any such consent, approval,
authorization or order would not have a Material Adverse Effect. None
of the Issuer, Caterair or any Subsidiary is (A) in violation of its
certificate of incorporation, bylaws or any other organizational
documents, except for violations with respect to foreign Subsidiaries
which, in the aggregate, would not have a Material Adverse Effect, (B)
in violation of any statute, judgment, decree, order, rule or
regulation applicable to the Issuer, Caterair or any Subsidiary, which
violation would have a Material Adverse Effect, or (C) in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan agreement, note, lease, license, franchise agreement,
permit, certificate or other agreement or instrument to which the
Issuer, Caterair or any Subsidiary is a party or to which any of them
or their respective properties is subject, which default would have a
Material Adverse Effect.
(i) The execution, delivery and performance by the Issuer,
Caterair and each of the Subsidiary Guarantors of this Agreement, the
Notes, the Exchange Notes, the Private Exchange Notes, the Registration
Rights Agreement, the Guarantees of Caterair and the Subsidiary
Guarantors, the Indenture, and the consummation by the Issuer, Caterair
and each of the Subsidiary Guarantors of the transactions contemplated
hereby and thereby will not (after giving effect to all amendments or
waivers obtained on or prior to the Closing Date) conflict with or
constitute or result in a breach or violation by the Issuer, Caterair
or any Subsidiary of (A) any of the terms or provisions of, or
constitute a default by the Issuer, Caterair or any Subsidiary under,
any indenture, mortgage, deed of trust, loan agreement, note, lease,
license, franchise agreement, or other agreement or instrument to which
any such person is a party or to which any of them or their respective
properties is subject, which conflict, breach, violation or default
would have a Material Adverse Effect, (B) the certificate of
incorporation, bylaws or any other organizational documents of any such
person, except for violations
<PAGE> 8
-8-
with respect to foreign Subsidiaries which, in the aggregate, would not
have a Material Adverse Effect, or (C) any statute, judgment, decree,
order, rule or regulation (excluding state securities and "Blue Sky"
laws) of any court or governmental agency or other body applicable to
any such person, or any of their respective properties, which conflict,
breach, violation or default would have a Material Adverse Effect.
(j) To the best knowledge of the Issuer and the Guarantors,
each of the Issuer, Caterair and the Subsidiaries possesses all
licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made or will have made all declarations
and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals necessary to own or lease, as the case may be, and to operate
its properties and to conduct its business as now conducted
("Permits"), except where the failure to have or obtain such Permits
would not, individually or in the aggregate, have a Material Adverse
Effect; to the best knowledge of the Issuer and the Guarantors, each of
the Issuer, Caterair and the Subsidiaries has fulfilled and performed
in all material respects its obligations with respect to such Permits
and no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any
other material impairment of the rights of the holder of any such
Permit; and to the best knowledge of the Issuer and the Guarantors,
none of the Issuer, Caterair or any Subsidiary has received any notice
in writing of any proceeding relating to revocation or modification of
any material Permit, except as described in the Final Memorandum or
except where such revocation or modification would not, individually or
in the aggregate, have a Material Adverse Effect.
(k) Each of the Notes, the Exchange Notes, the Guarantees, the
Indenture, the Registration Rights Agreement and this Agreement each
conform in all material respects to the respective description thereof
in the Final Memorandum.
(l) Except as would not, individually or in the aggregate,
have a Material Adverse Effect, (A) each of the Issuer, Caterair and
the Subsidiaries is in compliance with and not subject to liability
under any applicable Environmental Laws, (B) to the best knowledge of
the Issuer
<PAGE> 9
-9-
and the Guarantor, each of the Issuer and the Guarantors has made all
material filings and provided all material notices required under any
applicable Environmental Laws, and has and is in compliance with all
permits, licenses, authorizations and approvals in all material
respects required under any applicable Environmental Laws and each of
them is in full force and effect in all material respects, (C) there is
no civil, criminal or administrative action, suit, demand, claim,
hearing, notice of violation, investigation, proceeding, notice or
demand letter or request for information pending or, to the best
knowledge of the Issuer, Caterair or any of the Subsidiary Guarantors,
threatened in writing against the Issuer, Caterair or any of the
Subsidiaries under any Environmental Law, (D) no lien has been recorded
under any Environmental Law with respect to any assets, facility or
property owned, operated, leased or controlled by the Issuer, Caterair
or any of the Subsidiaries, (E) none of the Issuer nor any of the
Subsidiaries has received notice in writing that it has been identified
as a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA") or any comparable state law, (F) no property or
facility of the Issuer, Caterair or any of the Subsidiaries is (i)
listed or proposed for listing on the National Priorities List under
CERCLA or (ii) listed in the Comprehensive Environmental Response,
Compensation, Liability Information System List promulgated pursuant to
CERCLA, or on any comparable list maintained by any state or local
governmental authority.
For purposes of this Agreement, "Environmental Laws" means the
common law and all applicable federal, state and local laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or
protection of public or employee health and safety from environmental
effects or protection of the environment, including, without
limitation, laws relating to (A) emissions, discharges, releases or
threatened releases of hazardous materials, into the environment
(including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), (B) the manufacture,
processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of hazardous materials, and (C)
underground and above ground storage tanks, and related piping, and
emissions, discharges, releases or threatened releases therefrom.
<PAGE> 10
-10-
(m) The audited consolidated financial statements and
schedules of the Issuer and Caterair, respectively, included in the
Final Memorandum present fairly the consolidated financial position,
results of operations and cash flows of the Issuer and Caterair,
respectively, at the dates and for the periods to which they relate,
and have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as otherwise stated
therein, and the unaudited consolidated financial statements of the
Issuer and Caterair, respectively, and the related notes included in
the Final Memorandum, if any, present fairly the consolidated financial
position, results of operations and cash flows of the Issuer and
Caterair, respectively, at the dates and for the periods to which they
relate, subject to year-end audit adjustments and the omission of
notes, and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis, except as
otherwise stated therein.
The pro forma financial information (including the notes
thereto) included in the Final Memorandum (A) present fairly in all
material respects the information shown therein, (B) have been prepared
in accordance with the applicable requirements of Rule 11-02 of
Regulation S-X promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the Commission's published rules
and guidelines with respect to pro forma financial statements and (C)
have been properly computed on the bases described therein. The
assumptions used in the preparation of the pro forma financial
statements and other pro forma financial information included in the
Final Memorandum are reasonable and the adjustments used therein are
appropriate to give effect to the transactions, combinations or
circumstances referred to therein.
Coopers & Lybrand LLP, which has audited certain of such
financial statements and schedules as set forth in their reports
included in the Final Memorandum, is an independent public accounting
firm as required by the Act.
Arthur Andersen LLP, which has audited certain of such
financial statements and schedules as set forth in their reports
included in the Final Memorandum, is an independent public accounting
firm as required by the Act.
<PAGE> 11
-11-
(n) Except as described in the Final Memorandum, there is not
pending or, to the best knowledge of the Issuer, Caterair or any of the
Guarantors, threatened in writing any action, suit, proceeding, inquiry
or investigation to which the Issuer, Caterair or any of the
Subsidiaries, or to which the property of the Issuer, Caterair or any
of the Subsidiaries, is subject, before or brought by any court or
governmental agency or body, that, in the aggregate, would have a
Material Adverse Effect.
(o) Each of the Issuer, Caterair and the Subsidiaries has, and
immediately after the Closing Date will have (A) good and marketable
title to all of the real property and good title to all of the personal
property owned by it or purported to be owned by it, and, as of the
Closing Date, such title will be free and clear of all liens, except
for liens which would be permitted under the Indenture, and (B) a valid
leasehold interest in the real and personal property leased by it, or
purported to be leased by it, except for such liens and defects that,
in the aggregate, would not have a Material Adverse Effect. To the best
knowledge of the Issuer and the Guarantors, each of the Issuer,
Caterair and the Issuer Subsidiaries operates all material real and
personal property leased by it under valid and enforceable leases and
has performed in all material respects the obligations required to be
performed by it with respect to each such lease, except for such leases
and obligations which, in the aggregate, would not have a Material
Adverse Effect. To the best knowledge of the Issuer and the Guarantors,
all tangible assets and properties of the Issuer, Caterair and each of
the Issuer Subsidiaries are in good working order (subject to ordinary
wear and tear) and are adequate for the uses to which they are being
put, except as would not have a Material Adverse Effect.
(p) To the best knowledge of the Issuer and the Guarantors,
each of the Issuer, Caterair and the Issuer Subsidiaries owns, or is
licensed under, and has the right to use, all patents, trademarks,
service marks, trade names, copyrights and know-how (collectively,
"Intellectual Property") used in, or necessary for the conduct of, its
business as currently conducted, except for such ownership or licensing
defects which, singly or in the aggregate, would not have a Material
Adverse
<PAGE> 12
-12-
Effect, and the transactions contemplated hereby will not alter or
impair any such rights, except for such alterations or impairments as
would not have a Material Adverse Effect. To the best knowledge of the
Issuer and the Guarantors, no claims have been asserted in writing by
any person to the use of any such Intellectual Property or challenging
or questioning the validity or effectiveness of any license or
agreement related thereto, except for such claims as would not have a
Material Adverse Effect. To the best knowledge of the Issuer, Caterair
and the Guarantors, there is no valid basis for any such claim and the
use of such Intellectual Property by the Issuer, Caterair and the
Subsidiaries does not infringe on the rights of any person, except for
such claim or infringement which would not have a Material Adverse
Effect.
(q) Subsequent to the respective dates as of which information
is given in the Final Memorandum and except as described therein or
contemplated thereby, (A) neither the Issuer nor Caterair has incurred
any material liabilities or obligations, direct or contingent, or
entered into any material transactions, not in the ordinary course of
business and (B) neither the Issuer nor Caterair has purchased any of
its outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock.
(r) Each of the Issuer, Caterair and the Subsidiaries has
filed all material federal, state, local and foreign income and
franchise tax returns, except where the failure to so file such returns
would not have a Material Adverse Effect. All taxes, assessments, fees
and other charges (including, without limitation, withholding taxes,
penalties, and interest) due or claimed to be due from the Issuer,
Caterair or any of the Subsidiaries that are due and payable have been
paid, other than those being contested in good faith or those currently
payable without penalty or interest and for which an adequate reserve
or accrual has been established in accordance with generally accepted
accounting principles, and except where the failure so to pay would not
have, singly or in the aggregate, a Material Adverse Effect. The
Issuer, Caterair and the Guarantors know of no actual or proposed
additional tax assessments for any fiscal period against the Issuer,
Caterair or any of the Subsidiaries that, singly or in the aggregate,
would have a Material Adverse Effect.
(s) There are no legal or governmental proceedings involving
or affecting the Issuer, Caterair or any Subsidiary or any of their
respective properties or assets which would be required to be described
in a prospectus
<PAGE> 13
-13-
pursuant to the Act that are not described in the Final Memorandum, nor
are there any material contracts or other documents which would be
required to be described in a prospectus pursuant to the Act that are
not described in the Final Memorandum.
(t) Except as disclosed in the Final Memorandum, there are,
and immediately following consummation of the transactions contemplated
by this Agreement there will be, no consensual encumbrances or
restrictions on the ability of any subsidiary of the Issuer (A) to pay
dividends or make any other distributions on such subsidiary's capital
stock or to pay any indebtedness owed to the Issuer or any subsidiary
of the Issuer; (B) to make any loans or advances to, or investments in,
the Issuer or any of its other subsidiaries; or (C) to transfer any of
its property or assets to the Issuer or any of its other subsidiaries,
other than encumbrances or restrictions (i) of a type described in the
Final Memorandum, (ii) imposed by any agreement, lease or permit
entered into or obtained in the ordinary course of business in
connection with the operation of flight kitchens, (iii) arising
pursuant to the Existing Credit Agreement or the Senior Bank Financing,
or (iv) which, in the aggregate, would not have a Material Adverse
Effect. Except as disclosed in the Final Memorandum, there are, and
immediately following consummation of the transactions contemplated by
this Agreement there will be, no consensual encumbrances or
restrictions on the ability of any subsidiary of Caterair (A) to pay
dividends or make other distributions on such subsidiary's capital
stock or to pay any indebtedness owed to Caterair or any subsidiary of
Caterair; (B) to make any loans or advances to, or investments in,
Caterair or any of its other subsidiaries; or (C) to transfer any of
its property or assets to Caterair or any of its other subsidiaries,
other than encumbrances or restrictions (i) of a type described in the
Final Memorandum, (ii) imposed by any agreement, lease or permit
entered into or obtained in the ordinary course of business in
connection with the operation of flight kitchens, (iii) arising
pursuant the Existing Credit Agreement or the Senior Bank Financing, or
(iv) which, in the aggregate, would not have a Material Adverse Effect.
(u) None of the Issuer, Caterair or any of the Subsidiaries,
nor any agent acting on behalf of any of them, has taken or will take
any action that might cause this Agreement or the issuance or sale of
the Securities to
<PAGE> 14
-14-
violate Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System as in effect on the Closing Date.
(v) None of the Issuer, Caterair or any of the Subsidiaries is
now, or after giving effect to the issuance of the Securities and the
consummation of the transactions contemplated by this Agreement will
be, an "investment company" or "promoter" or "principal underwriter"
for an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended, and the rules and regulations
thereunder.
(w) None of the Issuer, Caterair or any of the Subsidiaries
has taken, nor will any of them take, directly or indirectly, any
action designed to, or that might be reasonably expected to, cause or
result in stabilization or manipulation of the price of the Securities.
(x) The statistical and market-related data included in the
Final Memorandum are based on or derived from sources which the Issuer
and Caterair believe to be reliable and accurate.
(y) There is no strike, labor dispute, slowdown or work
stoppage with the employees of the Issuer, Caterair or the Subsidiaries
or, to the knowledge of the Issuer, the Joint Ventures, which is
pending or, to the knowledge of the Issuer or Caterair, threatened in
writing, which would have a Material Adverse Effect.
(z) Each of the Issuer, Caterair and the Subsidiaries
maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (A) transactions are executed in
accordance with management's general or specific authorization, (B)
transactions are recorded as necessary to permit preparation of
financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
general or specific authorization and (D) the reported accountability
for assets is compared with existing assets at reasonable intervals.
(aa) None of the Issuer, Caterair or any of the Subsidiaries
nor any of their respective Affiliates (as defined in Rule 501(b) of
Regulation D under the Act) has directly, or through any agent, (i)
sold, offered for sale, solicited offers to buy or otherwise negotiated
in
<PAGE> 15
-15-
respect of any "security" (as defined in the Act) which is or could be
integrated with the sale of the Securities in a manner that would
require the registration under the Act of the Securities or (ii)
engaged in any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Act) in connection with
the offering of the Securities or in any manner involving a public
offering within the meaning of Section 4(2) of the Act.
(bb) Assuming the accuracy of the representations and
warranties of the Initial Purchasers in Section 8 hereof, it is not
necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers in the manner contemplated by this
Agreement to register any of the Securities under the Act or to qualify
the Indenture under the TIA.
(cc) No securities of the Issuer, Caterair or any Subsidiary
Guarantor are of the same class (within the meaning of Rule 144A under
the Act) as the Securities and listed on a national securities exchange
registered under Section 6 of the Exchange Act, or quoted in a U.S.
automated inter-dealer quotation system.
Any certificate signed by any officer of the Issuer or any
Subsidiary Guarantors and delivered to any Initial Purchaser or to
counsel for the Initial Purchasers shall be deemed a joint and several
representation and warranty by the Issuer and each of the Subsidiaries
to each Initial Purchaser as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Securities. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Issuer agrees to issue
and sell to each of the Initial Purchasers, and each of the Initial Purchasers
severally agrees to purchase from the Issuer, at a purchase price of 97.072% of
their principal amount, the respective principal amounts of the Securities set
forth opposite their names on Exhibit A hereto. The obligations of the Initial
Purchasers under this Agreement are several and not joint. One or more
certificates in definitive form for the Securities that the Initial Purchasers
have agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as each Initial Purchasers requests upon notice
to the Issuer at least 48 hours prior to the Closing Date, shall be delivered by
or on behalf of the Issuer, against pay-
<PAGE> 16
-16-
ment by or on behalf of the Initial Purchasers of the purchase price therefor by
wire transfer of immediately available funds. Such delivery of and payment for
the Securities shall be made at the offices of Cahill Gordon & Reindel, 80 Pine
Street, New York, New York 10005, at 10:00 A.M., New York time, on August 28,
1997, or at such other place, time or date as the Initial Purchasers and the
Issuer may agree upon, such time and date of delivery against payment being
herein referred to as the "Closing Date". The Issuer will make such certificate
or certificates for the Securities available for checking and packaging by the
Initial Purchasers at the offices in New York, New York of BT Securities
Corporation at least 24 hours prior to the Closing Date.
4. Offering by the Initial Purchasers. The Initial Purchasers propose
to make an offering of the Securities at the price and upon the terms and in the
manner set forth in the Final Memorandum as soon as practicable after this
Agreement is entered into and as in the sole judgment of the Initial Purchasers
is advisable.
5. Certain Covenants. The Issuer and the Guarantors covenant and agree
with each of the Initial Purchasers that:
(a) The Issuer will not amend or supplement the Final
Memorandum or any amendment or supplement thereto of which the Initial
Purchasers and counsel to the Initial Purchasers shall not previously
have been advised and furnished a copy for a reasonable period of time
prior to the proposed amendment or supplement and as to which the
Initial Purchasers shall not have given their consent, which consent
shall not be unreasonably withheld. The Issuer will promptly, upon the
reasonable request of the Initial Purchasers or counsel for the Initial
Purchasers, make any amendments or supplements to the Preliminary
Memorandum or the Final Memorandum that may be necessary or advisable
in connection with the resale of the Securities by the Initial
Purchasers.
(b) The Issuer and the Guarantors will cooperate with the
Initial Purchasers in arranging for the qualification of the Securities
for offering and sale under the securities or "Blue Sky" laws of such
jurisdictions as the Initial Purchasers may designate and will continue
such qualification in effect for as long as may be necessary to
complete the resale of the Securities by the Initial Purchasers;
provided, however, that in connection therewith none of the Issuer or
any Guarantor shall be required to
<PAGE> 17
-17-
qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction or subject itself to any tax in
any such jurisdiction where it is not then so subject.
(c) If, at any time prior to the completion of the
distribution by the Initial Purchasers of the Notes or the Private
Exchange Notes, any event occurs or information becomes known as a
result of which the Final Memorandum as then amended or supplemented
would include an untrue statement of a material fact, or omit to state
a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if
for any other reason it is necessary at any time to amend or supplement
the Final Memorandum in order to comply with applicable law, the Issuer
will promptly notify the Initial Purchasers thereof and will prepare,
at the Issuer's expense, an amendment to the Final Memorandum that
corrects such statement or omission or effects such compliance.
(d) The Issuer will, without charge, provide to the Initial
Purchasers and to counsel for the Initial Purchasers as many copies of
the Preliminary Memorandum and the Final Memorandum or any amendment or
supplement thereto as the Initial Purchasers may reasonably request.
(e) The Issuer will apply the net proceeds from the sale of
the Securities substantially as set forth under "Use of Proceeds" in
the Final Memorandum.
(f) For so long as any Securities remain outstanding, the
Issuer will furnish to the Initial Purchasers copies of all reports and
other communications (financial or otherwise) furnished by the Issuer
to the Trustee or the holders of the Securities and, as soon as
available, copies of any reports or financial statements furnished to
or filed by the Issuer with the Commission or any national securities
exchange on which any class of securities of the Issuer may be listed.
(g) None of the Issuer or the Guarantors will engage in any
form of general solicitation or general advertising (as those terms are
used in Regulation D under the Act) in connection with the offering of
the Securities or in any manner involving a public offering of the
Securities within the meaning of Section 4(2) of the Act.
<PAGE> 18
-18-
(h) For so long as any of the Securities remain outstanding,
the Issuer will make available, upon request, to any holder of such
Securities which is subject to transfer restrictions and any
prospective purchasers thereof the information specified in Rule
144A(d)(4) under the Act, unless the Issuer is then subject to Section
13 or 15(d) of the Exchange Act.
(i) The Issuer and each Guarantor will use its reasonable best
efforts to (i) permit the Securities to be designated PORTAL securities
in accordance with the rules and regulations adopted by the NASD
relating to trading in the Private Offerings, Resales and Trading
through Automated Linkages market (the "Portal Market") and (ii) permit
the Securities to be eligible for clearance and settlement through The
Depository Trust Company.
(j) In connection with Securities offered and sold in an
off-shore transaction (as defined in Regulation S) the Issuer will not
register any transfer of such Notes not made in accordance with the
provisions of Regulation S and will not, except in accordance with the
provisions of Regulation S, if applicable, issue any such Notes in the
form of definitive securities.
(k) The Issuer and the Guarantors will promptly (and in any
event, not later than the Closing Date) (i) enter into a Dealer-Manager
Agreement (the "Dealer Manager Agreement") appointing BT Securities
Corporation as Dealer Manager with respect to an Offer to Purchase and
Solicitation of Consents with respect to all outstanding 13% Senior
Subordinated Notes due 2005 (the "Old Notes") of the Issuer and (ii)
commence an Offer to Purchase and Solicitation of Consents pursuant to
the terms thereof; and the Issuer will purchase all Old Notes validly
tendered pursuant thereto.
6. Expenses. The Issuer agrees to pay all costs and expenses incident
to the performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 10 hereof, including all costs and expenses incident to (i)
the printing, word processing or other production of documents with respect to
such transactions, including any costs of printing the Preliminary Memorandum
and the Final Memorandum and any amendment or supplement thereto, and any "Blue
Sky" memoranda, (ii) all arrangements relating to the delivery to the Initial
Purchasers of copies of the foregoing
<PAGE> 19
-19-
documents, (iii) the fees and disbursements of counsel, accountants and any
other experts or advisors retained by the Issuer, (iv) the preparation, issuance
and delivery to the Initial Purchasers of any certificates evidencing the
Securities, (v) the qualification of the Securities under state securities and
"Blue Sky" laws, including filing fees and reasonable fees and disbursements of
counsel for the Initial Purchasers relating thereto, (vi) expenses of the Issuer
in connection with any meetings with prospective investors in the Securities,
(vii) fees and expenses of the Trustee including reasonable fees and expenses of
its counsel, and (viii) any fees charged by investment rating agencies for the
rating of the Securities. If the sale of the Securities provided for herein is
not consummated because any condition to the obligations of the Initial
Purchasers set forth in Section 7 hereof is not satisfied or because of any
failure, refusal or inability on the part of the Issuer to perform all
obligations and satisfy all conditions on its part to be performed or satisfied
hereunder, other than by reason of a default by the Initial Purchasers, the
Issuer will reimburse the Initial Purchasers upon demand for all reasonable
out-of-pocket expenses (including reasonable counsel fees and disbursements)
that shall have been incurred by the Initial Purchasers in connection with the
proposed purchase and sale of the Securities. The Issuer shall not be liable to
the Initial Purchasers for loss of contemplated profits from the transactions
covered by this Agreement.
7. Conditions of the Initial Purchasers' Obligations. The obligation of
the Initial Purchasers to purchase and pay for the Securities shall, in their
sole discretion, be subject to the following conditions:
(a) The Initial Purchasers shall have received an opinion,
dated the Closing Date, of Kaye, Scholer, Fierman, Hays & Handler, LLP,
counsel for the Issuer and the Guarantors, substantially the form of
Exhibit B hereto. References to the Final Memorandum in such opinion
shall include any amendment or supplement thereto prepared in
accordance with the provisions of this Agreement at the Closing Date.
(b) The Issuer shall have received an opinion, dated the
Closing Date, of Kaye, Scholer, Fierman, Hays & Handler, LLP, tax
counsel for the Issuer and Guarantors, with respect to certain tax
matters related to the Issuer and the Guarantors, in the form of
Exhibit C hereto.
<PAGE> 20
-20-
(c) The Initial Purchasers shall have received an opinion,
dated the Closing Date, of Price Waterhouse, LLP, tax advisors to the
Issuer and the Guarantors, with respect to certain tax matters related
to the Issuer and the Guarantors, in the form of Exhibit D hereto.
(d) The Initial Purchasers shall have received an opinion,
dated the Closing Date, of Cahill Gordon & Reindel, counsel for the
Initial Purchasers, with respect to the sufficiency of certain
corporate proceedings and other legal matters relating to this
Agreement, and such other related matters as the Initial Purchasers may
require. In rendering such opinion, Cahill Gordon & Reindel shall have
received and may rely upon such certificates and other documents and
information as they may reasonably request to pass upon such matters.
In addition, in rendering their opinion, Cahill Gordon & Reindel may
state that their opinion is limited to matters of New York, Delaware
corporate and federal law.
(e) The Initial Purchasers shall have received from Coopers &
Lybrand LLP, independent public accountants for the Issuer, letters
dated, respectively, the date hereof and the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers and Cahill
Gordon & Reindel, counsel for the Initial Purchasers.
(f) The Initial Purchasers shall have received from Arthur
Andersen LLP, independent public accountants for Caterair, letters
dated, respectively, the date hereof and the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers and Cahill
Gordon & Reindel, counsel for the Initial Purchasers.
(g) The issuance and sale of the Securities pursuant to this
Agreement shall not be enjoined (temporarily or permanently) and no
action, suit or proceeding shall have been commenced with respect to
any court or governmental authority.
(h) The Initial Purchasers shall have received a certificate
or certificates, dated the Closing Date, of an officer of the Issuer,
Caterair and each Guarantor to the effect that to the best of such
officers' knowledge after reasonable inquiry:
(A) The representations and warranties of the Issuer,
Caterair and each of the Subsidiary Guaran-
<PAGE> 21
-21-
tors in this Agreement, the SCIS Credit Agreement, the
Caterair Credit Agreement and the Dealer Manager Agreement are
true and correct in all material respects as if made on and as
of the Closing Date, and the Issuer, Caterair and each of the
Subsidiary Guarantors have performed in all material respects
all covenants and agreements and satisfied all conditions on
their part to be performed or satisfied hereunder at or prior
to the Closing Date;
(B) At the Closing Date, since the date hereof or
since the date of the most recent financial statements in the
Final Memorandum (exclusive of any amendment or supplement
thereto after the date hereof), no event or events have
occurred, no information has become known nor does any
condition exist that, individually or in the aggregate, would
have a Material Adverse Effect; and
(C) The sale of the Securities hereunder has not been
enjoined (temporarily or permanently).
(i) On the Closing Date, the Initial Purchasers shall have received the
Registration Rights Agreement executed by the Issuer and the Guarantors and such
agreement shall be in full force and effect.
(j) On or before the Closing Date, the Senior Bank Financing shall have
been consummated and the Existing Credit Agreement shall be fully repaid and
terminated.
(k) The Issuer and Caterair, CII and Sky Chefs, as guarantors, and the
Bank of New York, as trustee, shall have entered into a supplemental indenture
to the indenture dated as of September 15, 1995 (the "Old Indenture") governing
the Old Notes which shall be entered into in accordance with the terms of the
Old Indenture and shall provide for removal of sections 4.10, 4.11, 4.12, 4.13,
4.17, 4.18, 4.19, 4.20, 4.21, 4.22, and 5.01 of the Old Indenture.
(l) Caterair shall have received a waiver and an amendment to each of
its lease agreements with TriNet Essential Facilities X, Inc. and TriNet
Essential Facilities VIII R, Inc. with the effect of eliminating the minimum net
worth maintenance covenants therein.
<PAGE> 22
-22-
On or before the Closing Date, the Initial Purchasers and counsel
for the Initial Purchasers shall have received such further documents, opinions,
certificates and schedules or instruments relating to the business, corporate,
legal and financial affairs of the Issuer, Caterair, the Subsidiary Guarantors
and their respective subsidiaries as they shall have reasonably requested from
the Issuer, Caterair and the Subsidiary Guarantors.
All such opinions, certificates, letters, schedules, documents or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchasers and counsel for the Initial Purchasers. The Issuer, Caterair
and the Subsidiary Guarantors and their respective subsidiaries shall furnish to
the Initial Purchasers such conformed copies of such opinions, certificates,
letters, schedules, documents and instruments in such quantities as the Initial
Purchasers shall reasonably request.
8. Offering of Securities; Restrictions on Transfer. Each of the
Initial Purchasers represents and warrants (as to itself only) that it is a QIB.
Each of the Initial Purchasers agrees with the Issuer (as to itself only) that
(i) it has not and will not solicit offers for, or offer or sell, the Securities
by any form of general solicitation or general advertising (as those terms are
used in Regulation D under the Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Act; and (ii) it has and will solicit
offers for the Securities only from, and will offer the Securities only to (A)
in the case of offers inside the United States, persons whom the Initial
Purchasers reasonably believe to be QIBs or, if any such person is buying for
one or more institutional accounts for which such person is acting as fiduciary
or agent, only when such person has represented to the Initial Purchasers that
each such account is a QIB, to whom notice has been given that such sale or
delivery is being made in reliance on Rule 144A, and, in each case, in
transactions under Rule 144A and (B) in the case of offers outside the United
States, to persons other than U.S. persons ("foreign purchasers," which term
shall include dealers or other professional fiduciaries in the United States
acting on a discretionary basis for foreign beneficial owners (other than an
estate or trust)) in reliance upon Regulation S under the Act; provided,
however, that in the case of this clause (B), in purchasing such Securities such
persons are deemed to have represented and agreed as provided under the caption
"Transfer Restrictions" contained in the Final Memorandum.
<PAGE> 23
-23-
Each Initial Purchaser represents and warrants with respect to
offers and sales outside the United States that (i) it has and will comply with
all applicable laws and regulations in each jurisdiction in which it acquires,
offers, sells or delivers Securities or has in its possession or distributes any
Memorandum or any such other material, in all cases at its own expense; (ii) the
Securities have not been and will not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Act or pursuant to an exemption from the
registration requirements of the Act; (iii) it has offered the Notes and will
offer and sell the Notes (A) as part of its distribution at any time and (B)
otherwise until 40 days after the later of the commencement of the offering and
the Closing Date, only in accordance with Rule 903 of Regulation S and,
accordingly, neither it nor any persons acting on its behalf have engaged or
will engage in any directed selling efforts (within the meaning of Regulation S)
with respect to the Securities, and any such persons have complied and will
comply with the offering restrictions requirement of Regulation S; and (iv) it
agrees that, at or prior to confirmation of sales of any such Securities, it
will have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases Securities from it during
the restricted period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the United
States Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of the distribution of the Securities
at any time or (ii) otherwise until 40 days after the later of the
commencement of the offering and the closing date of the offering, except
in either case in accordance with Regulation S (or Rule 144A if
available), under the Securities Act. Terms used above have the meaning
given to them in Regulation S."
Terms used in this Section 8 and not defined in this Agreement have the meanings
given to them in Regulation S.
9. Indemnification and Contribution. (a) The Issuer and the Guarantors
agree, jointly and severally, to indemnify and hold harmless each Initial
Purchaser, and each person, if any, who controls any Initial Purchaser within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
<PAGE> 24
-24-
against any losses, claims, damages or liabilities, joint or several, to which
such Initial Purchaser or such controlling person may become subject under the
Act, the Exchange Act or otherwise, insofar as any such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in (A) any Memorandum or any amendment or
supplement thereto or (B) any application or other document, or any
amendment or supplement thereto, executed by the Issuer or any
Guarantor or based upon written information furnished by or on behalf
of the Issuer or any Guarantor filed in any jurisdiction in order to
qualify the Securities under the securities or "Blue Sky" laws thereof
or filed with any securities association or securities exchange (each
an "Application"), or
(ii) the omission or alleged omission to state, in any
Memorandum or any amendment or supplement thereto, or any Application,
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading,
and will reimburse, as incurred, the Initial Purchasers and each such
controlling person for any reasonable legal or other expenses incurred by such
Initial Purchaser or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, that the
Issuer and the Guarantors will not be liable (i) in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
any untrue statement or alleged untrue statement or omission or alleged omission
made in any Memorandum or any amendment or supplement thereto or any Application
in reliance upon and in conformity with written information furnished to the
Issuer by any Initial Purchaser specifically for use therein or (ii) with
respect to the Preliminary Memorandum, to the extent that any such loss, claim,
damage or liability arises solely from the fact that the Initial Purchasers sold
Securities to a person to whom there was not sent or given a copy of the Final
Memorandum (as amended or supplemented) at or prior to the written confirmation
of such sale if the Issuer shall have previously furnished copies thereof to the
Initial Purchasers in accordance with Section 5(d) hereof and the Final
Memorandum (as amended or supplemented) would have corrected any such untrue
statement or
<PAGE> 25
-25-
omission. This indemnity agreement will be in addition to any liability that the
Issuer and the Guarantors may otherwise have to the indemnified parties. The
Issuer and the Guarantors shall not be liable under this paragraph (a) for any
settlement of any claim or action effected without their prior written consent,
which consent shall not be unreasonably withheld or delayed.
The Initial Purchasers shall not, without the prior written consent
of the Issuer and the Guarantors, effect any settlement or compromise of any
pending or threatened proceeding in respect of which the Issuer or any of the
Guarantors is or could have been a party, or indemnity could have been sought
hereunder by the Issuer or the Guarantor, unless such settlement (A) includes an
unconditional written release of the Issuer and the Guarantors, in form and
substance reasonably satisfactory to the Issuer and the Guarantors, from all
liability on claims that are the subject matter of such proceeding and (B) does
not include any statement as to an admission of fault, culpability or failure to
act by or on behalf of the Issuer or the Guarantors.
(b) The Initial Purchasers agree, severally and not jointly, to
indemnify and hold harmless the Issuer and the Guarantors, their respective
directors, employees, agents and representatives and each person, if any, who
controls the Issuer or any Guarantor within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, against any losses, claims, damages or
liabilities to which the Issuer or any Guarantor or any such director, officer,
employee, agent, representative or controlling person may become subject under
the Act, the Exchange Act, or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in any Memorandum or any amendments or supplement thereto or any
Application or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in any Memorandum or any amendment or
supplement thereto, or any Application, or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
relating to such Initial Purchaser furnished to the Issuer by any Initial
Purchaser specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, the Issuer or
any Guarantor or any such director, officer, employee,
<PAGE> 26
-26-
agent, representative or controlling person for any legal or other expenses
reasonably incurred by any such person in connection with investigating or
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action in respect thereof. This indemnity
agreement will be in addition to any liability that such Initial Purchaser may
otherwise have to the indemnified parties. None of the Initial Purchasers shall
be liable under this Section 9 for any settlement of any claim or action
effected without its prior written consent, which shall not be unreasonably
withheld or delayed.
Neither the Issuer nor any Guarantor shall, without the prior
written consent of each Initial Purchaser affected thereby, effect any
settlement or compromise of any pending or threatened proceeding in respect of
which such Initial Purchaser is or could have been a party, or indemnity could
have been sought hereunder by such Initial Purchaser, unless such settlement (A)
includes an unconditional written release of such Initial Purchaser, in form and
substance reasonably satisfactory to such Initial Purchaser, from all liability
on claims that are the subject matter of such proceeding and (B) does not
include any statement as to an admission of fault, culpability or failure to act
by or on behalf of such Initial Purchaser.
(c) Promptly after receipt by an indemnified party under this Section 9
of notice of the commencement of any action for which such indemnified party is
entitled to indemnification under this Section 9, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party under
this Section 9, notify the indemnifying party of the commencement thereof in
writing; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party unless and to
the extent it did not otherwise learn of such action and such failure results in
the forfeiture by the indemnifying of substantial rights and defenses. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if (i) the use of counsel chosen by the indemnifying
party to represent the indemnifying party would present such counsel with a
conflict of interest, (ii) the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have
<PAGE> 27
-27-
been advised by counsel that there may be one or more legal defenses available
to it and/or other indemnified parties that are different from or additional to
those available to the indemnifying party, or (iii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party
within a reasonable time after notice of the institution of such action, then,
in each such case, the indemnifying party shall not have the right to direct the
defense of such action on behalf of such indemnified party or parties and such
indemnified party or parties shall have the right to select separate counsel to
defend such action on behalf of such indemnified party or parties. After notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof and reasonable approval by such indemnified party of
counsel appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 9 for any legal or other
expenses, other than reasonable costs of investigation, already incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that in connection with such action the indemnifying party shall not be liable
for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in the
same jurisdiction arising out of the same general allegations or circumstances,
designated by the Initial Purchasers in the case of paragraph (a) of this
Section 9 or the Issuer or any Guarantor in the case of paragraph (b) of this
Section 9, representing all indemnified parties under such paragraph (a) or
paragraph (b), as the case may be, who are parties to such action or actions) or
(ii) the indemnifying party has authorized in writing the employment of counsel
for the indemnified party at the expense of the indemnifying party. After such
notice from the indemnifying party to such indemnified party, the indemnifying
party will not be liable for the costs and expenses of any settlement of such
action effected by such indemnified party without the consent of the
indemnifying party, unless such indemnifying party waived its rights under this
Section 9, in which case the indemnified party may effect such a settlement
without such consent.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is unavailable or insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party, in order
to provide for just and equitable contribution, shall
<PAGE> 28
-28-
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect (i) the relative benefits
received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative benefits received by the Issuer and
the Guarantors on the one hand and any Initial Purchaser on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Securities (before deducting expenses other than discounts and
commissions) received by the Issuer bear to the total discounts and commissions
received by the such Initial Purchaser. The relative fault of the parties 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 Issuer and the Guarantors
on the one hand, or the Initial Purchasers on the other, the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission, and any other equitable considerations appropriate
in the circumstances. The Issuer, the Guarantors and the Initial Purchasers
agree that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the Issuer and the
Guarantors on the one hand and the Initial Purchasers on the other hand were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to in the
first sentence of this paragraph (d). Notwithstanding any other provision of
this paragraph (d), no Initial Purchaser shall be obligated to make
contributions hereunder that in the aggregate exceed the total discounts,
commissions and other compensation received by such Initial Purchaser under this
Agreement, less the aggregate amount of any damages that such Initial Purchaser
has otherwise been required to pay by reason of the untrue or alleged untrue
statements or the omissions or alleged omissions to state a material fact, and
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this para-
<PAGE> 29
-29-
graph (d), each person, if any, who controls an Initial Purchaser within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Initial Purchasers, and each director,
officer, employee, representative and agent of the Issuer and the Guarantors and
each person, if any, who controls the Issuer or any Guarantor within the meaning
of Section 15 of the Act of Section 20 of the Exchange Act shall have the same
rights to contribution as the Issuer and the Guarantors.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Issuer, the
Guarantors, their respective officers and the Initial Purchasers set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Issuer and the Guarantors, any of
their respective officers or directors, the Initial Purchasers or any
controlling person referred to in Section 9 hereof and (ii) delivery of and
payment for the Securities, and shall be binding upon, and shall inure to the
benefit of, any successors, assigns, heirs and personal representatives of the
Issuer and the Guarantors, the Initial Purchasers and the indemnified parties
referred to in Section 9 hereof. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6 and 9 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchasers by notice to the Issuer and the Guarantors
in writing given prior to the Closing Date in the event that the Issuer or any
of the Guarantors shall have failed, refused or been unable to perform in all
material respects all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder at or prior thereto or if at or prior to the
Closing Date:
(i) the Issuer, Caterair or any of the Subsidiaries shall have
sustained any loss or interference with respect to its businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, which loss or interference has had or
has a Material Adverse Effect, or there shall have been, in the sole
judgment of the Initial Purchasers, any Material Adverse Change, or any
development involving a prospective Material Adverse Change (including
without
<PAGE> 30
-30-
limitation a change in management or control of the Issuer), except in
each case as described in or contemplated by the Final Memorandum
(exclusive of any amendment or supplement thereto);
(ii) trading in securities generally on the New York Stock
Exchange, American Stock Exchange or the Nasdaq National Market shall
have been suspended or minimum or maximum prices shall have been
established on any such exchange or market;
(iii) a banking moratorium shall have been declared by New
York or United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international
calamity or emergency or (c) any material change in the financial
markets of the United States which, in the sole judgment of the Initial
Purchasers, makes it impracticable or inadvisable to proceed with the
offering or the delivery of the Securities as contemplated by the Final
Memorandum; or
(v) any securities of the Issuer shall have been downgraded or
placed on any "watch list" for possible downgrading by any nationally
recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 11 shall be
without liability of any party to any other party except as provided in Section
10 hereof.
12. Information Supplied by the Initial Purchasers. The statements set
forth in the first paragraph on page (i) of the Final Memorandum and the text
under the heading "Private Placement" in the Final Memorandum constitute the
only information furnished by the Initial Purchasers to the Issuer and the
Guarantors for the purposes of this Agreement. The Initial Purchasers confirm
that such statements are correct in all material respects.
13. Notices. All communications hereunder shall be in writing and, if
sent to the Initial Purchasers, shall be mailed or delivered or telecopied and
confirmed in writing to the Initial Purchasers c/o BT Securities Corporation,
One Bankers Trust Plaza, New York, New York 10005, Attention: James
<PAGE> 31
-31-
Clayton, and with a copy to Cahill Gordon & Reindel, 80 Pine Street, New York,
New York 10005, Attention: William M. Hartnett, Esq. If sent to the Issuer or
any Guarantor, shall be mailed, delivered or telegraphed and confirmed in
writing to Issuer or such Guarantor c/o SC International Services, Inc., 524 E.
Lamar Blvd., Arlington, Texas 76011-3999, Attention: Patrick Tolbert, with a
copy to Kaye, Scholer, Fierman, Hays & Handler, LLP, 425 Park Avenue, New York,
New York 10022, Attention: Joel I. Greenberg, Esq.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers, the Issuer, the Guarantors and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained; this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Issuer and the Guarantors contained in Section 9 of this
Agreement shall also be for the benefit of any person or persons who control or
any of the Initial Purchasers within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act and (ii) the indemnities of the Initial
Purchasers contained in Section 9 of this Agreement shall also be for the
benefit of the directors, officers, employees, agents and representatives of the
Issuer and the Guarantors and any person or persons who control the Issuer and
the Guarantors within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act. No purchaser of Securities from the Initial Purchasers will be
deemed a successor because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
<PAGE> 32
-32-
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Issuer, the
Subsidiary Guarantors and the Initial Purchasers.
Very truly yours,
SC INTERNATIONAL SERVICES, INC.
By: /s/ Thomas J. Lee
------------------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
SKY CHEFS, INC.
By: /s/ Thomas J. Lee
-----------------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
CATERAIR INTERNATIONAL, INC. (II)
By: /s/ Thomas J. Lee
-----------------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
<PAGE> 33
CATERAIR INTERNATIONAL
TRANSITION CORPORATION
ONEX OHIO ACCEPTANCE CORPORATION
ONEX OHIO FINANCE CORP.
ONEX OHIO FINANCE CORP. II
ONEX OHIO EQUITY CORP.
ONEX OHIO EQUITY CORP. II
ONEX OHIO CREDIT CORP.
ONEX OHIO CREDIT CORP. II
ONEX OHIO CAPITAL CORP.
ONEX OHIO CAPITAL CORP. II
ONEX OHIO FISCAL CORP.
ONEX OHIO FISCAL CORP. II
ONEX OHIO FUNDS CORP.
ONEX OHIO FUNDS CORP. II
ARLINGTON SERVICES, INC.
ARLINGTON SERVICES HOLDING
CORPORATION
SKY CHEFS INTERNATIONAL CORP.
BETHESDA SERVICES, INC
CATERAIR NEW ZEALAND LIMITED
(FORMERLY KNOWN AS BETHESDA
SERVICES HOLDING CORPORATION)
JFK CATERERS, INC.
CATERAIR CONSULTING SERVICES
CORPORATION
WESTERN AIRE CHEF, INC.
CATERAIR AIRPORT PROPERTIES, INC.
CATERAIR ST. THOMAS HOLDING
CORPORATION
SKY CHEFS ARGENTINE, INC.
By: /s/ Thomas J. Lee
------------------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
<PAGE> 34
CATERAIR INTERNATIONAL CORPORATION
By: /s/ Thomas J. Lee
-----------------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
<PAGE> 35
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
BT SECURITIES CORPORATION
By: /s/ Alan Freedman
------------------------------------
Name: Alan Freedman
Title: Vice President
J.P. MORGAN SECURITIES INC.
By: /s/ Andrew Holmes
-------------------------------------
Name: Andrew Holmes
Title: Vice President
CREDIT SUISSE FIRST BOSTON
CORPORATION
By: /s/ Joseph D. Fashano
-------------------------------------
Name: Joseph D. Fashano
Title: Director
GOLDMAN, SACHS & CO.
By: /s/ Goldman, Sachs & Co.
-------------------------------------
Name: Matt Leavitt
Title: Vice President
SMITH BARNEY INC.
By: /s/ Peter P.
-------------------------------------
Name: Peter P.
Title: Director
<PAGE> 36
BANKERS TRUST INTERNATIONAL PLC
By: /s/ Christine Barbella-Foggia
---------------------------------
Name: Christine Barbella-Foggia
Title: Vice President
<PAGE> 37
Exhibit A
<TABLE>
<CAPTION>
Principal Amount
Initial Purchasers of Notes
- ------------------ ----------------
<S> <C>
BT Securities Corporation....................... $140,000,000
J.P. Morgan Securities Inc...................... $ 60,000,000
Credit Suisse First Boston Corporation.......... $ 30,000,000
Goldman, Sachs & Co............................. $ 30,000,000
Smith Barney Inc................................ $ 30,000,000
Bankers Trust International PLC................. $ 10,000,000
------------
Total............................ $300,000,000
============
</TABLE>
<PAGE> 38
Exhibit B
[Form of Opinion of Kaye, Scholer,
Fierman, Hays & Handler, LLP]
<PAGE> 39
Exhibit B
[KAYE, SCHOLER, FIERMAN, HAYS & HANDLER LETTERHEAD]
(212) 836-8000
August 28, 1997
BT Securities Corporation
J.P. Morgan Securities Inc.
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Smith Barney Inc.
Bankers Trust International PLC
c/o BT Securities Corporation
One Bankers Trust Plaza
New York, New York 10005
Ladies and Gentlemen:
We have acted as counsel to SC International Services, Inc., a Delaware
corporation (the "ISSUER"), Sky Chefs, Inc., a Delaware corporation ("SKY
CHEFS"), Caterair International, Inc. (II), a Delaware corporation ("CII"),
Caterair International Corporation, a Delaware corporation ("CATERAIR"), and
each of the indirect domestic subsidiaries of the Issuer identified on the
signature pages of the Purchase Agreement referred to below (collectively, with
Sky Chefs, CII and Caterair, the "GUARANTORS", and each such corporation
individually, a "GUARANTOR"), in connection with the execution and delivery of
the Purchase Agreement, dated as of August 22, 1997 (the "PURCHASE AGREEMENT"),
among the Issuer, the Guarantors, and BT Securities Corporation, J.P. Morgan
Securities Inc., Credit Suisse First Boston Corporation, Goldman, Sachs & Co.,
Smith Barney Inc. and Bankers Trust International PLC, as initial purchasers
(collectively, the "INITIAL PURCHASERS"), and the transactions contemplated
thereby.
This opinion letter is delivered to the Initial Purchasers pursuant to
Section 7(a) of the Purchase Agreement. Unless otherwise indicated, capitalized
terms used but not defined herein have the meanings set forth in the Purchase
Agreement.
In connection herewith, we have examined originals or copies, certified
or otherwise identified to our satisfaction, of such documents executed on or
before the date hereof as we have deemed necessary or appropriate as a basis for
the opinions set forth herein.
<PAGE> 40
BT Securities Corporation
J.P. Morgan Securities Inc.
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Smith Barney Inc.
Bankers Trust International PLC 2 August 28, 1997
We have also examined, and are familiar with, executed originals or
copies, certified or otherwise identified to our satisfaction, of such corporate
documents and records of the Issuer and each Guarantor, such certificates of
public officials and officers of the Issuer and each Guarantor, and such other
agreements, instruments and other documents and records and such laws as we have
deemed necessary or appropriate for the purposes of this opinion. As to various
questions of fact material to our opinion, we have relied to the extent we have
deemed proper upon the representations made by the Issuer, each Guarantor and
the Initial Purchasers in the Purchase Agreement, the Notes, the Indenture and
the Registration Rights Agreement (collectively, the "DOCUMENTS") and assumed
that such parties will comply with the covenants contained in the Documents, and
certificates of public officials, officers of the Issuer and each Guarantor and
other appropriate persons.
In our examination, we have assumed the genuineness of all signatures
(other than as to the Issuer or any Guarantor), the authenticity, accuracy and
completeness of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies (including telecopies) and the authenticity of the originals of such
copies.
The laws covered by the opinions expressed herein are limited to the
United States Federal Securities Laws (including the Securities Act of 1933, the
Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment
Company Act of 1940 and the Investment Advisors Act of 1940), Regulation G, T, U
and X of the Board of Governors of the Federal Reserve System, the law of the
State of New York, and the General Corporation Law of the State of Delaware.
Based upon and subject to the foregoing and the other limitations,
qualifications and assumptions hereinafter set forth, we are of the opinion
that:
1. The Issuer and each Guarantor is validly existing in good
standing as a corporation under the laws of its jurisdiction of incorporation,
has the requisite corporate power and authority to own or lease its properties
and conduct its businesses as described in the Final Memorandum and is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction identified on Schedule 1 hereto.
2. To our knowledge based solely on a review of the minute books
of the Issuer, Sky Chefs, CII and Caterair and the attached certificates of
officers of each of the Issuer,
<PAGE> 41
BT Securities Corporation
J.P. Morgan Securities Inc.
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Smith Barney Inc.
Bankers Trust International PLC 3 August 28, 1997
Sky Chefs, CII and Caterair (the "CERTIFICATES"), at the Closing Date, the
issued and outstanding capital stock of (i) the Issuer consists of 100 shares of
Common Stock, $.01 par value per share, (ii) Sky Chefs consists of 100 shares of
Common Stock, $.01 par value per share, (iii) CII consists of 100 shares of
Common Stock, $.01 par value per share, and (iv) Caterair consists of 10,000
shares of Common Stock, $.01 par value per share. At the Closing Date, to our
knowledge based solely on a review of the minute books of the Issuer, Sky Chefs,
CII and Caterair and the Certificates, there are no outstanding subscriptions,
warrants, rights or options to acquire, or instruments convertible into or
exchangeable for, any capital stock or other equity interest in the Issuer, Sky
Chefs, CII or Caterair. The outstanding shares of capital stock of the Issuer,
Sky Chefs, CII and Caterair have been duly authorized and validly issued, are
fully paid and nonassessable and were not issued in violation of any preemptive
or similar rights granted by the Issuer, Sky Chefs, CII or Caterair, as
applicable, pursuant to any agreement identified on Schedule 2 hereto or its
certificate of incorporation. To our knowledge based solely on a review of the
minute books of Sky Chefs and CII and the Certificates, the Issuer is the record
owner of all outstanding shares of capital stock of Sky Chefs and CII. To our
knowledge based solely on a review of the minute books of Caterair and the
Certificates, Caterair Holdings Corporation is the record owner of all
outstanding shares of capital stock of Caterair.
3. The Issuer has the requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture, the Notes, the
Purchase Agreement and the Registration Rights Agreement. Each Guarantor has the
requisite corporate power and authority to execute, deliver and perform its
obligations under the Indenture, its Guarantee, the Purchase Agreement and the
Registration Rights Agreement.
4. The Indenture has been duly and validly authorized by the
Issuer and each Guarantor and, when executed and delivered by the Issuer and
each Guarantor (assuming the due authorization, execution and delivery thereof
by the Trustee), will constitute a valid and binding obligation of the Issuer
and each Guarantor, enforceable against each of them in accordance with its
terms, subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights (including, without limitation,
fraudulent transfer or conveyance laws), (ii) general equitable principles
(whether considered in a proceeding at law or in equity) and (iii) the Other
Exceptions (as defined herein, and collectively with the matters referred to in
clauses (i) and (ii) of this paragraph, the "EXCEPTIONS"). The Indenture meets
the requirements for qualification under the TIA.
<PAGE> 42
BT Securities Corporation
J.P. Morgan Securities Inc.
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Smith Barney Inc.
Bankers Trust International PLC 4 August 28, 1997
5. The Notes have been duly and validly authorized by the Issuer
for issuance. The Notes, when executed by the Issuer and authenticated by the
Trustee in accordance with the provisions of the Indenture, and delivered to and
paid for by the Initial Purchasers in accordance with the terms of the Purchase
Agreement, will have been duly executed and delivered by the Issuer and will
constitute valid and binding obligations of the Issuer enforceable in accordance
with their respective terms, subject to the Exceptions.
6. The Guarantee of each Guarantor endorsed on the Notes has been
duly and validly authorized by such Guarantor and, when executed and delivered
by such Guarantor will, upon the execution, authentication and delivery of the
Notes and payment therefor in accordance with the terms of the Purchase
Agreement, constitute a valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, subject to the
Exceptions.
7. The Exchange Notes (as defined in the Registration Rights
Agreement) have been duly and validly authorized by the Issuer. The Exchange
Notes when executed and issued by the Issuer and authenticated by the Trustee in
accordance with the terms of the Indenture and the Registration Rights Agreement
upon exchange of the Notes in accordance with the Registration Rights Agreement,
will constitute valid and binding obligations of the Issuer, enforceable in
accordance with their respective terms, subject to the Exceptions.
8. The Purchase Agreement has been duly authorized, executed and
delivered by the Issuer and each Guarantor.
9. The Registration Rights Agreement has been duly authorized,
executed and delivered by the Issuer and each Guarantor and assuming due
authorization, execution and delivery thereof by each other party thereto
constitutes a valid and binding obligation of the Issuer and each Guarantor,
enforceable in accordance with its terms, subject to the Exceptions.
10. Except as described in the Final Memorandum or identified on
Schedule 3 hereto, to our actual knowledge, no consent, approval, order,
authorization or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority of the State of New
York, or any subdivision thereof, or pursuant to the United States Federal
Securities Laws or the General Corporation Law of the State of Delaware is
required for the performance of the Purchase Agreement, the Notes, the
Guarantees of Sky Chefs, CII or Caterair, the Indenture or the Registration
Rights Agreement by the Issuer, Sky Chefs, CII or
<PAGE> 43
BT Securities Corporation
J.P. Morgan Securities Inc.
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Smith Barney Inc.
Bankers Trust International PLC 5 August 28, 1997
Caterair (to the extent each such entity is a party thereto), except (i) those
which have been obtained, (ii) those required under state securities or "Blue
Sky" laws in connection with the purchase and distribution of the Securities by
the Initial Purchasers (as to which we express no opinion), (iii) in connection
with the registration under the Act of the Exchange Notes and the Guarantees of
the Guarantors of the Exchange Notes pursuant to the Registration Rights
Agreement and (iv) the qualification of the Indenture or the trustee thereunder
under the TIA in connection with the registration of the Exchange Notes pursuant
to the Registration Rights Agreement.
11. Neither the execution, delivery and performance by the Issuer,
Sky Chefs, CII or Caterair of the Purchase Agreement, the Notes, the Guarantees
of Sky Chefs, CII or Caterair, the Indenture or the Registration Rights
Agreement (to the extent each such entity is a party thereto), nor the
compliance by the Issuer, Sky Chefs, CII or Caterair with the terms and
provisions thereof (after giving effect to all amendments and waivers obtained
on or prior to the Closing Date) (i) will contravene any provision of the
General Corporation Law of the State of Delaware, United States Federal
Securities Laws or laws of the State of New York which in our experience are
normally applicable to general business corporations that are not engaged in
regulated businesses and to transactions of the type contemplated by the
Documents or any order, writ, injunction or decree of any court or governmental
instrumentality that is identified on Schedule 4 hereto, (ii) except as set
forth on Schedule 2 hereto, will conflict or be inconsistent with or result in
any breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, any agreement or instrument identified on Schedule 2
hereto, or (iii) will violate any provision of the certificate of incorporation
or by-laws of the Issuer, Sky Chefs, CII or Caterair; provided, that, we do not
express any opinion as to whether the execution, delivery or performance by the
Issuer or any Guarantor of the Purchase Agreement, the Notes, the Guarantees,
the Indenture or the Registration Rights Agreement or compliance with the terms
thereof will constitute a violation of or a default under any covenant,
restriction or provision with respect to financial ratios or tests or any aspect
of the financial condition or results of operations of the Issuer or any
Guarantor.
12. Assuming (i) the Securities are sold by the Issuer and the
Guarantors to the Initial Purchasers, and initially resold by the Initial
Purchasers, in accordance with the terms of, and in the manner contemplated by
the Purchase Agreement and the Final Memorandum, (ii) the accuracy of the
Issuer's and the Guarantors' representations and warranties set forth in Section
2 of the Purchase Agreement and the due performance by the Issuer and each
Guarantor of the covenants and agreements set forth in Section 5 and (iii) the
accuracy of the Initial Purchasers'
<PAGE> 44
BT Securities Corporation
J.P. Morgan Securities Inc.
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Smith Barney Inc.
Bankers Trust International PLC 6 August 28, 1997
representations and warranties set forth in Section 8 of the Purchase Agreement
and the due performance by the Initial Purchasers of the covenants and
agreements set forth in Section 8 of the Purchase Agreement, the offer and sale
of the Securities to the Initial Purchasers in the manner contemplated by the
Purchase Agreement and the Final Memorandum or in connection with the initial
resale of the Securities by the Initial Purchasers in accordance with the
Purchase Agreement and the Final Memorandum does not require registration under
the Act and does not require the qualification of the Indenture under the TIA;
it being understood that no opinion is expressed as to any subsequent resale of
the Securities.
13. The Notes, the Guarantees, the Indenture, the Registration
Rights Agreement and the Purchase Agreement conform in all material respects to
the respective descriptions thereof in the Final Memorandum.
14. The statements made in the "Certain Federal Income Tax
Considerations" section of the Final Memorandum, to the extent they describe
statutes, rules or regulations or legal conclusions with respect to their
application, have been reviewed by us and are correct in all material respects.
15. Neither the consummation of the transactions contemplated by
the Purchase Agreement nor the issuance, sale, execution or delivery of the
Securities will violate Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System.
16. Neither the Issuer nor any Guarantor is now, or after giving
effect to the issuance of the Securities, the transactions contemplated by the
Purchase Agreement and the other transactions contemplated by the Final
Memorandum, will be, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
17. The statements in the Final Memorandum under the heading
"Description of Notes" and "Exchange Offer; Registration Rights," insofar as
such statements purport to summarize certain provisions of the Indenture, the
Notes, the Guarantees, the Exchange Notes and the Registration Rights Agreement,
subject to the limitations contained in such statements, provide a fair and
accurate summary in all material respects of such agreements or instruments.
We do not opine upon and do not assume any responsibility for and are
not passing upon the accuracy (except as indicated in clauses 13, 14 and 17
above), completeness and fairness of the statements contained in the Final
Memorandum and we have not made any
<PAGE> 45
BT Securities Corporation
J.P. Morgan Securities Inc.
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Smith Barney Inc.
Bankers Trust International PLC 7 August 28, 1997
independent check or verification thereof. However, we have participated in
conferences with officers and other representatives of the Issuer,
representatives of the independent accountants for the Issuer and
representatives of the Initial Purchasers in connection with the preparation of
the Final Memorandum. Based upon these conferences and our review of the
documents referenced above (our determination of materiality is based to the
extent we deem proper upon the opinions, representations and statements of the
officers and other representatives of the Issuer), no facts have come to our
attention which lead us to believe that the Final Memorandum as of the date
thereof or as of the date hereof contained or contains any untrue statement of a
material fact or omitted or omits to state any material fact necessary in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading (it being understood that we express no opinion
or belief as to the financial statements, schedules and other financial,
accounting and statistical data or information included in the Final Memorandum
or omitted therefrom).
Attached to this opinion is the Certificate which contains statements
to the effect that:
(i) Except as described in the Final Memorandum or set forth on
Schedule 5 hereto, there are no pending or, to the best knowledge of the
signatories of the Certificate, threatened (in writing) actions, suits,
proceedings, inquiries or investigations to which the Issuer, Sky Chefs,
CII or Caterair, or to which the property of the Issuer, Sky Chefs, CII or
Caterair, is subject before any court or before or brought by any
governmental agency or body of the Federal Government of the United States
or any State of the United States.
(ii) Except as described in the Final Memorandum or as set forth in the
documentation relating to the Senior Bank Financing, there are no express
consensual encumbrances or restrictions on the ability of Sky Chefs or CII
to (a) pay dividends or make any other distributions on any of its capital
stock or to pay any indebtedness owed to the Issuer or (b) make any loans
or advances to, or investments in, the Issuer.
Based solely on our actual knowledge and inquiry of certain officers of the
Issuer and the Guarantors, nothing has come to our attention that would give us
reason to doubt the veracity of the statements made in the Certificate.
<PAGE> 46
BT Securities Corporation
J.P. Morgan Securities Inc.
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Smith Barney Inc.
Bankers Trust International PLC 8 August 28, 1997
Our opinions set forth above are subject to the following limitations,
qualifications and assumptions:
The opinion expressed in paragraph 2 as to contractual preemptive
rights does not imply an opinion as to any anti-dilution or similar provisions
set forth in any license, agreement, contract, indenture, mortgage, deed of
trust, bank loan or credit agreement or other instrument.
The foregoing opinions are subject to the qualification that the
enforceability of certain waivers, rights and remedies provided in the Documents
may be unavailable or limited by certain laws and judicial decisions.
We express no opinion or belief as to the financial statements,
schedules and other financial, accounting and statistical data or information
included in the Final Memorandum or omitted therefrom or with respect to any
necessary qualification under the state securities or "Blue Sky" laws of the
various jurisdictions in which the Securities are being offered by the Initial
Purchasers.
With respect to our opinions set forth in paragraphs 10 and 11 above
with respect to the Issuer's, Sky Chefs', CII's or Caterair's performance of
agreements or obligations, we address performance only of agreements and
obligations which are required to be performed on or prior to the date hereof.
With respect to our opinions set forth above, we also assume that all
of the issued and outstanding shares of capital stock of each Guarantor are
owned beneficially and of record by the persons set forth on Schedule 1 attached
hereto. In addition, we assume that all of the issued and outstanding shares of
the capital stock of each Guarantor have been duly authorized and validly issued
and are fully paid and nonassessable.
We express no opinion as to (i) the provisions of the Purchase
Agreement, the Registration Rights Agreement, the Indenture, or any other
agreement or document providing for the indemnification of or contribution to a
party with respect to a liability arising under Federal or state securities laws
or where such indemnification or contribution is contrary to public policy, (ii)
any purported waiver of rights under stay, extension and usury laws contained in
the Indenture, the Notes or the Exchange Notes or (iii) the effect of any
fraudulent transfer or conveyance laws (collectively, the "OTHER EXCEPTIONS").
<PAGE> 47
BT Securities Corporation
J.P. Morgan Securities Inc.
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Smith Barney Inc.
Bankers Trust International PLC 9 August 28, 1997
To the extent that the obligations of the Issuer under the Indenture
may be dependent upon such matters, we assume for purposes of this opinion that
the Trustee under the Indenture is duly organized, validly existing and in good
standing under the laws of its jurisdiction of its organization; that the
Trustee is duly qualified to engage in the activities contemplated by the
Indenture; that the Indenture has been duly authorized, executed and delivered
by the Trustee and constitutes a legal, valid and binding obligation of the
Trustee, enforceable against the Trustee in accordance with its terms; that the
Trustee is in compliance, generally and with respect to acting as trustee under
the Indenture, with all applicable laws and regulations; and that the Trustee
has the requisite organizational and legal power and authority to perform its
obligations under the Indenture.
To the extent that the obligations of the Issuer under the Purchase
Agreement and the Registration Rights Agreement may be dependent upon such
matters, we assume for purposes of this opinion that each Initial Purchaser is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of its organization; that each Initial Purchaser is duly qualified
to engage in the activities contemplated by such agreements; that each of such
agreements has been duly authorized, executed and delivered by each Initial
Purchaser and constitutes a legal, valid and binding obligation of each Initial
Purchaser, enforceable against such Initial Purchaser in accordance with its
terms; that each Initial Purchaser is in compliance, generally and with respect
to acting as Initial Purchaser under such agreements, with all applicable laws
and regulations; and that each Initial Purchaser has the requisite
organizational and legal power and authority to perform its obligations under
such agreements.
Our opinions are rendered solely for your information with respect to
the foregoing, and may not be relied upon by any other person or for any other
purpose without our prior written consent.
Very truly yours,
<PAGE> 48
SCHEDULE 1
Jurisdictions in Which Entities Are in Good
Standing
DATE OF QUALIFICATION STATE
SC INTERNATIONAL SERVICES, INC.
July 10, 1995 Delaware
September 28, 1995 Texas
SKY CHEFS, INC.
September 19, 1941 Delaware
April 9, 1981 Alabama
November 2, 1941 Arizona
December 2, 1942 California
December 1, 1949 Colorado
September 28, 1995 Connecticut
May 2, 1977 Florida
September 28, 1995 Georgia
July 9, 1942 Illinois
November 3, 1944 Kentucky
December 1, 1980 Louisiana
March 5, 1970 Maryland
December 28, 1944 Massachusetts
December 2, 1971 Michigan
January 25, 1996 Minnesota
July 29, 1980 Missouri
October 11, 1985 Nebraska
September 28, 1995 Nevada
<PAGE> 49
DATE OF QUALIFICATION STATE
June 7, 1979 New Jersey
November 23, 1981 New Mexico
October 31, 1941 New York
May 5, 1986 North Carolina
November 3, 1941 Ohio
July 1, 1942 Oklahoma
October 13, 1966 Oregon
No Date Reported Pennsylvania
September 28, 1995 South Carolina
October 31, 1941 Tennessee
December 8, 1941 Texas
September 28, 1995 Utah
October 18, 1976 Virginia
September 28, 1995 Washington
June 21, 1968 Washington, D.C.
September 10, 1980 Wisconsin
SKY CHEFS INTERNATIONAL CORP.
November 9, 1993 Delaware
CATERAIR INTERNATIONAL, INC. (II)
July 6, 1995 Delaware
September 27, 1995 California
September 27, 1995 Maryland
2
<PAGE> 50
DATE OF QUALIFICATION STATE
September 27, 1995 Massachusetts
September 27, 1995 New York
September 29, 1995 Pennsylvania
September 27, 1995 Utah
BETHESDA SERVICES, INC.
September 21, 1995 Delaware
CATERAIR NEW ZEALAND LIMITED
(formerly Bethesda Services Holding Corporation)
September 21, 1995 Delaware
ARLINGTON SERVICES, INC.
December 8, 1992 Delaware
ARLINGTON SERVICES HOLDING CORPORATION
September 15, 1995 Delaware
3
<PAGE> 51
DATE OF QUALIFICATION STATE
ONEX OHIO ACCEPTANCE CORPORATION
April 23, 1986 Delaware
ONEX OHIO CREDIT CORP.
April 23, 1986 Delaware
ONEX OHIO EQUITY CORP.
April 27, 1987 Delaware
ONEX OHIO FINANCE CORP.
December 15, 1987 Delaware
ONEX OHIO FINANCE CORP. II
February 16, 1989 Delaware
ONEX OHIO CAPITAL CORP.
September 26, 1988 Delaware
ONEX OHIO FISCAL CORP.
September 26, 1988 Delaware
ONEX OHIO FUNDS CORP.
September 26, 1988 Delaware
4
<PAGE> 52
DATE OF QUALIFICATION STATE
ONEX OHIO CREDIT CORP. II
December 29, 1993 Delaware
ONEX OHIO FUNDS CORP. II
December 29, 1993 Delaware
ONEX OHIO FISCAL CORP. II
December 29, 1993 Delaware
ONEX OHIO EQUITY CORP. II
December 29, 1993 Delaware
ONEX OHIO CAPITAL CORP. II
December 29, 1993 Delaware
5
<PAGE> 53
DATE OF QUALIFICATION STATE
CATERAIR INTERNATIONAL CORPORATION
June 26, 1989 Delaware
October 18, 1989 Arizona
September 25, 1989 California
September 25, 1989 Connecticut
September 15, 1989 Florida
September 25, 1989 Georgia
September 25, 1989 Louisiana
June 30, 1989 Maryland
September 25, 1989 Massachusetts
September 25, 1989 Michigan
October 31, 1989 Minnesota
October 6, 1989 Missouri
December 8, 1989 Nevada
October 19, 1989 New Mexico
September 26, 1989 New York
September 25, 1989 Oregon
September 25, 1989 Pennsylvania
September 26, 1989 South Carolina
September 25, 1989 Texas
September 25, 1989 Utah
September 25, 1989 Washington
September 27, 1989 Washington, D.C.
CATERAIR AIRPORT PROPERTIES, INC.
(FORMERLY MARRIOTT AIRPORT PROPERTIES, INC.)
6
<PAGE> 54
DATE OF QUALIFICATION STATE
September 1, 1972 Delaware
June 26, 1989 California
CATERAIR CONSULTING SERVICES CORPORATION
(formerly KCI Caterers, Inc.)
July 2, 1971 Delaware
October 15, 1971 Missouri
CATERAIR ST. THOMAS HOLDINGS CORPORATION
November 13, 1992 Delaware
JFK CATERERS, INC.
October 11, 1983 Delaware
October 20, 1983 New York
7
<PAGE> 55
DATE OF QUALIFICATION STATE
WESTERN AIRE CHEF, INC.
May 17, 1973 Delaware
June 5, 1973 California
August 3, 1992 Minnesota
SKY CHEFS ARGENTINE, INC.
(formerly Marriott Argentine Airline Catering, Inc.)
June 15, 1990 Delaware
CATERAIR INTERNATIONAL TRANSITION CORPORATION
October 12, 1995 Delaware
January 5, 1996 South Carolina
8
<PAGE> 56
SCHEDULE 2
Agreements or Instruments
Capitalized terms used but not defined in this Schedule 2, have the meanings set
forth in the attached opinion letter
Catering Services Agreement, dated as of April 27, 1992, between Sky Chefs and
American Airlines, Inc. ("AMERICAN")
Amendment to Catering Services Agreement, dated as of February 12, 1993, between
Sky Chefs and American
Amendment to Catering Services Agreement, dated as of June 29, 1993, between Sky
Chefs and American
Amendment to Catering Services Agreement, dated as of July 15, 1994, between Sky
Chefs and American
Employment Agreement, dated as of January 1, 1997, between Michael Z. Kay and
Sky Chefs
Employment Agreement, dated as of January 1, 1997, between Patrick W. Tolbert
and Sky Chefs
Employment Agreement, dated as of January 1, 1997, between Randall C. Boyd and
Sky Chefs
Management Shareholders' Agreement, dated as of May 29, 1986, among Onex Food
Services, Inc. and certain other parties
Promissory Note, dated September 29, 1995, by Caterair in favor of the Issuer
Catering Services Agreement, dated February 11, 1992, between Caterair and
American, as amended
Global Catering Agreement, dated July 31, 1996, between Canadian Airlines
International Ltd. and Sky Chefs
Credit Agreement, dated as of September 29, 1995, among Onex Food Services,
Inc., the Issuer, Caterair, Caterair Holdings Corporation and the lenders named
therein, Bankers Trust Company, Morgan Guaranty Trust Company of New York and
Goldman, Sachs & Co., as documentation agent, Bankers Trust Company of New York,
as syndication agent, and Morgan Guaranty Trust Company of New York, as
administrative agent, and the Bank of New York, as co-agent -- This Agreement
will be satisfied and discharged at the closing of the offering of the Notes.
9
<PAGE> 57
The Indenture, dated as of September 15, 1995, among the Issuer, the Sky Chefs,
CII, Caterair and The Bank of New York, as trustee
Those several Lease Agreements, each dated as of May 15, 1993, between Caterair,
on the one hand, and TriNet Essential Facilities VIII B, Inc. or TriNet
Essential Facilities X, Inc., as the case may be, on the other hand, as amended
Agreement concerning Delta Dailyfoods Texas, Inc. between Cabeco Holdings, Inc.
and Sky Chefs and Aaldering Holdings, Inc., dated December 17, 1993
Securityholders' Agreement, dated as of September 29, 1995, among Onex Food
Services, Inc., Onex U.S. LLC and certain other parties
Stockholders' Agreement, dated as of December 6, 1993, among Onex Corporation,
Onex Food Services, Inc., OnCap Holdings U.S., Inc., OMI Quebec Inc., LSG
Lufthansa Service GmbH and LSG Lufthansa Service USA Corporation, as amended
Catering Agreement, effective the 30th day of September 1995, by and between
United Air Lines, Inc. and Sky Chefs relating to various airports
Catering Agreement, dated as of June 1, 1996, between Delta Air Lines, Inc. and
Sky Chefs relating to various airports
Catering Agreement, dated as of September 30, 1996, between Sky Chefs and
Northwest Airlines, Inc.
10
<PAGE> 58
SCHEDULE 3
Consent, Waivers, Approvals, Authorizations And Orders
None.
11
<PAGE> 59
SCHEDULE 4
Orders, Writs, Injunctions or Decrees
of any Court or Governmental Instrumentality
None.
12
<PAGE> 60
SCHEDULE 5
Pending or Threatened Litigations,
Actions, Suits or Proceedings
13
<PAGE> 61
Exhibit C
[Form of Opinion of Kaye, Scholer,
Fierman, Hays & Handler, LLP,
with respect to certain tax matters]
<PAGE> 62
Exhibit D
[Form of Opinion of Price Waterhouse, LLP]
<PAGE> 63
Schedule A
SUBSIDIARIES
SC International Services, Inc.
("SCIS")
<TABLE>
<CAPTION>
------------------------------------ ----------------- ----------------------
OWNERSHIP JURISDICTION
SUBSIDIARY PERCENTAGE OF INCORPORATION
------------------------------------ ----------------- ----------------------
<S> <C> <C>
Sky Chefs, Inc.* ("Sky Chefs") SCIS (100%) Delaware
------------------------------------ ----------------- ----------------------
Caterair International, Inc. (II)* SCIS (100%) Delaware
("CII")
------------------------------------ ----------------- ----------------------
Caterair International SCIS (100%) Delaware
Transition Corporation*
------------------------------------ ----------------- ----------------------
Onex Ohio Acceptance SCIS (100%) Delaware
Corporation*
------------------------------------ ----------------- ----------------------
Onex Ohio Finance Corp.* SCIS (100%) Delaware
------------------------------------ ----------------- ----------------------
Onex Ohio Finance Corp. II* SCIS (100%) Delaware
------------------------------------ ----------------- ----------------------
Onex Ohio Equity Corp.* SCIS (100%) Delaware
------------------------------------ ----------------- ----------------------
Onex Ohio Equity Corp. II* SCIS (100%) Delaware
------------------------------------ ----------------- ----------------------
Onex Ohio Credit Corp.* SCIS (100%) Delaware
------------------------------------ ----------------- ----------------------
Onex Ohio Credit Corp. II* SCIS (100%) Delaware
------------------------------------ ----------------- ----------------------
Onex Ohio Capital Corp.* SCIS (100%) Delaware
------------------------------------ ----------------- ----------------------
Onex Ohio Capital Corp. II* SCIS (100%) Delaware
------------------------------------ ----------------- ----------------------
Onex Ohio Fiscal Corp.* SCIS (100%) Delaware
------------------------------------ ----------------- ----------------------
Onex Ohio Fiscal Corp. II* SCIS (100%) Delaware
------------------------------------ ----------------- ----------------------
Onex Ohio Funds Corp.* SCIS (100%) Delaware
------------------------------------ ----------------- ----------------------
Onex Ohio Funds Corp. II* SCIS (100%) Delaware
------------------------------------ ----------------- ----------------------
Arlington Services, Inc.* ("ASI") Sky Chefs (100%) Delaware
------------------------------------ ----------------- ----------------------
Arlington Services Holding Sky Chefs (100%) Delaware
Corporation* ("ASHC")
------------------------------------ ----------------- ----------------------
Sky Chefs International Corp.* Sky Chefs (100%) Delaware
("SCIC")
------------------------------------ ----------------- ----------------------
Bethesda Services, Inc.* ("BSI") CII (100%) Delaware
------------------------------------ ----------------- ----------------------
</TABLE>
A-1
<PAGE> 64
<TABLE>
<CAPTION>
------------------------------------ ----------------- ----------------------
OWNERSHIP JURISDICTION
SUBSIDIARY PERCENTAGE OF INCORPORATION
------------------------------------ ----------------- ----------------------
<S> <C> <C>
Caterair New Zealand Limited* BSI (100%) Delaware
(formerly known as Bethesda
Services Holding Corporation)
("CNZL")
------------------------------------ ----------------- ----------------------
JFK Caterers, Inc.* ASHC (100%) Delaware
------------------------------------ ----------------- ----------------------
Caterair Consulting Services ASHC (100%) Delaware
Corporation*
------------------------------------ ----------------- ----------------------
Western Aire Chef, Inc.* ("WAC") ASHC (100%) Delaware
------------------------------------ ----------------- ----------------------
Caterair Airport Properties, Inc.* ASHC (100%) Delaware
("CAP")
------------------------------------ ----------------- ----------------------
Caterair St. Thomas Holding ASHC (100%) Delaware
Corporation* ("CSTHC")
------------------------------------ ----------------- ----------------------
Sky Chefs Argentine, Inc.* ASHC (100%) Delaware
------------------------------------ ----------------- ----------------------
LSG Sky Chefs do Brazil SCIC (100%) Brazil
Catering-Refeicoes Ltda. ("LSG do
Brazil")
------------------------------------ ----------------- ----------------------
ServCater International Ltda. LSG do Brazil Brazil
(90%)
------------------------------------ ----------------- ----------------------
Arlington Services Mexico S.A. de ASHC (100%) Mexico
C.V. ("ASM")
------------------------------------ ----------------- ----------------------
Caterair de Mexico S.A. de C.V. ASM (100%) Mexico
------------------------------------ ----------------- ----------------------
Comisariato Gotre S.A. ASM (100%) Mexico
------------------------------------ ----------------- ----------------------
Inmobiliaria Maraca S.A. de C.V. ASM (100%) Mexico
------------------------------------ ----------------- ----------------------
Casa de Ponce de Leon, S.A. ASM (100%) Mexico
("CPL")
------------------------------------ ----------------- ----------------------
Cocina del Aire Provincia S.A. de CPL (100%) Mexico
C.V.
------------------------------------ ----------------- ----------------------
Caterair Inflite Services de CP L(100%) Mexico
Mexico S.A. de C.V.
------------------------------------ ----------------- ----------------------
Cater Suprimento de Refeicoes, ASHC (100%) Brazil
Ltd. ("CSRL")
------------------------------------ ----------------- ----------------------
Caterair Servicos de Bordo e CSRL (100%) Brazil
Hotelaria S.A.
------------------------------------ ----------------- ----------------------
Caterair Chateau Canada ASHC (100%) Canada
Limited ("CCCL")
------------------------------------ ----------------- ----------------------
</TABLE>
A-2
<PAGE> 65
<TABLE>
<CAPTION>
------------------------------------ ----------------- ----------------------
OWNERSHIP JURISDICTION
SUBSIDIARY PERCENTAGE OF INCORPORATION
------------------------------------ ----------------- ----------------------
<S> <C> <C>
SC International Services Ireland CCCL (100%) Ireland
------------------------------------ ----------------- ----------------------
Sky Chefs U.K. Limited ("SCUKL") ASHC (100%) United Kingdom
------------------------------------ ----------------- ----------------------
LSG Lufthansa Service Sky SCUKL (50%) United Kingdom
Chefs/GCC Limited
------------------------------------ ----------------- ----------------------
Arlington Services Panama S.A. de ASHC (100%) Panama
C.V. ("ASP")
------------------------------------ ----------------- ----------------------
Inversiones Turisticas ASP (100%) Panama
Aeropuerto Panama S.A. ("ITAP")
------------------------------------ ----------------- ----------------------
Caterair International de Panama ITAP (100%) Panama
S.A.
------------------------------------ ----------------- ----------------------
Caterair Barcelona S.A. ASHC ([80]%) Spain
------------------------------------ ----------------- ----------------------
Caterair Madrid S.A. ("CM") ASHC (100%) Spain
------------------------------------ ----------------- ----------------------
Caterair Barcelona S.A. CM (20%) Spain
------------------------------------ ----------------- ----------------------
LSG Lufthansa Service Sky Chefs ASHC (100%) France
France S.A.
------------------------------------ ----------------- ----------------------
Caterair International ASHC (100%) Venezuela
Venezuela C.A. ("CIV")
------------------------------------ ----------------- ----------------------
Marriott Export Services, L.A. CIV (100%) Venezuela
------------------------------------ ----------------- ----------------------
Marriott International Trade CIV (100%) Venezuela
Services C.A.
------------------------------------ ----------------- ----------------------
Caterair International Japan Ltd. ASHC (100%) Japan
------------------------------------ ----------------- ----------------------
Caterair In-Flite Services of ASHC (100%) Virgin Islands
V.I., Inc.
------------------------------------ ----------------- ----------------------
Marriott In-Flite Services of ASHC (100%) Korea
Korea, Ltd.-
------------------------------------ ----------------- ----------------------
Caterair Australia Pty. Ltd. ("CAP CAP (100%) Australia
Ltd.")
------------------------------------ ----------------- ----------------------
Caterair Airport Services Pty. CAP Ltd. (51%) Australia
Ltd. ("CASP")
------------------------------------ ----------------- ----------------------
Caterair Airport Services (Sydney) CASP (100%) Australia
Pty. Ltd.
------------------------------------ ----------------- ----------------------
Caterair Taiwan Inflight Services, CNZL (100%) Taiwan
Inc.-
------------------------------------ ----------------- ----------------------
</TABLE>
A-3
<PAGE> 66
<TABLE>
<CAPTION>
------------------------------------ ----------------- ----------------------
OWNERSHIP JURISDICTION
SUBSIDIARY PERCENTAGE OF INCORPORATION
------------------------------------ ----------------- ----------------------
<S> <C> <C>
Caterair Portugal CAP (26%) Portugal
Assistancia A Bordo Limitada
------------------------------------ ----------------- ----------------------
Caterair Chile S.A. ("CC") WAC (99%) Chile
CAP (1%)
------------------------------------ ----------------- ----------------------
Caterair Servicos CC (97%) Chile
Industriales Ltda Sergio
Aldunate (3%)
</TABLE>
- -------------------------
* Guarantor of Notes.
- - Held pursuant to certain trust arrangements.
A-4
<PAGE> 67
Caterair International Corporation
("Caterair")
<TABLE>
<CAPTION>
---------------------------------- ------------------- ----------------------
OWNERSHIP JURISDICTION
SUBSIDIARY PERCENTAGE OF INCORPORATION
---------------------------------- ------------------- ----------------------
<S> <C> <C>
Caterair Contracting Caterair (100%) Delaware
Corporation
---------------------------------- ------------------- ----------------------
Caterair Portugal Caterair (74%) Portugal
Assistancia A Bordo
Limitada
---------------------------------- ------------------- ----------------------
</TABLE>
A-5
<PAGE> 68
JOINT VENTURES
SC International Services, Inc.
("SCIS")
<TABLE>
<CAPTION>
------------------------------------ ----------------- ----------------------
OWNERSHIP JURISDICTION
JOINT VENTURE PERCENTAGE OF INCORPORATION
------------------------------------ ----------------- ----------------------
<S> <C> <C>
Aerococina, S.A. de C.V. SCIS (49%) Mexico
------------------------------------ ----------------- ----------------------
LSG Lufthansa Service Sky Chefs SCUKL (50%) United Kingdom
GCC Limited
------------------------------------ ----------------- ----------------------
Caterair Brasil, S.A. ASHC (49%) Brazil
------------------------------------ ----------------- ----------------------
Barbados Flight Kitchen ASHC (49%) Barbados
Limited-(u)
------------------------------------ ----------------- ----------------------
Versair Inflight Services Ltd.-(u) ASHC (24%) Jamaica
------------------------------------ ----------------- ----------------------
St Lucia Catering Services Ltd.-(u) ASHC (49%) St. Lucia
------------------------------------ ----------------- ----------------------
Antigua Catering Services Ltd.(u) ASHC (49%) Antigua
------------------------------------ ----------------- ----------------------
Caterair Lebanon SAL - ASHC (20%) Lebanon
------------------------------------ ----------------- ----------------------
Gulf International Caterers W.L.L. ASHC (49%) Bahrain
------------------------------------ ----------------- ----------------------
St. Thomas Catering CSTHC (37%) Delaware
Corporation(u)
------------------------------------ ----------------- ----------------------
Inflight Holdings (Cayman) Ltd. ASHC (49%) Cayman Islands
("IHCL")-(u)
------------------------------------ ----------------- ----------------------
Ecuador Inflight Services (Cayman) IHCL (100%) Ecuador
Ltd. ("EISCL")(u)
------------------------------------ ----------------- ----------------------
Cateraire del Ecuador(u) EISCL (61%) Ecuador
------------------------------------ ----------------- ----------------------
Industrial Catering Services IHCL (100%) Cayman Islands
(Cayman) Ltd. ("ICSCL")(u)
------------------------------------ ----------------- ----------------------
Godca S.A.(u) ICSCL (100%) El Salvador
------------------------------------ ----------------- ----------------------
Cayman Catering Services Ltd.(u) IHCL (100%) Cayman Islands
------------------------------------ ----------------- ----------------------
Belize Inflight Services (Cayman) IHCL (100%) Cayman Islands
Ltd. ("BISCL")(u)
------------------------------------ ----------------- ----------------------
Belize Inflight Services Limited(u) BISCL (100%) Belize
------------------------------------ ----------------- ----------------------
</TABLE>
A-6
<PAGE> 69
<TABLE>
<CAPTION>
------------------------------------ ----------------- ----------------------
OWNERSHIP JURISDICTION
JOINT VENTURE PERCENTAGE OF INCORPORATION
------------------------------------ ----------------- ----------------------
<S> <C> <C>
Cocina del Aire (Cayman) Ltd. IHCL (100%) Cayman Islands
("CACL")(u)
------------------------------------ ----------------- ----------------------
Cocina del Aire, S.A. de C.V.(u) CACL (100%) Guatemala
- ------------------------------------ ----------------- ----------------------
Grenada Inflight (Cayman) Ltd. IHCL (100%) Cayman Islands
("GICL")(u)
------------------------------------ ----------------- ----------------------
Inflight Caterers (Grenada) Ltd.(u) GICL (50%) Grenada
------------------------------------ ----------------- ----------------------
St. Maarten In-flight (Cayman) IHCL (100%) Cayman Islands
Ltd. ("SMICL")(u)
------------------------------------ ----------------- ----------------------
St. Maarten In-flight SMICL (100%) St. Maarten
Services N.V.(u)
------------------------------------ ----------------- ----------------------
Cocina de Vuelos S.A. de C.V.-(u) ASHC (49%) El Salvador
------------------------------------ ----------------- ----------------------
Airport Restaurants (1992) Limited ASHC (49%) Barbados
-(u)
------------------------------------ ----------------- ----------------------
Aeromar, Ltd. ("AL") SCUKL (49%) Russia
------------------------------------ ----------------- ----------------------
Huntsman Aeromar AL (25%) Russia
------------------------------------ ----------------- ----------------------
Comisariato de Baja ASM (50%) Mexico
California S.A. de C.V.
------------------------------------ ----------------- ----------------------
Delta Dailyfood Texas, Inc. Sky Chefs (33%) Texas
------------------------------------ ----------------- ----------------------
</TABLE>
- ----------------------------
- - Held pursuant to certain trust arrangements.
(u) Related to Goddard/SCIS Joint Venture
A-7
<PAGE> 70
Caterair International Corporation
("Caterair")
[None.]
A-8
<PAGE> 1
EXHIBIT 10.2
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of August 28, 1997
by and among
SC INTERNATIONAL SERVICES, INC.,
(as Issuer)
the Guarantors named herein,
(as Guarantors)
and
BT SECURITIES CORPORATION,
J.P. MORGAN SECURITIES INC.,
CREDIT SUISSE FIRST BOSTON CORPORATION,
GOLDMAN, SACHS & CO.,
SMITH BARNEY INC.,
BANKERS TRUST INTERNATIONAL PLC,
(as Initial Purchasers)
================================================================================
$300,000,000
9 1/4% SENIOR SUBORDINATED NOTES DUE 2007
<PAGE> 2
This Registration Rights Agreement is dated as of August 28, 1997,
by and among SC International Services, Inc., a Delaware corporation (the
"Issuer"), Sky Chefs, Inc., ("Sky Chefs"), Caterair International, Inc. (II)
("CII"), Caterair International Corporation ("Caterair"), and the additional
guarantors named on the signature pages hereto (together with Sky Chefs, CII and
Caterair, the "Guarantors") and BT Securities Corporation, J.P. Morgan
Securities Inc., Credit Suisse First Boston Corporation, Goldman, Sachs & Co.,
Smith Barney Inc. and Bankers Trust International PLC (the "Initial
Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated
August 22, 1997, between the Issuer, the Guarantors and the Initial Purchasers
(the "Purchase Agreement"), which provides for the sale by the Issuer and the
Guarantors to the Initial Purchasers of $300,000,000 aggregate principal amount
of 9 1/4% Senior Subordinated Notes due 2007 of the Issuer (the "Notes"). In
order to induce the Initial Purchasers to enter into the Purchase Agreement, the
Issuer and the Guarantors have agreed to provide the registration rights set
forth in this Agreement for the benefit of the Initial Purchasers and any
subsequent holder or holders of the Notes. The execution and delivery of this
Agreement is a condition to the closing of the transactions contemplated by the
Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: As defined in Section 4(a) hereof.
Advice: As defined in Section 5 hereof.
Affiliate: With respect to any specified person, "Affiliate"
shall mean any other person directly or indirectly controlling or
controlled by or under direct or indirect common control with such
specified person. For the purposes of this definition, "control,"
when used with respect to any person, means the power to direct
the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by
contract or otherwise and the terms "affiliated," "controlling"
and "controlled" have meanings correlative to the foregoing.
<PAGE> 3
- 2 -
Agreement: This Registration Rights Agreement, as the same may be
amended, supplemented or modified from time to time in accordance with the terms
hereof.
Applicable Period: As defined in Section 2(b) hereof.
Business Day: Any day except a Saturday, a Sunday or another day
on which banking institutions in New York, New York generally are required or
authorized by law or other government action to be closed.
Consummate or consummate: When used to qualify the term "Exchange
Offer," shall mean validly and lawfully to issue and deliver the Exchange Notes
pursuant to the Exchange Offer for all Notes validly tendered and not validly
withdrawn pursuant thereto in accordance with the terms of this Agreement.
Effectiveness Date: With respect to (i) the Exchange Registration
Statement, the 150th day after the Issue Date and (ii) any Shelf Registration
Statement, the 90th day after the Filing Date with respect thereto.
Effectiveness Period: As defined in Section 3(a) hereof.
Event Date: As defined in Section 4(b).
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC pursuant thereto.
Exchange Date: As defined in Section 2(d) hereof.
Exchange Notes: The 9 1/4% Senior Subordinated Notes due 2007 of
the Issuer, that are identical to the Notes in all material respects, except
that the provisions regarding restrictions on transfer shall be modified, as
provided in the Indenture (or the indenture pursuant to which the Exchange Notes
are issued), and the issuance thereof pursuant to the Exchange Offer shall have
been registered pursuant to an effective Registration Statement in compliance
with the Securities Act.
Exchange Offer: An offer to issue, in exchange for any and all of
the Notes, a like aggregate principal amount of Exchange Notes, which offer
shall be made by the Issuer pursuant to Section 2 hereof.
<PAGE> 4
- 3 -
Exchange Registration Statement: As defined in Section 2(a)
hereof.
Filing Date: (A) If no Registration Statement has been filed by
the Issuer and the Guarantors pursuant to this Agreement, the 45th day after the
Issue Date; and (B) in any other case (which may be applicable notwithstanding
the consummation of the Exchange Offer), the 90th day after delivery of a Shelf
Notice.
Guarantors: As defined in the preamble hereof.
Holder: Any holder of Registrable Notes.
Indemnified Person: As defined in Section 7(c) hereof.
Indemnifying Person: As defined in Section 7(c) hereof.
Indenture: The Indenture, dated as of August 28, 1997, between the
Issuer, the Guarantors and The Bank of New York, as trustee thereunder, pursuant
to which the Notes are issued, as amended or supplemented from time to time in
accordance with the terms thereof.
Initial Purchasers: As defined in the preamble hereof.
Initial Shelf Registration: As defined in Section 3(a).
Inspectors: As defined in Section 5(n).
Issue Date: The date on which the Notes were issued and sold to
the Initial Purchasers pursuant to the Purchase Agreement.
Issuer: As defined in the preamble hereof.
Notes: As defined in the preamble hereof.
Participant: As defined in Section 7(a).
Participating Broker-Dealer: As defined in Section 2 hereof.
<PAGE> 5
- 4 -
Person: Any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or agency, department or
instrumentality thereof.
Private Exchange: As defined in Section 2 hereof.
Private Exchange Notes: As defined in Section 2 hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated pursuant to the Securities
Act), as amended or supplemented by any prospectus supplement, with respect to
the terms of the offering of any portion of the Registrable Notes covered by
such Registration Statement, and all other amendments and supplements to any
such prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such prospectus.
Purchase Agreement: As defined in the preamble hereof.
Records: As defined in Section 5(n) hereof.
Registrable Notes: Each Note upon original issuance thereof and at
all times subsequent thereto, each Exchange Note as to which Section 2(c)(iv)
hereof is applicable upon original issuance and at all times subsequent thereto
and each Private Exchange Note upon original issuance thereof and at all times
subsequent thereto, until in the case of any such Note, Exchange Note or Private
Exchange Note, as the case may be, the earliest to occur of (i) a Registration
Statement (other than, with respect to any Exchange Note as to which Section
2(c)(iv) hereof is applicable, the Exchange Registration Statement) covering
such Note, Exchange Note or Private Exchange Note has been declared effective by
the SEC and such Note, Exchange Note or such Private Exchange Note, as the case
may be, has been disposed of in accordance with such effective Registration
Statement, (ii) such Note has been exchanged pursuant to the Exchange Offer for
an Exchange Note or Exchange Notes that may be resold without restriction under
federal securities laws, (iii) such Note, Exchange Note or Private Exchange
Note, as the case may be, ceases to be outstanding for purposes of the Indenture
or (iv) such Note, Exchange Note or Private Exchange
<PAGE> 6
- 5 -
Note, as the case may be, may be resold without restriction pursuant to Rule 144
under the Securities Act.
Registration Statement: Any registration statement of the Issuer
filed with the SEC that covers any of the Registrable Notes pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference, if any, in such
registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 144A: Rule 144A promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 144(k): Rule 144(k) promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 158: Rule 158 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 174: Rule 174 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 415: Rule 415 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
<PAGE> 7
- 6 -
Rule 424: Rule 424 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
Shelf Notice: As defined in Section 2(c) hereof.
Shelf Registration: As defined in Section 3(b) hereof.
Shelf Registration Statement: Any Registration Statement relating
to a Shelf Registration.
Special Counsel: Such special counsel to the holders of
Registrable Notes as shall be agreed upon by the Issuer and Holders of a
majority in aggregate principal amount of Registrable Notes, the reasonable
expenses of such Holders will be reimbursed by the Issuer pursuant to Section 6
hereof.
Subsequent Shelf Registration: As defined in Section 3(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture.
underwritten registration or underwritten offering: A registration
in connection with which securities of the Issuer are sold to an underwriter for
reoffering to the public pursuant to an effective Registration Statement.
2. Exchange Offer
(a) To the extent not prohibited by any applicable laws, rules,
regulations or applicable interpretations of the staff of the SEC, the Issuer
and the Guarantors shall (A) prepare and, on or prior to the Filing Date, file
with the SEC a Registration Statement under the Securities Act with respect to
an offer by the Issuer to the holders of the Notes to issue and deliver to such
holders, in exchange for Notes, a like principal amount of Exchange Notes, (B)
use their reason-
<PAGE> 8
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able best efforts to cause the Exchange Registration Statement (as defined) to
be declared effective by the SEC under the Securities Act on or prior to the
Effectiveness Date, and (C) commence the Exchange Offer and use their reasonable
best efforts to issue, on or prior to 195 days after the Issue Date, the
Exchange Notes. The offer and sale of the Exchange Notes pursuant to the
Exchange Offer shall be registered pursuant to the Securities Act on an
appropriate form (the "Exchange Registration Statement") and duly registered or
qualified under all applicable state securities or Blue Sky laws and will comply
with all applicable tender offer rules and regulations under the Exchange Act
and state securities or Blue Sky laws. The Exchange Offer and Private Exchange
shall not be subject to any condition, other than that (i) the Exchange Offer or
Private Exchange, as the case may be, does not violate any applicable laws,
rules, regulations or interpretations of the staff of the SEC, (ii) no action or
proceeding shall have been instituted or threatened in any court or by any
governmental agency which would be reasonably likely to materially impair the
ability of the Issuer to proceed with the Exchange Offer or the Private
Exchange, and no material adverse development shall have occurred in any action
or proceeding with respect to the Issuer and (iii) all governmental approvals
shall have been obtained, which approvals the Issuer deems necessary for the
consummation of the Exchange Offer or the Private Exchange.
Upon consummation of the Exchange Offer in accordance with this
Section 2, the provisions of this Agreement shall continue to apply solely with
respect to Registrable Notes that are Private Exchange Notes and Exchange Notes
as to which Section 2(c)(iv) is applicable and Exchange Notes held by
Participating Broker-Dealers, and the Issuer and the Guarantors shall have no
further obligations to register Registrable Notes (other than Private Exchange
Notes and other than in respect of any Exchange Notes as to which Section
2(c)(iv) hereof applies) pursuant to Section 3 hereof. No securities shall be
included in the Exchange Registration Statement other than the Exchange Notes.
Each Holder of Notes that participates in the Exchange Offer will
be required to represent to the Issuer, the Guarantors and their counsel in
writing (which may be contained in the applicable letter of transmittal) that at
the time of the consummation of the Exchange Offer (i) any Exchange Notes
received by such holder will be acquired in the ordinary course of its business,
(ii) such Holder will have no arrangement or understanding with any Person to
participate in the distribution (within the meaning of the Securities Act) of
the Exchange
<PAGE> 9
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Notes and (iii) such Holder is not an Affiliate of the Issuer or any of the
Guarantors.
(b) The Issuer shall include within the Prospectus contained in
the Exchange Registration Statement a section entitled "Plan of Distribution"
which shall contain a summary statement of the positions taken or policies made
by the staff of the SEC with respect to the potential "underwriter" status of
any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act) of Exchange Notes received by such broker-dealer in the
Exchange Offer (a "Participating Broker-Dealer"), whether such positions or
policies have been publicly disseminated by the staff of the SEC or such
positions or policies represent the prevailing views of the staff of the SEC.
Such "Plan of Distribution" section shall also expressly permit, to the extent
permitted by applicable policies and regulations of the SEC, the use of the
Prospectus by all Persons subject to the prospectus delivery requirements of the
Securities Act, including, to the extent permitted by applicable policies and
regulations of the SEC, all Participating Broker-Dealers, and include a
statement describing the means by which Participating Broker-Dealers may resell
the Exchange Notes in compliance with the Securities Act.
The Issuer shall use its reasonable best efforts to keep the Exchange
Registration Statement effective and to amend and supplement the Prospectus
contained therein in order to permit such Prospectus to be lawfully delivered by
all Persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as is necessary to comply with applicable law in
connection with any resale of the Exchange Notes covered thereby; provided,
however, that such period shall not exceed 90 days after the consummation of the
Exchange Offer (or such longer period if extended pursuant to the last paragraph
of Section 5 hereof) (the "Applicable Period").
If, prior to consummation of the Exchange Offer, the Initial Purchasers
hold any Notes acquired by them and having, or which are reasonably likely to be
determined to have, the status of an unsold allotment in the initial
distribution, the Issuer, upon the request of the Initial Purchasers, shall,
simultaneously with the delivery of the Exchange Notes in the Exchange Offer,
issue and deliver to such Initial Purchasers, in exchange (the "Private
Exchange") for such Notes held by the Initial Purchasers, a like principal
amount of debt securities of the Issuer, that are identical in all material
respects to the Exchange Notes (the "Private Exchange Notes") (except that they
may bear a customary legend with respect to restrictions
<PAGE> 10
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on transfer). The Private Exchange Notes shall be issued pursuant to the same
indenture as the Exchange Notes and shall bear the same CUSIP number as the
Exchange Notes.
Interest on the Exchange Notes and the Private Exchange Notes will
accrue from (A) the later of (i) the last interest payment date on which
interest was paid on the Notes surrendered in exchange therefor or (ii) if the
Notes are surrendered for exchange on a date subsequent to the record date for
an interest payment date to occur on or after the date of such exchange and as
to which interest will be paid, the date of such interest payment or (B) if no
interest has been paid on the Notes, from the date of the original issuance of
the Notes.
In connection with the Exchange Offer, the Issuer shall:
(1) mail, or cause to be mailed, to each Holder of Notes entitled
to participate in the Exchange Offer a copy of the Prospectus forming
part of the Exchange Registration Statement, together with an
appropriate letter of transmittal and related documents;
(2) keep the Exchange Offer open for not less than 20 Business
Days after the date that notice of the Exchange Offer is mailed to
Holders of Notes (or longer if required by applicable law);
(3) utilize the services of a depositary for the Exchange Offer
with an address in the Borough of Manhattan, the City of New York;
(4) permit Holders of Notes to withdraw tendered Notes at any time
prior to the close of business, New York time, on the last Business Day
on which the Exchange Offer shall remain open; and
(5) otherwise comply in all material respects with all applicable
laws, rules and regulations.
As soon as practicable after the close of the Exchange Offer or
the Private Exchange, if any, the Issuer shall:
(1) accept for exchange all Notes validly tendered and not validly
withdrawn pursuant to the Exchange Offer or the Private Exchange, if
any;
<PAGE> 11
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(2) deliver to the Trustee for cancellation all Notes so accepted
for exchange; and
(3) cause the Trustee to authenticate and deliver promptly to each
Holder of Notes, Exchange Notes or Private Exchange Notes, as the case
may be, equal in principal amount to the Notes of such Holder so
accepted for exchange.
The Exchange Notes and the Private Exchange Notes may be issued
under (i) the Indenture or (ii) an indenture identical in all material respects
to the Indenture, which in either event shall provide that the Exchange Notes
shall not be subject to the transfer restrictions set forth in the Indenture and
the Private Exchange Notes shall be subject to the transfer restrictions set
forth in the Indenture. The Indenture or such indenture shall provide that the
Exchange Notes, the Private Exchange Notes and the Notes shall vote and consent
together on all matters as one class and that neither the Exchange Notes, the
Private Exchange Notes nor the Notes will have the right to vote or consent as a
separate class on any matter.
(c) If, (i) because of any change in law or in currently
prevailing interpretations of the staff of the SEC, the Issuer and the
Guarantors are not permitted to effect the Exchange Offer, (ii) the Exchange
Offer is not consummated within 195 days of the Issue Date, (iii) any Holder of
Private Exchange Notes so requests in writing to the Issuer at any time after
the consummation of the Exchange Offer, or (iv) in the case of any Holder that
participates in the Exchange Offer, such Holder does not receive Exchange Notes
on the date of the exchange that may be sold without restriction under federal
securities laws (other than due solely to the status of such Holder as an
Affiliate of the Issuer within the meaning of the Securities Act or any
prospectus delivery requirements applicable to such Holder) and so notifies the
Issuer within 30 days after such Holder first becomes aware of such
restrictions, in the case of each of clauses (i) to and including (iv) of this
sentence, then the Issuer shall promptly deliver to the Holders of the Notes and
the Trustee written notice thereof (the "Shelf Notice") and shall file a Shelf
Registration pursuant to Section 3 hereof.
3. Shelf Registration
If at any time a Shelf Notice is delivered as contemplated by
Section 2(c) hereof, then:
<PAGE> 12
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(a) Shelf Registration. The Issuer and the Guarantors shall file
with the SEC a Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415 covering all of the Registrable Notes not permitted
to be exchanged in the Exchange Offer in accordance with the terms of this
Agreement, Private Exchange Notes and Exchange Notes as to which Section
2(c)(iv) is applicable (the "Initial Shelf Registration"). The Issuer and the
Guarantors shall use their reasonable best efforts to file with the SEC the
initial Shelf Registration on or before the applicable Filing Date. The Initial
Shelf Registration shall be on Form S-1 or another appropriate form permitting
registration of such Registrable Note for resale by the Holders thereof in the
manner or manners designated by them (including, without limitation, one or more
underwritten offerings).
The Issuer and the Guarantors shall use their reasonable best
efforts to cause the Initial Shelf Registration to be declared effective under
the Securities Act on or prior to the Effectiveness Date and to keep the Initial
Shelf Registration continuously effective under the Securities Act, subject to
Section 3(e) hereof, until the date which is two years from the Issue Date,
subject to extension pursuant to the last paragraph of Section 5 hereof (the
"Effectiveness Period"), or such shorter period ending when all Registrable
Notes covered by the Initial Shelf Registration have been sold in the manner set
forth and as contemplated in the Initial Shelf Registration or, if applicable, a
Subsequent Shelf Registration covering all of the Registrable Notes has been
declared effective; provided, however, that the Effectiveness Period in respect
of the Initial Shelf Registration shall be extended to the extent required to
permit dealers to comply with the applicable prospectus delivery requirements of
Rule 174 under the Securities Act and as otherwise provided herein and shall be
subject to reduction to the extent that the applicable provisions of Rule 144(k)
are amended or revised to reduce the two year holding period set forth therein.
(b) Subsequent Shelf Registrations. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time during the Effectiveness Period (other than because of the
sale of all of the securities registered thereunder or suspension of
effectiveness permitted under Section 3(e) hereof), the Issuer and the
Guarantors shall use their reasonable best efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof, and in any event
shall within 45 days of such cessation of effectiveness amend the Initial Shelf
Registration in a
<PAGE> 13
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manner to obtain the withdrawal of the order suspending the effectiveness
thereof, or file an additional Shelf Registration Statement pursuant to Rule 415
covering all of the Registrable Notes covered by and not sold under the Initial
Shelf Registration or an earlier Subsequent Shelf Registration (each, a
"Subsequent Shelf Registration"). If a Subsequent Shelf Registration is filed,
the Issuer and the Guarantors shall, subject to Section 3(e), use their
reasonable best efforts to cause the Subsequent Shelf Registration to be
declared effective under the Securities Act as soon as practicable after such
filing and to keep such Subsequent Shelf Registration continuously effective for
a period equal to the number of days in the Effectiveness Period less the
aggregate number of days during which the Initial Shelf Registration or any
Subsequent Shelf Registration was previously continuously effective. As used
herein the term "Shelf Registration" means the Initial Shelf Registration and
any Subsequent Shelf Registration.
(c) Supplements and Amendments. The Issuer and the Guarantors
shall promptly supplement and amend any Shelf Registration if required by the
rules, regulations or instructions applicable to the registration form used for
such Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Holders of a majority in aggregate principal amount of the
Registrable Notes covered by such Registration Statement or by any underwriter
of such Registrable Notes.
(d) No Holder of Registrable Notes may include any of its
Registrable Notes in any Shelf Registration Statement pursuant to this Agreement
unless and until such Holder furnishes to the Issuer in writing, within 20 days
after receipt of a request therefor, such information as the Issuer may
reasonably request for use in connection with any Shelf Registration Statement
or Prospectus or preliminary prospectus included therein. No Holder of
Registrable Notes shall be entitled to Additional Interest pursuant to Section 4
hereof unless and until such Holder shall have provided all such reasonably
requested information. Each Holder of Registrable Notes as to which any Shelf
Registration Statement is being effected agrees to furnish promptly to the
Issuer all information required to be disclosed in order to make the information
previously furnished to the Issuer by such holder not materially misleading.
(e) Suspension Periods. Notwithstanding anything to the contrary
set forth herein, the Issuer and the Guarantors may, during the Effectiveness
Period, suspend the effectiveness of any Shelf Registration Statement for a
period not to exceed 30 days in any 360 day period if (i) an event occurs and is
<PAGE> 14
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continuing as a result of which such Shelf Registration Statement would, in each
of the Issuer's and the Guarantors' good faith judgment, contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading and (ii) (a) the Issuer and the Guarantors
determine in their good faith judgment that the disclosure of such event at such
time would have a material adverse effect on the business, operations or
prospects of the Issuer or (b) the disclosure otherwise relates to a pending
material business transaction which has not yet been publicly disclosed. The
Issuer and the Guarantors shall not be required to pay any Additional Interest
due to the suspension of a Shelf Registration Statement pursuant to this Section
3(e).
4. Additional Interest
(a) The parties hereto agree that the holders of Registrable
Notes will suffer damages if the Issuer and the Guarantors fail to fulfill their
obligations pursuant to Section 2 or Section 3, as applicable, and that it would
not be feasible to ascertain the extent of such damages. Accordingly, the Issuer
agrees to pay, as liquidated damages, additional interest on the Notes
("Additional Interest") under the circumstances and to the extent set forth
below:
(i) (A) neither the Exchange Registration Statement nor the
Initial Shelf Registration has been filed on or prior to the Filing
Date applicable thereto or (B) notwithstanding that the Issuer and
Guarantors have consummated or will consummate the Exchange Offer, the
Issuer and the Guarantors are required to file a Shelf Registration and
such Shelf Registration is not filed on or prior to the Filing Date
applicable thereto, then, commencing on the day after any such Filing
Date, Additional Interest shall accrue on the principal amount of the
Registrable Notes at a rate of 0.50% per annum for the first 90 days
immediately following such applicable Filing Date, and such Additional
Interest rate shall increase by an additional 0.50% per annum at the
beginning of each subsequent 90-day period; or
(ii) if (A) neither the Exchange Registration Statement nor the
Initial Shelf Registration is declared effective by the SEC on or prior
to the Effectiveness Date applicable thereto or (B) notwithstanding
that the Issuer and the Guarantors have consummated or will consummate
the Exchange Offer, the Issuer and the Guarantors are required
<PAGE> 15
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to file a Shelf Registration and such Shelf Registration is not
declared effective by the SEC on or prior to the Effectiveness Date
applicable to such Shelf Registration, then, commencing on the day
after such Effectiveness Date, Additional Interest shall accrue on the
principal amount of the Registrable Notes at a rate of 0.50% per annum
for the first 90 days immediately following the day after such
Effectiveness Date, and such Additional Interest rate shall increase by
an additional 0.50% per annum at the beginning of each subsequent
90-day period; or
(iii) if (A) the Issuer and the Guarantors have not exchanged
Exchange Notes for all Notes validly tendered in accordance with the
terms of the Exchange Offer on or prior to the 195th day after the
Issue Date or (B) if applicable, a Shelf Registration has been declared
effective and such Shelf Registration ceases to be effective at any
time during the Effectiveness Period (other than as permitted
hereunder, including, without limitation, in accordance with Section
3(e) hereof), then Additional Interest shall accrue on the principal
amount of the Registrable Notes at a rate of 0.50% per annum for the
first 90 days commencing on the (x) 195th day after the Issue Date, in
the case of (A) above, or (y) the day such Shelf Registration ceases to
be effective in the case of (B) above (other than as specifically
permitted by this Agreement), and such Additional Interest rate shall
increase by an additional 0.50% per annum at the beginning of each such
subsequent 90-day period;
provided, however, that the Additional Interest rate on the Notes may not exceed
at any one time in the aggregate 1.50% per annum; provided, further, however,
that (1) upon the filing of the applicable Exchange Registration Statement or
the applicable Shelf Registration as required hereunder (in the case of clause
(i) above of this Section 4), (2) upon the effectiveness of the Exchange
Registration Statement or the applicable Shelf Registration as required
hereunder (in the case of clause (ii) of this Section 4), or (3) upon the
exchange of the Exchange Notes for all Notes tendered (in the case of clause
(iii)(A) of this Section 4), or upon the effectiveness of the applicable Shelf
Registration which had ceased to remain effective (in the case of (iii)(B) of
this Section 4) (other than as specifically permitted by this Agreement),
Additional Interest on the Notes in respect of which such events relate as a
result of such clause (or the relevant subclause thereof), as the case may be,
shall cease to accrue and, in any case, such Additional Inter-
<PAGE> 16
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est shall not be payable in respect of more than one of clauses (i), (ii) or
(iii) at any one time.
(b) The Issuer shall notify the Trustee within one Business Day
after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "Event Date"). Any amounts of
Additional Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section
4 will be payable in cash semi-annually on each March 1 and September 1 (to the
Holders of record on the February 15 and August 15 immediately preceding such
dates), commencing with the first such date occurring after any such Additional
Interest commences to accrue. The amount of Additional Interest will be
determined by multiplying the applicable Additional Interest rate by the
principal amount of the Registrable Notes, multiplied by a fraction, the
numerator of which is the number of days such Additional Interest rate was
applicable during such period (determined on the basis of a 360-day year
comprised of twelve 30-day months and, in the case of a partial month, the
actual number of days elapsed), and the denominator of which is 360.
5. Registration Procedures
In connection with the filing of any Registration Statement
pursuant to Sections 2 or 3 hereof, the Issuer and the Guarantors shall effect
such registrations to permit the sale of the applicable Registrable Notes
covered thereby in accordance with the intended method or methods of disposition
thereof, and pursuant thereto and in connection with any Registration Statement
filed by the Issuer and the Guarantors hereunder, the Issuer and Guarantors
shall:
(a) In the case of a Shelf Registration, a reasonable period of
time prior to the initial filing of a Shelf Registration Statement or
Prospectus and a reasonable period of time prior to the filing of any
amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference),
furnish to the Holders of the Registrable Notes included in such Shelf
Registration Statement, their counsel and the managing underwriters, if
any, copies of all such documents proposed to be filed, which documents
(other than those incorporated or deemed to be incorporated by
reference) will be subject to the review of such Holders, their Special
Counsel and such underwriters, if any. The Issuer and the Guarantors
shall not file any such Shelf Registration Statement or related
Prospectus or any amendments or supplements thereto to which the
Holders of a ma-
<PAGE> 17
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jority in principal amount of the Registrable Notes included in such
Shelf Registration Statement shall reasonably object on a timely basis;
(b) Prepare and file with the SEC such amendments, including
post-effective amendments, to each Registration Statement as may be
necessary to, subject to Section 3(e) hereof, keep such Registration
Statement continuously effective for the Effectiveness Period or the
Applicable Period or until consummation of the Exchange Offer, as the
case may be; cause the related Prospectus to be supplemented by any
Prospectus supplement required by applicable law, and as so
supplemented to be filed pursuant to Rule 424; and comply with the
provisions of the Securities Act and the Exchange Act applicable to it
or them with respect to the disposition of all securities covered by
such Registration Statement as so amended or in such Prospectus as so
supplemented and with subsequent resale of any securities being sold by
a Participating Broker-Dealer covered by any such Prospectus during the
Applicable Period;
(c) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Exchange Notes during the Applicable Period relating
thereto from whom the Issuer has received written notice that it will
be a Participating Broker-Dealer in the Exchange Offer, notify the
selling Holders of Registrable Notes, or each such Participating
Broker-Dealer, as the case may be, their counsel and the managing
underwriters, if any, promptly (but in any event within two Business
Days), and confirm such notice in writing, (i)(A) when a Prospectus or
any Prospectus supplement or post-effective amendment has been filed,
and (B) with respect to a Registration Statement or any post-effective
amendment, when the same has become effective under the Securities Act,
(ii) of any request by the SEC or any other Federal or state
governmental authority for amendments or supplements to a Registration
Statement or related Prospectus or for additional information, (iii) of
the issuance by the SEC of any stop order suspending or enjoining the
use of a Prospectus or the effectiveness of a Registration Statement or
the initiation of any proceedings for that purpose, (iv) of the receipt
by the Issuer and the Guarantors of any notification with respect to
the suspension of the qualification or exemption from qualification of
any of
<PAGE> 18
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the Registrable Notes or the Exchange Notes to be sold by any
Participating Broker-Dealer for offer or sale in any jurisdiction, or
the initiation or threatening of any proceeding for such purpose, and
(v) of the happening of any event or information becoming known to the
Issuer and the Guarantors that makes any statement made in a
Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in
or amendments or supplements to such Registration Statement, Prospectus
or documents so that, in the case of the Registration Statement, it
will not contain any 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 that in the case of a
Prospectus, it will not contain any 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, in light of the circumstances
under which they were made, not misleading and (vi) of the
determination by the Issuer that a post-effective amendment to a
Registration Statement would be appropriate;
(d) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Exchange Notes during the Applicable Period, use its
reasonable best efforts to avoid the issuance of or, if issued, obtain
the withdrawal of any order suspending the use of a Prospectus or the
effectiveness of a Registration Statement or suspending the
qualification (or exemption from qualification) of any of the
Registrable Notes or the Exchange Notes to be sold by any Participating
Broker-Dealer, for sale in any jurisdiction, at the earliest
practicable date;
(e) If a Shelf Registration Statement is filed pursuant to Section
3 hereof and if requested by the managing underwriters, if any, or the
Holders of a majority in aggregate principal amount of the Registrable
Notes being sold in connection with any underwritten offering or any
Participating Broker-Dealer, (i) promptly as practicable incorporate in
a Prospectus supplement or post-effective amendment such information as
the managing underwriters, if any, and such Holders, any Participating
Broker-Dealer
<PAGE> 19
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or counsel for any of them determine is reasonably necessary to be
included therein, (ii) make all required filings of such Prospectus
supplement or such post-effective amendment under the Securities Act as
soon as practicable after the Issuer has received notification of the
matters to be incorporated in such Prospectus supplement or
post-effective amendment and (iii) supplement or make amendments to
such Registration Statement;
(f) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Exchange Notes during the Applicable Period, furnish
to each selling Holder of Registrable Notes and to each such
Participating Broker-Dealer who so requests and to counsel of each
managing underwriter, if any, at the sole expense of the Issuer, at
least one conformed copy of such Registration Statement and each
amendment thereto, including financial statements and schedules, all
documents incorporated or deemed to be incorporated therein by
reference, and all exhibits to the extent requested (including those
previously furnished or incorporated by reference) as soon as
practicable after the filing of such documents with the SEC;
(g) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Exchange Notes during the Applicable Period, deliver
to each selling Holder of Registrable Notes or each such Participating
Broker-Dealer, as the case may be, their respective counsel, and the
underwriters, if any, without charge, as many copies of the Prospectus
(including each form of preliminary prospectus) and each amendment or
supplement thereto as such Persons may reasonably request; and, subject
to the last paragraph of this Section 5, the Issuer hereby consents to
the use of such Prospectus and each amendment or supplement thereto by
each of the selling Holders of Registrable Notes or each such
Participating Broker-Dealer, as the case may be, and the underwriters,
if any, in connection with the offering and sale of the Registrable
Notes covered by, or the sale by Participating Broker-Dealers of the
Exchange Notes pursuant to, such Prospectus and any amendment or
supplement thereto;
<PAGE> 20
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(h) Prior to any public offering of Registrable Notes or any
delivery of a Prospectus contained in the Exchange Registration
Statement by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, use its reasonable best efforts to
register or qualify or cooperate with the selling Holders of
Registrable Notes or each such Participating Broker-Dealer, as the case
may be, the managing underwriter or underwriters, if any, and their
respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of such
Registrable Notes for offer and sale under the securities or Blue Sky
laws of such jurisdictions within the United States as any such selling
Holder, Participating Broker-Dealer or underwriter reasonably requests
in writing; provided, however, that where Exchange Notes held by
Participating Broker-Dealers or Registrable Notes offered other than
through an underwritten offering, the Issuer agrees to cause the
Issuer's counsel to perform Blue Sky investigations and file
registrations and qualifications required to be filed pursuant to this
Section 5(h); keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration
Statement is required to be kept effective hereunder and do any and all
other acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of the Exchange Notes held by
Participating Broker-Dealers or the Registrable Notes covered by the
applicable Registration Statement; provided, however, that the Issuer
shall not be required to (i) qualify generally to do business in any
jurisdiction where it is not then so qualified or (ii) take any action
which would subject it to general service of process or to taxation in
any jurisdiction where it is not so subject;
(i) In connection with any sale or transfer of Registrable Notes
that will result in such securities no longer being Registrable Notes,
cooperate with the selling Holders thereof and the managing
underwriters, if any, to facilitate the timely preparation and delivery
of certificates representing Registrable Notes to be sold, which
certificates shall not bear any restrictive legends and shall be in a
form eligible for deposit with The Depository Trust Company and to
enable such Registrable Notes to be in such denominations and
registered in such names as the managing underwriters, if any, or such
Holders may request at least two Business Days prior to any sale of
Registrable Notes;
<PAGE> 21
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(j) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Exchange Notes during the Applicable Period, upon the
occurrence of any event contemplated by Section 5(c)(v) or 5(c)(vi), as
promptly as practicable, prepare and (subject to Section 5(a)) file
with the SEC a supplement or amendment, including, if appropriate, a
post-effective amendment, to each Registration Statement or a
supplement to the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference, or file any other
document so that, as thereafter delivered to the purchasers of the
Registrable Notes being sold thereunder or to the purchasers of the
Exchange Notes to whom such Prospectus will be delivered by a
Participating Broker-Dealer, any such Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Notwithstanding the foregoing, the Issuer shall not be
required to amend or supplement a Registration Statement, any related
Prospectus or any document incorporated therein by reference, in the
event that, and for a period not to exceed an aggregate of 30 days in
any calendar year if, (i) an event occurs and is continuing as a result
of which the Shelf Registration would, in the Issuer's good faith
judgment, contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, and (ii)(a) the Issuer determines in its good faith
judgment that the disclosure of such event at such time would have a
material adverse effect on the business, operations or prospects of the
Issuer or (b) the disclosure otherwise relates to a pending material
business transaction that has not yet been publicly disclosed;
(k) Use its reasonable best efforts to cause the Registrable Notes
or Exchange Notes covered by the applicable Registration Statement to
be rated with the appropriate rating agencies, if so requested by the
Holders of a majority in aggregate principal amount of Registrable
Notes being sold pursuant to such Registration Statement or the
managing underwriter or underwriters, if any;
<PAGE> 22
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(l) Prior to the effective date of the first Registration
Statement relating to the Registrable Notes, to provide a CUSIP number
for the Exchange Notes (and Private Exchange Notes, if applicable);
(m) In connection with any underwritten offering of any
Registrable Notes pursuant to a Shelf Registration Statement, enter
into an underwriting agreement as is customary in underwritten
offerings of debt securities similar to the Notes in form and substance
satisfactory to the Issuer and take all such other reasonable actions
in connection therewith as are reasonably requested by the managing
underwriters, if any, or the Holders of a majority in aggregate
principal amount of the Registrable Notes being sold in order to
expedite or facilitate the disposition of such Registrable Notes, and,
in such connection, (i) make such representations and warranties to the
underwriters, if any, with respect to the business of the Issuer and
its subsidiaries (including with respect to businesses or assets
acquired or to be acquired by any of them), and the Shelf Registration
Statement, Prospectus and documents, if any, incorporated or deemed to
be incorporated by reference therein, in each case, as are customarily
made by issuers to underwriters in underwritten offerings of debt
securities similar to the Notes in form and substance satisfactory to
the Issuer, and confirm the same if and when customarily requested in
form and substance satisfactory to the Issuer; (ii) obtain opinions of
counsel to the Issuer and the Guarantors and updates thereof in form,
scope and substance reasonably satisfactory to the managing
underwriters, if any, addressed to the underwriters, if any, covering
the matters customarily covered in opinions reasonably requested in
underwritten offerings of debt securities similar to the Notes and such
other matters as may be reasonably requested by the managing
underwriters, if any; (iii) obtain customary "cold comfort" letters and
updates thereof from the independent certified public accountants of
the Issuer and the Guarantors (and, if necessary, any other independent
certified public accountants of any subsidiary of the Issuer or any of
the Guarantors or of any business acquired by the Issuer or any of the
Guarantors or any such subsidiary for which financial statements and
financial data is, or is required to be, included in the Shelf
Registration Statement) in form, scope and substance reasonably
satisfactory to the managing underwriters, if any, addressed to the
underwriters, if any, such letters to be in customary form and covering
matters of the type customarily covered in
<PAGE> 23
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"cold comfort" letters in connection with underwritten offerings of
debt securities similar to the Notes and such other matters as may be
reasonably requested by the underwriters as permitted by Statement on
Auditing Standards No. 72; and (iv) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and
procedures no less favorable to the selling Holders and the
underwriters, if any, than those set forth in Section 7 hereof (or such
other provisions and procedures acceptable to Holders of a majority in
aggregate principal amount of Registrable Notes covered by such Shelf
Registration Statement and the managing underwriters, if any) entered
into by the Issuer. The above shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder;
(n) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Exchange Notes during the Applicable Period, make
available for inspection by any selling Holder of Registrable Notes
being sold, or each such Participating Broker-Dealer, as the case may
be, any underwriter participating in any such disposition of
Registrable Notes, if any, and any attorney, accountant or other agent
retained by any such selling Holders, or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable
business hours, all relevant financial and other records, pertinent
corporate documents and instruments of the Issuer and its subsidiaries
and each of the Guarantors (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and
employees of the Issuer and its subsidiaries and each of the Guarantors
to supply all information reasonably requested by any such Inspector in
connection with such Registration Statement. Each Inspector shall agree
in writing that it will keep Records confidential and that it will not
disclose any of the Records unless (i) the disclosure of such Records
is necessary to avoid or correct a misstatement or omission in such
Registration Statement or Prospectus, (ii) the release of such Records
is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, (iii) disclosure of such information is, in the
opinion of counsel for any
<PAGE> 24
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Inspector, necessary or advisable in connection with any action, claim,
suit or proceeding, directly or indirectly, involving or potentially
involving such Inspector and arising out of, based upon, relating to,
or involving this Agreement, or any transactions contemplated hereby or
arising hereunder, or (iv) the information in such Records has been
made generally available to the public. Each selling Holder of such
Registrable Notes will be required to agree that information obtained
by it as a result of such inspections shall be deemed confidential and
shall not be used by it as the basis for any market transactions in the
securities of the Issuer unless and until such information is generally
available to the public (other than as a result of an impermissible
disclosure or failure to safeguard by such Person). Each selling Holder
of such Registrable Notes and each such Participating Broker-Dealer
will be required to further agree that it will, upon learning that
disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Issuer and allow the Issuer and the
Guarantors to undertake appropriate action to prevent disclosure of the
Records deemed confidential at the Issuer's and the Guarantors'
expense;
(o) Provide an indenture trustee for the Registrable Notes and/or
the Exchange Notes, as the case may be, and cause the Indenture or a
trust indenture provided for in Section 2(a) hereof, as the case may
be, to be qualified under the TIA not later than the effective date of
the Exchange Offer or the first Registration Statement relating to the
Registrable Notes; and, in connection therewith, cooperate with the
trustee under any such indenture and the holders of the Registrable
Notes, to effect such changes to such indenture, if any, as may be
required for such indenture to be so qualified in accordance with the
terms of the TIA; and execute, and use its reasonable efforts to cause
such trustee to execute, all customary documents as may be required to
effect such changes, and all other forms and documents required to be
filed with the SEC to enable such indenture to be so qualified in a
timely manner;
(p) Comply with all applicable rules and regulations of the SEC
and make generally available to the Issuer's securityholders earning
statements satisfying the provisions of Section 11(a) of the Securities
Act and Rule 158, no later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such
<PAGE> 25
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period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Notes are sold to underwriters in a firm
commitment or reasonable efforts underwritten offering and (ii) if not
sold to underwriters in such an offering, commencing on the first day
of the first fiscal quarter of the Issuer after the effective date of a
Registration Statement, which statement shall cover said 12-month
periods, consistent with the requirements of Rule 158;
(q) Upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Issuer and the Guarantors, in a
form customary for underwritten transactions, addressed to the Trustee
for the benefit of all Holders of Registrable Notes participating in
the Exchange Offer or the Private Exchange, as the case may be, that
the Exchange Notes or Private Exchange Notes, as the case may be, the
related Guarantees and the related indenture constitute legal, valid
and binding obligations of the Issuer and the Guarantors, enforceable
against the Issuer and the Guarantors in accordance with their
respective terms;
(r) If the Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Notes by Holders to the
Issuer (or to such other Person as directed by the Issuer) in exchange
for the Exchange Notes or the Private Exchange Notes, as the case may
be, the Issuer shall mark, or cause to be marked, on such Registrable
Notes that such Registrable Notes are being cancelled in exchange for
the Exchange Notes or the Private Exchange Notes, as the case may be;
(s) Cooperate with each seller of Registrable Notes covered by any
Registration Statement and each underwriter, if any, participating in
the disposition of such Registrable Notes and their respective counsel
in connection with any filings required to be made with the National
Association of Securities Dealers, Inc. ("NASD"); and
(t) Use its reasonable best efforts to take all other steps
reasonably necessary to effect the registration of the Exchange Notes
and/or Registrable Notes covered by a Registration Statement
contemplated hereby.
The Issuer and the Guarantors may require each seller of Registrable Notes as to
which any registration is being effected to
<PAGE> 26
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furnish to the Issuer and the Guarantors such information regarding the
distribution of such Registrable Notes as the Issuer may reasonably request. The
Issuer and the Guarantors may exclude from such registration the Registrable
Notes of any seller who unreasonably fails to furnish such information within 20
days after receiving such request. Each seller as to which any Shelf
Registration is being effected agrees to furnish promptly to the Issuer all
information required to be disclosed in order to make the information previously
furnished to the Issuer by such seller not materially misleading.
Each Holder of Registrable Notes and each Participating Broker-Dealer
agrees by its acquisition of such Registrable Notes or Exchange Notes to be sold
by such Participating Broker-Dealer, as the case may be, that upon actual
receipt of any notice from the Issuer of the happening of any event of the kind
described in Sections 5(c)(iii), 5(c)(iv), 5(c)(v) or 5(c)(vi) hereof, such
Holder will forthwith discontinue disposition of such Registrable Notes covered
by such Registration Statement or Prospectus or Exchange Notes to be sold by
such Holder or Participating Broker-Dealer, as the case may be, until such
Holder's or Participating Broker-Dealer's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(j) hereof, or until
it is advised in writing (the "Advice") by the Issuer that the use of the
applicable Prospectus may be resumed, and has received copies of any amendments
or supplements thereto. In the event that the Issuer shall give any such notice,
each of the Effectiveness Period and the Applicable Period shall be extended by
the number of days during such periods from and including the date of the giving
of such notice to and including the date when each seller of Registrable Notes
covered by such Registration Statement or Exchange Notes to be sold by such
Participating Broker-Dealer, as the case may be, shall have received (x) the
copies of the supplemented or amended Prospectus contemplated by Section 5(j)
hereof or (y) the Advice.
6. Registration Expenses
All fees and expenses incident to the performance of or compliance with
this Agreement by the Issuer and the Guarantors shall be borne by the Issuer and
the Guarantors whether or not any Registration Statement is filed or becomes
effective or the Exchange Offer is consummated, including, without limitation,
(i) all registration and filing fees (including, without limitation, (A) fees
and expenses with respect to filings required to be made with the NASD in
connection with an underwritten offering and (B) fees and expenses of compliance
with
<PAGE> 27
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state securities or Blue Sky laws), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Notes or Exchange
Notes in a form eligible for deposit with The Depository Trust Company and of
printing Prospectuses if the printing of the prospectus is requested by the
managing underwriters, if any, by the Holders of the majority in aggregate
principal amount of the Registrable Notes included in any Registration Statement
or in respect of any Exchange Notes to be sold by any Participating
Broker-Dealer during the Applicable Period, as the case may be), (iii)
messenger, telephone and delivery expenses, (iv) reasonable fees and
disbursements of counsel for the Issuer and the Guarantors and in the case of a
Shelf Registration, the Special Counsel (not to exceed one firm of counsel (in
addition to appropriate local counsel)), (v) fees and disbursements of all
independent certified public accountants referred to in Section 5(m)(iii) hereof
(including, without limitation, the expenses of any special audit and "cold
comfort" letters required by or incident to such performance), (vi) rating
agency fees, if any, and any fees associated with making the Registrable Notes
eligible for trading through The Depository Trust Company, (vii) Securities Act
liability insurance, if the Issuer or the Guarantors desire such insurance,
(viii) fees and expenses of all other Persons retained by the Issuer and the
Guarantors, (ix) internal expenses of the Issuer and the Guarantors (including,
without limitation, all salaries and expenses of officers and employees of the
Issuer and the Guarantors performing legal or accounting duties), (x) the
expense of any annual audit of the Issuer and the Guarantors, (xi) the fees and
expenses incurred in connection with the listing of the securities to be
registered on any securities exchange, if applicable, and (xii) the expenses
relating to printing, word processing and distributing all Registration
Statements, underwriting agreements, securities sales agreements, indentures and
any other documents necessary in order to comply with this Agreement.
Notwithstanding the foregoing, the Holders of Registrable Notes being registered
shall pay all underwriting discounts, commissions and placement agent fees
attributable to the sale of such Registrable Notes.
7. Indemnification
(a) The Issuer and the Guarantors agree to indemnify and hold harmless
each Holder of Registrable Notes and each Participating Broker-Dealer selling
Exchange Notes during the Applicable Period, the Affiliates, directors,
officers, agents, representatives and employees of each such Person, and each
other Person, if any, who controls any such Person or its Affiliates within the
meaning of either Section 15 of the Securi-
<PAGE> 28
- 27 -
ties Act or Section 20 of the Exchange Act (each, a "Participant"), from and
against any and all losses, claims, damages and liabilities (including, without
limitation, the reasonable legal fees and other expenses actually incurred in
connection with any suit, action or proceeding or any claim asserted) caused by,
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement (or any amendment
thereto) or Prospectus (as amended or supplemented) or any preliminary
prospectus, or caused by, arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading except insofar as such losses, claims,
damages or liabilities are caused by, arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to any Participant furnished to
the Issuer and the Guarantors in writing by or on behalf of such Participant
expressly for use therein; provided, however, that the Issuer and the Guarantors
will not be liable if such untrue statement or omission or alleged untrue
statement or omission was contained or made in any preliminary prospectus and
corrected in the final Prospectus or any amendment or supplement thereto and any
such loss, liability, claim, or damage or expense suffered or incurred by the
Participants resulted from any action, claim or suit by any Person who purchased
Registrable Notes or Exchange Notes which are the subject thereof from such
Participant and it is established by the Issuer and the Guarantors in the
related proceeding that such Participant failed to deliver or provide a copy of
the final Prospectus (as amended or supplemented) to such Person with or prior
to the confirmation of the sale of such Registrable Notes or Exchange Notes sold
to such Person if required by applicable law, unless such failure to deliver or
provide a copy of the Prospectus (as amended or supplemented) was a result of
noncompliance by the Issuer and the Guarantors with Section 5 of this Agreement.
(b) Each Participant agrees, severally and not jointly, to indemnify
and hold harmless the Issuer and each of the Guarantors, their respective
directors, officers, employees, agents and representatives and each Person who
controls the Issuer or the Guarantors within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Issuer and the Guarantors to each Participant, but
only (i) with reference to information relating to such Participant furnished to
the Issuer and the Guarantors in writing by such Participant ex-
<PAGE> 29
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pressly for use in any Registration Statement or Prospectus, any amendment or
supplement thereto, or any preliminary prospectus or (ii) with respect to any
untrue statement or representation made by such Participant in writing to the
Issuer and the Guarantors. The liability of any Participant under this paragraph
shall in no event exceed the proceeds received by such Participant from sales of
Registrable Notes or Exchange Notes giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental
or regulatory investigation), claim or demand shall be brought or asserted
against any Person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such Person (the "Indemnified Person")
shall promptly notify the Person against whom such indemnity may be sought (the
"Indemnifying Person") in writing, and the Indemnifying Person, upon request of
the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding; provided, however, that the failure to so notify the
Indemnifying Person shall not relieve it of any obligation or liability which it
may have hereunder or otherwise (unless and only to the extent that such failure
directly results in the loss or compromise of any material rights or defenses by
the Indemnifying Person and the Indemnifying Person was not otherwise aware of
such action or claim). In any such proceeding, any Indemnified Person 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 Person unless (i) the Indemnifying
Person and the Indemnified Person shall have mutually agreed in writing to the
contrary, (ii) the Indemnifying Person shall have failed within a reasonable
period of time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that, unless there exists a conflict among Indemnified Persons, the
Indemnifying Person shall not, in connection with any one such proceeding or
separate but substantially similar related proceeding in the same jurisdiction
arising out of the same general allegations, be liable for the fees and expenses
of more than one separate firm (in addition to any local counsel) for all
Indemnified Persons, and that all such fees and expenses shall be reimbursed as
they are
<PAGE> 30
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incurred. Any such separate firm for the Participants and such control Persons
of Participants shall be designated in writing by Participants who sold a
majority in interest of Registrable Notes or Exchange Notes sold by all such
Participants and any such separate firm for the Issuer, its directors, its
officers, its employees, its agents, its representatives and such control
Persons of the Issuer shall be designated in writing by the Issuer. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its prior written consent, but if settled with such consent or
if there be a final non-appealable judgment for the plaintiff for which the
Indemnified Person is entitled to indemnification pursuant to this Agreement,
the Indemnifying Person agrees to indemnify and hold harmless each Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. No Indemnifying Person shall, without the prior written consent of the
Indemnified Person (which consent shall not be unreasonably withheld or
delayed), effect any settlement or compromise of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party, or indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement (A) includes an unconditional written release of such
Indemnified Person, in form and substance reasonably satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of any Indemnified Person.
(d) If the indemnification provided for in the first and second
paragraphs of this Section 7 is for any reason unavailable to, or insufficient
to hold harmless, an Indemnified Person in respect of any losses, claims,
damages or liabilities referred to therein, then each Indemnifying Person under
such paragraphs, in lieu of indemnifying such Indemnified Person thereunder and
in order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
(i) the relative benefits received by the Indemnifying Person or Persons on the
one hand and the Indemnified Person or Persons on the other from the offering of
the Notes or (ii) if the allocation provided by the foregoing clause (i) is not
permitted by applicable law, not only such relative benefits but also the
relative fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims,
<PAGE> 31
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damages or liabilities (or actions in respect thereof) as well as any other
relevant equitable considerations. The relative benefits received by the Issuer
on the one hand and the Participants on the other shall be deemed to be in the
same proportion as the total proceeds from the offering (net of discounts and
commissions but before deducting expenses) of the Notes received by the Issuer
bear to the total proceeds received by such Participants from the sale of
Registrable Notes or Exchange Notes, as the case may be, in each case, as set
forth in the table on the cover page of the Offering Memorandum dated August 22,
1997 in respect of the sale of the Notes. The relative fault of the parties
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 Issuer on the
one hand or such Participant or such other Indemnified Person, as the case may
be, on the other, the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses actually incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes exceeds the amount of any damages that such Participant has
otherwise been required to pay or has paid 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.
(f) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability
<PAGE> 32
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which the Indemnifying Persons may otherwise have to the Indemnified Persons
referred to above.
8. Rule 144A
The Issuer and the Guarantors covenant that they will file the
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the SEC thereunder in a timely manner
in accordance with the requirements of the Securities Act and the Exchange Act.
The Issuer further covenants for so long as any Registrable Notes remain
outstanding, to make available to any holder or beneficial owner of Registrable
Notes in connection with any sale thereof and any prospective purchaser of such
Registrable Notes from such holder or beneficial owner the information required
by Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Registrable Notes pursuant to Rule 144A.
9. Underwritten Registrations
If any of the Registrable Notes covered by any Shelf Registration
are to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will administer the offering will be
selected by the holders of a majority in aggregate principal amount of the
Registrable Notes included in such offering and reasonably acceptable to the
Issuer.
No Person may participate in any underwritten registration
hereunder unless such Person (i) agrees to sell such Person's Registrable Notes
on the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (ii) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
10. Miscellaneous
(a) No Inconsistent Agreements. The Issuer has not entered, as of
the date hereof, and the Issuer will not, after the date of this Agreement,
enter into any agreement with respect to any of its securities that is
inconsistent with the rights granted to the Holders of Registrable Notes in this
Agreement or otherwise conflicts with the provisions hereof. The rights granted
to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the Holders of any of the Issuer's or
the Guarantors' other
<PAGE> 33
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issued and outstanding securities under any such agreements. Neither the Issuer
nor the Guarantors have entered and neither the Issuer nor the Guarantors will
enter into any agreement with respect to any of its securities which will grant
to any Person piggy-back registration rights with respect to a Registration
Statement.
(b) Adjustments Affecting Registrable Notes. Neither the Issuer
nor the Guarantors will, directly or indirectly, take any action with respect to
the Registrable Notes as a class that would adversely affect the ability of the
Holders of Registrable Notes to include such Registrable Notes in a registration
undertaken pursuant to this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, otherwise than with the prior
written consent of the Holders of not less than a majority in aggregate
principal amount of the then outstanding Registrable Notes; provided, however,
that Section 7 and this Section 10(c) may not be amended, modified or
supplemented without the prior written consent of each Holder and each
Participating Broker-Dealer (including any Person who was a Holder or
Participating Broker-Dealer of Registrable Notes or Exchange Notes, disposed of
pursuant to any Registration Statement) affected by any such amendment,
modification or supplement. Notwithstanding the foregoing, a waiver or consent
to depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders of Registrable Notes whose securities are
being sold pursuant to a Registration Statement and that does not directly or
indirectly affect, impair, limit or compromise the rights of other Holders of
Registrable Notes may be given by Holders of at least a majority in aggregate
principal amount of the Registrable Notes being sold by such Holders pursuant to
such Registration Statement.
(d) Notices. All notices and other communications (including
without limitation any notices or other communications to the Trustee) provided
for or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
(1) if to a Holder of Registrable Notes or any Participating
Broker-Dealer, at the most current address of such Holder or any such
Participating Broker-Dealer set forth on the records of the registrar
under the Indenture,
<PAGE> 34
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with a copy in like manner to the Initial Purchasers as follows:
BT Securities Corporation
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Facsimile No: (212) 250-7200
Attention: Corporate Finance Department
(2) if to the Initial Purchasers, at the addresses specified in
Section 10(d)(1);
(3) if to the Issuer or the Guarantors, as follows:
SC International Services, Inc.
524 E. Lamar Blvd.
Arlington, Texas 76011-3999
Facsimile No: (817) 792-2222
Attention: Patrick Tolbert
with a copy to:
Kaye, Scholer, Fierman, Hays
& Handler, LLP
425 Park Avenue
New York, New York 10022
Facsimile No.: (212) 836-7152
Attention: Joel I. Greenberg, Esq.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if sent by facsimile.
Copies of all such notices, demands or other communications shall
be concurrently delivered by the person giving the same to the Trustee at the
address and in the manner specified in such Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto, including, without limitation and without the need for express
assignment, subsequent holders of Registrable Notes and Participating
Broker-Dealers and each Indemnified Person.
<PAGE> 35
- 34 -
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and, all of which taken
together shall constitute one and the same Agreement.
(g) Governing Law; Submission to Jurisdiction. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW
YORK. THE ISSUER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK
STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY
FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN
RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND EACH IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS.
(h) Severability. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
(i) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
All references made in this Agreement to "Section" and "paragraph" refer to such
Section or paragraph of this Agreement, unless expressly stated otherwise.
(j) Notes Held by the Issuer or its Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by the Issuer or its Affiliates (as
such term is defined in Rule 405 under the Securities Act) shall not be
<PAGE> 36
- 35 -
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
(k) Third Party Beneficiaries. Holders of Registrable Notes and
Participating Broker-Dealers are intended third party beneficiaries of this
Agreement and this Agreement may be enforced by such Persons.
(l) Entire Agreement. This Agreement, together with the Purchase
Agreement and the Indenture, is intended by the parties as a final expression of
their agreement and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the registration rights granted by the Issuer with respect to the Registrable
Notes. This Agreement supersedes all prior agreements and understandings between
the parties with respect to such subject matter.
<PAGE> 37
IN WITNESS WHEREOF, the parties have caused this Registration
Rights Agreement to be duly executed as of the date first written above.
THE ISSUER:
SC INTERNATIONAL SERVICES, INC.
By: /s/ Patrick W. Tolbert
-------------------------------------
Name: Patrick W. Tolbert
Title: Executive Vice President and
Chief Financial and
Administrative Officer
THE GUARANTORS:
SKY CHEFS, INC.
By: /s/ Thomas J. Lee
-------------------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
CATERAIR INTERNATIONAL, INC. (II)
By: /s/ Thomas J. Lee
--------------------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
CATERAIR INTERNATIONAL
CORPORATION
By: /s/ Thomas J. Lee
--------------------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
<PAGE> 38
CATERAIR INTERNATIONAL TRANSITION
CORPORATION
ONEX OHIO ACCEPTANCE CORPORATION
ONEX OHIO FINANCE CORP.
ONEX OHIO FINANCE CORP. II
ONEX OHIO EQUITY CORP.
ONEX OHIO EQUITY CORP. II
ONEX OHIO CREDIT CORP.
ONEX OHIO CREDIT CORP. II
ONEX OHIO CAPITAL CORP.
ONEX OHIO CAPITAL CORP. II
ONEX OHIO FISCAL CORP.
ONEX OHIO FISCAL CORP. II
ONEX OHIO FUNDS CORP.
ONEX OHIO FUNDS CORP. II
ARLINGTON SERVICES, INC.
ARLINGTON SERVICES HOLDING
CORPORATION
SKY CHEFS INTERNATIONAL CORP.
BETHESDA SERVICES, INC
CATERAIR NEW ZEALAND LIMITED
(FORMERLY KNOWN AS BETHESDA
SERVICES HOLDING CORPORATION)
JFK CATERERS, INC.
CATERAIR CONSULTING SERVICES
CORPORATION
WESTERN AIRE CHEF, INC.
CATERAIR AIRPORT PROPERTIES, INC.
CATERAIR ST. THOMAS HOLDING
CORPORATION
SKY CHEFS ARGENTINE, INC.
By: /s/ Thomas J. Lee
-----------------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
<PAGE> 39
THE INITIAL PURCHASERS:
BT SECURITIES CORPORATION
J.P. MORGAN SECURITIES, INC.
CREDIT SUISSE FIRST BOSTON
CORPORATION
GOLDMAN, SACHS & CO.
SMITH BARNEY INC.
BANKERS TRUST INTERNATIONAL PLC
by BT SECURITIES CORPORATION
By: /s/ James A. Clayton
-------------------------------------
Name: James A. Clayton
Title: Managing Director
<PAGE> 1
EXHIBIT 10.3
DEALER MANAGER AGREEMENT
August 22, 1997
BT SECURITIES CORPORATION
130 Liberty Street
New York, NY 10006
Ladies and Gentlemen:
1. The Tender Offer and Consent Solicitation. SC International
Services, Inc., a Delaware corporation ("Purchaser"), is making a tender offer
(hereinafter referred to, together with any amendments, supplements or
extensions thereof, as the "Tender Offer") to purchase all of its outstanding
13% Senior Subordinated Notes due 2005 (the "Notes"), issued pursuant to an
Indenture, dated as of September 15, 1995 (the "Indenture"), among Purchaser, as
issuer, Sky Chefs, Inc., Caterair International, Inc. (II) and Caterair
International Corporation, as guarantors ("Guarantors"), The Bank of New York,
as trustee, (the "Trustee"). In conjunction with the Tender Offer, Purchaser is
soliciting (the "Solicitation") consents (the "Consents") of the holders of
Notes to certain amendments to the Indenture. The Tender Offer and the
Solicitation will be on the terms and subject to the conditions set forth in the
Offer to Purchase and Consent Solicitation Statement (the "Offer to Purchase")
and Consent and Letter of Transmittal (the "Letter of Transmittal") attached
hereto as Exhibits A and B, respectively.
2. Appointment as Dealer Manager and Solicitation Agent. Purchaser and
Guarantors hereby appoint BT Securities Corporation ("BT") as Dealer Manager and
Solicitation Agent ("Dealer Manager"), and authorize BT to act as such in
connection with the Tender Offer and Solicitation, and you agree to act as
Dealer Manager, in each case on the terms and conditions set forth herein. As
Dealer Manager, BT agrees, in accordance with its customary practices, to
perform those services in connection with the Tender Offer and Solicitation as
are customarily performed by investment banks acting in such roles in connection
with tender offers and consent solicitations of a like nature, including, but
not limited to, providing advice to Purchaser and Guarantors with respect to the
terms and timing of the Tender Offer and Solicitation, assisting Purchaser and
Guarantors in the preparation of the Tender Offer and Consent Solicitation
Material (as defined below), using reasonable best efforts to solicit tenders of
Notes and delivery of Consents pursuant to the Tender Offer and Solicitation and
communicating generally regarding the
<PAGE> 2
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Tender Offer and Solicitation with brokers, dealers, commercial banks and trust
companies and other nominees or holders of Notes, both of record and beneficial.
In such capacity, BT shall act as an independent contractor, and BT's duties
arising out of its engagement pursuant to this Agreement shall be owed solely to
Purchaser and Guarantors.
Purchaser and Guarantors further authorize BT to communicate with
Bank of New York, in its capacity as depositary (the "Depositary"), with respect
to matters relating to the Tender Offer and Solicitation. Purchaser and
Guarantors have instructed the Depositary to advise BT at least daily as to the
aggregate principal amount of Notes that have been tendered pursuant to the
Tender Offer, the aggregate principal amount of Consents that have been
delivered pursuant to the Solicitation and as to such other matters in
connection with the Tender Offer and Solicitation as BT may reasonably request.
3. No Liability for Acts of Dealers, Banks and Trust Companies. BT
shall have no liability to Purchaser, Guarantors or any other person for any
losses, claims, damages, liabilities and expenses (each, a "Loss", and
collectively, the "Losses") arising from any act or omission on the part of any
broker or dealer in securities (a "Dealer") (other than as set forth below),
bank or trust company, or any other person, and neither BT nor any affiliate of
BT shall be liable for any Losses arising from their own acts or omissions in
performing their respective obligations as a Dealer Manager or as a Dealer
hereunder, except for any such Losses which are finally judicially determined to
result primarily from such Dealer Manager's or Dealer's bad faith, willful
misconduct or gross negligence. In soliciting or obtaining tenders of Notes and
delivery of Consents, no Dealer, bank or trust company is to be deemed to be
acting as an agent of BT or the agent of Purchaser, Guarantors or any of its
affiliates, and BT, as Dealer Manager, is not to be deemed the agent of any
Dealer, bank or trust company or the agent or fiduciary of Purchaser, Guarantors
or any of its affiliates, equity holders, creditors or of any other person. In
soliciting or obtaining tenders of Notes and delivery of Consents, BT shall not
be and shall not be deemed for any purpose to act as a partner or joint venturer
of or a member of a syndicate or group with Purchaser, Guarantors or any of
their affiliates in connection with the Tender Offer or the Solicitation, any
purchase of Notes, any payment for Consents or otherwise, and none of Purchaser,
Guarantors or any of their affiliates shall be deemed to act as BT's agent.
Purchaser and Guarantors shall have sole authority for the acceptance or
rejection of any and all tenders of Notes or delivery of Consents.
<PAGE> 3
-3-
4. The Tender Offer and Consent Solicitation Material. Purchaser and
Guarantors agree to furnish BT, at their expense, with as many copies as BT may
reasonably request of the Offer to Purchase and all documents incorporated by
reference therein or attached thereto, the Letter of Transmittal, all statements
and other documents, if any, filed or to be filed by Purchaser and/or Guarantors
(including, without limitation, the notice of guaranteed delivery) with the
Securities and Exchange Commission (the "Commission"), if any, or any other
federal, state, local or foreign governmental or regulatory authorities or any
court (each an "Other Agency" and collectively, the "Other Agencies") relating
to the Tender Offer and Solicitation, any other documents, materials or filings
relating thereto or to be used by Purchaser and/or Guarantors in connection
therewith (including, without limitation, all notices of guaranteed delivery,
letters to brokers, securities dealers, commercial banks, trust companies and
nominees, any newspaper advertisements and any press releases) and any
amendments or supplements to any such statements and documents (the definitive
forms of all of the foregoing materials are hereinafter collectively referred to
as the "Tender Offer and Consent Solicitation Material"), and is authorized to
use copies of the Tender Offer and Consent Solicitation Material in connection
with its duties hereunder. The Tender Offer and Consent Solicitation Material
has been or will be prepared and approved by, and (except as set forth herein)
is the sole responsibility of, Purchaser and Guarantors.
BT hereby agrees, as a Dealer Manager, that it will not disseminate
any written material for or in connection with the solicitation of tenders of
Notes and delivery of Consents pursuant to the Tender Offer and Solicitation
other than the Tender Offer and Consent Solicitation Material, and BT agrees
that it will not make any statements in connection with such Tender Offer or
Solicitation, other than the statements that are set forth in the Tender Offer
and Consent Solicitation Material or as otherwise authorized by Purchaser and
Guarantors.
Purchaser and Guarantors agree that no Tender Offer and Consent
Solicitation Material will be used in connection with the Tender Offer or
Solicitation or will be filed with the Commission or any Other Agency with
respect to the Tender Offer or Solicitation or any reference made to BT without
first obtaining BT's prior approval, which approval shall not be unreasonably
withheld or delayed. In the event that Purchaser and Guarantors use or permit
the use of any Tender Offer and Consent Solicitation Material in connection with
the Tender Offer or Solicitation or files any such material with the Commission
or any Other Agency without BT's prior approval, then BT shall be entitled to
withdraw as Dealer Manager in connection with the Tender Offer and/or
Solicitation without any additional liability or penalty to BT or any
<PAGE> 4
-4-
BT Indemnified Party (as hereinafter defined) in connection with such
withdrawal, and BT shall remain entitled to the indemnification provided in
Section 11 hereof and to receive the reimbursement for all expenses payable
under this Agreement which have accrued to the date of such withdrawal or would
otherwise be due to BT on such date. If BT withdraws as Dealer Manager, the
reimbursement for its expenses through the date of such withdrawal shall be paid
to BT as promptly as commercially practicable after such date.
5. Expenses of Dealer Manager and Others. Purchaser and Guarantors
agree to pay directly, or reimburse BT, as the case may be, for (i) all
reasonable expenses incurred by BT relating to the preparation, printing,
filing, mailing and publishing of all Tender Offer and Consent Solicitation
Material, (ii) all reasonable fees and expenses of the Depositary referred to in
the Offer to Purchase, (iii) all reasonable advertising charges authorized by
Purchaser and Guarantors in connection with the Tender Offer and Solicitation,
(iv) all reasonable amounts, if any, payable to Dealers (including BT), and
banks and trust companies as reimbursement for their customary mailing and
handling expenses incurred in forwarding the Tender Offer and Consent
Solicitation Material to their customers and (v) all other reasonable fees and
expenses incurred by BT in connection with the Tender Offer or Solicitation or
otherwise in connection with the performance of services hereunder (including
reasonable fees and disbursements of BT's legal counsel). All payments to be
made by Purchaser and Guarantors pursuant to this Section 5 shall be made as
promptly as commercially practicable against delivery to Purchaser and
Guarantors of statements therefor in reasonable detail. Purchaser and Guarantors
shall be liable for the payments provided for in this Section whether or not the
Tender Offer or the Solicitation is commenced, withdrawn, terminated or canceled
for any reason (except BT's bad faith, willful misconduct or gross negligence)
or whether or not BT withdraws pursuant to Section 4 hereof (but in case of such
withdrawal, Purchaser's and Guarantors' obligations to pay such expenses shall
extend only to expenses accrued as of the effective date of such withdrawal).
6. Noteholder Lists. Purchaser and Guarantors will cause the Depositary
to provide BT with cards or lists or other records in such form as BT may
reasonably request showing the names and addresses of, and the aggregate
principal amount of Notes held by, the holders of Notes as of a recent date and
will cause the Depositary to advise BT from day to day during the period of the
Tender Offer and Solicitation as to any transfers of record of Notes.
7. Sufficient Funds. Purchaser represents and warrants to BT that it
(assuming satisfaction of each condition set
<PAGE> 5
-5-
forth in the Tender Offer and Consent Solicitation Material by the time set
forth therein) will have sufficient funds to enable Purchaser to pay, and
Purchaser hereby agrees that it will pay promptly, in accordance with the terms
and conditions of the Tender Offer and Solicitation and Section 6 hereof, the
consideration for the Notes which Purchaser becomes obligated to purchase and
Consents which Purchaser has offered, and which Purchaser may be required, to
pay under the Tender Offer or Solicitation and the fees and expenses payable
hereunder.
8. Additional Representations and Warranties of Purchaser. Purchaser
and Guarantors represent and warrant to BT that:
(a) Each of Purchaser and Guarantors is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is duly qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its businesses or the ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or to be in good standing, considering all such cases
in the aggregate, would not have a material adverse effect on the
business, properties, financial position or results of operations of
each of Purchaser and Guarantors and all of their respective
subsidiaries and affiliates, taken as a whole.
(b) Each of Purchaser and Guarantors has all requisite
corporate power and authority to take and has duly taken all necessary
corporate action to authorize (i) the Tender Offer and Solicitation
(including any related borrowings by any of Purchaser, Guarantors or
any of their respective subsidiaries or affiliates), (ii) the purchase
by Purchaser of Notes pursuant to the Tender Offer and payment by
Purchaser for Consents pursuant to the Solicitation and (iii) the
execution, delivery and performance of this Agreement, and this
Agreement has been duly executed and delivered on behalf of Purchaser
and Guarantors and, assuming due authorization, execution and delivery
of this Agreement by BT, is a legal, valid and binding obligation of
Purchaser and Guarantors enforceable against Purchaser and Guarantors
in accordance with its terms, subject to (x) bankruptcy, insolvency,
reorganization, moratorium and other laws now or hereafter in effect
relating to creditors' rights generally, (y) general principles of
equity and (z) the unenforceability under certain circumstances of
provisions for indemnification of or contribution to a party with
respect to a liability where such indemnification or contribution is
contrary to public policy.
<PAGE> 6
-6-
(c) The Tender Offer and Consent Solicitation Material
complies in all material respects with the applicable requirements of
the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated by the Commission thereunder (collectively, the
"Exchange Act") and the Trust Indenture Act of 1939, as amended (the
"TIA"), and in each case the rules and regulations of the Commission.
The Tender Offer and Consent Solicitation Material do not contain and
will not contain any untrue statement of a material fact and do not
omit or will not omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in the light
of the circumstances under which they are made, not misleading;
provided, however, that no representation is made with respect to any
statements contained in, or any matter omitted from, the Tender Offer
and Consent Solicitation Material in reliance upon and in conformity
with written information furnished or confirmed in writing by BT to
Purchaser expressly for use therein. In connection with the Tender
Offer and Solicitation, Purchaser and Guarantors have complied, and
will continue to comply, in all material respects with the applicable
provisions of the Exchange Act.
(d) Purchaser and Guarantors will file, as required, any and
all necessary amendments or supplements to any documents, if any, filed
with the Commission or Other Agency relating to the Tender Offer and
Solicitation and will promptly furnish to BT true and complete copies
of each such amendment and supplement upon the filing thereof.
(e) The Tender Offer and Solicitation (including any related
borrowings by Purchaser, Guarantors or any of their respective
subsidiaries or affiliates), the purchase by Purchaser of Notes
pursuant to the Tender Offer, the payment by Purchaser for Consents
pursuant to the Solicitation, and the execution, delivery and
performance of this Agreement by Purchaser and Guarantors comply and
will comply in all material respects with all material applicable
requirements of federal, state, local and foreign law, including,
without limitation, any material applicable regulations of the
Commission and Other Agencies and all material applicable judgments,
orders or decrees except for such failures to comply which would not
materially adversely affect the ability of Purchaser and Guarantors to
execute, deliver and perform this Agreement or to commence and
consummate the Tender Offer and Solicitation substantially in
accordance with their terms; and no consent, authorization, approval,
order, exemption, registration, qualification or other action of, or
filing with or notice to, the Commission or any Other Agency is
required under such laws in connection with the execu-
<PAGE> 7
-7-
tion, delivery and performance of this Agreement by Purchaser and
Guarantors, the making or consummation by Purchaser of the Tender Offer
and Solicitation or the consummation by Purchaser and Guarantors of the
other transactions contemplated by this Agreement or the Offer to
Purchase, except where the failure to obtain or make such consent,
authorization, approval, order, exemption, registration, qualification
or other action or filing or notification would not materially
adversely affect the ability of Purchaser and Guarantors to execute,
deliver and perform this Agreement or to commence and consummate the
Tender Offer and Solicitation substantially in accordance with their
terms. All such required consents, authorizations, approvals, orders,
exemptions, registrations, qualifications and other actions of and
filings with and notices to the Commission and the Other Agencies will
have been obtained, taken or made, as the case may be, and all
statutory or regulatory waiting periods will have elapsed, prior to the
purchase of the Notes pursuant to the Tender Offer and the payment for
Consents pursuant to the Solicitation except those which would not
materially adversely affect the ability of Purchaser and Guarantors to
execute, deliver and perform this Agreement or to commence and
consummate the Tender Offer and Solicitation substantially in
accordance with their terms.
(f) The Tender Offer and Solicitation (including any related
borrowings by Purchaser, Guarantors or any of their respective
subsidiaries or affiliates), the purchase of Notes by Purchaser
pursuant to the Tender Offer, the payment by Purchaser for Consents
pursuant to the Solicitation and the execution, delivery and
performance of this Agreement by Purchaser and Guarantors do not and
will not (assuming satisfaction of each condition set forth in the
Tender Offer and Consent Solicitation Material by the time required
therein) (i) conflict with or result in a violation of any of the
provisions of the certificate of incorporation or by-laws of Purchaser
and Guarantors, (ii) conflict with or violate in any material respect
any material law, rule, regulation, order, judgment or decree
applicable to Purchaser or Guarantors or by which any material property
or material asset of Purchaser, Guarantors or any of their respective
subsidiaries is or would reasonably be likely to be bound or (iii)
result in a breach of any of the material terms or provisions of, or
constitute a default (with or without due notice and/or lapse of time)
under, any material loan or credit agreement, indenture, mortgage, note
or other agreement or instrument to which Purchaser, Guarantors or any
of their respective subsidiaries is a party or by which any of them or
any of their respective properties or assets is or would reasonably be
likely to be bound except, in the
<PAGE> 8
-8-
case of (ii) and (iii) above, where such conflict, violation, breach or
default would not materially adversely affect the ability of Purchaser
and Guarantors to execute, deliver and perform this Agreement or to
commence and consummate the Tender Offer and Solicitation substantially
in accordance with their terms.
(g) No stop order, restraining order or denial of an
application for approval has been issued and no investigation,
proceeding or litigation has been commenced or, to the best of
Purchaser's or Guarantors' knowledge, threatened in writing before the
Commission or any Other Agency with respect to the making or
consummation of the Tender Offer or Solicitation (including the
obtaining or use of funds to purchase Notes or to pay for Consents
pursuant thereto) or the consummation of the other transactions
contemplated by this Agreement or the Offer to Purchase or with respect
to the ownership of the Notes by Purchaser, Caterair or any of their
respective subsidiaries or affiliates.
(h) Each of Purchaser and Guarantors is not, nor will be as a
result of the purchase by Purchaser of Notes that it may become
obligated to purchase pursuant to the terms of the Tender Offer, an
"investment company" under the Investment Company Act of 1940, as
amended, and the rules and regulations promulgated by the Commission
thereunder.
(i) Each of the representations and warranties set forth in
this Agreement will be true and correct on and as of the date on which
the Tender Offer and Solicitation are commenced, on and as of the date
on which any Tender Offer and Consent Solicitation Material is first
distributed to holders of Notes, and on and as of the date on which any
Notes are purchased pursuant to the Tender Offer or payment is made for
Consents pursuant to the Solicitation.
9. Opinion of Purchaser's Counsel. Simultaneously with the execution
and delivery of this Agreement, Kaye, Scholer, Fierman, Hays & Handler, LLP,
counsel to the Purchaser and the Guarantor shall have rendered an opinion to BT
in the form of Exhibit C.
10. Notification of Certain Events. Purchaser and Guarantors shall
advise BT promptly after it becomes aware of (i) the occurrence of any event
which it believes would reasonably be expected to cause Purchaser or Guarantors
to withdraw, rescind or terminate the Tender Offer or Solicitation or would
reasonably be expected to permit Purchaser or Guarantors to exercise any right
not to purchase Notes tendered pursuant to the Tender Offer or to pay for any
Consents delivered pursuant to the Solicitation, (ii)
<PAGE> 9
-9-
the occurrence of any event, or the discovery of any fact, the occurrence or
existence of which it believes would reasonably be expected to require the
making of any change in any of the Tender Offer and Consent Solicitation
Material then being used or would reasonably be expected to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect, (iii) any proposal or requirement to make,
amend or supplement any filing in connection with the Tender Offer or
Solicitation or to make any filing in connection with the Tender Offer or
Solicitation pursuant to any applicable law, rule or regulation, (iv) the
issuance to Purchaser or Guarantors by the Commission or any Other Agency of any
comment or order or the taking of any other action concerning the Tender Offer
or Solicitation (and, if in writing, will furnish BT with a copy thereof), (v)
any other material developments in connection with the Tender Offer or
Solicitation or the financing thereof, including, without limitation, the
commencement of any lawsuit concerning the Tender Offer or Solicitation and (vi)
any other information relating to the Tender Offer or Solicitation, the Tender
Offer and Consent Solicitation Material or this Agreement which BT may from time
to time reasonably request.
11. Indemnification. (a) Purchaser and Guarantors agree to hold
harmless and indemnify BT (including any affiliated companies) and any officer,
director, partner, employee or agent of BT or any such affiliated companies and
any entity or person controlling (within the meaning of Section 20(a) of the
Exchange Act) BT, including any affiliated companies (each, a "BT Indemnified
Party") from and against any and all Losses whatsoever (including, but not
limited to, any and all reasonable expenses incurred in investigating, preparing
or defending against any litigation or proceeding, commenced or threatened, or
any claims whatsoever whether or not resulting in any liability) (i) arising out
of or based upon any untrue statement or alleged untrue statement of a material
fact contained in the Tender Offer and Consent Solicitation Material, or in any
other material used by Purchaser or Guarantors, or authorized in writing by
Purchaser or Guarantors for use in connection with the Tender Offer and
Solicitation or the transactions contemplated thereby, or arising out of or
based upon the omission or alleged omission to state in any such document a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (other than statements or omissions made in reliance upon information
furnished by BT to Purchaser expressly for use therein), (ii) arising out of or
based upon any withdrawal, rescission, termination or modification by Purchaser
or Guarantors of, or failure by Purchaser or Guarantors to make or consummate,
the Tender Offer or Solicitation or the transactions contemplated thereby or any
other failure to comply with the terms and conditions specified
<PAGE> 10
-10-
in the Tender Offer and Consent Solicitation Material, (iii) arising out of the
breach by Purchaser or Guarantors of any representation, warranty or covenant or
failure to comply with any of the agreements set forth in this Agreement or (iv)
otherwise arising out of, relating to or in connection with the Tender Offer or
Solicitation, the other transactions described in the Tender Offer and Consent
Solicitation Material or BT's services as Dealer Manager hereunder. Purchaser
shall not, however, as to any BT Indemnified Party be responsible for any Loss
pursuant to clause (iv) of the preceding sentence of this Section 11 which has
been finally judicially determined to result primarily from the bad faith,
willful misconduct or gross negligence on the part of any BT Indemnified Party,
respectively.
(b) Purchaser, Guarantors and BT agree that if any indemnification
sought by any BT Indemnified Party pursuant to this Section 11 is unavailable
for any reason or insufficient to hold such indemnified party harmless for any
such Losses, which, pursuant to the terms of Section 11(a) would be subject to
indemnification, the indemnifying party shall contribute to the Losses for which
such indemnification is held unavailable or insufficient in such proportion as
is appropriate to reflect the relative benefits received (or anticipated to be
received) by Purchaser and Guarantors, on the one hand, and actually received by
BT, on the other hand, in connection with the transactions contemplated by this
Agreement or, if such allocation is not permitted by applicable law, not only
such relative benefits but also the relative faults of Purchaser and Guarantors,
on the one hand, and BT, on the other hand, as well as any other equitable
considerations, subject to the limitation that in any event the aggregate
contribution by BT to all Losses with respect to which contribution is available
hereunder shall not exceed the total of all reimbursements actually received by
BT in connection with its engagement hereunder. The relative fault of the
Purchaser and BT 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, or relating to, the Purchaser, Guarantors and their respective
affiliates or BT and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Purchaser and BT agree that it would not be just and equitable if
contribution pursuant to this subsection (b) of this Section 11 were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in this subsection (b) of
this Section 11.
(c) The foregoing rights to indemnity and contribution shall be in
addition to any other right which any BT Indemnified Party may have against
Purchaser at common law or otherwise. If
<PAGE> 11
-11-
any litigation or proceeding is brought against any BT Indemnified Party in
respect of which indemnification may be sought against Purchaser and Guarantors
pursuant to this Section 11, such BT Indemnified Party shall promptly notify
Purchaser in writing of the commencement of such litigation or proceeding, but
the failure so to notify Purchaser and Guarantors shall relieve Purchaser and
Guarantors from any liability which it may have hereunder only if, and to the
extent that, such failure results in the loss of material defenses which would
have been available to the Purchaser or any Guarantor had such notice been so
received, and will not in any event relieve Purchaser from any other obligation
or liability that it may have to any BT Indemnified Party other than under this
Agreement. In case any such litigation or proceeding shall be brought against
any BT Indemnified Party and such indemnified party shall notify Purchaser and
Guarantors in writing of the commencement of such litigation or proceeding,
Purchaser and Guarantors shall be entitled to participate in such litigation or
proceeding, and, to the extent Purchaser and Guarantors may wish after written
notice from Purchaser and Guarantors to such BT Indemnified Party, to assume the
defense of such litigation or proceeding with counsel of its choice at its
expense; provided, however, that such counsel shall be satisfactory to such BT
Indemnified Party in the exercise of its reasonable judgment. Notwithstanding
the election of Purchaser and Guarantors to assume the defense of such
litigation or proceeding, such indemnified party shall have the right to employ
separate counsel and to participate in the defense of such litigation or
proceeding, and Purchaser and Guarantors shall bear the reasonable fees, costs
and expenses of such separate counsel and shall pay such fees, costs and
expenses promptly (provided that with respect to any single litigation or
proceeding or with respect to several litigations or proceedings involving
substantially similar legal claims, Purchaser and Guarantors shall not be
required to bear the fees, costs and expenses of more than one such counsel
other than local counsel) if (i) in the reasonable judgment of a BT Indemnified
Party, the use of counsel chosen by Purchaser and Guarantors to represent such
BT Indemnified Party would present such counsel with a conflict of interest,
(ii) the defendants in, or targets of, any such litigation or proceeding include
both a BT Indemnified Party, on the one hand, and Purchaser and Guarantors, on
the other hand, and such BT Indemnified Party shall have reasonably concluded
that there may be legal defenses available to it or to other BT Indemnified
Parties which are different from or additional to those available to Purchaser
and Guarantors (in which case Purchaser and Guarantors shall not have the right
to direct the defense of such action on behalf of such BT Indemnified Party),
(iii) Purchaser and Guarantors shall not have employed counsel satisfactory to
such BT Indemnified Party in the exercise of such BT Indemnified Party's
reasonable judgment, to represent such BT Indemnified Party within a reason-
<PAGE> 12
-12-
able time after notice of the institution of such litigation or proceeding or
(iv) Purchaser and Guarantors shall authorize in writing such BT Indemnified
Party to employ separate counsel at the expense of Purchaser and Guarantors.
After notice from Purchaser and Guarantors to such BT Indemnified Party of
Purchaser's and Guarantors' election to so assume the defense thereof and
approval by such BT Indemnified Party of Purchaser's and Guarantors' counsel
appointed to defend such action, Purchaser and Guarantors will not be liable to
such BT Indemnified Party under this Section 11 for (A) any legal or other
expenses, unless such BT Indemnified Party shall have employed separate counsel
in accordance with the proviso of the immediately preceding sentence, and (B)
the costs and expenses of any settlement of such action effected by such BT
Indemnified Party without the consent of Purchaser and Guarantors, which consent
shall not be unreasonably withheld or delayed. In any action or proceeding the
defense of which Purchaser and Guarantors assume, the BT Indemnified Party shall
have the right to participate in such litigation and retain its own counsel at
such BT Indemnified Party's own expense. Purchaser, Guarantors and BT agree to
notify the other promptly of the assertion of any claim against it, any of its
officers or directors or any entity or person who controls it within the meaning
of Section 20(a) of the Exchange Act in connection with the Tender Offer and
Solicitation. The foregoing indemnification commitments shall apply whether or
not the BT Indemnified Party is a formal party to such litigation or proceeding.
(d) Purchaser and Guarantors also agree to reimburse each BT
Indemnified Party for all expenses (including reasonable fees and disbursements
of counsel) as they are incurred by such BT Indemnified Party in connection with
investigating, preparing for, defending or providing evidence (including
appearing as a witness) with respect to any action, claim, investigation,
inquiry, arbitration or other proceeding referred to in this Section 11, whether
or not in connection with pending or threatened litigation in which any BT
Indemnified Party is a party; provided, that if the Indemnifying Party shall
have assumed the defense thereof with counsel reasonably acceptable to the
Indemnified Party in accordance with the terms hereof, the Indemnifying Party
shall only be liable for such expenses as are incurred by the Indemnified Party
prior to such assumption. Any BT Indemnified Party receiving funds from
Purchaser and Guarantors pursuant to this paragraph (d) shall return such funds
to Purchaser and Guarantors in the event that Purchaser and Guarantors are not
responsible for any Loss pursuant to the last sentence of Section 11(a).
(e) Each of the parties hereto agrees that it will not, without
prior written consent of each other party hereto, settle, compromise or consent
to the entry of any judgment in any
<PAGE> 13
-13-
pending or threatened claim, action or proceeding in respect of which
indemnification may be sought hereunder (whether or not any BT Indemnified
Party, Purchaser or Guarantors is an actual or potential party), unless such
settlement, compromise or consent includes an unconditional release of any BT
Indemnified Party (or Purchaser or Guarantors, as the case may be) from all
liability arising out of such claim, action or proceeding.
12. Conditions to Obligations of the Dealer Manager. Each of BT's
obligations hereunder shall at all times be subject to the conditions that (a)
all representations, warranties and other statements of Purchaser and Guarantors
contained herein are now, and at all times during the period of the Tender Offer
and Solicitation shall be, true and correct in all material respects and (b)
Purchaser and Guarantors at all times shall have performed in all material
respects all of their obligations hereunder theretofore to be performed.
13. Termination. This Agreement shall terminate upon (a) the
expiration, termination or withdrawal of the Tender Offer and Solicitation, (b)
withdrawal by BT as Dealer Manager pursuant to Section 4 hereof or (c)
Purchaser's and Guarantors' termination of this Agreement as a result of a
breach by BT of any material provision of this Agreement, it being understood
that Sections 3, 11, 15, 16, 19, 20, 21 and 22 hereof shall survive any
termination of this Agreement.
14. Notices. All notices and other communications required or permitted
to be given under this Agreement shall be in writing and, if sent to BT, shall
be given (and shall be deemed to have been given upon receipt) by delivery in
person, by cable, by telecopy, by telegram, by telex or by registered or
certified mail (postage prepaid, return receipt requested) to the applicable
party at the addresses indicated below or at such other address as such party
shall have delivered to each of the other parties hereto in accordance with this
Section 14:
(a) if to BT:
BT Securities Corporation
130 Liberty Street
New York, NY 10006
Telecopy No.: (212) 250-7200
Attention: James Clayton
<PAGE> 14
-14-
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Telecopy No.: (212) 269-5420
Attention: William M. Hartnett, Esq.
(b) if to Purchaser or any Guarantors:
SC International Services, Inc.
524 E. Lamar Blvd.
Arlington, Texas
Telecopy No.: (817) 792-2222
Attention: Patrick Tolbert
with a copy to:
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, New York 10022
Telecopy No.: (212) 836-7149
Attention: Joel I. Greenberg, Esq.
15. Consent to Jurisdiction; Service of Process. Each of the parties
hereto hereby (a) submits to the jurisdiction of any New York State or Federal
court sitting in the City of New York with respect to any actions and
proceedings arising out of or relating to this Agreement, (b) agrees that all
claims with respect to such actions or proceedings may be heard and determined
in such New York State or Federal court, (c) waives the defense of an
inconvenient forum, (d) agrees not to commence any action or proceeding relating
to this Agreement other than in a New York State or Federal court sitting in the
City of New York and (e) agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
16. Joint and Several Obligations, Etc. In the event that Purchaser
makes the Tender Offer and Solicitation through one or more of its affiliates,
each reference in this Agreement to Purchaser shall be deemed to be a reference
to Purchaser and any such affiliates, and the representations, warranties,
covenants and agreements of Purchaser and any such affiliates hereunder shall be
joint and several.
17. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the
<PAGE> 15
-15-
subject matter hereof and supersedes all prior agreements and undertakings, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof.
18. Amendment. This Agreement may not be amended except in writing
signed by each party to be bound thereby.
19. Governing Law. The validity and interpretation of this Agreement
shall be governed by, and construed and enforced in accordance with, the laws of
the State of New York, without regard to conflicts of law principles thereof.
20. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY AGREES,
AND, IN THE CASE OF PURCHASER TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON
BEHALF OF ITS SECURITY HOLDERS, TO WAIVE ANY RIGHT TO A TRIAL BY JURY WITH
RESPECT TO ANY CLAIM, COUNTER-CLAIM OR ACTION ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (INCLUDING, WITHOUT
LIMITATION, THE TENDER OFFER AND SOLICITATION).
21. Counterparts; Severability. This Agreement may be executed in two
or more separate counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument. Any term or
provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction.
22. Parties in Interest. This Agreement, including rights to indemnity
and contribution hereunder, shall be binding upon and inure solely to the
benefit of each party hereto, the BT Indemnified Parties and their respective
successors, heirs and assigns, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
23. Tombstone. Purchaser and Guarantors acknowledge that the Dealer
Manager may at any time after consummation of the Tender Offer and Solicitation
place an announcement in such newspapers and periodicals as it may choose, at
its own cost, stating that it acted as financial advisor and dealer manager to
Purchaser and Guarantors in connection with the Tender Offer and the
Solicitation, provided that the Dealer Manager will submit a copy of any such
announcements to Purchaser and Guarantors for their
<PAGE> 16
-16-
prior approval, which approval shall not be unreasonably withheld or delayed.
<PAGE> 17
Please indicate your willingness to act as a Dealer Manager and your
acceptance of the foregoing provisions by signing to us a copy of this
Agreement so signed, whereupon this Agreement and your acceptance shall
constitute a binding agreement between us.
Very truly yours,
SC INTERNATIONAL SERVICES, INC.
By: /s/ Thomas J. Lee
------------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
SKY CHEFS, INC.
By: /s/ Thomas J. Lee
------------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
CATERAIR INTERNATIONAL, INC. (II)
By: /s/ Thomas J. Lee
------------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
CATERAIR INTERNATIONAL CORPORATION
By: /s/ Thomas J. Lee
------------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
<PAGE> 18
-2-
Accepted as of the date first above written:
BT SECURITIES CORPORATION
By: /s/ Alan Freedman
------------------------
Name: Alan Freedman
Title: Vice President
<PAGE> 19
Exhibit A
[Offer to Purchase]
A-1
<PAGE> 20
Exhibit B
[Letter of Transmittal]
B-1
<PAGE> 21
Exhibit C
[Executed Opinion of Counsel to Purchaser and Guarantors]
[KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP LETTERHEAD]
August 25, 1997
BT Securities Corporation
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Ladies and Gentlemen:
We have acted as counsel to SC International Services, Inc., a Delaware
corporation (the "PURCHASER"), Sky Chefs, Inc., a Delaware corporation ("SKY
CHEFS"), and Caterair International Corporation, a Delaware corporation
("CATERAIR," and together with Sky Chefs, the "GUARANTORS"), in connection with
the execution and delivery of that certain dealer manager agreement (the
"DEALER MANAGER AGREEMENT"), dated the date hereof, among the Purchaser, the
Guarantors and BT Securities Corporation ("BT") relating to BT's agreement to
act as dealer manager and solicitation agent in connection with the Purchaser's
offer to purchase all of its outstanding 13% Senior Subordinated Notes due 2005
(the "NOTES") and the related solicitation by the Purchaser of consents (the
"CONSENT SOLICITATION") from the holders (the "HOLDERS") of the Notes to
certain amendments to the Indenture, dated as of September 15, 1995, among the
Purchaser, the Guarantors and The Bank of New York, as trustee (the
"INDENTURE"). This opinion is being rendered pursuant to Section 9 of the
Dealer Manager Agreement. Capitalized terms used but not defined herein have
the meanings set forth in the Dealer Manager Agreement.
We have examined originals or copies certified to our satisfaction of
the Dealer Manager Agreement, the Purchaser's Offer to Purchase and Consent
Solicitation Statement, dated the date hereof, to the Holders, together with
the documents related thereto, including, without limitation, the Consent and
Letter of Transmittal, sent or delivered by the Purchaser to the Holders
together therewith (collectively, the "SOLICITATION DOCUMENTS"), the Indenture
and such certificates, documents and records and have made such other
investigation as we have deemed necessary in connection with the opinions
hereinafter set forth.
C-1
<PAGE> 22
[KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP LETTERHEAD]
BT Securities Corporation 2 August 25, 1997
As to issues of fact, we have relied upon the above documents,
certificates and statements with respect to the accuracy of factual matters to
the extent as we have deemed proper. We have assumed the genuineness of all
signatures, and the capacity of the persons so signing, the authenticity of all
documents submitted to us as originals, the conformity to the original
documents of all copies submitted to us as certified or photostatic copies, and
the authenticity of originals of the latter documents.
The laws covered by the opinions expressed herein are limited to the
United States Federal Securities Laws (including the Securities Act of 1933,
the Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the
Investment Company Act of 1940 and the Investment Advisors Act of 1940), the
law of the State of New York and the General Corporation Law of the State of
Delaware.
Based upon and subject to the foregoing and the other limitations,
qualifications and assumptions hereinafter set forth, we are of the opinion
that:
1. The Purchaser and each Guarantor is validly existing in good
standing as a corporation under the laws of its jurisdiction of incorporation
and has the requisite corporate power and authority to execute and deliver the
Dealer Manager Agreement and, in the case of the Purchaser, to conduct the
Tender Offer and the Solicitation.
2. The Tender Offer, the Solicitation, the purchase by the Purchaser
of the Notes pursuant to the Tender Offer and the payment by the Purchaser for
the Consents have been duly authorized by the Purchaser.
3. The Dealer Manager Agreement has been duly authorized, executed and
delivered by the Purchaser and each Guarantor and, assuming the due
authorization, execution and delivery thereof by BT, the Dealer Manager
Agreement will constitute a valid and binding agreement of the Purchaser and
each Guarantor, enforceable against the Purchaser and each Guarantor in
accordance with its terms, subject to (i) bankruptcy, insolvency,
reorganization, fraudulent transfer or conveyance, moratorium and other similar
laws now or hereafter in effect affecting the enforcement of creditors' rights
(including, without limitation, fraudulent transfer or conveyance laws), (ii)
equitable principles (whether considered in a proceeding at law or in equity)
and (iii) the matters addressed in the next sentence of this paragraph. We
express no opinion as to (i) the provisions of the Dealer Manager Agreement or
any other agreement or document providing for the indemnification of or
contribution to a party with respect to a liability arising under federal or
state securities laws or where such indemnification or contribution is contrary
to public policy or (ii) the enforceability of Section 15 of the Dealer Manager
Agreement.
4. Other than those which have been obtained or made, no consent,
approval, waiver, license, authorization, approval, order, qualification or
other action by or filing or registration with,
<PAGE> 23
[KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP LETTERHEAD]
BT Securities Corporation 3 August 25, 1997
or notice to, any New York or Delaware corporate or federal governmental
authority is required in connection with the commencement or consummation of
the Tender Offer or the Solicitation.
5. The execution, delivery and performance by the Purchaser and the
Guarantors of the Dealer Manager Agreement, the compliance by the Purchaser and
the Guarantors with the terms thereof, the consummation of the transactions
contemplated thereby by the Purchaser and the Guarantors and the consummation
by the Purchaser of the Tender Offer and the Solicitation, and compliance by the
Purchaser and each Guarantor with the provisions of the Dealer Manager
Agreement will not (assuming satisfaction of each condition set forth in the
Solicitation Documents by the time required therein) (i) contravene any
provision of the General Corporation Law of the State of Delaware, United
States Federal Securities Laws or laws of the State of New York which in our
experience are normally applicable to general business corporations that are
not engaged in regulated businesses and to transactions of the type
contemplated by the Dealer Manager Agreement, (ii) except as set forth on Annex
A hereto, conflict or be inconsistent with or result in the breach of, any of
the terms, covenants, conditions or provisions of, or constitute a default
under any agreement or instrument identified on Annex A hereto or any order,
writ, injunction or decree of any court or governmental instrumentality that is
identified on Annex B hereto, or (iii) violate any provision of the certificate
of incorporation or bylaws of the Purchaser or any Guarantor; provided, that,
we do not express any opinion as to whether the execution, delivery or
performance by the Purchaser or any Guarantor of the Dealer Manager Agreement
or the consummation of the Tender Offer or the Consent Solicitation will
constitute a violation of or a default under any covenant, restriction or
provision with respect to financial ratios or tests or as to any aspect of the
financial condition or results of operations of the Purchaser or any Guarantor.
6. The commencement, conduct and consummation by the Purchaser of the
Tender Offer and the Solicitation, the purchase by the Purchaser of the Notes
pursuant to the Tender Offer, the payment by the Purchaser for the Consents
pursuant to the Solicitation and the execution, delivery and performance of the
Dealer Manager Agreement by the Purchaser and the Guarantors comply in all
material respects with Section 14 of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder and the Trust Indenture
Act of 1939, as amended, and the rules and regulations of the Commission
promulgated thereunder.
We do not opine upon and do not assume any responsibility for and are
not passing upon the accuracy, completeness and fairness of the statements
contained in the Tender Offer and Consent Solicitation Material, and we have
not made any independent check or verification thereof. However, we have
participated in conferences with officers and other representatives of the
Purchaser and representatives of the independent accountants for the Purchaser
at which the Tender Offer and Consent Solicitation Material and related matters
were discussed. Based upon these conferences and our review of the documents
referenced above (our determination of materiality is based in part upon the
opinions, representations and statements of the officers and other
representatives of the Purchaser), no facts have come to our attention which
lead us to believe that any of the Tender Offer and Consent Solicitation
Material as of the date hereof contain any untrue
<PAGE> 24
[KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP LETTERHEAD]
BT Securities Corporation 4 August 25, 1997
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading (it being understood that we express no
opinion or belief as to the financial statements, schedules and other
financial, accounting and statistical data or information contained or
incorporated by reference in any of the Tender Offer and Consent Solicitation
Material or omitted therefrom).
Our opinions set forth above are subject to the following limitations,
qualifications and assumptions.
We express no opinion with respect to "broker-dealer" laws or state
securities or "blue sky laws."
For the purposes of our opinion rendered in paragraph 6, we have
assumed that the Tender Offer and Consent Solicitation Material does not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
With respect to our opinions set forth herein relating to the
Purchaser's or the Guarantors' performance of agreements or obligations, we
assume that performance of agreements or obligations to be performed on or
prior to the date hereof occurs on the date hereof. For the purposes of our
opinions set forth herein, we have assumed that the Tender Offer and
Solicitation will be commenced, conducted and consummated on the terms and
under the conditions described in the Solicitation Documents, dated the date
hereof.
To the extent that the obligations of the Purchaser and the Guarantors
under the Dealer Manager Agreement may be dependent upon such matters, we
assume for the purposes of this opinion that BT is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization; that BT is duly qualified to engage in the activities
contemplated by the Dealer Manager Agreement; that such Dealer Manager
Agreement has been duly authorized, executed and delivered by BT and
constitutes the legal, valid and binding obligation of BT, enforceable against
BT in accordance with its terms; that BT is in compliance, generally and with
respect to acting as Dealer Manager under the Dealer Manager Agreement, with
all applicable laws and regulations; and that BT has the requisite
organizational and legal power and authority to perform its obligations under
such Dealer Manager Agreement.
<PAGE> 25
[KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP LETTERHEAD]
BT Securities Corporation 5 August 25, 1997
This opinion is rendered solely for your information and assistance in
connection with the above transactions and may not be relied upon by any other
person or for any other purpose without our prior written consent.
Very truly yours,
/s/ KAYE, SCHOLER, FIERMAN, HAYS & HANDLER LLP
<PAGE> 26
EXHIBIT A
Catering Services Agreement, dated as of April 27, 1992, between Sky Chefs and
American Airlines, Inc. ("AMERICAN")
Amendment to Catering Services Agreement, dated as of February 12, 1993,
between Sky Chefs and American
Amendment to Catering Services Agreement, dated as of June 29, 1993, between
Sky Chefs and American
Amendment to Catering Services Agreement, dated as of July 15, 1994, between
Sky Chefs and American
Employment Agreement, dated as of January 1, 1997, between Michael Z. Kay and
Sky Chefs
Employment Agreement, dated as of January 1, 1997, between Patrick W. Tolbert
and Sky Chefs
Employment Agreement, dated as of January 1, 1997, between Randall C. Boyd and
Sky Chefs, Inc.
Management Shareholders' Agreement, dated as of May 29, 1986, among Onex Food
Services, Inc., and certain other parties
Promissory Note, dated September 29, 1995, in the initial principal amount of
$37,788,000, by Caterair in favor of the Purchaser
Catering Services Agreement, dated February 11, 1992, between Caterair and
American, as amended
Credit Agreement, dated as of September 29, 1995, among Onex Food Services,
Inc., the Purchaser, Caterair, Caterair Holdings Corporation and the lenders
named therein, Bankers Trust Company, Morgan Guaranty Trust Company of New York
and Goldman, Sachs & Co., as documentation agent, Bankers Trust Company of New
York, as syndication agent, and Morgan Guaranty Trust Company of New York, as
administrative agent, and the Bank of New York, as co-agent.
The Indenture
Those several Lease Agreements, each dated as of May 15, 1993, between Caterair,
on the one hand, and TriNet Essential Facilities VIII B, Inc. or TriNet
Essential Facilities X, Inc., as the case may be, on the other hand, as amended.
A-1
<PAGE> 27
ANNEX B
None
B-1
<PAGE> 1
Exhibit 10.4
As of August 25, 1997
DEPOSITARY AGREEMENT
The Bank of New York
Corporate Trust Trustee Administration
101 Barclay Street, 21st Floor
New York, New York 10286
Ladies and Gentlemen:
SC International Services Inc. (the "Company") proposes to
make a tender offer (the "Offer") to purchase any and all of its outstanding 13%
Senior Subordinated Notes due 2005 (the "Notes") from any and all registered
holders thereof (the "Holders"). In conjunction with the Offer, the Company is
soliciting (the "Solicitation") consents (the "Consents") of Holders to certain
proposed amendments to the Indenture, dated as of September 15, 1995 (the
"Indenture"), between the Company, the Guarantors (as defined in the Indenture)
and The Bank of New York, as trustee, pursuant to which the Notes were issued.
The terms and conditions of the Offer and Solicitation as currently contemplated
are set forth in an Offer to Purchase and Consent Solicitation, dated August 25,
1997 (the "Offer to Purchase"), proposed to be distributed to all Holders.
The Company hereby appoints The Bank of New York to act as
depositary (the "Depositary") in connection with the Offer and Solicitation.
References hereinafter to "you" shall refer to The Bank of New York.
The Offer and Solicitation are expected to be commenced by the
Company on or about August 25, 1997. The Consent and Letter of Transmittal
accompanying the Offer to Purchase (or in the case of book entry securities, the
ATOP system) is to be used by the Holders to tender the Notes, and deliver the
Consents, and contains instructions with respect to the delivery of certificates
for Notes.
The Offer and Solicitation shall expire at 5:00 p.m., New York
City time, on September 24, 1997, unless extended (the "Expiration Date").
Subject to the terms and conditions set forth in the Offer to Purchase, the
Company expressly reserves the right to extend the Offer and Solicitation from
time to time and may extend the Offer and Solicitation by giving oral (confirmed
in writing) or written notice to you before 9:00 A.M., New York City time, on
the business day following the previously scheduled Expiration Date.
The Company expressly reserves the right to amend or terminate
the Offer and Solicitation, and not to accept any Notes not theretofore
accepted, upon the occurrence of any of the conditions, or, in other cases, the
failure to occur of certain of the conditions of the Offer
<PAGE> 2
specified in the Offer to Purchase under the caption "Principal Terms of the
Tender Offer and Consent Solicitation -- Conditions to the Offer." The Company
will give oral (confirmed in writing) or written notice of any amendment,
termination or nonacceptance to you as promptly as practicable.
In carrying out your duties as Depositary, you are to act in
accordance with the following instructions:
1. You will perform such duties and only such duties as are
specifically set forth in the Offer to Purchase and the related Consent and
Letter of Transmittal or as specifically set forth herein; provided however,
that in no way will your general duty to act in good faith be discharged by the
foregoing.
2. You will establish an account with respect to the Notes at
The Depositary Trust Company (the "Book-Entry Transfer Facility") for purposes
of the Offer and Solicitation within two business days after the date of the
Offer to Purchase, and any financial institution that is a participant in the
Book-Entry Transfer Facility's systems may make book-entry delivery of the Notes
by causing the Book-Entry Transfer Facility to transfer such Notes into your
account in accordance with the Book-Entry Transfer Facility's procedure for such
transfer.
3. You are to examine each of the Consents and Letters of
Transmittal and certificates for Notes (or confirmation of book-entry transfer
into your account at the Book-Entry Transfer Facility) and any other documents
delivered or mailed to you by or for Holders to ascertain whether: (i) the
Consents and Letters of Transmittal and any such other documents are duly
executed and properly completed in accordance with instructions set forth
therein and (ii) the Notes have otherwise been properly tendered and the
Consents delivered. In each case where the Letter of Transmittal or any other
document has been improperly completed or executed or any of the certificates
for Notes are not in proper form for transfer or some other irregularity in
connection with the acceptance of the Offer or delivery of a Consent exists, you
will endeavor to inform the presenters of the need for fulfillment of all
requirements and to take any other action as may be necessary or advisable to
cause such irregularity to be corrected.
4. With the approval of the President, Senior Vice President,
Executive Vice President, or any Vice President of the Company or any other
authorized employee of the Company (such approval, if given orally, to be
confirmed in writing) or any other party designated by such an officer in
writing, you are authorized to waive any irregularities in connection with any
tender of Notes pursuant to the Offer or delivery of Consents pursuant to the
Solicitation.
5. Tenders of Notes and deliveries of Consents may be made
only as set forth in the Consent and Letter of Transmittal and in the section of
the Offer to Purchase captioned "Principal Terms of the Tender Offer and the
Consent Solicitation -- Procedures for Tendering Notes and Delivering Consents,"
and Notes shall be considered properly tendered to you, and
2
<PAGE> 3
Consents properly delivered, only when tendered or delivered in accordance with
the procedures set forth therein.
Notwithstanding the provisions of this paragraph 5, Notes or
Consents which the President, Senior Vice President, Executive Vice President,
or any Vice President of the Company or any other authorized employee of the
Company shall approve as having been properly tendered or delivered shall be
considered to be properly tendered or delivered (such approval, if given orally,
shall be confirmed in writing).
6. You shall advise the Company with respect to any Consents
received after the Expiration Date and any Notes received subsequent to the
Expiration Date and accept its instructions with respect to disposition of such
Consents and Notes.
7. You shall accept tenders of Notes and deliveries of
Consents:
(a) in cases where the Notes are registered in two or more
names only if signed by all named holders;
(b) in cases where the signing person (as indicated on the
Consent and Letter of Transmittal) is acting in a fiduciary or a representative
capacity only when proper evidence of his or her authority so to act is
submitted; and
(c) from persons other than the registered holder of Notes
provided that customary transfer requirements, including any applicable transfer
taxes, are fulfilled.
You shall accept partial tenders of Notes where so
indicated and as permitted in the Consent and Letter of Transmittal and deliver
certificates for Notes to the transfer agent for split-up and return any
untendered Notes to the Holder (or such other person as may be designated in the
Letter of Transmittal) as promptly as practicable after expiration or
termination of the Offer.
8. Upon satisfaction or waiver by the Company of all of the
conditions to the Offer, the Company will notify you (such notice if given
orally, to be confirmed in writing) of its acceptance for payment, at any time
or from time to time, of any or all Notes properly tendered. Upon receipt of
payment from the Company, you shall promptly thereafter make payment of the
Consent Payment and Tender Offer Consideration (as such terms are defined in the
Offer to Purchase); provided, however, that in all cases, such payment with
respect to Notes tendered pursuant to the Offer will be made only after timely
receipt by you of certificates for such Notes (or confirmation of book-entry
transfer into your account at the Book-Entry Transfer Facility), a properly
completed and duly executed Consent and Letter of Transmittal (or facsimile
thereof) with any required signature guarantees and any other required
documents.
9. Tenders of Notes and deliveries of Consents pursuant to the
Offer and Solicitation are irrevocable.
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<PAGE> 4
10. The Company shall not be required to purchase any Notes
tendered if any of the conditions set forth in the Offer to Purchase are not
met. Notice of any decision by the Company not to accept any Notes tendered
shall be given (and confirmed in writing) by the Company to you.
11. If, pursuant to the Offer, the Company does not accept all
or part of the Notes tendered because of an invalid tender, the occurrence of
certain other events set forth in the Offer to Purchase under the caption
"Principal Terms and Conditions of the Tender Offer and Consent Solicitation --
Conditions of the Tender Offer and Consent Solicitation" or otherwise, you shall
as soon as practicable after the expiration or termination of the Offer return
those certificates for unaccepted Notes (or effect appropriate book-entry
transfer), together with any related required documents and the Consents and
Letters of Transmittal relating thereto that are in your possession, to the
persons who deposited them.
12. All certificates for reissued Notes or unaccepted Notes
shall be forwarded by first-class certified mail, return receipt requested.
13. You are not authorized to pay or offer to pay any
concessions, commissions or solicitation fees to any broker, dealer, bank or
other persons or to engage or utilize any person to solicit tenders.
14. As Depositary hereunder you:
(a) shall have no duties or obligations other than
those specifically set forth therein or as may be subsequently agreed to in
writing by you and the Company;
(b) will be regarded as making no representations and
having no responsibilities as to the validity, sufficiency, value or genuineness
of any of the certificates or the Notes represented thereby deposited with you
pursuant to the Offer, and will not be required to and will make no
representation as to the validity, value or genuineness of the Offer or
Solicitation;
(c) shall not be obligated to take any legal action
hereunder which might in your reasonable judgment involve any expense or
liability, unless you shall have been furnished with reasonable indemnity;
(d) may reasonably rely on and shall be protected in
acting in reliance upon any certificate, instrument, opinion, notice, letter or
other document or security delivered to you and reasonably believed by you to be
genuine and to have been signed by the proper party or parties;
(e) may reasonably act upon any tender, statement,
request, comment, agreement or other instrument whatsoever not only as to its
due execution and validity and effectiveness of its provisions, but also as to
the truth and accuracy of any information contained
4
<PAGE> 5
therein, which you shall in good faith believe to be genuine or to have been
signed or represented by a proper person or persons;
(f) may rely on and shall be protected in acting upon
written or oral instructions from any officer of the Company;
(g) may consult with your counsel with respect to any
questions relating to your duties and responsibilities and the advice or opinion
of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by you hereunder in
good faith and in accordance with the advice or opinion of such counsel; and
(h) shall not advise any person tendering Notes or
delivering Consents pursuant to the Offer or Solicitation as to the wisdom of
making such tender or delivery or as to the market value or decline or
appreciation in market value of any Notes.
15. You shall take such action as may from time to time be
requested by the Company or its counsel (and such other action as you may
reasonably deem appropriate) to furnish copies of the Offer to Purchase, Consent
and Letter of Transmittal and the Notice of Guaranteed Delivery (as defined in
the Offer to Purchase) or such other forms as may be approved from time to time
by the Company, to all persons requesting such documents and to accept and
comply with telephone requests for information relating to the Offer and
Solicitation; provided that such information shall relate only to the procedures
for accepting (or withdrawing from) the Offer or Solicitation. The Company will
furnish you with copies of such documents at your request. All other requests
for information relating to the Offer shall be directed to the Dealer Manager
(as defined in the Offer to Purchase).
16. You shall advise by facsimile transmission or telephone,
and promptly thereafter confirm in writing to the Treasurer of the Company and
such other person or persons as he or she may request, daily (and more
frequently during the week immediately preceding the Expiration Date, and if
otherwise requested) up to and including the Expiration Date, as to the number
of Consents received and Notes tendered pursuant to the Offer and Solicitation
and the items received by you pursuant to this Agreement, separately reporting
and giving cumulative totals as to items properly received and items improperly
received. In addition, you will also inform, and cooperate in making available
to, the Company or any such other person or persons upon oral request made from
time to time prior to the Expiration Date of such other information as it or he
or she reasonably requests. Such cooperation shall include, without limitation,
the granting by you to the Company and such persons as the Company may request
of access to those persons on your staff who are responsible for receiving
Consents and Notes, in order to ensure that immediately prior to the Consent
Date and the Expiration Date the Company shall have received information in
sufficient detail to enable it to decide whether to extend such dates. You shall
prepare a final list of all persons whose Consents are received and Notes were
accepted for payment, the aggregate principal amount of Notes tendered, the
aggregate principal amount of Notes accepted and deliver said list to the
Company.
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<PAGE> 6
17. Consents and Letters of Transmittal and Notices of
Guaranteed Delivery shall be stamped by you as to the date and the time of
receipt thereof and shall be preserved by you for a period of time at least
equal to the period of time you preserve other records pertaining to the
transfer of securities. You shall dispose of unused Consents and Letters of
Transmittal and other surplus materials by returning them to the Company.
18. You hereby expressly waive any lien, encumbrance or right
of set-off whatsoever that you may have with respect to funds deposited with you
in relation to the Offer and Solicitation by reasons of amounts, if any,
borrowed by the Company, or any of its subsidiaries or affiliates, pursuant to
any loan or credit agreement with you or for compensation owed to you hereunder.
19. For services rendered as Depositary hereunder, you shall
be entitled to $2,500 plus $500 per extension of the Offer.
20. You hereby acknowledge receipt of the Offer to Purchase
and the Consent and Letter of Transmittal and further acknowledge that you have
examined each of them. Any inconsistency between this Agreement, on the one
hand, and the Offer to Purchase and the Consent and Letter of Transmittal (as
they may be amended from time to time), on the other hand, shall be resolved in
favor of the latter two documents, except with respect to the duties,
liabilities and indemnification of you as Depositary, which shall be controlled
by this Agreement.
21. The Company covenants and agrees to indemnify and hold you
harmless in your capacity as Depositary hereunder against any loss, liability,
cost or expense, including reasonable attorneys' fees and expenses, arising out
of or in connection with any act, omission, delay or refusal made by you in
reliance upon any signature, endorsement, assignment, certificate, order,
request, notice, instruction or other instrument or document reasonably believed
by you to be valid, genuine and sufficient and in accepting any tender or
Consent or effecting any transfer of Notes reasonably believed by you in good
faith to be authorized, and in delaying or refusing in good faith to accept any
tenders or Consents or effect any transfer of Notes; provided, however, that the
Company shall not be liable for indemnification or otherwise for any loss,
liability, cost or expense to the extent arising out of your negligence or
willful misconduct. In no case shall the Company be liable unless the Company
shall be notified by you, by letter or by facsimile confirmed by letter, of the
written assertion of a claim against you or of any other action commenced
against you, promptly after you shall have received any such written assertion
or notice of commencement of action. The Company shall be entitled to
participate at its own expense in the defense of any such claim or other action,
and, if the Company so elects, the Company shall assume the defense of any suit
brought to enforce any such claim. In the event that the Company shall assume
the defense of any such suit, the Company shall not be liable for the fees and
expense of any additional counsel thereafter retained by you so long as the
Company shall retain counsel reasonably satisfactory to you to defend such suit.
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<PAGE> 7
22. You shall arrange to comply with all requirements under
the tax laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the Internal
Revenue Service. The Company understands that you are required to deduct 31% on
payments to holders who have not supplied their correct Taxpayer Identification
Number or required certification. Such funds will be turned over to the Internal
Revenue Service in accordance with applicable regulations.
23. You shall deliver or cause to be delivered, in a timely
manner to each governmental authority to which any transfer taxes are payable in
respect of the tender of Notes, your check in the amount of all transfer taxes
so payable, and the Company shall reimburse you for the amount of any and all
transfer taxes payable in respect of the tender of Notes; provided, however,
that you shall reimburse the Company for amounts refunded to you in respect of
your payment of any such transfer taxes, at such time as such refund is received
by you.
24. This Agreement and your appointment as Depositary
hereunder shall be construed and enforced in accordance with the laws of the
State of New York applicable to agreements made and to be performed entirely
within such state, and without regard to conflicts of law principles, and shall
inure to the benefit of, and the obligations created hereby shall be binding
upon, the successors and assigns of each of the parties hereto.
25. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
26. In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
27. This Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in whole or in part, except by
a written instrument signed by a duly authorized representative of the party to
be charged. This Agreement may not be modified orally.
28. Unless otherwise provided herein, all notices, requests
and other communications to any party hereunder shall be in writing (including
facsimile or similar writing) and shall be given to such party, addressed to it,
at its address or telecopy number set forth below:
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<PAGE> 8
If to the Company:
SC International Services, Inc.
524 E. Lamar
Arlington, TX 76011
Facsimile: (817) 792-2222
Attention: Mr. Patrick W. Tolbert
Executive Vice President and Chief
Financial and Administrative Officer
Copies to:
Kaye, Scholer, Fierman,
Hays & Handler, LLP
425 Park Avenue
New York, NY 10022
Facsimile: (212) 836-7152
Attention: Joel I. Greenberg, Esq.
If to the Depositary:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, NY 10286
Facsimile: (212) 815-5915
Attention: Corporate Trust Trustee
Administration
29. Unless terminated earlier by the parties hereto, this
Agreement shall terminate 90 days following the Expiration Date. Notwithstanding
the foregoing, Paragraphs 19, 21 and 23 shall survive the termination of this
Agreement. Upon any termination of this Agreement, you shall promptly deliver to
the Company any certificates for Notes, funds or property then held by you as
Depositary under this Agreement.
30. This Agreement shall be binding and effective as of the
date hereof.
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<PAGE> 9
Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy.
SC INTERNATIONAL SERVICES, INC.
By: /s/ Thomas J. Lee
--------------------------
Name: Thomas J. Lee
Title: Authorized Signatory
Accepted as of the date
first above written
THE BANK OF NEW YORK, as Depositary
By: /s/ Walter Gitlin
-------------------------
Name: Walter Gitlin
Title: Vice President
9
<PAGE> 1
EXHIBIT 10.13
EXCHANGE AGREEMENT
AND
AMENDMENT TO STOCKHOLDERS' AGREEMENT
This Exchange Agreement and Amendment to Stockholders' Agreement
(this "Exchange Agreement"), dated as of December __, 1996, among Onex Food
Services, Inc., a Delaware corporation ("OFSI"), LSG Lufthansa Service GmbH, a
Gesellschaft mit beschrankter Haftung organized under the laws of Germany
("LSG"), and LSG Lufthansa Service USA Corporation, a Delaware corporation ("LSG
USA").
WHEREAS, as of the date hereof, LSG USA, a subsidiary of LSG, owns
38,326.36 shares of OFSI's Class A Common Stock, par value $.01 per share (the
"Class A Stock");
WHEREAS, OFSI, LSG and certain other parties entered into that
certain Stockholders' Agreement, dated December 6, 1993 (the "Stockholders'
Agreement"), which sets forth certain rights and obligations of LSG and LSG USA
with respect to the Class A Stock;
WHEREAS, OFSI, LSG and LSG USA each desire that LSG and LSG USA
exchange the OFSI Class A Stock for 38,326.36 shares of OFSI's Class AA Common
Stock, par value $.01 per share (the "Class AA Stock");
The parties hereto, intending to be legally bound, hereby agree as
follows:
1. Exchange. Upon the terms and subject to the conditions of this
Exchange Agreement, (i) LSG and LSG USA hereby grant, sell, convey, assign,
transfer and deliver to OFSI all right title and interest of LSG and LSG USA in
the Class A Stock, free and clear of all encumbrances, liens, or other
restrictions on transfer, and (ii) OFSI hereby accepts the Class A Stock for
exchange; each in reliance on the representations and warranties set forth
herein. In consideration for the Class A Stock, OFSI shall deliver to LSG (or,
at LSG's election, LSG USA) the Class AA Stock.
2. Deliveries and Receipt. Simultaneously with the delivery of this
Exchange Agreement, (i) LSG and LSG USA have delivered to OFSI the certificates
representing the Class A Stock, together with stock powers or appropriate
instruments of transfer endorsed in blank, and (ii) OFSI has delivered to LSG
certificates, in the name of LSG (or LSG USA), representing the Class AA Stock.
OFSI hereby acknowledges receipt of the Class A Stock and LSG and LSG USA hereby
acknowledge receipt of the Class AA Stock.
3. Representations and Warranties of LSG. Each of LSG and LSG USA
hereby represent and warrant to OFSI as follows:
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<PAGE> 2
3.1. Organization and Authority. LSG is a Gesellschaft mit
beschrankter Haftung duly organized, validly existing and in good standing under
the laws of its jurisdiction of formation. LSG USA is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. The execution, delivery and performance of this
Exchange Agreement have been duly authorized by all necessary action of LSG and
LSG USA; this Exchange Agreement has been duly executed and delivered and
constitutes a valid and binding obligation of LSG and LSG USA in accordance with
its terms subject to applicable bankruptcy, insolvency, reorganization and other
similar laws affecting creditors' rights generally and to general principles of
equity.
3.2. No Conflict. The execution and delivery of this Exchange
Agreement and performance of LSG's and LSG USA's obligations hereunder will not
(a) violate any provision of any of the documents or instruments governing the
existence or formation of LSG or LSG USA, or (b) violate any statute or law or
any judgment, decree, order, regulation or rule of any court or other
governmental body applicable to LSG or LSG USA, or (c) constitute a breach or
default under any contract to which LSG or LSG USA is a party.
3.3. Approvals. The execution, delivery and performance by LSG or
LSG USA of this Exchange Agreement does not and will not require any
registration with, consent or waiver or approval of or notice to, or other
action to with or by any governmental body.
3.4. Title. LSG USA is the beneficial and record owner of the Class
A Stock, free and clear of all security interests, liens and other encumbrances
(other than those created under the Stockholders' Agreement). Upon the
consummation of the transactions contemplated by this Exchange Agreement, OFSI
will acquire good and valid title to the Class A Stock, free and clear of all
security interests, liens and other encumbrances.
4. Representations and Warranties of OFSI. OFSI hereby represents
and warrants to LSG and LSG USA as follows:
4.1. Organization and Authority. OFSI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The execution, delivery and performance of this Exchange Agreement
have been duly authorized by all necessary action of OFSI; this Exchange
Agreement has been duly executed and delivered and constitutes a valid and
binding obligation of OFSI in accordance with its terms subject to applicable
bankruptcy, insolvency, reorganization and other similar laws affecting
creditors' rights generally and to general principles of equity.
4.2. No Conflict. The execution and delivery of this Exchange
Agreement and performance of OFSI's obligations hereunder will not (a) violate
any provision of the certificate of incorporation or bylaws of OFSI, or (b)
violate any statute or law or any judgment, decree, order, regulation or rule of
any court or other governmental body applicable to OFSI, or (c) constitute a
breach or default under any contract to which OFSI is a party.
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<PAGE> 3
4.3. Approvals. The execution, delivery and performance by OFSI of
this Exchange Agreement does not and will not require any registration with,
consent or waiver or approval of or notice to, or other action to with or by any
governmental body.
4.4. Class AA Shares. Upon the issuance by OFSI to LSG of the Class
AA Stock hereunder, such shares shall be duly authorized, validly issued, fully
paid and nonassessable.
5. Consent Under and Amendments to Stockholders' Agreement.
5.1. Amendments. The parties hereto hereby consent and agree that
(a) The Stockholders' Agreement is hereby amended such that the
definitions of "Common Stock" and "OFSI/LSG Shares" set forth in the
Stockholders' Agreement shall include the shares of Class AA Stock received by
LSG and/or LSG USA in connection with the transactions contemplated by this
Exchange Agreement (and any Class AA Stock received by LSG after the date
hereof) and the provisions of the Stockholders' Agreement shall apply to the
Class AA Stock in the same manner as the Stockholders' Agreement applies to the
Class A Stock.
(b) Section 1.3(a) of the Stockholders' Agreement is hereby amended
and restated to read in its entirety as follows:
"(a) For each fiscal year of OFSI, the amount of dividends
paid by OFSI on the OFSI/LSG Shares shall not be less than an
amount equal to the product of (x) 30% of OFSI's consolidated
net income for the fiscal year preceding the date on which the
dividend is paid determined in accordance with United States
generally accepted accounting principles without taking into
account the effect on OFSI and its subsidiaries of the
transactions between OFSI and certain of its affiliates, on
the one hand, and Caterair Holdings Corporation, Caterair
International Corporation and certain of their respective
affiliates, on the other hand, consummated on September 29,
1995 on the basis of an arrangement mutually agreed to by LSG
and OFSI multiplied by (y) a fraction, the numerator of which
the number of OFSI/LSG Shares outstanding on the record date
for the determination of holders entitled to the dividend and
the denominator of which is the total number of shares of
OFSI's Class A Common Stock and Class AA Common Stock
outstanding on such date (excluding shares held by OFSI as
treasury shares) unless (A) there has been a Public Offering
or (B) Onex U.S. LLC and LSG otherwise agree; provided, that
the foregoing shall be subject to the following limitations:
(i) OFSI shall not be required to declare and pay
dividends on the OFSI/LSG Shares for any fiscal year in excess
of $2,500,000 (provided,
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<PAGE> 4
that, any unused portion of such amount during any fiscal year
may be carried over to any subsequent fiscal year); and
(ii) no dividend may be declared or paid on the OFSI/LSG
Shares (A) in excess of the funds of OFSI legally available
for the payment of dividends; (B) other than in accordance
with OFSI's Amended and Restated Certificate of Incorporation;
or (C) if OFSI is not permitted to declare or pay such
dividend under any agreement relating to the indebtedness of
OFSI or any of its subsidiaries or if SC International
Services, Inc. is not permitted by any agreement relating to
its indebtedness to declare or pay a dividend to OFSI to
enable OFSI to pay a dividend on the OFSI/LSG Shares."
(c) Section 1.3(b) of the Stockholders' Agreement is hereby amended
by adding the following at the end of such Section:
"(viii) the issuance by OFSI of any shares of its Class AA
Common Stock."
5.2. Consent. For purposes of the Stockholders' Agreement, the
parties hereto consent to the transactions contemplated hereby.
6. Binding Effect and Assignment. All of the terms and provisions of
this Exchange Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors and assigns.
LSG may assign its rights and obligations under this Exchange Agreement to any
subsidiary of LSG, but no such assignment shall relieve LSG of its obligations
hereunder. Except as provided in the preceding sentence, no party may assign any
of its rights or obligations under this Exchange Agreement.
7. Exclusive Agreement; Amendment. This Exchange Agreement
supersedes all prior agreements among the parties with respect to its subject
matter, is intended as a complete and exclusive statement of the terms of the
agreement among the parties with respect thereto and cannot be changed or
terminated except by a written instrument executed by the party or parties
against whom enforcement thereof is sought.
8. Governing Law. This Exchange Agreement and (unless otherwise
provided), all amendments hereof and waivers and consents hereunder shall be
governed by the internal laws of the State of Delaware without regard to the
conflicts of laws principles thereof.
9. Submission to Jurisdiction.
(a) Any legal action or proceeding with respect to this Exchange
Agreement or any of the transactions contemplated hereby may be brought against
any of the parties in the courts of the State of Delaware or the United States
of America for the District of Delaware; each
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<PAGE> 5
of the parties hereby consents to and generally and unconditionally, the
jurisdiction of the aforesaid courts (and the appropriate appellate courts) in
any such legal action or proceedings.
(b) Each of the parties hereto hereby irrevocably waives, in
connection with any such action or proceeding, any objection, including, without
limitation, any objection to the laying of venue or based on the grounds of
forum non conveniens, which it may now or hereafter have to bringing any such
action or proceeding in such jurisdiction.
(c) Each of the parties hereto irrevocably consents to the service
of process of any of the aforementioned courts in any action or proceeding
anywhere in the world.
(d) Nothing herein shall affect the right of any party hereto to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against any other party hereto in any other
jurisdiction.
10. Counterparts. This Exchange Agreement may be executed in two or
more counterparts, each of which shall be considered an original, but all of
which together shall constitute the same instrument.
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<PAGE> 6
IN WITNESS WHEREOF, the undersigned have executed this Exchange
Agreement as of the date first written above.
ONEX FOOD SERVICES, INC.
By: Patrick W. Tolbert
-----------------------
Name:
Title:
LSG LUFTHANSA SERVICE GmbH
By: /s/ Authorized Signatory
------------------------
Name:
Title:
LSG LUFTHANSA SERVICE USA
CORPORATION
By: /s/ Authorized Signatory
------------------------
Name:
Title:
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<PAGE> 7
Accepted and agreed to, solely with respect
to Section 5 as of this __ day of December, 1996.
ONEX CORPORATION
By: /s/ Authorized Signatory
------------------------------
Name:
Title:
ONEX U.S. LLC
By: /s/ Donald F. West
------------------------------
Name: Donald F. West
Title: Representative
7
<PAGE> 1
EXHIBIT 10.19
THIS AGREEMENT IS SUBJECT TO ARBITRATION AS PROVIDED IN SECTIONS 6(H) AND 13
HEREOF
EMPLOYMENT AGREEMENT
Agreement dated as of January 1, 1997, between J.J. O'Neill, an individual
residing at 5036 Radbrook, Dallas, Texas ("Executive"), and Onex Food Services,
Inc., a Delaware corporation, having principal offices in Arlington, Texas
("Corporation").
Corporation hereby employs Executive, and Executive accepts employment by
Corporation, upon the terms and subject to the conditions of this Agreement and,
accordingly, Executive and Corporation agree as follows:
1. Definitions. In this Agreement (including this Section) the following
terms shall have the following meanings:
A. "Affiliate" shall mean, with respect to any Person, any Person
which, directly or indirectly, controls or is controlled by that Person,
or is under common control with that Person. For purposes of this
definition "control" (including, with correlative meaning, the terms
"controlled by" and "under common control with"), as used with respect to
any Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or by
contract or otherwise;
B. "Basic Salary" shall mean a salary at the annual rate of
$250,000;
C. "Director's Fee" shall mean an annual payment of $60,000;
D. "Employment Year" shall mean a twelve-month period commencing on
the 1st day of January and ending on the 31st day of December next
following; provided that if Executive's employment is terminated prior to
the end of a calendar year, the last Employment Year shall be the period
commencing on January 1st of such year and concluding on the date of
termination;
E. "Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, trust, association,
unincorporated organization or other entity; and
F. "Subsidiary" shall mean, with respect to any Person ("Owner"),
any Person of which securities or other interests having the power to
elect a majority of that Person's Board of Directors or similar governing
body (other than securities or interests having that power only upon the
happening of a contingency that has not occurred) or otherwise direct the
management of such Person are held by Owner or one or more of its
Subsidiaries.
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2. Duties of Executive. Executive shall, during the term of his employment
under this Agreement, serve Corporation in the capacity of Chairman or Chief
Executive Officer with such duties as may from time to time be assigned to him
by the Board of Directors of Corporation; however, Executive shall not be
required to perform duties (i) other than those which are customarily and
ordinarily performed by executives in similar capacities of corporations similar
to Corporation or (ii) which are materially different in nature or scope from
those previously performed by Executive for Corporation prior to the execution
hereof. It is intended that Executive will be elected and serve as a member of
the Board of Directors of Corporation while he is employed hereunder. Executive
shall, during the term of his employment under this Agreement, serve in such
positions with Subsidiaries and Affiliates of Corporation as the Board of
Directors of Corporation may from time to time reasonably request. It is the
intention of the parties hereto to use and employ the abilities of Executive in
the most mutually advantageous fashion.
3. Term. The term of Executive's employment under this Agreement shall
commence on January 1, 1997 and expire on January 31, 1999, unless earlier
terminated pursuant to the provisions of Section 9, 10 or 12 hereof.
4. Time Required to Devote to Duties and Place of Employment. Executive
shall devote reasonable and substantial efforts, although not full business
time, to the performance of the Executive's duties and the advancement of the
business and affairs of Corporation, including, if applicable, its Subsidiaries
and/or Affiliates to which Executive may have been assigned under Section 2
hereof. Executive shall well and faithfully serve Corporation, including such
applicable Subsidiaries and/or Affiliates, during the continuance of his
employment hereunder and use his best efforts to promote the interests and
welfare thereof. Notwithstanding the foregoing, Executive may participate in
community affairs and passive investment activities, so long as such activities
do not interfere with the due performance of his duties hereunder. Executive's
place of employment shall be the Dallas/Fort Worth, Texas, area or, with his
concurrence, such other area in which the Board of Directors of Corporation may
determine to locate the principal executive offices of Corporation. Executive
shall not be required to relocate or establish a place of employment outside of
the areas contemplated by the preceding sentence.
5. Remuneration.
A. In consideration of the services to be provided by him hereunder,
Executive shall, during the term of his employment hereunder, be paid the
Basic Salary in respect of each Employment Year or portion thereof in
equal semi-monthly installments in arrears.
B. Should Executive's employment hereunder be terminated on a day
other than a day when a semi-monthly installment of salary is payable to
Executive, the amount payable to Executive on the date of termination
shall be the remainder of the semi-monthly installment that would
otherwise be payable to him in accordance with the terms of this Section 5
as if his employment hereunder had been continued through the whole of
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such semi-monthly employment period, together with any other monies
payable pursuant to this Agreement.
C. Director's Fee payable immediately following the first meeting of
the Board of Directors of Corporation in each year other than 1999.
6. Additional Matters. During the term of his employment hereunder,
Executive shall be entitled to:
A. All benefits and coverages provided by hospital, medical, dental,
group life, short and long-term disability coverage and retirement plan
benefits and coverages currently and from time to time made available to
employees and executives of Corporation under its executive employees'
benefit program; provided, however, that in no event shall any of such
benefits or coverages be modified so as to provide reduced levels of
benefits or coverages or otherwise be less advantageous to Executive than
were afforded to executive employees of Corporation in January 1996,
unless the Board of Directors of Corporation determines in its discretion
that it is in the best interests of Corporation to reduce such benefits or
coverages for senior executives of Corporation generally.
B. All vacation sick leave and other benefits in accordance with
Corporation's policies currently and from time to time in effect for its
executive employees (including without limitation split-dollar life
insurance); provided, however, that such benefits or programs shall not be
less advantageous than those afforded or provided by Corporation to its
executive employees in January 1996, unless the Board of Directors of
Corporation determines in its discretion that it is in the best interests
of Corporation to reduce such benefits or programs for senior executives
of Corporation generally.
C. A perquisites allowance at the annual rate of $30,000 to cover
such items as an automobile allowance, country club membership, etc.
D. Receive advances, or be reimbursed on a timely basis, for all
travel, entertainment and other out-of-pocket expenses, actually and
reasonably incurred by him in connection with the performance of his
duties hereunder and for which reasonable supporting documentation is
furnished to Corporation.
E. If Corporation has in effect, as of the date hereof or thereafter
during the term hereof, a plan or program for the deferral of sums payable
to Executive hereunder, an opportunity to participate therein.
F. All benefits of a Participant in Corporation's Supplemental
Executive Retirement Plan and any and all successor plans (the "SERP").
Corporation agrees to
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purchase annuities as a means of further securing and paying benefits
pursuant to the SERP.
G. In the event that Executive becomes disabled during the term of
this Agreement (or any extension or renewal hereof) Corporation shall
continue to pay Executive his full Basic Salary until the earliest to
occur of (i) the cessation of such disability; (ii) Executive's becoming
entitled to an unreduced Normal Retirement Pension under Corporation's
Defined Benefit Pension Plan; (iii) the Executive's death; or (iv) January
31, 1999; provided, however, that if disability benefits would otherwise
cease under the foregoing clauses (ii) or (iii), such benefits shall
continue until a date which is at least one year from the date of
disability, or most recent disability, if that date is later. The amount
payable to the Executive shall be offset on a prospective basis by (i) the
amount of any proceeds received by Executive from any disability income
program (whether or not insured) maintained by Corporation or any
Affiliate, (ii) the amount of any disability payment under the U.S. Social
Security Disability Insurance Program; (iii) any amounts payable on
account of disability under any retirement program sponsored by
Corporation or any Affiliate, including any amounts payable under the
SERP, exclusive, however, of any benefits resulting from a salary deferral
or similar arrangement; and (iv) any amount of remuneration received by
Executive from gainful employment, other than employment approved by
Executive's physician for therapy or rehabilitation. For purposes of this
paragraph H, Executive shall be deemed disabled if he suffers a physical,
mental or emotional injury, illness or disorder which renders him unable
to perform substantially all of his usual and customary duties for
Corporation with the degree of decorum and dignity normally associated
with employment in a similar capacity. In the event that there is a
disagreement between Corporation and Executive concerning the existence of
a disability, such disagreement shall be resolved by the majority opinion
of three physicians, one of whom shall be appointed by Corporation, one of
whom shall be appointed by the Executive, and one of whom shall be
appointed by each of the two foregoing physicians. Executive's Basic
Salary shall be continued until such time as a determination is made on
the issue of disability, but not after the date on which such payments
would terminate pursuant to the first sentence of this Section 6(G).
7. Equity Participation. In connection with Executive's employment
pursuant hereto, Executive has purchased shares of the common stock of
Corporation. Executive acknowledges and agrees that (i) his purchase of those
shares shall not entitle him to continued employment by Corporation or affect
Corporation's rights to terminate his employment and (ii) his investment in
those shares shall not be taken into account in determining the damages, if any,
which he would be entitled to recover upon Corporation's termination of his
employment in contravention of, or upon any other breach of, this Agreement.
8. Confidential Information. Executive acknowledges that, in the course of
performing and fulfilling his duties hereunder he may have access to and may be
entrusted with confidential information concerning the present and contemplated
activities of, the techniques and modes of business operations evolved and used
or to be evolved and used by Corporation, its
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Subsidiaries and Affiliates and their respective customers and clients, which
information is not generally known in the industry in which Corporation does
business, the disclosure of any of which confidential information to competitors
of Corporation, its Subsidiaries or Affiliates or to other Persons would be
highly detrimental to the interests of Corporation, its Subsidiaries and
Affiliates. Executive further acknowledges and agrees that the right to maintain
confidential such information constitutes a proprietary right which Corporation,
its Subsidiaries and Affiliates are entitled to protect. Accordingly, Executive
covenants and agrees with Corporation and with each Subsidiary and Affiliate of
Corporation that (i) he will not during the continuance of his employment under
this Agreement disclose any of such confidential information to any Person, nor
shall he use the same, except as required in the normal course of his employment
hereunder, and (ii) after the termination or expiration of his employment under
this Agreement, he will not disclose or make any use of any of such information
without the consent of Corporation; provided, however, that Corporation
acknowledges and agrees that Executive shall not be prohibited by this Section
from using the personal skills and know-how developed by Executive prior to the
execution of this Agreement and during the term hereof and acknowledges and
agrees that, subject to the provisions of Section 11 hereof, Executive may
pursue a career and earn his livelihood through the use of such skills and
know-how he has obtained (but not any confidential information, systems or
techniques of Corporation) before and during his employment hereunder after the
termination or expiration of this Agreement without the express consent of, or
any liability to, Corporation. Executive acknowledges and agrees that in the
event of any actual or threatened violation of the provisions of this Section 8
or of Section 11 hereof, Corporation and/or any Subsidiary or Affiliate may
commence proceedings in any court of competent jurisdiction for, and shall be
entitled to obtain, preliminary and permanent injunctive relief or other
appropriate equitable remedies (without any bond or other security being
required) and an accounting of all profits and benefits arising out of such
violation, which rights and remedies shall be in addition to any other rights or
remedies to which such Person may be entitled at law.
9. Termination of Agreement by Corporation for Cause. This Agreement shall
not be terminable by Corporation prior to the expiration of the term hereof
except for good cause or as contemplated by Section 12 hereof. As used herein,
"good cause" shall be limited to the following:
A. Executive's repeated unavailability or refusal to devote the time
required for the performance of his duties as described in Section 2
hereof;
B. Executive's intentional and repeated refusal to follow
instructions of the Board of Directors of Corporation (provided such
instructions are made in good faith, are not arbitrary or capricious and
do not require Executive to subject himself to criminal liability or
material civil liability against which he is not indemnified by
Corporation) (Corporation acknowledges that "intentional and repeated"
connotes reasonable notice to Executive after one or more instances of
refusal and prior to any further instances which, together with earlier
ones, are relied on by Corporation for termination under this paragraph
9B);
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C. Intentional misrepresentation or unlawful conduct by Executive in
the discharge of his responsibilities;
D. Executive's intentional disclosure to third parties of any
material confidential business information (as described in Section 8
hereof) without Corporation's consent; or
E. Theft of or fraud by Executive involving property of Corporation
or any of its Subsidiaries or Affiliates, conviction of Executive of a
felony, criminal offense or other action by Executive involving moral
turpitude which brings the Corporation into public disrepute.
Corporation recognizes that one of the principal benefits to it of the
employment of Executive hereunder will be the benefit of Executive's best
independent judgment in connection with his area of responsibility. Accordingly,
notwithstanding anything to the contrary herein, good cause for termination of
Executive hereunder shall not include Executive's exercising his right to
articulate to Corporation's Board of Directors his views as to Corporation's
plans or policies, so long as he carries out the instructions of the Board of
Directors of Corporation.
Prior to terminating Executive's employment pursuant to paragraph 9A
hereof, Corporation shall advise Executive in writing of the non-performance
that permits such termination and Executive shall have a period of 30 days after
such notice is given within which to cure such claimed non-performance and
Corporation may not terminate his employment hereunder pursuant to paragraph 9A
hereof unless such non-performance is not cured during that period. However, if
the procedure contemplated by the preceding sentence is followed twice during
the term of this Agreement, the preceding sentence shall not apply thereafter.
10. Death of Executive. This Agreement shall terminate upon the death of
Executive.
11. Covenant Not to Compete. Executive covenants and agrees with
Corporation that he will not (without the prior written consent of Corporation)
at any time:
A. during the term of his engagement hereunder,
B. during the period with respect to which he is actually receiving
payments pursuant to Section 12 hereof (or could have been so entitled but
for the last sentence of Section 12 hereof),
C. during the two-year period following the termination of
Executive's employment (i) by Corporation for good cause or (ii) by
Executive other than as permitted by the second sentence of Section 12
hereof, or
D. until 18 months after the expiration of the term contemplated by
Section 3 hereof
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either individually or in partnership or in conjunction with any Person or
Persons, as principal, agent, shareholder, guarantor, creditor, employee or in
any other manner whatsoever, carry on or be engaged in or advise, lend money to,
guarantee the debts or obligations of, or permit his name or any part thereof to
be used by any Person engaged in or concerned with or interested in any business
carried on, within the United States or any country anywhere in the world in
which Corporation or any of its Subsidiaries or Affiliates (or LSG Lufthansa
Service GmbH) carries on business (whether directly or through a joint venture
or similar arrangement), which competes with the products manufactured and sold
or services provided by Corporation or any of its Subsidiaries or Affiliates (or
LSG Lufthansa Service GmbH) .
12. Rights and Remedies of Executive. Should Corporation violate or fail
to perform any material provision hereof, Executive shall have the right and
option, upon written notice to Corporation, to terminate his employment under
this Agreement. In the event of (i) a termination of Executive's employment by
Corporation other than for good cause, or (ii) a termination of Executive's
employment by Executive by reason of a material violation or failure of
Corporation to perform any material provision hereof, Executive shall be
entitled to receive, as the exclusive remedy for such termination, violation or
failure, payment of the then Basic Salary in accordance with Section 5 hereof
(payable when and as such payments would have become due in accordance with such
Section) for a period beginning on the date of termination and ending on January
31, 1999, reduced by any salary or other compensation for services actually
earned by Executive from any source during such period (excluding income from
passive investments). It is understood, however, that Executive shall have no
obligation to seek other employment during such period. In the event of any
violation of Section 8 or Section 11 hereof, Executive shall cease to be
entitled to any payments pursuant to this Section 12 (no limitation on any other
remedies available to Corporation being intended).
13. Arbitration. Except as contemplated by the last sentence of Section 8
hereof, any dispute between the parties hereto, whether arising during the
period of this Agreement or at any time thereafter which relates to the
validity, construction, meaning, performance or effect of this Agreement or the
rights and obligations of the parties hereto shall be determined pursuant to the
commercial arbitration rules of the American Arbitration Association in Dallas,
Texas. The decision of the arbitrators pursuant to such procedures shall be
final and binding upon the parties and shall not be subject to appeal. The
decision of the arbitrators with respect to a disputed claim that this Agreement
was terminated for good cause shall be binding upon the parties hereto for the
purposes of determining whether the Executive was terminated "with cause" within
the meaning of Section 2.3 of the Management Shareholders Agreement dated May
29, 1986 to which Corporation and Executive are parties, but shall not be
binding with respect to, and shall have no effect on the determination of, any
dispute under any other agreement between the parties.
14. Assignment. Neither this Agreement nor the parties' obligations
hereunder are assignable; provided, however, that in the event that all or
substantially all of the assets and liabilities of Corporation are transferred
to another Person at any time during the term of this Agreement, this Agreement
shall be deemed assigned to such Person, and Executive shall
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continue to be bound by the provisions hereof provided that such assignee shall
assume and agree to perform all obligations of Corporation expressed herein. No
such assignment shall release Corporation from its obligations to Executive
under this Agreement, and Corporation shall remain liable hereunder
notwithstanding such assignment.
15. Notices. All notices which may or are required to be given pursuant to
this Agreement shall be in writing and shall be served properly if personally
delivered or mailed by registered mail, postage prepaid, addressed as follows:
Corporation:
c/o SC International Services, Inc.
524 East Lamar Boulevard
Arlington, Texas 76011
Attention: Chief Financial and Administrative Officer
with a copy to:
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, New York 10022
Attention: Joel I. Greenberg, Esq.
Executive:
J. J. O'Neill
5036 Radbrook
Dallas, Texas 75220
or to such other address or addresses as any such party may from time to time
designate by notice in writing to the others. The date of receipt of any such
notice shall be the date of delivery, if the notice is personally served or, if
mailed, on the third business day next following the date of mailing.
16. Entire Agreement. This Agreement (together with all benefit or plan
documents referred to herein) constitutes the entire understanding between the
parties with respect to the subject matter hereof, superseding all negotiations,
prior discussions and agreements, written or oral. This Agreement may not be
amended except in writing executed by the parties hereto. In the event of an
inconsistency between the provisions of this Agreement and any benefit or plan
document referred to herein, the provision conferring the greater benefit upon
Executive shall control.
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17. Indemnification. The certificate of incorporation or by-laws of
Corporation shall provide for indemnification of Executive to the full extent
provided by Section 145 of the Delaware General Corporation Law.
18. Further Assurance. Each of the parties hereto shall do or cause to be
made, done and executed, all such further and other things, acts, deeds,
documents, conveyances and assurances as may be necessary or reasonably required
to carry out the intended purpose of this Agreement fully and effectually.
19. Construction. Where the singular or masculine are used in this
Agreement, the same shall be construed as being the plural or feminine or neuter
and vice versa, where the context so requires or permits.
20. Headings. The headings of the Sections of this Agreement are inserted
for purposes of convenience of reference only and shall not affect the
construction or meaning of any provision of this Agreement.
21. Severability. If any covenant or provision herein is determined to be
void or unenforceable, in whole or in part, it shall not be deemed to affect or
impair the validity of any other covenant or provision or the remaining part or
parts thereof.
22. Good Faith. The parties agree to conduct themselves in good faith and
deal fairly with each other in the employment relationship created by this
Agreement and to refrain from action which injures either party's right to
receive the benefits hereof.
23. Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of Texas.
24. Attorneys' Fees and Disbursements. Corporation agrees to pay
reasonable attorneys' fees (and disbursements) incurred by Executive in
connection with the preparation and execution of this Agreement, in an amount
not exceeding $750.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
/s/ J. J. O'Neill
----------------------------
J. J. O'Neill
ONEX FOOD SERVICES, INC.
By: /s/ Patrick W. Tolbert
----------------------
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EXHIBIT 10.20
THIS AGREEMENT IS SUBJECT TO ARBITRATION AS PROVIDED BY SECTION 13 HEREOF.
EMPLOYMENT AGREEMENT
Agreement dated as of January 1, 1997, between Michael Z. Kay, an
individual residing at 601 Townsend Place, Atlanta, GA 30327 ("Executive"), and
Sky Chefs, Inc., a Delaware corporation, having principal offices in Arlington,
Texas ("Corporation").
Corporation hereby employs Executive, and Executive accepts employment by
Corporation, upon the terms and subject to the conditions of this Agreement and,
accordingly, Executive and Corporation agree as follows:
1. Definitions. In this Agreement (including this Section) the following
terms shall have the following meanings:
A. "Affiliate" shall mean, with respect to any Person, any Person
which, directly or indirectly, controls or is controlled by that Person,
or is under common control with that Person. For purposes of this
definition "control" (including, with correlative meaning, the terms
"controlled by" and "under common control with"), as used with respect to
any Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or by
contract or otherwise;
B. "Basic Salary" shall mean a salary at the annual rate of
$600,000, provided that such amount shall be reviewed and be subject to
increase at the discretion of the Board of Directors of Corporation
annually having regard to job performance, cost-of-living considerations
and other factors;
C. "Employment Year" shall mean a twelve-month period commencing on
the 1st day of January and ending on the 31st day of December next
following; provided that if Executive's employment is terminated prior to
the end of a calendar year, the last Employment Year shall be the period
commencing on January 1st of such year and concluding on the date of
termination;
D. "Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, trust, association,
unincorporated organization or other entity; and
E. "Subsidiary" shall mean, with respect to any Person ("Owner"),
any Person of which securities or other interests having the power to
elect a majority of that Person's Board of Directors or similar governing
body (other than securities or interests
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having that power only upon the happening of a contingency that has not
occurred) or otherwise direct the management of such Person are held by
Owner or one or more of its Subsidiaries.
2. Duties of Executive. Executive shall, during the term of his employment
under this Agreement, serve Corporation in the capacity of President and Chief
Executive Officer, with such duties as may from time to time be assigned to him
by the Board of Directors; however, Executive shall not be required to perform
duties (i) other than those which are customarily and ordinarily performed by
executives in similar capacities of corporations similar to Corporation or (ii)
which are materially different in nature or scope from those previously
performed by Executive for Corporation prior to the execution hereof. It is
intended that Executive will be elected and serve as a member of the Board of
Directors of Corporation while he is employed hereunder. Executive shall, during
the term of his employment under this Agreement, serve in such positions with
Subsidiaries and Affiliates of Corporation as the Board of Directors of
Corporation may from time to time reasonably request. It is the intention of the
parties hereto to use and employ the abilities of Executive in the most mutually
advantageous fashion.
3. Term. The term of Executive's employment under this Agreement shall
commence on January 1, 1997 and expire on December 31, 2001, unless earlier
terminated pursuant to the provisions of this Section or Section 9, 10 or 12
hereof. The parties hereto agree that no later than January 2, 2001 they will
begin good faith discussions concerning the possible renewal or extension on
mutually agreeable terms of the employment of Executive by Corporation; provided
that neither party hereto shall be under any obligation to actually agree to a
renewal or extension hereof. If mutually acceptable terms for renewal are not
agreed upon by 5:00 P.M., Dallas, Texas, time on June 30, 2001, this Agreement
and the parties' obligations hereunder shall terminate (except Executive's
obligations pursuant to this Section and Sections 8 and 11 hereof), and
Executive shall be entitled to receive for a period beginning on July 1, 2001,
and ending June 30, 2002, (a) payment of the then Basic Salary in accordance
with Section 5 hereof (with no increase for 2002), (b) payment of an amount
equal to the average annual incentive bonus received by Executive pursuant to
Section 6(A) hereof for the preceding two full Employment Years (payable on or
before April 30, 2002) and (c) all other benefits in effect for senior
management employees at the time of such termination, including executive
medical plan and annual physical; provided, however, that all such benefits and
payments shall be reduced by any salary or other compensation for services
actually earned by Executive from any source during such period (excluding
income from passive investments). It is understood, however, that Executive
shall have no obligation to seek other employment during such period. This
severance payment shall be in lieu of, and not in addition to, severance
payments to which senior management employees of Corporation may be entitled
pursuant to policies of Corporation applicable to such employees or to employees
generally. In the event of any violation of Section 8 or Section 11 hereof,
Executive shall cease to be entitled to any payments pursuant to this Section 3
(no limitation on any other remedies available to Corporation being intended).
4. Time Required to Devote to Duties and Place of Employment. Executive
shall devote his full working time, attention and ability to the business of
Corporation, including, if
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applicable, its Subsidiaries and/or Affiliates to which Executive may have been
assigned under Section 2 hereof. Executive shall well and faithfully serve
Corporation, including such applicable Subsidiaries and/or Affiliates during the
continuance of his employment hereunder and use his best efforts to promote the
interests and welfare thereof. Notwithstanding the foregoing, Executive may
participate in community affairs and passive investment activities not involving
any measurable portion of Executive's business time, so long as such activities
do not interfere with the due performance of his duties hereunder. Executive's
place of employment shall be the Dallas/Fort Worth, Texas, area or such other
area in which the Board of Directors of Corporation may determine to locate the
principal executive offices of Corporation.
5. Remuneration.
A. In consideration of the services to be provided by him hereunder,
Executive shall, during the term of his employment hereunder, be paid the
Basic Salary in respect of each Employment Year or portion thereof in
equal semi-monthly installments in arrears.
B. Should Executive's employment hereunder be terminated on a day
other than a day when a semi-monthly installment of salary is payable to
Executive, the amount payable to Executive on the date of termination
shall be the remainder of the semi-monthly installment that would
otherwise be payable to him in accordance with the terms of this Section 5
as if his employment hereunder had been continued through the whole of
such semi-monthly employment period, together with any other monies
payable pursuant to this Agreement.
6. Additional Matters. During the term of his employment hereunder,
Executive shall be entitled to:
A. A bonus calculated in accordance with Corporation's incentive
bonus plan in effect from time to time.
B. All benefits and coverages provided by hospital, medical, dental,
group life, short and long-term disability coverage and retirement plan
benefits and coverages currently and from time to time made available to
employees and executives of Corporation under its executive employees'
benefit program; provided, however, that in no event shall any of such
benefits or coverages be modified so as to provide reduced levels of
benefits or coverages or otherwise be less advantageous to Executive than
were afforded to executive employees of Corporation in January 1996,
unless the Board of Directors of Corporation determines in its discretion
that it is in the best interests of Corporation to reduce such benefits or
coverages for senior executives of Corporation generally.
C. All vacation sick leave and other benefits in accordance with
Corporation's policies currently and from time to time in effect for its
executive
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employees (including without limitation split-dollar life insurance);
provided, however, that such benefits or programs shall not be less
advantageous than those afforded or provided by Corporation to its
executive employees in January 1996, unless the Board of Directors of
Corporation determines in its discretion that it is in the best interests
of Corporation to reduce such benefits or programs for senior executives
of Corporation generally.
D. A perquisites allowance at the annual rate of $30,000 to cover
such items as an automobile allowance, country club membership, etc. Such
amount may be adjusted from time to time by the Board of Directors.
E. Receive advances, or be reimbursed on a timely basis, for all
travel, entertainment and other out-of-pocket expenses, actually and
reasonably incurred by him in connection with the performance of his
duties hereunder and for which reasonable supporting documentation is
furnished to Corporation.
F. If Corporation has in effect, as of the date hereof or thereafter
during the term hereof, a plan or program for the deferral of sums payable
to Executive hereunder, an opportunity to participate therein.
G. All benefits of a Participant in Corporation's Supplemental
Executive Retirement Plan and any and all successor plans (the "SERP").
H. In the event that Executive becomes disabled during the term of
this Agreement (or any extension or renewal hereof) the Corporation shall
continue to pay Executive his full Basic Salary until the earliest to
occur of (i) the cessation of such disability; (ii) Executive's becoming
entitled to an unreduced Normal Retirement Pension under Corporation's
Defined Benefit Pension Plan, (iii) the Executive's death; provided,
however, that if disability benefits would otherwise cease under the
foregoing clause (ii) or (iii), such benefits shall continue until a date
which is at least one year from the date of disability, or most recent
disability, if that date is later. The amount payable to the Executive
shall be offset on a prospective basis by (i) the amount of any proceeds
received by Executive from any disability income program (whether or not
insured) maintained by Corporation or any Affiliate, (ii) the amount of
any disability payment under the U.S. Social Security Disability Insurance
Program; (iii) any amounts payable on account of disability under any
retirement program sponsored by Corporation or any Affiliate, including
any amounts payable under the SERP, exclusive however, of any benefits
resulting from a salary deferral or similar arrangement; and (iv) any
amount of remuneration received by Executive from gainful employment,
other than employment approved by Executive's physician for therapy or
rehabilitation. For purposes of this paragraph H, Executive shall be
deemed disabled if he suffers a physical, mental or emotional injury,
illness or disorder which renders him unable to perform substantially all
of his usual and customary duties for Corporation with the degree of
decorum and dignity normally associated with employment in a similar
capacity. In the event that there is a
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disagreement between Corporation and Executive concerning the existence of
a disability, such disagreement shall be resolved by the majority opinion
of three physicians, one of whom shall be appointed by Corporation, one of
whom shall be appointed by the Executive, and one of whom shall be
appointed by each of the two foregoing physicians. Executive's Basic
Salary shall be continued until such time as a determination is made on
the issue of disability, but not after the date on which such payments
would terminate pursuant to the first sentence of this Section 6(H).
7. Equity Participation. In connection with Executive's employment
pursuant hereto, Executive has purchased shares of the common stock of Onex Food
Services, Inc., an Affiliate of Corporation. Executive acknowledges and agrees
that (i) his purchase of those shares shall not entitle him to continued
employment by Corporation or affect Corporation's rights to terminate his
employment and (ii) his investment in those shares shall not be taken into
account in determining the damages, if any, which he would be entitled to
recover upon Corporation's termination of his employment in contravention of or
upon any other breach of, this Agreement.
8. Confidential Information. Executive acknowledges that, in the course of
performing and fulfilling his duties hereunder he may have access to and may be
entrusted with confidential information concerning the present and contemplated
activities of, the techniques and modes of business operations evolved and used
or to be evolved and used by Corporation, its Subsidiaries and Affiliates and
their respective customers and clients, which information is not generally known
in the industry in which Corporation does business, the disclosure of any of
which confidential information to competitors of Corporation, its Subsidiaries
or Affiliates or to other Persons would be highly detrimental to the interests
of Corporation, its Subsidiaries and Affiliates. Executive further acknowledges
and agrees that the right to maintain confidential such information constitutes
a proprietary right which Corporation, its Subsidiaries and Affiliates are
entitled to protect. Accordingly, Executive covenants and agrees with
Corporation and with each Subsidiary and Affiliate of Corporation that (i) he
will not during the continuance of his employment under this Agreement disclose
any of such confidential information to any Person, nor shall he use the same,
except as required in the normal course of his employment hereunder, and (ii)
after the termination or expiration of his employment under this Agreement, he
will not disclose or make any use of any of such information without the consent
of Corporation; provided, however, that Corporation acknowledges and agrees that
Executive shall not be prohibited by this Section from using the personal skills
and know-how developed by Executive prior to the execution of this Agreement and
during the term hereof and acknowledges and agrees that subject to the
provisions of Section 11 hereof, Executive may pursue a career and earn his
livelihood through the use of such skills and know-how he has obtained (but not
any confidential information, systems or techniques of Corporation) before and
during his employment hereunder after the termination or expiration of this
Agreement without the express consent of, or any liability to, Corporation.
Executive acknowledges and agrees that in the event of any actual or threatened
violation of the provisions of this Section 8 or of Section 11 hereof,
Corporation and/or any Subsidiary or Affiliate may commence proceedings in any
court of competent jurisdiction for, and shall be entitled to obtain,
preliminary and permanent injunctive relief or other appropriate equitable
remedies (without any bond or other security being required) and an
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accounting of all profits and benefits arising out of such violation, which
rights and remedies shall be in addition to any other rights or remedies to
which such Person may be entitled at law.
9. Termination of Agreement by Corporation for Cause. This Agreement shall
not be terminable by Corporation prior to the expiration of the term hereof
except for good cause or as contemplated by Section 12 hereof. As used herein,
"good cause" shall be limited to the following:
A. Executive's repeated unavailability or refusal to devote the time
required for the performance of his duties as described in Section 2
hereof;
B. Executive's intentional and repeated refusal to follow
instructions of the Board of Directors of Corporation (provided such
instructions are made in good faith, are not arbitrary or capricious and
do not require Executive to subject himself to criminal liability or
material civil liability against which he is not indemnified by
Corporation) (Corporation acknowledges that "intentional and repeated"
connotes reasonable notice to Executive after one or more instances of
refusal and prior to any further instances which, together with earlier
ones, are relied on by Corporation for termination under this paragraph
9B);
C. Intentional misrepresentation or unlawful conduct by Executive in
the discharge of his responsibilities;
D. Executive's intentional disclosure to third parties of any
material confidential business information (as described in Section 8
hereof) without Corporation's consent; or
E. Theft of or fraud by Executive involving property of Corporation
or any of its Subsidiaries or Affiliates, conviction of Executive of a
felony, criminal offense or other action by Executive involving moral
turpitude which brings the Corporation into public disrepute.
Corporation recognizes that one of the principal benefits to it of the
employment of Executive hereunder will be the benefit of Executive's best
independent judgment in connection with his area of responsibility. Accordingly,
notwithstanding anything to the contrary herein, good cause for termination of
Executive hereunder shall not include Executive's exercising his right to
articulate to the Board of Directors of Corporation his views as to
Corporation's plans or policies, so long as he carries out the instructions of
the Board of Directors of Corporation.
Prior to terminating Executive's employment pursuant to paragraph 9A
hereof, Corporation shall advise Executive in writing of the non-performance
that permits such termination and Executive shall have a period of 30 days after
such notice is given within which to cure such claimed non-performance and
Corporation may not terminate his employment hereunder pursuant to paragraph 9A
hereof unless such non-performance is not cured during that
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period. However, if the procedure contemplated by the preceding sentence is
followed twice during the term of this Agreement, the preceding sentence shall
not apply thereafter.
10. Death of Executive. This Agreement shall terminate upon the death of
Executive.
11. Covenant Not to Compete. Executive covenants and agrees with
Corporation that he will not (without the prior written consent of Corporation)
at any time
A. during the term of his engagement hereunder,
B. during the period with respect to which he is actually receiving
payments pursuant to Section 12 hereof (or could have been so entitled but
for the last sentence of Section 12 hereof) or Section 3 hereof (or could
have been so entitled but for the last sentence of Section 3 hereof),
C. during the two-year period following the termination of
Executive's employment (x) by Corporation for good cause or (y) by
Executive other than as permitted by the second sentence of Section 12
hereof, or until June 30, 2004, whichever occurs first, or
D. until June 30, 2004, provided that during the renewal discussions
required by Section 3, Corporation has offered to extend Executive's
employment through at least December 31, 2003, at compensation no less
than he is then receiving, either individually or in partnership or in
conjunction with any Person or Persons, as principal, agent, shareholder,
guarantor, creditor, employee or in any other manner whatsoever, carry on
or be engaged in or advise, lend money to, guarantee the debts or
obligations of, or permit his name or any part thereof to be used by any
Person engaged in or concerned with or interested in any business carried
on, within the United States or any country anywhere in the world in which
Corporation or any of its Subsidiaries or Affiliates (or LSG Lufthansa
Service GmbH) carries on business (whether directly or through a joint
venture or similar arrangement), which competes with the products
manufactured and sold or services provided by Corporation or any of its
Subsidiaries or Affiliates (or LSG Lufthansa Service GmbH).
12. Rights and Remedies of Executive. Should Corporation violate or fail
to perform any material provision hereof, Executive shall have the right and
option, upon written notice to Corporation, to terminate his employment under
this Agreement. In the event of (i) a termination of Executive's employment by
Corporation other than for good cause or (ii) a termination of Executive's
employment by Executive by reason of a material violation or failure of
Corporation to perform any material provision hereof, Executive shall be
entitled to receive, as the exclusive remedy for such termination, violation or
failure, (a) payment of the then Basic Salary in accordance with Section 5
hereof, (b) payment of an amount equal to the average annual incentive bonus
received by Executive pursuant to Section 6(A) hereof for the preceding two
years (payable when and as such payments would have become due in accordance
with such
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Section) and (c) all other benefits in effect for senior management employees at
the time of such termination including the annual benefit amount described in
6D, executive medical plan and annual physical, for each year for the period
beginning on the date of termination and ending on December 31, 2002, reduced by
any salary or other compensation for services actually earned by Executive from
any source during such period (excluding income from passive investments). It is
understood, however, that Executive shall have no obligation to seek other
employment during such period. If as of the date of termination of Executive's
employment he had received only one annual incentive bonus, the bonus increment
of the Severance Amount shall be equal to such prior incentive bonus. If as of
the date of termination of Executive's employment he had not received an
incentive bonus, there shall be no bonus increment for the Severance Amount,
unless in the sole discretion of Corporation, Corporation shall elect to include
such an increment. This Severance Payment shall be in lieu of, and not in
addition to, severance payments to which senior management employees of
Corporation may be entitled pursuant to policies of Corporation applicable to
such employees or to employees generally. In the event of any violation of
Section 8 or Section 11 hereof, Executive shall cease to be entitled to any
payments pursuant to this Section 12 (no limitation on any other remedies
available to Corporation being intended).
13. Arbitration. Except as contemplated by the last sentence of Section 8
hereof, any dispute between the parties hereto, whether arising during the
period of this Agreement or at any time thereafter which relates to the
validity, construction, meaning, performance or effect of this Agreement or the
rights and obligations of the parties hereto shall be determined pursuant to the
commercial arbitration rules of the American Arbitration Association in Dallas,
Texas. The decision of the arbitrators pursuant to such procedures shall be
final and binding upon the parties and shall not be subject to appeal. The
decision of the arbitrators with respect to a disputed claim that this Agreement
was terminated for good cause shall be binding upon the parties hereto (and, by
its signature hereto, on Onex Food Services, Inc.) for the purposes of
determining whether the Executive was terminated "with cause" within the meaning
of Section 2.3 of the Management Shareholders Agreement dated May 29, 1986 to
which Onex Food Services, Inc. and Executive are parties, but shall not be
binding with respect to, and shall have no effect on the determination of, any
dispute under any other agreement between the parties.
14. Assignment. Neither this Agreement nor the parties' obligations
hereunder are assignable; provided, however, that in the event that all or
substantially all of the assets and liabilities of Corporation are transferred
to another Person at any time during the term of this Agreement, this Agreement
shall be assigned to such Person, and Executive shall continue to be bound by
the provisions hereof provided that such assignee shall assume and agree to
perform all obligations of Corporation expressed herein. No such assignment
shall release Corporation from its obligations to Executive under this
Agreement, and Corporation shall remain liable hereunder notwithstanding such
assignment.
15. Notices. All notices which may or are required to be given pursuant to
this Agreement shall be in writing and shall be served properly if personally
delivered or mailed by registered mail, postage prepaid, addressed as follows:
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Corporation:
c/o SC International Services, Inc.
524 East Lamar Boulevard
Arlington, Texas 76011
Attention: Chief Financial and Administrative Officer
with a copy to:
c/o Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, New York 10022
Attention: Joel I. Greenberg, Esq.
Executive:
Michael Z. Kay
601 Townsend Place
Atlanta, GA 30327
or to such other address or addresses as any such party may from time to time
designate by notice in writing to the others. The date of receipt of any such
notice shall be the date of delivery, if the notice is personally served or, if
mailed, on the third business day next following the date of mailing.
16. Entire Agreement. This Agreement (together with all benefit or plan
documents referred to herein) constitutes the entire understanding between the
parties (and Onex Food Services, Inc., with respect to the subject matter
hereof, superseding all negotiations, prior discussions and agreements, written
or oral. This Agreement may not be amended except in writing executed by the
parties hereto.
17. Indemnification. The certificate of incorporation or by-laws of
Corporation shall provide for indemnification of Executive to the full extent
provided by Section 145 of the Delaware General Corporation Law.
18. Further Assurance. Each of the parties hereto shall do or cause to be
made, done and executed, all such further and other things, acts, deeds,
documents, conveyances and assurances as may be necessary or reasonably required
to carry out the intended purpose of this Agreement fully and effectually.
19. Construction. Where the singular or masculine are used in this
Agreement, the same shall be construed as being the plural or feminine or neuter
and vice versa, where the context so requires or permits.
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20. Headings. The headings of the Sections of this Agreement are inserted
for purposes of convenience of reference only and shall not affect the
construction or meaning of any provision of this Agreement.
21. Severability. If any covenant or provision herein is determined to be
void or unenforceable, in whole or in part, it shall not be deemed to affect or
impair the validity of any other covenant or provision or the remaining part or
parts thereof.
22. Good Faith. The parties agree to conduct themselves in good faith and
deal fairly with each other in the employment relationship created by this
Agreement and to refrain from action which injures either party's right to
receive the benefits hereof.
23. Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of Texas.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
MICHAEL Z. KAY SKY CHEFS, INC.
/s/ Michael Z. Kay By /s/ Patrick W. Tolbert
- -------------------------- ---------------------------
FOR THE PURPOSES STATED IN
SECTION 13.
ONEX FOOD SERVICES, INC.
By /s/ Patrick W. Tolbert
---------------------------
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EXHIBIT 10.21
THIS AGREEMENT IS SUBJECT TO ARBITRATION AS PROVIDED BY SECTION 13 HEREOF.
EMPLOYMENT AGREEMENT
Agreement dated as of January 1, 1997, between Patrick W. Tolbert, an
individual residing at 3702 Harvard Ave., Highland Park, Texas 75205
("Executive"), and Sky Chefs, Inc., a Delaware corporation, having principal
offices in Arlington, Texas ("Corporation").
Corporation hereby employs Executive, and Executive accepts employment by
Corporation, upon the terms and subject to the conditions of this Agreement,
and, accordingly, Executive and Corporation agree as follows:
1. Definitions. In this Agreement (including this Section) the following
terms shall have the following meanings:
A. "Affiliate" shall mean, with respect to any Person, any Person
which, directly or indirectly, controls or is controlled by that Person,
or is under common control with that Person. For purposes of this
definition, "control" (including, with correlative meaning, the terms
"controlled by" and "under common control with"), as used with respect to
any Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or by
contract or otherwise;
B. "Basic Salary" shall mean a salary at the annual rate of
$340,000. The Basic Salary shall be reviewed annually, having regard to
job performance, cost-of-living considerations and other factors;
C. "Director's Fee" shall mean an annual payment of $60,000;
D. "Employment Year" shall mean a twelve-month period commencing on
the 1st day of January and ending on the 31st day of December next
following; provided that if Executive's employment is terminated prior to
the end of a calendar year, the last Employment Year shall be the period
commencing on January 1st of such year and concluding on the date of
termination;
E. "Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, trust, association,
unincorporated organization or other entity; and
F. "Subsidiary" shall mean, with respect to any Person ("Owner"),
any Person of which securities or other interests having the power to
elect a majority of that Person's Board of Directors or similar governing
body (other than securities or interests having that power only upon the
happening of a contingency that has not occurred) or
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otherwise direct the management of such Person are held by Owner or one or
more of its Subsidiaries.
2. Duties of Executive. Executive shall, during the term of his employment
under this Agreement, serve Corporation in the capacity of Executive Vice
President, Chief Financial and Administrative Officer, with such duties as may
from time to time be assigned to him by the Chief Executive Officer and/or the
Board of Directors of Corporation; however, Executive shall not be required to
perform duties other than those customarily and ordinarily performed by
executives in similar capacities of corporations similar to Corporation.
Executive shall, during the term of his employment under this Agreement, serve
in such positions with Subsidiaries and Affiliates of Corporation as the Board
of Directors of Corporation may from time to time reasonably request. It is the
intention of the parties hereto to use and employ the abilities of Executive in
the most mutually advantageous fashion.
3. Term. The term of Executive's employment under this Agreement shall
commence on January 1, 1997 and expire on December 31, 2001, unless earlier
terminated pursuant to the provisions of Section 9, 10 or 12 hereof. The parties
hereto agree that no later than June 30, 2000, they will begin good faith
discussions concerning the possible renewal or extension on mutually agreeable
terms of the employment of Executive by Corporation (such discussions to be
completed within six months); provided that neither party hereto shall be under
any obligation to actually agree to a renewal or extension hereof.
4. Time Required to Devote to Duties and Place of Employment. Executive
shall devote his full working time, attention and ability to the business of
Corporation, including, if applicable, its Subsidiaries and/or Affiliates to
which Executive may have been assigned under Section 2 hereof. Executive shall
well and faithfully serve Corporation, including such applicable Subsidiaries
and/or Affiliates, during the continuance of his employment hereunder and use
his best efforts to promote the interests and welfare thereof. Notwithstanding
the foregoing, Executive may participate in community affairs and passive
investment activities not involving any measurable portion of Executive's
business time, so long as such activities do not interfere with the due
performance of his duties hereunder. Executive's place of employment shall be
the Dallas/Fort Worth, Texas, area or such other area in which the Board of
Directors of Corporation may determine to locate the principal executive offices
of Corporation.
5. Remuneration.
A. In consideration of the services to be provided by him hereunder,
Executive shall, during the term of his employment hereunder, be paid the
Basic Salary in respect of each Employment Year or portion thereof in
equal semi-monthly installments in arrears.
B. Should Executive's employment hereunder be terminated on a day
other than a day when a semi-monthly installment of salary is payable to
Executive, the amount payable to Executive on the date of termination
shall be the remainder of the semi-
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monthly installment that would otherwise be payable to him in accordance
with the terms of this Section 5 as if his employment hereunder had been
continued through the whole of such semi-monthly employment period,
together with any other monies payable pursuant to this Agreement.
C. Director's Fee payable by Onex Food Services, Inc., immediately
following the first meeting of the Board of Directors of Onex Food
Services, Inc. in each year.
6. Additional Matters. During the term of his employment hereunder,
Executive shall be entitled to:
A. A bonus calculated in accordance with Corporation's incentive
bonus plan in effect from time to time.
B. All benefits and coverages provided by hospital, medical, dental,
group life, short- and long-term disability coverage and retirement plan
benefits and coverages currently and from time to time made available to
employees and executives of Corporation under its executive employees'
benefit program; provided, however, that in no event shall any of such
benefits or coverages be modified so as to provide reduced levels of
benefits or coverages or otherwise be less advantageous to Executive than
were afforded to executive employees of Corporation in January 1996,
unless the Board of Directors of Corporation determines in its discretion
that it is in the best interests of Corporation to reduce such benefits or
coverages for senior executives of Corporation generally.
C. All vacation, sick leave and other benefits in accordance with
Corporation's policies currently and from time to time in effect for its
executive employees (including, without limitation, split-dollar life
insurance); provided, however, that such benefits or programs shall not be
less advantageous than those afforded or provided by Corporation to its
executive employees in January 1996, unless the Board of Directors of
Corporation determines in its discretion that it is in the best interests
of Corporation to reduce such benefits or programs for senior executives
of Corporation generally. Executive will be entitled to three weeks'
vacation until such time as Corporation's vacation policy entitles
Executive to more than three weeks. At such time Executive will be
entitled to the number of vacation weeks provided in Corporation's
vacation policy.
D. A perquisites allowance at the annual rate of $30,000 to cover
such items as an automobile allowance, country club membership, etc. Such
amount may be adjusted from time to time by the Board of Directors.
E. Receive advances, or be reimbursed on a timely basis, for all
travel, entertainment and other out-of-pocket expenses, actually and
reasonably incurred by him
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in connection with the performance of his duties hereunder and for which
reasonable supporting documentation is furnished to Corporation.
F. If Corporation has in effect, as of the date hereof or thereafter
during the term hereof, a plan or program for the deferral of sums payable
to Executive hereunder, an opportunity to participate therein.
G. All benefits of a Participant in the Corporation's Supplemental
Executive Retirement Plan and any and all successor plans (the "SERP").
H. An annual physical.
7. Equity Participation. In connection with Executive's employment
pursuant hereto, Executive has purchased shares of the common stock of Onex Food
Services, Inc., an Affiliate of Corporation. Executive acknowledges and agrees
that (i) his purchase of those shares shall not entitle him to continued
employment by Corporation or affect Corporation's rights to terminate his
employment and (ii) his investment in those shares shall not be taken into
account in determining the damages, if any, which he would be entitled to
recover upon Corporation's termination of his employment in contravention of, or
upon any other breach of, this Agreement.
8. Confidential Information. Executive acknowledges that, in the course of
performing and fulfilling his duties hereunder he may have access to and may be
entrusted with confidential information concerning the present and contemplated
activities of, the techniques and modes of business operations evolved and used
or to be evolved and used by Corporation, its Subsidiaries and Affiliates and
their respective customers and clients, which information is not generally known
in the industry in which Corporation does business, the disclosure of any of
which confidential information to competitors of Corporation, its Subsidiaries
or Affiliates or to other Persons would be highly detrimental to the interests
of Corporation, its Subsidiaries and Affiliates. Executive further acknowledges
and agrees that the right to maintain confidential such information constitutes
a proprietary right which Corporation, its Subsidiaries and Affiliates are
entitled to protect. Accordingly, Executive covenants and agrees with
Corporation and with each Subsidiary and Affiliate of Corporation that (i) he
will not during the continuance of his employment under this Agreement disclose
any of such confidential information to any Person, nor shall he use the same,
except as required in the normal course of his employment hereunder, and (ii)
after the termination or expiration of his employment under this Agreement, he
will not disclose or make any use of any of such information without the consent
of Corporation; provided, however, that Corporation acknowledges and agrees that
Executive shall not be prohibited by this Section from using the personal skills
and know-how developed by Executive prior to the execution of this Agreement and
during the term hereof and acknowledges and agrees that, subject to the
provisions of Section 11 hereof, Executive may pursue a career and earn his
livelihood through the use of such skills and know-how he has obtained (but not
any confidential information, systems or techniques of Corporation) before and
during his employment hereunder after the termination or expiration of this
Agreement without the express consent of, or any liability to, Corporation.
Executive acknowledges and agrees that in the event of any actual or
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threatened violation of the provisions of this Section 8 or of Section 11
hereof, Corporation and/or any Subsidiary or Affiliate may commence proceedings
in any court of competent jurisdiction for, and shall be entitled to obtain,
preliminary and permanent injunctive relief or other appropriate equitable
remedies (without any bond or other security being required) and an accounting
of all profits and benefits arising out of such violation, which rights and
remedies shall be in addition to any other rights or remedies to which such
Person may be entitled at law.
9. Termination of Agreement by Corporation for Cause. This Agreement shall
not be terminable by Corporation prior to the expiration of the term hereof
except for good cause or as contemplated by Section 12 hereof. As used herein,
"good cause" shall be limited to the following:
A. Executive's repeated unavailability or refusal to devote the time
required for the performance of his duties as described in Section 2
hereof;
B. Executive's intentional and repeated refusal to follow
instructions of the Chief Executive Officer or Board of Directors of
Corporation (provided such instructions are made in good faith, are not
arbitrary or capricious and do not require Executive to subject himself to
criminal liability or material civil liability against which he is not
indemnified by Corporation) (Corporation acknowledges that "intentional
and repeated" connotes reasonable notice to Executive after one or more
instances of refusal and prior to any further instances which, together
with earlier ones, are relied on by Corporation for termination under this
paragraph 9B);
C. Intentional misrepresentation or unlawful conduct by Executive in
the discharge of his responsibilities;
D. Executive's intentional disclosure to third parties of any
material confidential business information (as described in Section 8
hereof) without Corporation's consent; or
E. Theft of or fraud by Executive involving property of Corporation
or any of its Subsidiaries or Affiliates, conviction of Executive of a
felony, criminal offense or other action by Executive involving moral
turpitude which brings the Corporation into public disrepute.
Corporation recognizes that one of the principal benefits to it of the
employment of Executive hereunder will be the benefit of Executive's best
independent judgment in connection with his area of responsibility. Accordingly,
notwithstanding anything to the contrary herein, good cause for termination of
Executive hereunder shall not include Executive's exercising his right to
articulate to the Chief Executive Officer or Board of Directors of Corporation
his views as to Corporation's plans or policies, so long as he carries out the
instructions of the Chief Executive Officer and Board of Directors of
Corporation.
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Prior to terminating Executive's employment pursuant to paragraph 9A
hereof, Corporation shall advise Executive in writing of the non-performance
that permits such termination and Executive shall have a period of 30 days after
such notice is given within which to cure such claimed non-performance and
Corporation may not terminate his employment hereunder pursuant to paragraph 9A
hereof unless such non-performance is not cured during that period. However, if
the procedure contemplated by the preceding sentence is followed twice during
the term of this Agreement, the preceding sentence shall not apply thereafter.
10. Death of Executive. This Agreement shall terminate upon the death of
Executive.
11. Covenant Not to Compete. Executive covenants and agrees with
Corporation that he will not (without the prior written consent of Corporation)
at any time:
A. during the term of his engagement hereunder,
B. during the period with respect to which he is actually receiving
payments pursuant to Section 12 hereof (or could have been so entitled but
for the last sentence of Section 12 hereof),
C. during the two-year period following the termination of
Executive's employment (i) by Corporation for good cause or (ii) by
Executive other than as permitted by the second sentence of Section 12
hereof, or until 18 months after the date on which the term contemplated
by Section 3 hereof would have expired, whichever occurs first, or
D. until 18 months after the expiration of the term contemplated by
Section 3 hereof, provided that during the discussions required by Section
3, Corporation has offered to extend Executive's employment for at least
12 months after such expiration, at compensation no less than he is then
receiving,
either individually or in partnership or in conjunction with any Person or
Persons, as principal, agent, shareholder, guarantor, creditor, employee or in
any other manner whatsoever, carry on or be engaged in or advise, lend money to,
guarantee the debts or obligations of, or permit his name or any part thereof to
be used by any Person engaged in or concerned with or interested in any business
carried on, within the United States or any country anywhere in the world in
which Corporation or any of its Subsidiaries or Affiliates (or LSG Lufthansa
Service GmbH) carries on business (whether directly or through a joint venture
or similar arrangement), which competes with the products manufactured and sold
or services provided by Corporation or any of its Subsidiaries or Affiliates (or
LSG Lufthansa Service GmbH).
12. Rights and Remedies of Executive. Should Corporation violate or fail
to perform any material provision hereof, Executive shall have the right and
option, upon written notice to Corporation, to terminate his employment under
this Agreement. In the event of (i) a termination of Executive's employment by
Corporation other than for good cause, or (ii) a termination of
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Executive's employment by Executive by reason of a material violation or failure
of Corporation to perform any material provision hereof, Executive shall be
entitled to receive, as the exclusive remedy for such termination, violation or
failure, (a) payment of the then Basic Salary in accordance with Section 5
hereof, (b) payment of an amount equal to the average annual incentive bonus
received by Executive pursuant to Section 6(A) hereof for the preceding two
years (payable when and as such payments would have become due in accordance
with such Section) and (c) all other benefits in effect for senior management
employees at the time of such termination, including the annual benefit amount
described in 6D, executive medical plan and annual physical, for each year for
the period beginning on the date of termination and ending on December 31, 2001,
reduced by any salary or other compensation for services actually earned by
Executive from any source during such period (excluding income from passive
investments). It is understood, however, that Executive shall have no obligation
to seek other employment during such period. If as of the date of termination of
Executive's employment he had received only one annual incentive bonus, the
bonus increment of the Severance Amount shall be equal to such prior incentive
bonus. If as of the date of termination of Executive's employment he had not
received an incentive bonus, there shall be no bonus increment for the Severance
Amount, unless in the sole discretion of Corporation, Corporation shall elect to
include such an increment. This severance payment shall be in lieu of, and not
in addition to, severance payments to which senior management employees of
Corporation may be entitled pursuant to policies of Corporation applicable to
such employees or to employees generally. In the event of any violation of
Section 8 or Section 11 hereof, Executive shall cease to be entitled to any
payments pursuant to this Section 12 (no limitation on any other remedies
available to Corporation being intended).
13. Arbitration. Except as contemplated by the last sentence of Section 8
hereof, any dispute between the parties hereto, whether arising during the
period of this Agreement or at any time thereafter which relates to the
validity, construction, meaning, performance or effect of this Agreement or the
rights and obligations of the parties hereto shall be determined pursuant to the
commercial arbitration rules of the American Arbitration Association in Dallas,
Texas. The decision of the arbitrators pursuant to such procedures shall be
final and binding upon the parties and shall not be subject to appeal. The
decision of the arbitrators with respect to a disputed claim that this Agreement
was terminated for good cause shall be binding upon the parties hereto (and, by
its signature hereto, on Onex Food Services, Inc.) for the purposes of
determining whether the Executive was terminated "with cause" within the meaning
of Section 2.3 of the Management Shareholders' Agreement dated May 29, 1986 to
which Onex Food Services, Inc. and Executive are parties, but shall not be
binding with respect to, and shall have no effect on the determination of, any
dispute under any other agreement between the parties.
14. Assignment. Neither this Agreement nor the parties' obligations
hereunder are assignable; provided, however, that in the event that all or
substantially all of the assets and liabilities of Corporation are transferred
to another Person at any time during the term of this Agreement, this Agreement
shall be deemed assigned to such Person, and Executive shall continue to be
bound by the provisions hereof provided that such assignee shall assume and
agree to perform all obligations of Corporation expressed herein. No such
assignment shall
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<PAGE> 8
release Corporation from its obligations to Executive under this Agreement, and
Corporation shall remain liable hereunder notwithstanding such assignment.
15. Notices. All notices which may or are required to be given pursuant to
this Agreement shall be in writing and shall be served properly if personally
delivered or mailed by registered mail, postage prepaid, addressed as follows:
Corporation:
Sky Chefs, Inc.
524 East Lamar Boulevard
Arlington, Texas 76011
Attention: Chief Executive Officer
with a copy to:
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, New York 10022
Attention: Joel I. Greenberg, Esq.
Executive:
Patrick W. Tolbert
3702 Harvard Avenue
Highland Park, Texas 75205
or to such other address or addresses as any such party may from time to time
designate by notice in writing to the others. The date of receipt of any such
notice shall be the date of delivery, if the notice is personally served or, if
mailed, on the third business day next following the date of mailing.
16. Entire Agreement. This Agreement (together with all benefit or plan
documents referred to herein) constitutes the entire understanding between the
parties (and Onex Food Services, Inc.) with respect to the subject matter
hereof, superseding all negotiations, prior discussions and agreements, written
or oral. This Agreement may not be amended except in writing executed by the
parties hereto.
17. Indemnification. The certificate of incorporation or by-laws of
Corporation shall provide for indemnification of Executive to the full extent
provided by Section 145 of the Delaware General Corporation Law.
18. Further Assurance. Each of the parties hereto shall do or cause to be
made, done and executed, all such further and other things, acts, deeds,
documents, conveyances and
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<PAGE> 9
assurances as may be necessary or reasonably required to carry out the intended
purpose of this Agreement fully and effectually.
19. Construction. Where the singular or masculine are used in this
Agreement, the same shall be construed as being the plural or feminine or neuter
and vice versa, where the context so requires or permits.
20. Headings. The headings of the Sections of this Agreement are inserted
for purposes of convenience of reference only and shall not affect the
construction or meaning of any provision of this Agreement.
21. Severability. If any covenant or provision herein is determined to be
void or unenforceable in whole or in part, it shall not be deemed to affect or
impair the validity of any other covenant or provision or the remaining part or
parts thereof.
22. Good Faith. The parties agree to conduct themselves in good faith and
deal fairly with each other in the employment relationship created by this
Agreement and to refrain from action which injures either party's right to
receive the benefits hereof.
23. Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of Texas.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
/s/ Patrick W. Tolbert
--------------------------------
Patrick W. Tolbert
SKY CHEFS, INC.
/s/ Michael Z. Kay
--------------------------------
By: Michael Z. Hay
FOR THE PURPOSES STATED IN SECTIONS
5C and 13.
ONEX FOOD SERVICES, INC.
By: /s/ J. J. O'Neill
-----------------------------
9
<PAGE> 1
EXHIBIT 10.22
THIS AGREEMENT IS SUBJECT TO ARBITRATION AS PROVIDED BY SECTION 13 HEREOF.
EMPLOYMENT AGREEMENT
Agreement dated as of January 1, 1997, between Randall C. Boyd, an
individual residing at 807 Pearl, Southlake, Texas 76092 ("Executive"), and Sky
Chefs, Inc., a Delaware corporation, having principal offices in Arlington,
Texas ("Corporation").
Corporation hereby employs Executive, and Executive accepts employment by
Corporation, upon the terms and subject to the conditions of this Agreement,
and, accordingly, Executive and Corporation agree as follows:
1. Definitions. In this Agreement (including this Section) the following
terms shall have the following meanings:
A. "Affiliate" shall mean, with respect to any Person, any Person
which, directly or indirectly, controls or is controlled by that Person,
or is under common control with that Person. For purposes of this
definition, "control" (including, with correlative meaning, the terms
"controlled by" and "under common control with"), as used with respect to
any Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or by
contract or otherwise;
B. "Basic Salary" shall mean a salary at the annual rate of
$275,000. The Basic Salary shall be reviewed annually at the discretion of
the Chief Executive Officer subject to review by the Board of Directors,
having regard to job performance, cost-of-living considerations and other
factors;
C. "Employment Year" shall mean a twelve-month period commencing on
the 1st day of January and ending on the 31st day of December next
following; provided that if Executive's employment is terminated prior to
the end of a calendar year, the last Employment Year shall be the period
commencing on January 1st of such year and concluding on the date of
termination;
D. "Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, trust, association,
unincorporated organization or other entity; and
E. "Subsidiary" shall mean, with respect to any Person ("Owner"),
any Person of which securities or other interests having the power to
elect a majority of that Person's Board of Directors or similar governing
body (other than securities or interests having that power only upon the
happening of a contingency that has not occurred) or otherwise direct the
management of such Person are held by Owner or one or more of its
Subsidiaries.
1
<PAGE> 2
2. Duties of Executive. Executive shall, during the term of his employment
under this Agreement, serve Corporation in the capacity of Senior Vice President
Marketing and Customer Services, with such duties as may from time to time be
assigned to him by the Chief Executive Officer of Corporation. Executive shall,
during the term of his employment under this Agreement, serve in such positions
with Subsidiaries and Affiliates of Corporation as the Chief Executive Officer
of Corporation may from time to time reasonably request. It is the intention of
the parties hereto to use and employ the abilities of Executive in the most
mutually advantageous fashion.
3. Term. The term of Executive's employment under this Agreement shall
commence on January 1, 1997 and expire on December 31, 2001, unless earlier
terminated pursuant to the provisions of Section 9, 10 or 12 hereof.
4. Time Required to Devote to Duties and Place of Employment. Executive
shall devote his full working time, attention and ability to the business of
Corporation, including, if applicable, its Subsidiaries and/or Affiliates to
which Executive may have been assigned under Section 2 hereof. Executive shall
well and faithfully serve Corporation, including such applicable Subsidiaries
and/or Affiliates, during the continuance of his employment hereunder and use
his best efforts to promote the interests and welfare thereof. Notwithstanding
the foregoing, Executive may participate in community affairs and passive
investment activities not involving any measurable portion of Executive's
business time, so long as such activities do not interfere with the due
performance of his duties hereunder. Executive's place of employment shall be
the Dallas/Fort Worth, Texas, area or such other area in which the Board of
Directors of Corporation may determine to locate the principal executive offices
of Corporation.
5. Remuneration.
A. In consideration of the services to be provided by him hereunder,
Executive shall, during the term of his employment hereunder, be paid the
Basic Salary in respect of each Employment Year or portion thereof in
equal semi-monthly installments in arrears.
B. Should Executive's employment hereunder be terminated on a day
other than a day when a semi-monthly installment of salary is payable to
Executive, the amount payable to Executive on the date of termination
shall be the remainder of the semi-monthly installment that would
otherwise be payable to him in accordance with the terms of this Section 5
as if his employment hereunder had been continued through the whole of
such semi-monthly employment period, together with any other monies
payable pursuant to this Agreement.
2
<PAGE> 3
6. Additional Matters. During the term of his employment hereunder,
Executive shall be entitled to:
A. A bonus calculated in accordance with Corporation's incentive
bonus plan in effect from time to time.
B. All benefits and coverages provided by hospital, medical, dental,
group life, short- and long-term disability coverage and retirement plan
benefits and coverages currently and from time to time made available to
employees and executives of Corporation under its executive employees'
benefit program; provided, however, that in no event shall any of such
benefits or coverages be modified so as to provide reduced levels of
benefits or coverages or otherwise be less advantageous to Executive than
were afforded to executive employees of Corporation in January 1996,
unless the Board of Directors of Corporation determines in its discretion
that it is in the best interests of Corporation to reduce such benefits or
coverages for senior executives of Corporation generally.
C. All vacation, sick leave and other benefits in accordance with
Corporation's policies currently and from time to time in effect for its
executive employees (including, without limitation, split-dollar life
insurance); provided, however, that such benefits or programs shall not be
less advantageous than those afforded or provided by Corporation to its
executive employees in January 1996, unless the Board of Directors of
Corporation determines in its discretion that it is in the best interests
of Corporation to reduce such benefits or programs for senior executives
of Corporation generally.
D. A perquisites allowance at the annual rate of $30,000 to cover
such items as an automobile allowance, country club membership, etc. Such
amount may be adjusted from time to time by the Board of Directors.
E. Receive advances, or be reimbursed on a timely basis, for all
travel, entertainment and other out-of-pocket expenses, actually and
reasonably incurred by him in connection with the performance of his
duties hereunder and for which reasonable supporting documentation is
furnished to Corporation.
F. If Corporation has in effect, as of the date hereof or thereafter
during the term hereof, a plan or program for the deferral of sums payable
to Executive hereunder, an opportunity to participate therein.
G. All benefits of a Participant in the Corporation's Supplemental
Executive Retirement Plan and any and all successor plans (the "SERP").
3
<PAGE> 4
If any benefits and coverages as stated in Corporation's policies or benefit
plan documents are specially conditioned or limited in this Agreement in a
manner not stated in such policies or plan documents, the special conditions and
limitations provided in this Agreement will govern.
7. Equity Participation. In connection with Executive's employment
pursuant hereto, Executive has purchased shares of the common stock of Onex Food
Services, Inc., an Affiliate of Corporation. Executive acknowledges and agrees
that (i) his purchase of those shares shall not entitle him to continued
employment by Corporation or affect Corporation's rights to terminate his
employment and (ii) his investment in those shares shall not be taken into
account in determining the damages, if any, which he would be entitled to
recover upon Corporation's termination of his employment in contravention of, or
upon any other breach of, this Agreement.
8. Confidential Information. Executive acknowledges that, in the course of
performing and fulfilling his duties hereunder he may have access to and may be
entrusted with confidential information concerning the present and contemplated
activities of, the techniques and modes of business operations evolved and used
or to be evolved and used by Corporation, its Subsidiaries and Affiliates and
their respective customers and clients, which information is not generally known
in the industry in which Corporation does business, the disclosure of any of
which confidential information to competitors of Corporation, its Subsidiaries
or Affiliates or to other Persons would be highly detrimental to the interests
of Corporation, its Subsidiaries and Affiliates. Executive further acknowledges
and agrees that the right to maintain confidential such information constitutes
a proprietary right which Corporation, its Subsidiaries and Affiliates are
entitled to protect. Accordingly, Executive covenants and agrees with
Corporation and with each Subsidiary and Affiliate of Corporation that (i) he
will not during the continuance of his employment under this Agreement disclose
any of such confidential information to any Person, nor shall he use the same,
except as required in the normal course of his employment hereunder, and (ii)
after the termination or expiration of his employment under this Agreement, he
will not disclose or make any use of any of such information without the consent
of Corporation; provided, however, that Corporation acknowledges and agrees that
Executive shall not be prohibited by this Section from using the personal skills
and know-how developed by Executive prior to the execution of this Agreement and
during the term hereof and acknowledges and agrees that, subject to the
provisions of Section 11 hereof, Executive may pursue a career and earn his
livelihood through the use of such skills and know-how he has obtained (but not
any confidential information, systems or techniques of Corporation) before and
during his employment hereunder after the termination or expiration of this
Agreement without the express consent of, or any liability to, Corporation.
Executive acknowledges and agrees that in the event of any actual or threatened
violation of the provisions of this Section 8 or of Section 11 hereof,
Corporation and/or any Subsidiary or Affiliate may commence proceedings in any
court of competent jurisdiction for, and shall be entitled to obtain,
preliminary and permanent injunctive relief or other appropriate equitable
remedies (without any bond or other security being required) and an accounting
of all profits and benefits arising out of such violation, which rights and
remedies shall be in addition to any other rights or remedies to which such
Person may be entitled at law.
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<PAGE> 5
9. Termination of Agreement by Corporation for Cause. This Agreement shall
not terminable by Corporation prior to the expiration of the term hereof except
for good cause or as contemplated by Section 12 hereof. As used herein, "good
cause" shall be limited to the following:
A. Executive's repeated unavailability or refusal to devote the time
required for the performance of his duties as described in Section 2
hereof;
B. Executive's intentional and repeated refusal to follow
instructions of the Chief Executive Officer or Board of Directors of
Corporation (provided such instructions are made in good faith, are not
arbitrary or capricious and do not require Executive to subject himself to
criminal liability or material civil liability against which he is not
indemnified by Corporation) (Corporation acknowledges that "intentional
and repeated" connotes reasonable notice to Executive after one or more
instances of refusal and prior to any further instances which, together
with earlier ones, are relied on by Corporation for termination under this
paragraph 9B);
C. Intentional misrepresentation or unlawful conduct by Executive in
the discharge of his responsibilities;
D. Executive's intentional disclosure to third parties of any
material confidential business information (as described in Section 8
hereof) without Corporation's consent; or
E. Theft of or fraud by Executive involving property of Corporation
or any of its Subsidiaries or Affiliates, conviction of Executive of a
felony, criminal offense or other action by Executive involving moral
turpitude which brings the Corporation into public disrepute.
Corporation recognizes that one of the principal benefits to it of the
employment of Executive hereunder will be the benefit of Executive's best
independent judgment in connection with his area of responsibility. Accordingly,
notwithstanding anything to the contrary herein, good cause for termination of
Executive hereunder shall not include Executive's exercising his right to
articulate to the Chief Executive Officer or Board of Directors of Corporation
his views as to Corporation's plans or policies, so long as he carries out the
instructions of the Chief Executive Officer and Board of Directors of
Corporation.
Prior to terminating Executive's employment pursuant to paragraph 9A
hereof, Corporation shall advise Executive in writing of the non-performance
that permits such termination and Executive shall have a period of 30 days after
such notice is given within which to cure such claimed non-performance and
Corporation may not terminate his employment hereunder pursuant to paragraph 9A
hereof unless such non-performance is not cured during that period. However, if
the procedure contemplated by the preceding sentence is followed twice during
the term of this Agreement, the preceding sentence shall not apply thereafter.
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<PAGE> 6
10. Death of Executive. This Agreement shall terminate upon the death of
Executive.
11. Covenant Not to Compete. Executive covenants and agrees with
Corporation that he will not (without the prior written consent of Corporation)
at any time:
A. during the term of his engagement hereunder,
B. during the period with respect to which he is actually receiving
payments pursuant to Section 12 hereof (or could have been so entitled but
for the last sentence of Section 12 hereof),
C. during the two-year period following the termination of
Executive's employment (i) by Corporation for good cause or (ii) by
Executive other than as permitted by the second sentence of Section 12
hereof, or until 18 months after the date on which the term contemplated
by Section 3 hereof would have expired, whichever occurs first, or
D. during the 18-month period following the expiration of the term
contemplated by Section 3 hereof,
either individually or in partnership or in conjunction with any Person or
Persons, as principal, agent, shareholder, guarantor, creditor, employee or in
any other manner whatsoever, carry on or be engaged in or advise, lend money to,
guarantee the debts or obligations of, or permit his name or any part thereof to
be used by any Person engaged in or concerned with or interested in any business
carried on, within the United States or any country anywhere in the world in
which Corporation or any of its Subsidiaries or Affiliates (or LSG Lufthansa
Service GmbH) carries on business (whether directly or through a joint venture
or similar arrangement), which competes with the products manufactured and sold
or services provided by Corporation or any of its Subsidiaries or Affiliates (or
LSG Lufthansa Service GmbH).
12. Rights and Remedies of Executive. Should Corporation violate or fail
to perform any material provision hereof, Executive shall have the right and
option, upon written notice to Corporation, to terminate his employment under
this Agreement. In the event of:
(i) a termination of Executive's employment by Corporation other
than for good cause, or
(ii) a termination of Executive's employment by Executive by reason
of a material violation or failure of Corporation to perform any material
provision hereof,
Executive shall be entitled to receive, as the exclusive remedy for such
termination, violation or failure, (a) payment of the then Basic Salary in
accordance with Section 5 hereof, (b) payment of an amount equal to the average
annual incentive bonus received by Executive pursuant to Section 6(A) hereof for
the preceding two years (payable when and as such payments would have
6
<PAGE> 7
become due in accordance with such Section) and (c) all other benefits in effect
for senior management employees at the time of such termination, including the
annual benefit amount described in 6D, executive medical plan and annual
physical, for each year for the period beginning on the date of termination and
ending on December 31, 2001, reduced by any salary or other compensation for
services actually earned by Executive from any source during such period
(excluding income from passive investments). It is understood, however, that
Executive shall have no obligation to seek other employment during such period.
This severance payment shall be in lieu of and not in addition to, severance
payments to which senior management employees of Corporation may be entitled
pursuant to policies of Corporation applicable to such employees or to employees
generally. In the event of any violation of Section 8 or Section 11 hereof,
Executive shall cease to be entitled to any payments pursuant to this Section 12
(no limitation on any other remedies available to Corporation being intended).
13. Arbitration. Except as contemplated by the last sentence of Section 8
hereof, any dispute between the parties hereto, whether arising during the
period of this Agreement or at any time thereafter, which relates to the
validity, construction, meaning, performance or effect of this Agreement or the
rights and obligations of the parties hereto shall be determined pursuant to the
commercial arbitration rules of the American Arbitration Association in Dallas,
Texas. The decision of the arbitrators pursuant to such procedures shall be
final and binding upon the parties and shall not be subject to appeal. The
decision of the arbitrators with respect to a disputed claim that this Agreement
was terminated for good cause shall be binding upon the parties hereto (and, by
its signature hereto, on Onex Food Services, Inc.) for the purposes of
determining whether the Executive was terminated "with cause" within the meaning
of Section 2.3 of the Management Shareholders' Agreement dated May 29, 1986 to
which Onex Food Services, Inc. and Executive are parties, but shall not be
binding with respect to, and shall have no effect on the determination of, any
dispute under any other agreement between the parties.
14. Assignment. Neither this Agreement nor the parties' obligations
hereunder are assignable; provided, however, that in the event that all or
substantially all of the assets and liabilities of Corporation are transferred
to another Person at any time during the term of this Agreement, this Agreement
shall be deemed assigned to such Person, and Executive shall continue to be
bound by the provisions hereof provided that such assignee shall assume and
agree to perform all obligations of Corporation expressed herein. No such
assignment shall release Corporation from its obligations to Executive under
this Agreement, and Corporation shall remain liable hereunder notwithstanding
such assignment.
15. Notices. All notices which may or are required to be given pursuant to
this Agreement shall be in writing and shall be served properly if personally
delivered or mailed by registered mail, postage prepaid, addressed as follows:
7
<PAGE> 8
Corporation:
Sky Chefs, Inc.
524 East Lamar Boulevard
Arlington, Texas 76011
Attention: Chief Executive Officer
Executive:
Randall C. Boyd
807 Pearl
Southlake, Texas 76092
or to such other address or addresses as any such party may from time to time
designate by notice in writing to the others. The date of receipt of any such
notice shall be the date of delivery, if the notice is personally served or, if
mailed, on the third business day next following the date of mailing.
16. Entire Agreement. This Agreement (together with all benefit or plan
documents referred to herein) constitutes the entire understanding between the
parties (and Onex Food Services, Inc.) with respect to the subject matter
hereof, superseding all negotiations, prior discussions and agreements, written
or oral. This Agreement may not be amended except in writing executed by the
parties hereto.
17. Indemnification. The certificate of incorporation or by-laws of
Corporation shall provide for indemnification of Executive to the full extent
provided by Section 145 of the Delaware General Corporation Law.
18. Further Assurance. Each of the parties hereto shall do or cause to be
made, done and executed, all such further and other things, acts, deeds,
documents, conveyances and assurances as may be necessary or reasonably required
to carry out the intended purpose of this Agreement fully and effectually.
19. Construction. Where the singular or masculine are used in this
Agreement, the same shall be construed as being the plural or feminine or neuter
and vice versa, where the context so requires or permits.
20. Headings. The headings of the Sections of this Agreement are inserted
for purposes of convenience of reference only and shall not affect the
construction or meaning of any provision of this Agreement.
21. Severability. If any covenant or provision herein is determined to be
void or unenforceable in whole or in part, it shall not be deemed to affect or
impair the validity of any other covenant or provision or the remaining part or
parts thereof.
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<PAGE> 9
22. Good Faith. The parties agree to conduct themselves in good faith and
deal fairly with each other in the employment relationship created by this
Agreement and to refrain from action which injures either party's right to
receive the benefits hereof.
23. Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of Texas.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
/s/ Randall C. Boyd
---------------------------------
Randall C. Boyd
SKY CHEFS, INC.
By: /s/ Michael Z. Kay
-----------------------------
Michael Z. Kay
Chief Executive Officer
FOR THE PURPOSES STATED IN SECTION 13.
ONEX FOOD SERVICES, INC.
By /s/ Authorized Signatory
------------------------------
9
<PAGE> 1
EXHIBIT 10.26
MANAGEMENT ADVISORY AGREEMENT
Management Advisory Agreement (the "AGREEMENT"), dated as of September
28, 1995, between OMI Partnership Holdings Ltd., an Ontario corporation
("OMI"), and SC International Services, Inc., a Delaware corporation ("SCIS").
RECITALS
SCIS desires to engage OMI to provide services to SCIS and its
subsidiaries, including Sky Chefs, on the terms set forth herein.
AGREEMENT
The parties, intending to be legally bound, hereby agree as follows:
1. Services. SCIS hereby engages OMI to provide advisory services
to SCIS and its subsidiaries in connection with:
(a) strategic planning;
(b) the identification of financing, acquisition and
divestiture opportunities and assistance with respect to
such matters; and
(c) other financial matters in which OMI has acquired
expertise, as OMI and the Board of Directors of SCIS
may from time to time agree.
2. Term. This Agreement shall continue until terminated by a
writing executed by both parties hereto.
3. Fees and Expenses.
(a) As compensation for OMI's advisory services rendered pursuant
to this Agreement, SCIS shall pay to OMI the following fees:
(i) $689,000 for the year ending December 31, 1995;
(ii) $1,500,000 for the year ending December 31, 1996;
(iii) $1,500,000 for the year ending December 31, 1997; and
(iv) $1,250,000 for each year thereafter, adjusted by a
percentage equal to the year-over-year change in the
most recently published Consumer Price Index for all
Urban Consumers, U.S. City Average, as published by the
U.S. Department of Labor, provided that such fee shall
not exceed $1,500,000 for any year.
Fees shall be payable in advance in equal monthly installments on the first day
of each month.
(b) As compensation for OMI's services in connection with the
transactions and financings contemplated by the Master Agreement, dated as of
April 26, 1995, between and among OMI Food
<PAGE> 2
Services, Inc., Caterair Holdings Corporation and Caterair International
Corporation, as amended, SCIS shall pay OMI a fee of $4,000,000 upon the
closing of such transactions and financings.
(c) SCIS shall promptly reimburse OMI for all reasonable out-of-pocket
costs and expenses incurred thereby and by its representatives in connection
with the performance of its services hereunder.
4. Indemnity. SCIS shall indemnify and hold harmless OMI and its
controlling persons, stockholders, partners, directors, officers, agents and
employees, to the full extent lawful, from and against any losses, claims,
damages or liabilities related to or arising out of this Agreement or OMI's role
in connection herewith, including related activities prior to the date hereof,
and shall promptly reimburse OMI and any other party entitled to be indemnified
hereunder for all reasonable out-of-pocket expenses (including counsel fees and
expenses) as incurred by OMI or any such party in connection with investigating,
preparing or defending any such claim, whether or not in connection with pending
or threatened litigation in which OMI or any other party entitled to be
indemnified hereunder is a party. SCIS will not, however, be responsible for any
claims, liabilities, losses, damages or expenses which are finally judicially
determined to have resulted primarily from OMI's wilful misconduct or gross
negligence. If such indemnification is for any reason not available, the parties
shall contribute to the losses, claims, damages and liabilities involved in such
proportion as it is appropriate to reflect the relative benefits received (or
anticipated to be received) by the parties from the actual and proposed
transactions giving rise to or contemplated by this Agreement as well as other
possible considerations such as the relative fault of the parties. Under no
circumstances shall OMI and the other parties entitled to be indemnified
hereunder be responsible for any amounts in excess of the amount of any fees
received by OMI. The foregoing agreement shall be in addition to any rights that
OMI or any indemnified party may have at common law or otherwise.
SCIS shall not, without OMI's prior consent, settle or compromise any
pending or threatened claim, action or suit in respect of which indemnification
or contribution may be sought hereunder unless the foregoing contains an
unconditional release of OMI and any other party entitled to be indemnified
hereunder from all liability and obligation arising therefrom. OMI shall have
no liability to SCIS arising out of or in connection with this Agreement unless
a loss results to SCIS that is finally judicially determined to have resulted
primarily from OMI's wilful misconduct or gross negligence. SCIS hereby
consents to personal jurisdiction, service and venue in any court in which any
claim which is subject to this Agreement is brought against OMI or any other
party entitled to be indemnified hereunder. Any right to trial by jury with
respect to any claim or action arising out of or contemplated by this Section
is hereby waived. The provisions of this Section shall survive the expiration
of this Agreement.
5. Notices. Any notice required or permitted to be given hereunder
shall be in writing and shall be deemed sufficient if (a) delivered in person,
(b) mailed by certified mail or (c) sent by facsimile transmission, with a copy
sent simultaneously by the United States mail as follows:
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<PAGE> 3
If to SCIS, to:
524 East Lamar
Arlington, Texas 76011
Attention: Patrick W. Tolbert
Executive Vice President and
Chief Financial and Administrative Officer
Telecopier: (817) 792-2222
with a copy to:
Kaye, Scholer, Fierman, Hays & Handler
425 Park Avenue
New York, New York 10022
Attention: Joel I. Greenberg, Esq.
Telecopier: (212) 836-7149
If to OMI, to:
161 Bay Street
Toronto, Ontario M5J 2S1
Canada
Attention: Ewout Heersink
Chief Financial Officer
Telecopier: (416) 362-5765
with a copy to:
Kaye, Scholer, Fierman, Hays & Handler
425 Park Avenue
New York, New York 10022
Attention: Joel I. Greenberg, Esq.
Telecopier: (212) 836-7149
Either party, by written notice to the other party hereto, may designate
additional or different addresses for subsequent notices or communications.
6. Permissible Activities. Nothing herein shall in any way preclude OMI
from engaging in any business activities or from performing services for its
own account or for the account of others.
7. Amendments. This Agreement supersedes all prior agreements among the
parties with respect to its subject matter, is intended as a complete and
exclusive statement of the terms of the
3
<PAGE> 4
agreement among the parties with respect thereto and cannot be changed or
terminated orally. The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. A waiver by any party of any
breach of this Agreement shall not operate or be construed as a waiver of any
subsequent breach. Any waiver must be in writing.
8. Miscellaneous. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and of their respective successors and
permitted assigns, including any corporation into which either of the parties
shall consolidate or merge or to which either of them shall transfer
substantially all of its assets. This Agreement may be assigned by OMI only.
This Agreement shall be governed by and construed in accordance with the laws of
the province of Ontario, Canada applicable to contracts made and to be performed
entirely within such state.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
OMI PARTNERSHIP HOLDINGS LTD.
By: /s/ Ewout W. Heersink
--------------------------
Name:
Title:
SC INTERNATIONAL SERVICES, INC.
By: /s/ Thomas J. Lee
---------------------------
Name:
Title:
4
<PAGE> 1
EXHIBIT 10.27
(Orlando, FL-479)
LEASE AGREEMENT
Between
TRINET ESSENTIAL FACILITIES VIII N, INC.
as Landlord
and
CATERAIR INTERNATIONAL CORPORATION
as Tenant
Dated as of May 15, 1993
<PAGE> 2
TABLE OF CONTENTS
Page
----
BASIC LEASE INFORMATION
1. DEMISE OF PREMISES ................................................... 1
2. USE .................................................................. 1
3. TERM ................................................................. 2
4. RENTAL ............................................................... 3
5. NET LEASE; NON-TERMINABILITY ......................................... 6
6. QUIET ENJOYMENT; SALE TO COMPETITORS ................................. 7
7. UTILITY BILLS ........................................................ 7
8. REPAIRS AND MAINTENANCE .............................................. 7
9. IMPOSITIONS .......................................................... 9
10. DESTRUCTION OF OR DAMAGE TO PREMISES ................................. 11
11. INSURANCE, HOLD HARMLESS AND INDEMNIFICATION ......................... 12
12. GOVERNMENTAL ORDERS; COVENANTS; LANDLORD CURE;
PERMITTED CONTEST .................................................... 20
13. EMINENT DOMAIN ....................................................... 24
14. TERMINATION OF LEASE ................................................. 25
15. DEFAULT: Events of Default ........................................... 26
16. REMEDIES ............................................................. 29
17. SUBORDINATION ........................................................ 31
18. LANDLORD'S RIGHT OF ENTRY ............................................ 32
19. NOTICES .............................................................. 33
20. STATUS OF LEASE; FINANCIAL DATA ...................................... 34
21. MECHANICS' LIENS ..................................................... 36
22. END OF TERM .......................................................... 37
23. ALTERATIONS .......................................................... 39
24. MEMORANDUM OF LEASE .................................................. 39
<PAGE> 3
25. SUBLETTING/ASSIGNMENT ................................................ 39
26. HAZARDOUS MATERIAL ................................................... 39
27. RIGHT OF FIRST REFUSAL ............................................... 44
28. MISCELLANEOUS PROVISIONS ............................................. 45
ANNEX I.
DEFINITIONS
EXHIBITS
A. LEGAL DESCRIPTION
B. ASSIGNMENT OF LEASE
C. STATUS REPORT
D. PERMITTED ENCUMBRANCES
E. MAINTENANCE SCHEDULE
<PAGE> 4
THIS LEASE, made and entered into as of May 15, 1993 (together with all
amendments and supplements hereto, this "Lease"), by and between TRINET
ESSENTIAL FACILITIES VIII N, INC. a Maryland corporation with offices at Four
Embarcadero Center, San Francisco, California 94111 (together, with any
successor or assigns, hereinafter called the "Landlord") and CATERAIR
INTERNATIONAL CORPORATION, a Delaware corporation, with offices at 7811 Montrose
Road, Potomac, Maryland 20854 (together with any permitted successor or assigns,
hereinafter called the "Tenant"). Capitalized terms used herein not otherwise
defined shall have the meanings specified in Annex I hereto.
WITNESSETH
In consideration of the covenants and agreements herein contained, the
parties hereto mutually agree as follows:
1. DEMISE OF PREMISES: Landlord hereby demises and leases to Tenant and
Tenant hereby leases and rents from Landlord the Premises, in its "as is"
condition, subject to the existing state of title (without express or implied
warranty of Landlord with respect to the condition or fitness of the Premises
for a particular use or title thereto), consisting of the land parcel more
particularly described in Exhibit A attached hereto and incorporated herein by
reference and located at Orlando, Florida and the buildings, structures,
improvements now or hereafter located on said land and fixtures (other than
Tenant's Trade Fixtures) erected thereon, parking areas and driveways, together
with any easements, rights, and appurtenances in connection therewith or
belonging thereto all being collectively hereinafter referred to as "the
Premises". No easement for light, air or view is included with or appurtenant to
the Premises. Any diminution or shutting off of light, air or view by any
structure which may hereafter be erected (whether or not constructed by
Landlord) shall in no way affect this Lease or impose any liability on Landlord.
2. USE: Tenant shall use and occupy the Premises for any lawful
nonresidential purposes so long as such use does not diminish, deteriorate, or
alter (except as permitted by Paragraph 23) the physical structure of the
Premises, normal wear and tear excepted. Tenant shall not use or occupy the
same, or knowingly permit them to be used or occupied, contrary to any statute,
rule, order, ordinance, requirement or regulation applicable thereto, or in any
manner which would violate any certificate of occupancy affecting the same or
which would make void or voidable any insurance then in force with respect
thereto or which would make it impossible to obtain fire or other insurance
thereon required to be furnished hereunder by Tenant, or which would cause
structural injury to the Premises or cause the value or usefulness of the
Premises, or any portion thereof, to substantially diminish (normal wear and
tear excepted), or which would constitute a public or private nuisance or waste,
and
<PAGE> 5
Tenant agrees that it will promptly, upon discovery of any such use, take all
necessary steps to compel the discontinuance of such use. Tenant shall not use,
suffer or permit the Premises, or any portion thereof, to be used by Tenant,
third party or the public, as such, without restriction or in such manner as
might reasonably tend to impair Landlord's title to the Premises, or in such
manner as might reasonably make possible a claim or claims of adverse usage or
adverse possession by the public, as such, or third persons, or of implied
dedication of the Premises, or any portion thereof. Nothing contained in this
Lease and no action or inaction by Landlord shall be deemed or construed to mean
that Landlord has granted to Tenant any right, power or permission to do any act
or make any agreement that may create, or give rise to or be the foundation for
any such right, title, interest, lien, charge or other encumbrance upon the
estate of the Landlord in the Premises.
3. TERM:
A. The initial term of this Lease (the "Initial Term") shall be for a
minimum period of twenty-five (25) years, which term shall begin on the
Commencement Date (as that term is hereinafter defined) and shall end on the
last day of the month in which the twenty-fifth anniversary of the Commencement
Date occurs, subject (in the event that the Initiating Date occurs after the
fifth anniversary of the Commencement Date) to automatic extension to the date
that is the 20th anniversary of the Initiating Date and subject to extension
pursuant to Paragraph 26D (the "Lease Expiration Date").
B. The term "Commencement Date" shall mean June 3, 1993 (the "Closing").
C. Tenant shall have the right, at its option, to renew this Lease, for
four (4) renewal terms (each, a "Renewal Term") of five (5) years each
(individually, the First, Second, Third and Fourth Renewal Terms). The First
Renewal Term shall commence on the day after the Lease Expiration Date and shall
terminate on the fifth (5th) anniversary of the Lease Expiration Date. Each of
the Second, Third and Fourth Renewal Terms shall commence on the day after the
date of expiration of the immediately preceding Renewal Term and shall terminate
on the fifth (5th) anniversary of the termination of the immediately preceding
Renewal Term. (Each such Renewal Term commencement date shall be referred to
herein as the "Renewal Term Commencement Date" with respect to the related
Renewal Term and each such Renewal Term expiration date shall be referred to
herein as the "Renewal Term Expiration Date" with respect to the related Renewal
Term.) The option to renew the Term of this Lease as
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<PAGE> 6
described above shall be by written notice to Landlord at least 18 months prior
to the Lease Expiration Date or 12 months prior to the Renewal Term Expiration
Date of the then current term, as the case may be. Subject to the provisions of
Paragraph 4, the terms and conditions of this Lease shall apply to any Renewal
Term with the same force and effect as if such Renewal Term had originally been
included in the term of the Lease. The right of Tenant to have any renewal of
the Term of this Lease shall be conditioned upon Tenant not being then in
default under the Lease beyond the applicable cure periods and upon the Lease
being in full force and effect as of the Renewal Term Commencement Date. All of
the terms, covenants and conditions of this Lease shall continue in full force
and effect during the Renewal Term, except that the minimum rent shall be as
provided for in Paragraph 4. The Initial Term, together with any Renewal Terms,
shall constitute the "Term" of this Lease.
4. RENTAL:
A. Tenant agrees to pay fixed rent ("Fixed Rent") to Landlord without
notice, by check sent to Landlord at such address as shall be provided by
Landlord to Tenant, provided that such check shall be received by Landlord in
sufficient time that the funds will be received by the Fixed Rent due date, or
to such other persons or place as may be provided by written notice from the
person then entitled to receive the Fixed Rent, in equal installments in advance
on or before the first day of each month as specified in the Basic Lease
Information.
If Fixed Rent is not paid when due, interest shall accrue thereon at the
Overdue Rate until payment is made. Tenant hereby acknowledges that late payment
by Tenant to Landlord of Fixed Rent, Additional Rent and other sums due under
this Lease will cause Landlord to incur costs not contemplated by this Lease,
the exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges and late
charges which may be imposed on Landlord by the terms of any mortgage or trust
deed covering the Premises. Accordingly, if any installment of Fixed Rent or any
other sum due to Landlord from Tenant shall not have been received by Landlord
or Landlord's designee within fifteen (15) days after such amount shall be due,
then, without any requirement for notice to Tenant, Tenant shall pay to Landlord
a late charge equal to two percent (2%) of such overdue amount, together with
interest on such overdue amount at the Overdue Rate. The parties agree that such
late charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant's
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<PAGE> 7
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder; provided that
nothing contained herein shall relieve Landlord of a duty to mitigate damages
under applicable law.
B. The Fixed Rent for each Renewal Term shall be payable in equal monthly
installments in advance on or before the first day of each month as provided in
the Basic Lease Information.
C. If, at any time from the first day of the month following the fourth
anniversary of the Commencement Date through the last day of the month in which
the seventh anniversary of the Commencement Date occurs (the "Initiating Date"),
Tenant obtains a BBB- or better investment grade credit rating from Standard &
Poors Corporation and a Baa3 or better investment grade credit rating from
Moody's Investors Services, Inc. for its senior debt obligations, and such
investment grade credit ratings are maintained for 12 consecutive months (the
"Lookback Period"), then:
(i) on the first day of the month following the Lookback Period, the
annual Fixed Rent shall be reset to equal the Fixed Rent on the
Initiating Date less an amount equal to the Purchase Price
multiplied by the lesser of (a) 1.0%, or (b) the difference between
(x) the Fixed Rent on the Initiating Date (calculated as a
percentage of the Purchase Price), and (y) the yield for 10-year
Treasury bills plus 275 basis points. The yield for use in the
foregoing calculation will be as shown in the Treasury Constant
Maturity Series in statistical release H.l5(519) of the Federal
Reserve Board; or if that release is unavailable, a comparable
publication.
(ii) the annual Fixed Rent specified in the Basic Lease Information shall
be increased at the end of every 30-month period measured from the
Initiating Date by an amount equal to the annual Fixed Rent prior to
such increase multiplied by the greater of 5.72028% or 56.25% of the
increase in the CPI over the prior 30-month period. Such increase in
the Fixed Rent shall not be greater than 11.632519% of the annual
Fixed Rent immediately prior to the increase.
D. If at any time from the first day of the month following the Initiating
Date, Tenant obtains an A- or better investment grade credit rating from
Standard & Poors Corporation and an A3 or better investment grade credit rating
from Moody's Investors Services, Inc. for its senior debt obligations, and
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<PAGE> 8
such investment grade credit ratings are maintained during the Lookback period,
then:
(i) on the first day of the month following the Lookback Period, the
annual Fixed Rent shall be reset to equal the Fixed Rent on the
Initiating Date less an amount equal to the Purchase Price
multiplied by the lesser of (a) 2.0%, or (b) the difference between
(x) the Fixed Rent on the Initiating Date (calculated as a
percentage of the Purchase Price) and (y) the yield, determined as
provided above, for 10-year Treasury obligations plus 225 basis
points.
(ii) the annual Fixed Rent specified in the Basic Lease Information shall
be increased at the end of every 30-month period measured from the
Initiating Date by an amount equal to the annual Fixed Rent prior to
such increase multiplied by the greater of 5.72028% or 56.25% of the
increase in the CPI over the prior 30-month period. Such increase in
the Fixed Rent shall not be greater than 11.632519% of the annual
Fixed Rent immediately prior to the increase.
E. If, at any time from the first day of the month following the
Initiating Date, Tenant obtains either of the required investment grade ratings
indicated in subparagraphs C and D, but not both and such investment grade
credit ratings are maintained during the Lookback Period, then:
(i) on the first day of the month following the Lookback Period, the
annual Fixed Rent shall be reset to equal the Fixed Rent on the
Initiating Date less an amount equal to the Purchase Price
multiplied by the lesser of (a) 1.5%, or (b) the difference between
(x) the Fixed Rent on the Initiating Date (calculated as a
percentage of the Purchase Price) and (y) the yield, determined as
provided above, for 10-year Treasury obligations plus 250 basis
points.
(ii) the annual Fixed Rent specified in the Basic Lease Information shall
be increased at the end of every 30-month period measured from the
Initiating Date by an amount equal to the annual Fixed Rent prior to
such increase multiplied by the greater of 5.72028% or 56.25% of the
increase in the CPI over the prior 30-month period. Such increase in
the Fixed Rent shall not be greater than 11.632519% of the annual
Fixed Rent immediately prior to the increase.
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<PAGE> 9
In no event shall the calculation required by subparagraphs C(i), D(i) and
E(i) above result in an increase in Fixed Rent.
5. NET LEASE; NON-TERMINABILITY: (a) This is an absolutely net lease and
the Fixed Rent, Additional Rent and all other sums payable hereunder by Tenant,
whether as the purchase price for the Premises or otherwise, shall be paid
without notice (except as expressly provided herein), demand, setoff,
counterclaim, abatement, suspension, deduction or defense.
(b) This Lease shall not terminate, nor shall Tenant have any right to
terminate this Lease (except as provided in paragraph 14), nor shall Tenant be
entitled to any abatement or reduction of rent hereunder (except as otherwise
expressly provided herein), nor shall the obligations of Tenant under this Lease
be affected, by reason of (i) any damage to or destruction of all or any part of
the Premises from whatever cause, (ii) subject to paragraph 14, the taking of
the Premises or any portion thereof by condemnation, requisition or otherwise,
(iii) the prohibition, limitation or restriction of Tenant's use of all or any
part of the Premises, or any interference with such use, (iv) any eviction by
paramount title or otherwise, (v) Tenant's acquisition or ownership of all or
any part of the Premises otherwise than as expressly provided herein, (vi) any
default on the part of Landlord under this Lease, or under any other agreement
to which Landlord and Tenant may be parties, (vii) the failure of Landlord to
deliver possession of the Premises on the commencement of the term hereof or
(viii) any other cause whether similar or dissimilar to the foregoing, any
present or future law to the contrary notwithstanding. It is the intention of
the parties hereto that the obligations of Tenant hereunder shall be separate
and independent covenants and agreements, that the Fixed Rent, the Additional
Rent and all other sums payable by Tenant hereunder shall continue to be payable
in all events and that the obligations of Tenant hereunder shall continue
unaffected unless the requirement to pay or perform the same shall have been
terminated pursuant to any express provision of this Lease.
(c) Tenant agrees that it will remain obligated under this Lease in
accordance with its terms, and that it will not take any action to terminate,
rescind or avoid this Lease, notwithstanding (i) the bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution or winding-
up or other proceeding affecting Landlord or its successor in interest, or (ii)
any action with respect to this Lease which may be taken by any trustee or
receiver of Landlord or its successor in interest or by any court in any such
proceeding.
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<PAGE> 10
(d) Tenant waives all rights which may now or hereafter be conferred by
law (i) to quit, terminate or surrender this Lease or the Premises or any part
thereof, or (ii) to any abatement, suspension, deferment or reduction of the
Fixed Rent, Additional Rent or any other sums payable under this Lease, except
as otherwise expressly provided herein. It is not the intent of the parties
hereto to restrict in any way Tenant's other remedies, whether at common law or
under statute.
6. QUIET ENJOYMENT; SALE TO COMPETITORS:
(a) Landlord covenants with Tenant, that upon the payment of the Fixed
Rent and Additional Rent and the performance in all material respects of all the
terms of this Lease, Tenant shall at all times during the Term, peaceably and
quietly enjoy the Premises without any disturbance from Landlord or from any
person claiming by, through, or under Landlord.
(b) So long as Tenant is not in any material default under this Lease,
Landlord shall not sell all or any portion of the Premises to any entity
engaged, either directly or indirectly, in the airline food service industry
without Tenant's prior written consent, provided however, that this provision
shall not apply if such entity is a passive owner unable to exercise control
over the operation of the Premises, or during the continuance of an Event of
Default.
7. UTILITY BILLS:
Tenant shall pay as Additional Rent before they become delinquent any
water, sewer, gas, fuel, electricity, light, heat power and all other utility
bills for the Premises and the business conducted thereon.
8. REPAIRS AND MAINTENANCE:
(a) Tenant shall, at its own sole cost and expense, keep the Premises in
good order and condition, normal wear and tear and damage covered by insurance
excepted, at all times on and after commencement of the Term to and including
the date of the termination of the Term, by lapse of time or otherwise. Tenant
shall promptly and adequately repair the Premises and all its component parts,
and replace or repair all landscaping and all damaged or broken fixtures, other
than trade fixtures, and appurtenances.
In addition, Tenant shall timely and properly maintain all of the Premises
including, but not necessarily limited to, mechanical systems, electrical
systems, plumbing and sewage
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<PAGE> 11
systems, foundations and floor slabs, glazing systems, structural steel, masonry
walls and wall enclosures, and water tightness of all curtain walls by a
qualified stationary engineer or otherwise, in accordance with the greater
standard of
(i) the customary maintenance by prudent operators in the industry;
(ii) that which is necessary so as not to void, diminish, or impair any
warranty for such component from time to time in effect; and
(iii) that which is necessary to preserve and protect the useful life of
such component, ordinary wear and tear excepted.
In addition, Tenant shall maintain and repair, or cause others to maintain and
repair or replace, as the case may be, the roof, and repair any material defect
in materials or workmanship relating to the foundation, columns, and structural
steel which comprise a part of the Premises. Landlord, not more frequently than
annually during the Term (except in the event of an emergency or extraordinary
condition), may cause independent private inspectors, qualified in the specific
discipline, to make inspections of any building and building systems on the
Premises or segments thereof to determine Tenant's compliance under this
Section.
If the Tenant does not timely or properly perform repairs as above
provided, Landlord may, but is not required to, after twenty (20) days' notice
to Tenant, make such repairs, replacements or maintenance in a reasonably
diligent fashion, and Tenant shall pay Landlord forthwith upon being billed for
same by Landlord the cost thereof plus all overhead, general conditions, fees
and other costs or expenses arising from Landlord's involvement with such
repairs, replacements and maintenance.
Landlord may, but shall not be required to, enter the Premises personally
or through independent contractors at all reasonable times upon reasonable
notice (except in the case of an emergency) to inspect the Premises, and to make
such repairs, alterations, improvements and additions to the Premises or to any
equipment or fixtures located on the Premises as Landlord deems reasonably
necessary and which Tenant failed to do as required in this Lease.
(b) It is intended by Tenant and Landlord that Landlord shall have no
obligation, in any manner whatsoever, to repair or maintain the Premises (or the
equipment therein),
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<PAGE> 12
whether structural or nonstructural, all of which obligations are intended, as
between Landlord and Tenant, to be those of Tenant. Tenant expressly waives the
benefit of any statute now or in the future in effect which would otherwise
afford Tenant the right to make repairs at Landlord's expense or to terminate
this Lease because of Landlord's failure to keep the Premises in good order,
condition and repair.
(c) Prior to the commencement of the Lease Landlord received an
engineering study of the Premises performed by Eckland Consultants Inc. Exhibit
E attached hereto shows a list of those matters which must be corrected. Tenant
agrees to correct the matters listed on Exhibit E, at Tenant's sole cost and
expense, to be completed no later than the dates set forth on Exhibit E.
9. IMPOSITIONS: (a) Tenant covenants and agrees to pay, during the Term,
as Additional Rent, before any fine, penalty, interest or cost may be added
thereto for the nonpayment thereof, all real estate taxes, special assessments,
utility bills referred to in Paragraph 7, street lighting, excise levies,
licenses, permits, inspection fees, other governmental charges; and all other
charges or burdens of whatsoever kind and nature (including costs, fees, and
expenses of complying with any restrictive covenants or similar agreements to
which the Premises are subject incurred in the use, occupancy, operation,
leasing or possession of the Premises (excluding any income taxes on the Fixed
Rent imposed on Landlord, it being the intent of the parties hereto that any tax
on the net income derived from the Fixed Rent payable in respect to the Premises
imposed by any governmental authority shall be paid by Landlord), without
particularizing by any known name or by whatever name hereafter called, and
whether any of the foregoing be general or special, ordinary or extraordinary,
foreseen or unforeseen, which at any time during the Term may be payable. Tenant
shall pay all special (or similar) assessments or installments thereof
(including interest thereon) for public improvements or benefits which, during
the Term shall be laid, assessed, levied or imposed upon or become a lien upon
the Premises and which are payable during the Term, or any portion thereof;
provided, however, that if by law any special assessment is payable or, at the
option of the party obligated to make such payment, may be paid in installments
(whether or not interest shall accrue on the unpaid balance of such special
assessment), Tenant may pay the same, together with any interest accrued on the
unpaid balance of such special assessment in installments as the same
respectively become payable and before any fine, penalty, interest or cost may
be added thereto for the nonpayment of any such installment and the interest
thereon. Tenant shall pay all real estate taxes,
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<PAGE> 13
whether heretofore or hereafter levied or assessed upon the Premises, or any
portion thereof, which are due and payable during the Term. At the end of the
Term of the Lease, Tenant's obligation to pay such taxes shall be prorated in
the event the tax period and the Term are not coextensive.
(b) Except for any tax on the net income derived from the Fixed Rent, if
at any time during the Term, any method of taxation shall be such that there
shall be levied, assessed or imposed on the Landlord, or on the Fixed Rent or
Additional Rent, or on the Premises, or any portion thereof, a capital levy,
gross receipts tax or other tax on the rents received therefrom, or a franchise
tax, or an assessment, gross levy or charge measured by or based in whole or in
part upon such gross Rents, Tenant, to the extent permitted by law, covenants to
pay and discharge the same, it being the intention of the parties hereto that
the Fixed Rent to be paid hereunder shall be paid to Landlord absolutely net
without deduction or charge of any nature whatsoever, foreseeable or
unforeseeable, ordinary or extraordinary, or of any nature, kind, or
description, except as otherwise expressly provided in this Lease.
(c) Tenant covenants to furnish Landlord, within thirty (30) days after
the date upon which any Imposition or other tax, assessment, levy or charge is
payable by Tenant, official receipts of the appropriate taxing authority, or
other appropriate proof satisfactory to Landlord, evidencing the payment of the
same. The certificate, advice or bill of the appropriate official designated by
law to make or issue the same or to receive payment of any Imposition may be
relied upon by Landlord as sufficient evidence that such Imposition, is due and
unpaid at the time of making or issuance of such certificate, advice or bill.
(d) Upon the occurrence of an Event of Default and after the conclusion of
any cure period following an Event of Default hereunder, Tenant shall pay to
Landlord, at Landlord's written demand, the known or estimated yearly real
estate taxes and assessments, payable with respect to the Premises in monthly
payments equal to one-twelfth (1/12) of the known or estimated yearly real
estate taxes and assessments, next payable with respect to the Premises. From
time to time, after a default hereunder, Landlord may re-estimate the amount of
real estate taxes and assessments, and in such event Landlord shall notify
Tenant, in writing, of such re-estimate and fix future monthly installments for
the remaining period prior to the next tax and assessment due date in an amount
sufficient to pay the re-estimated amount over the balance of such period after
giving credit for payments made by Tenant on the previous estimate.
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<PAGE> 14
If the total monthly payments made by Tenant pursuant to this Section
shall exceed the amount of payments necessary for said taxes and assessments,
such excess over $1,000.00 shall be promptly paid to the Tenant and the balance
shall be credited on subsequent monthly payments of the same nature. However, if
the total of such monthly payments so made under this paragraph shall be
insufficient to pay such taxes and assessments when due, then Tenant shall pay
to Landlord such amount as may be necessary to make up the deficiency. All such
deposits made by Tenant pursuant to this Paragraph 9(d) shall be deposited in a
federally insured institution reasonably satisfactory to Landlord and Tenant,
and all interest earned thereon shall accrue to the benefit of Tenant. Payment
by Tenant of real estate taxes, assessments, under this Paragraph shall be
considered as performance of such obligation under the provisions of Paragraph
9(a) hereof.
10. DESTRUCTION OF OR DAMAGE TO PREMISES:
(a) Tenant covenants that in case of damage to or destruction of any or
all of the buildings, structures and improvements (collectively, the
"Improvements") upon the Premises by fire or any other cause, insured or
uninsured, Tenant will promptly, at its sole cost and expense, restore, repair,
replace or rebuild the Improvements so damaged or destroyed as nearly as
practicable to the condition, quality and class thereof immediately prior to
such damage or destruction, or with such changes or alterations as Tenant shall
elect to make in conformity with Paragraph 23 of this Lease. This Lease shall
continue, with Fixed Rent and Additional Rent unabated. In performing its
obligations under this Paragraph 10, Tenant shall be entitled to insurance
proceeds under the terms and conditions set forth in Paragraph 11 hereof.
Landlord shall have the right to approve the plans and specifications for the
work of repair, replacement or rebuilding, such approval not to be unreasonably
withheld or delayed. Tenant shall diligently obtain all necessary permits for
such work or repair and shall maintain builder risk insurance in amounts
reasonably satisfactory to Landlord until completion of such work. Such
restoration, repairs, replacement or rebuilding shall be commenced promptly and
prosecuted with diligence, subject to unavoidable delays and force majeure.
(b) If all or substantially all of the Premises are destroyed as a result
of fire or other casualty, then the provisions of Paragraph 14 shall apply.
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11. INSURANCE, HOLD HARMLESS AND INDEMNIFICATION:
(a) Tenant at its sole cost and expense shall obtain and continuously
maintain in full force and effect during the Term "All-Risk" policies of
property insurance including damage by fire and the perils commonly covered
under the special causes of loss, and also including the perils of earthquake
and flood, covering real and personal property and loss of business income,
including all of the Improvements, alterations, additions and changes on or at
the Premises, which insurance shall be for the benefit of Landlord (as an
additional insured and loss payee) and Tenant, as their interests may appear,
and also protecting the insurable interests of any other entity the Landlord may
designate from time to time, including but not limited to mortgagee(s) or trust
deed holder(s), additional insured(s), loss payee(s), or others (hereinafter
referred to as "Property Insurance").
Such Property Insurance shall:
(i) be written with companies licensed to do business in the State where
the Premises are located, having a current A.M. Best rating of A- or
better and a current A.M. Best Financial Size Category of VII or
better;
(ii) insure the interest of Landlord's mortgagee(s) or trust deed
holder(s) additional insured(s), loss payee(s), or other entities
Landlord may designate from time to time, under standard mortgagee
clauses, lender's loss payable endorsements, or other prescribed
forms, effective as of the Commencement Date; and
(iii) be maintained continuously throughout the Term hereof; and
(iv) provide for a deductible no greater than $100,000 per occurrence for
the peril of flood, and a deductible no greater than $25,000 per
occurrence for all other perils (other than earthquake). For losses
to any unit of insurance caused by earthquake in Florida, a
deductible no greater than 2% of the value of such unit of insurance
(subject to a minimum deductible not exceeding $100,000 per
occurrence) shall apply. For the purposes of applying the earthquake
deductible, a unit of insurance shall consist of all the following
items taken as a whole: (a) each
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separate building or structure, (b) the contents of each separate
building or structure, and (c) 12 months business income (net profit
or loss before income taxes that would have been earned or incurred,
including payroll) attributable to each separate building. To the
extent such coverage is either not commercially available at logical
cost (i.e., in terms of availability, standard industry practice and
cost effectiveness) or Tenant desires to increase the amount of the
deductible, the deductible pursuant to this Paragraph 11(a)(iv) may
be increased subject to Landlord's and Tenant's mutual agreement,
such agreement not to be unreasonably withheld.
At all times, the Property Insurance coverage shall be in an amount equal
to one hundred percent (100%) of the then "Full Replacement Cost" of the
Improvements, alterations, additions and changes on or at the Premises. Full
Replacement Cost shall be interpreted to mean the cost of repairing or replacing
the improvements, alterations, additions and changes on or at the Premises with
property of like kind and quality, determined at the time of loss, without
deduction for depreciation or wear and tear, and it shall include a reasonable
sum for architectural, engineering, legal, interest charges, permit fees,
administrative and supervisory fees connected with the restoration or
replacement of such Improvements in the event of damage thereto or destruction
thereof. Any co-insurance penalty, deductible, or self-insured retention
applicable shall be the sole responsibility of, and shall be paid by, Tenant.
(b) During the Term, Tenant, at its sole cost and expense, but for the
benefit of Landlord, (as an additional insured) and also protecting the
insurable interests of any other entity the Landlord may designate from time to
time, including but not limited to Landlord's mortgagee(s) or trust deed holder,
additional insured(s), loss payee(s), or other entities Landlord may designate
from time to time, shall obtain and continuously maintain, in full force and
effect, the following insurance coverage written with companies licensed to do
business in the State where the Premises are located, having a current A.M. Best
Rating of A- or better and a current A.M. Best Financial Size Category of VII or
better or, if such companies are not rated by A.M. Best, then companies of
equivalent size and conditions:
(i) Commercial general liability insurance or comprehensive general
liability insurance with broad form comprehensive liability
endorsement, applying to
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Premises and operations (including coverage for property damage
resulting from the explosion, collapse, and underground hazards),
products and completed operations, contractual liability, broad form
property damage, and personal injury, all with a minimum combined
single limit of $1,000,000.00 each occurrence and $2,000,000.00
general aggregate per location.
(ii) Automobile Liability applying to any owned, hired and non-owned
automobiles, with a minimum combined single limit of $1,000,000.00
each accident.
(iii) umbrella liability with a minimum combined single limit of
$25,000,000.00 each occurrence and a minimum aggregate limit per
location of $25,000,000.00
(iv) Such other insurance which is commercially available at logical
(i.e., in terms of availability, standard industry practice and cost
effectiveness) cost, and in such amounts as may from time to time be
required by Landlord, against other insurable hazards or occurrences
which at the time are commonly insured against in the case of
premises, operations, and/or buildings or improvements similar in
nature, construction, design, general location, use, and/or
occupancy, to those on the Premises.
(c) Tenant shall maintain a policy or policies of statutory workers'
compensation insurance covering all employees in amounts required by applicable
state law and employers' liability with minimum limits of $100,000.00 each
accident, $100,000.00 disease-each employee, and $100,000.00 disease-policy
limit.
(d) Each policy of insurance required under this Paragraph 11 shall have
attached thereto
(i) an endorsement that such policy shall not be cancelled or materially
changed without at least sixty (60) days prior written notice to
Landlord, except in the case of non-payment of premium, in
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which case there shall be at least ten (10) days prior written
notice; and
(ii) A Lender's Loss Payable Endorsement Form 438BFU (with respect to
insurance described in Paragraph 11(a)).
To the extent the foregoing endorsements are not obtainable in precisely
the form prescribed, Tenant shall obtain reasonably similar endorsements. All
policies of insurance shall be written in such form and shall be distributed in
such companies as shall be satisfactory to Landlord. Certificates of Insurance
(ACORD 25-S) and Evidence of Property Insurance (ACORD 27) (collectively, the
"Certificates") shall be delivered to Landlord accompanied by, or Tenant shall
provide, as appropriate, evidence satisfactory to Landlord that the premiums
thereon have been paid currently. Such Certificates and evidence of payment
shall be delivered to Landlord on or before the Commencement Date. Prior to the
expiration of such policies, Certificates of all renewal or replacement
policies, plus evidence of current premium payment, shall be delivered to
Landlord not less than thirty (30) days prior to the expiration of the then
current policy term. Insurance binders evidencing the binding of policies of
insurance or the renewals thereof for the coverage specified shall be accepted
in the event such Certificates are not available at the time in question, for a
temporary duration, pending policy issuance. Within thirty (30) days of written
request, Tenant shall cause Certificates to be delivered to Landlord, or deliver
a letter to Landlord from the underwriter(s) stating the reasons for the delay,
and stipulating when Certificates will be available. In no event shall the
insurance for the coverage specified be allowed to lapse. Copies of Tenant's
insurance policies shall be made available for inspection by Landlord or its
designee or Mortgagee or Mortgagee's designee during normal business hours at
Tenant's address.
Nothing in this Paragraph 11 shall prevent Tenant from taking out
insurance of the kind and in the amount provided for under the preceding
paragraphs under a blanket insurance policy or policies which may cover other
properties owned, operated, leased or occupied by Tenant as well as the
Premises.
Such policy of blanket insurance shall specify the amount exclusively
allocated to the Premises, or in lieu thereof, Tenant shall furnish Landlord and
the holder of any mortgage or trust deed with a written statement from the
insurer's authorized representative or broker specifying the values reported for
the Premises at inception for premium determination purposes.
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Further, such policies of blanket insurance shall, as respects the Premises,
contain the various provisions required of such an insurance policy by the
foregoing provisions of this Paragraph 11.
(e) In the event of lost or damage to the Premises or in the event of any
claim in connection with the injury to death of any person or the damage of any
property arising out of or occurring at the Premises or arising out of
operations at the Premises, Tenant shall promptly notify Landlord thereof in
writing, and shall prepare and present timely claims to the appropriate insurers
on behalf of Tenant, Landlord and any assignee or mortgagee of Landlord.
(f) The proceeds of any property claim for damage to the premises, net of
any collection expenses, shall be paid to or deposited with either a bank or
trust company having an office in the State of Florida and designated by
Landlord (herein called the "Proceeds Trustee") in the name of the Proceeds
Trustee as trustee for Landlord and Tenant and disbursed in the manner
hereinafter provided. In the event Landlord mortgages the Premises with a first
mortgage, the mortgagee thereunder (regardless of its location) may, at its
option, be appointed Proceeds Trustee for so long as such first mortgage remains
outstanding. Insurance proceeds shall be deposited in an interest bearing
account (if available) and interest shall be distributed to Tenant upon
completion of said installation, repair, replacement or rebuilding, provided no
default has occurred and is continuing hereunder. All checks drawn on said
account shall be co-signed by the Proceeds Trustee and Tenant. Insurance
proceeds shall be disbursed to Tenant by the Proceeds Trustee upon receipt by
Landlord and Proceeds Trustee of the following:
(i) A certificate signed by a licensed architect or engineer selected by
Tenant, subject to the approval of Landlord (such approval not to be
unreasonably withheld or delayed) and also signed by Tenant, dated
not more than thirty (30) days prior to the application for such
disbursement, setting forth in substance the following:
a. that the sum then requested to be disbursed either has been
paid by Tenant or is justly due to contractors,
subcontractors, materialmen, engineers, architects or other
persons (whose names and addresses shall be stated) who have
rendered and furnished certain labor and materials for the
work; giving a brief description of such services rendered and
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materials placed in use on the Premises and the principal
subdivisions or categories thereof and the amounts so paid or
due to each of said persons in respect thereof, and stating
the progress of the work up to the date of said certificate;
b. that the sum then requested to be disbursed, plus all sums
previously disbursed, does not exceed the cost of the work as
actually accomplished up to the date of such certificate (less
ten percent (10%) of such cost which shall be retained by the
Proceeds Trustee to be disbursed following completion of the
work to be done by the named contractor);
c. that, to the best of their knowledge, except for the amounts,
if any, stated in said certificate pursuant to the foregoing
clause (i) of this paragraph to be due for services or
materials, there is no outstanding indebtedness known to the
person signing the certificate, after due inquiry, which is
then due and payable for work, labor, services and materials
in connection with the work, which, if unpaid, might become
the basis of a vendor's, mechanic's laborer's, materialman's
statutory or similar lien upon Tenant's leasehold estate or
Tenant's or Landlord's interest in the Premises or any part
thereof; and
d. that the amount remaining in the possession of the Proceeds
Trustee after disbursement of the sum then requested at least
equals the estimated unpaid costs to complete the work (and if
insufficient funds remain, Tenant shall deposit additional
funds with the Proceeds Trustee sufficient to enable the
architect or engineer to make the foregoing certification).
(ii) A certificate signed by Tenant, dated not more than thirty (30) days
prior to the application for such disbursement, setting forth in
substance that, to the best knowledge of Tenant, after due inquiry;
a. all materials and all property described in the certificate
are free and clear of all liens and encumbrances, except such
as may secure indebtedness due to persons (whose names and
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addresses and the several amounts due them shall be stated)
specified in said certificate, which liens and encumbrances
will be discharged upon payment of such indebtedness and
encumbrances to which this Lease is subject; and
b. that no default hereunder has occurred which has not been
remedied.
(iii) Evidence reasonably satisfactory to the Proceeds Trustee and
Landlord showing that there has not been filed or recorded with
respect to Tenant's leasehold estate or Tenant's or Landlord's
interest in the Premises or any part thereof any vendor's,
mechanic's, design professional's, laborer's or materialman's
statutory or similar lien which has not been discharged of record,
except such as will be discharged upon payment of the amount then
requested to be disbursed.
(iv) Lien waivers from each person entitled to a mechanics' or
materialmen's lien against the Premises by reason of such work.
(v) Upon compliance with the foregoing provisions, the Proceeds Trustee
shall, out of the deposited sums, disburse to the persons named in
the certificate furnished the respective amounts stated in said
certificate to be due to them and/or shall disburse to Tenant the
amount stated in said certificate to have been paid by Tenant.
(vi) At any time after the completion in full of the work, the whole
balance of the deposited sums not theretofore disbursed pursuant to
the foregoing provisions of this paragraph 11(f) shall be disbursed
to or upon the order of Tenant, upon receipt by the Proceeds Trustee
of:
a. a certificate signed by Tenant, dated not more than thirty
(30) days prior to the application for such disbursement,
setting forth in substance the following:
(1) that the work has been completed in full;
(2) that all amounts which Tenant is or may be entitled to
have disbursed under the foregoing provisions of this
Paragraph 11(f) on account of services rendered or
materials furnished in connection with the work and
placed in use on the Premises have been disbursed under
said provisions;
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(3) that all amounts for whose payment Tenant is or may
become liable in respect of the work have been paid in
full except to the extent, if any, of any retainage and
which retainage shall be applied to the final payments
of the amounts due; and
(4) that no default has occurred hereunder which has not
been remedied;
b. a copy of the final plans and specifications of the
improvements on the Premises, which plans and specifications
shall be delivered to Landlord;
c. an official search or a certificate of a title company
reasonably satisfactory to the Proceeds Trustee showing that
there has not been filed with respect to Tenant's leasehold
estate or Tenant's or Landlord's interest in the Premises or
any part thereof, any vendor's, mechanic's, laborer's or
materialman's statutory or similar lien which has not been
discharged of record;
d. a certificate of completion signed by the supervising
architect or engineer referred to in Paragraph 11(f)(i) above;
and
e. a certificate of occupancy or equivalent governmental
approval.
No such damage or destruction shall release Tenant from any obligation
hereunder for Fixed Rent, Additional Rent or other sums payable under this
Lease.
Any insurance proceeds remaining after completion of the reconstruction as
specified in Paragraph 11(f)(vi) above shall be paid to Tenant.
(g) To the fullest extent permitted by law, Tenant shall protect, defend,
indemnify and hold Landlord, its direct or indirect partners, and any and all
respective members, partners, executive officers, directors, stockholders,
agents and employees of the aforementioned, any mortgagee and their respective
successors and assigns and any other individual or entity to whom a duty is owed
(collectively), the Landlord Group) harmless from and against any and all
claims, losses, and judgments, liabilities, damages, causes of action, costs and
expenses
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(including, without limitation, reasonable attorney's fees and reasonable
investigative and discovery costs), arising from Tenant's use of the Premises
(including all common areas) and the ways adjoining the Premises, or from the
conduct of Tenant's business or from any activity, work or things done,
permitted or suffered by Tenant in or about the Premises (including all common
areas) and the ways adjoining the Premises, or elsewhere and shall further
protect, defend, indemnify and hold Landlord Group harmless from and against any
and all claims, losses, judgments, liabilities, damages, causes of action, costs
and expenses (including, without limitation, reasonable attorney's fees and
reasonable investigative and discovery costs), arising from any breach or
default in the performance of any obligation on Tenant's part to be performed
under the terms of this Lease, or arising from any negligence (active, passive,
or otherwise), willful misconduct, acts, or omissions of Tenant, or any of
Tenant's agents, contractors or subcontractors, employees, servants, customers,
invitees, subtenants, any other individual or entity, and from and against all
costs and expenses (including, without limitation, reasonable attorney's fees
and reasonable investigative and discovery costs) actually incurred, in the
defense of any such claim or any action or proceeding brought thereon; and in
case any action or proceeding be brought against a member of Landlord Group by
reason of any such claim, Tenant upon notice from any member of Landlord Group
shall defend the same at Tenant's expense by counsel reasonably satisfactory to
Landlord Group or selected by the insurance carrier. Tenant, as a material part
of the consideration to Landlord, assumes all risk of damage to property or
injury to or death of persons, in, upon or about the Premises arising from any
cause and Tenant waives all claims in respect thereof against Landlord unless
caused by the willful or sole negligent act of Landlord, its direct or indirect
partners, or the respective members, partners, executive officers, directors,
stockholders, agents and employees of the aforementioned.
12. GOVERNMENTAL ORDERS; COVENANTS; LANDLORD CURE; PERMITTED CONTEST:
A. Tenant shall throughout the Term promptly comply or cause compliance
with or remove or cure any violation of any and all present and future laws,
including, without limitation, the American with Disabilities Act of 1990, as
the same may be amended from time to time, ordinances (zoning or otherwise),
orders, rules, regulations and requirements of all Federal, State, municipal and
other governmental bodies having jurisdiction over the Premises and the
appropriate departments, commissions, boards and officers thereof, and the
orders, rules and regulations of the Board of Fire Underwriters where the
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Premises are situated, or any other body now or hereafter constituted exercising
lawful or valid authority over the Premises, or any portion thereof, or the
sidewalks, curbs, roadways, alleys or entrances adjacent or appurtenant thereto,
or exercising authority with respect to the use or manner of use of the
Premises, or such adjacent or appurtenant facilities, and whether the
compliance, curing or removal of any such violation and the costs and expenses
necessitated thereby shall have been foreseen or unforeseen, ordinary or
extraordinary, and whether or not the same shall be presently within the
contemplation of Landlord or Tenant or shall involve any change in governmental
policy, or require structural or extraordinary repairs, alterations or additions
by Tenant and irrespective of the amount of the costs thereof. Tenant, at its
sole cost and expense, shall comply with all agreements, contracts, easements,
restrictions, reservations or covenants, if any, running with the land, or
hereafter created by Tenant or consented to, in writing, by Tenant or requested,
in writing, by Tenant. Tenant shall also comply with, observe and perform all
provisions and requirements of all policies of insurance at any time in force
with respect to the Premises and required to be obtained and maintained under
the terms of Paragraph 11 hereof and shall comply with all development permits
issued by governmental authorities issued in connection with development of the
Premises.
B. If Tenant shall at any time fail to pay any Imposition in accordance
with the provisions of Paragraph 9, or to take out, pay for, maintain and
deliver any of the insurance policies or certificates of insurance provided for
in Paragraph 11, or shall fail to make any other payment or perform any other
act on its part to be made or performed, then Landlord, after ten (10) days
prior written notice to Tenant (or without notice in case of emergency), and
without waiving or releasing Tenant from any obligation of Tenant contained in
this Lease, may, but shall be under no obligation to do so,
(i) pay after said ten (10) days' written notice to Tenant, any
Imposition payable by Tenant pursuant to the provisions of Paragraph
9;
(ii) take out, pay for and maintain any of the insurance policies
provided for in this Lease; or
(iii) make any other payment or perform any other act on Tenant's part to
be paid or performed hereunder, except that any time permitted to
Tenant to perform any
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act required to be performed by Tenant hereunder shall be extended
for such period as may be necessary to effectuate such performance
provided Tenant is continuously, diligently and in good faith
prosecuting such performance.
Landlord may enter upon the Premises for any such purpose and take all such
action therein or thereon as may be necessary therefor and all such action taken
by Landlord shall be in a reasonably diligent fashion. All sums so paid by
Landlord and all costs and expenses, including reasonable attorney's fees,
incurred by Landlord in connection with the performance of any such act,
together with interest thereon at the Overdue Rate, shall be paid by Tenant to
Landlord on demand. Landlord shall not be limited in the proof of any damages
which Landlord may claim against Tenant arising out of or by reason of Tenant's
failure to provide and keep in force insurance as aforesaid, to the amount of
the insurance premium or premiums not paid or incurred by Tenant, and which
would have been payable upon such insurance, but Landlord shall also be entitled
to recover, as damages for such breach, the uninsured amount of any loss (to the
extent of any deficiency between the dollar limits of insurance required by the
provisions of this Lease and the dollar limits of the insurance actually carried
by Tenant), damages, costs and expenses of suit, including reasonable attorney's
fees, suffered or incurred by reason of damage to or destruction of the
Premises, or any portion thereof or other damage or loss which Tenant is
required to insure against hereunder, occurring during any period when Tenant
shall have failed or neglected to provide insurance as aforesaid.
C. If Tenant desires to contest the validity, amount, propriety, or
accuracy of any Imposition, Tenant shall notify Landlord of same which notice
shall state the nature of the Imposition being contested and the grounds for
such contest. Within fifteen (15) days of Landlord's receipt of such notice
Landlord will notify Tenant that (i) Landlord will contest the Imposition in
question, or (ii) that Landlord consents to the contest by Tenant. If Landlord
fails to so notify Tenant, it shall be presumed that Landlord has elected (ii).
If Landlord agrees to the contest the Imposition, it may do so on the grounds
described in Tenant's notice, and all the costs, expenses, fees or other
obligations incurred by Landlord in conducting such challenge shall be deemed
Additional Rent hereunder. If Landlord, either actively or by default, elects
(ii) above, Tenant shall have the right, at its own expense, to contest the
amount, propriety, accuracy, or validity, in whole or in part, of any Imposition
by appropriate proceedings diligently
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conducted in good faith, but only after payment of such Imposition, unless non-
payment, would not cause a lien to be filed against title to the Premises or
would otherwise jeopardize title to the Premises or Tenant's leasehold interest
therein; in which event, notwithstanding the provisions of Paragraph 9(a)
hereof, Tenant may postpone or defer payment of such Imposition. However, if
Landlord reasonably deems Tenant to be financially unsound, Tenant shall deposit
with Landlord cash or a certificate of deposit payable to Landlord issued by a
national bank or Federal savings and loan association in the amount of the
Impositions so contested and unpaid, together with all interest and penalties
which may accrue, in Landlord's reasonable judgment, in connection therewith,
and all charges that may or might be assessed against or become a charge on the
Premises, or any portion thereof, during the pendency of such proceedings. If,
during the continuance of such proceedings, Landlord shall, from time to time,
reasonably deem the amount deposited, as aforesaid, insufficient, Tenant shall,
upon demand of Landlord, make additional deposits of such additional sums of
money or such additional certificates of deposit as Landlord may reasonably
request. Upon failure of Tenant to make such additional deposits, the amount
theretofore deposited may be applied by Landlord to the payment, removal and
discharge of such Imposition, and the interest, fines and penalties in
connection therewith, and any costs, fees (including reasonable attorney's fees)
and other liability (including reasonable costs incurred by Landlord) accruing
in any such proceedings.
Upon the termination of any such proceedings, Tenant shall pay the amount
of such Imposition or part thereof, if any, as finally determined in such
proceedings, the payment of which may have been deferred during the prosecution
of such proceedings, together with any costs, fees, including attorney's fees,
interest, penalties, fines and other liability in connection therewith. Upon
such payment, Landlord shall return all amounts or certificates of deposit
deposited with it in respect to the contest of such Imposition, as aforesaid
along with any interest earned thereon as a result of an investment thereof, at
Tenant's request and expense, in a Federally insured security or account.
However, at the written direction of Tenant, Landlord shall make such payment
out of the funds on deposit with Landlord and the balance, if any, shall be
returned to Tenant. Tenant shall be entitled to the refund of any Imposition,
penalty, fine and interest thereon received by Landlord which have been paid by
Tenant or which have been paid by Landlord but for which Landlord has been
previously reimbursed in full by Tenant.
Landlord shall not be required to join in any proceedings referred to in
this Paragraph 12(C) unless the provisions of any
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law, rule or regulations at the time in effect shall require that such
proceedings be brought by or in the name of Landlord, in which event Landlord
shall join in such proceedings or permit the same to be brought in Landlord's
name upon compliance with such conditions as Landlord may reasonably require.
Landlord shall not ultimately be subject to any liability for the payment of any
fees, including attorney's fees, costs and expenses in connection with such
proceedings and Tenant agrees to bear the entire obligations therefor. Tenant
agrees to pay all such fees (including reasonable attorney's fees), costs and
expenses or, on demand, to make reimbursement to Landlord for such payment.
During the time when any such certificate of deposit is on deposit with
Landlord, and prior to the time when the same is returned to Tenant or applied
against the payment, removal or discharge of Impositions, as above provided,
Tenant shall be entitled to receive all interest paid thereon. Cash deposits
shall bear interest as above provided if the investment thereof is so requested
by Tenant.
13. EMINENT DOMAIN:
(a) If less than substantially all of the Premises shall be taken for
public or quasi-public purposes, having a material impact on Tenant's
operations, Tenant will promptly, at its sole cost and expense, restore, repair,
replace or rebuild the improvements so taken as nearly as practicable to the
condition, quality and class thereof immediately prior to such taking, or with
such changes or alterations as Tenant shall elect to make in conformity with
Paragraph 23 of this Lease. In performing its obligations, Tenant shall be
entitled to condemnation proceeds under the same terms and conditions set forth
for casualty proceeds in Paragraph 11 hereof. Any condemnation proceeds in
excess of the amount claimed by any lender of Landlord, and such amounts as are
made available to Tenant for restoration or repair of the Premises, shall be the
sole and exclusive property of Landlord. Tenant shall have the right to
participate in condemnation proceedings with Landlord, and shall be entitled to
receive any separate award made by the condemning authority in respect of
business interruption or business relocations.
(b) If the Landlord is entitled to condemnation proceeds as describing the
next to last sentence of Paragraph 13(a), each installment of Fixed Rent
thereafter payable hereunder shall be reduced by a fraction thereof, the
numerator of which shall be the proceeds retained by Landlord and the
denominator of which shall be the Purchase Price specified in the Basic Lease
Information.
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(c) If all or substantially all of the Premises shall be taken for public
or quasi-public purposes, then the provisions of Paragraph 14 of this Lease
shall apply.
14. TERMINATION OF LEASE:
(a) If all or substantially all of the Premises are either destroyed as a
result of fire or other casualty, or taken for public or quasi-public purposes,
and the Premises are therefore rendered unsuitable for restoration for continued
use and occupancy in Tenant's business, then Tenant shall, not later than thirty
(30) days after such occurrence, deliver to Landlord (i) notice of its desire to
terminate this Lease with respect to the Premises on the next due date for the
Fixed Rent payment, (the "Termination Date") which occurs not less than 45 days
after the delivery of such notice and (ii) a certificate of the President or
Vice President of Tenant describing the event giving rise to such termination
and stating that Tenant has determined that such event has rendered the Premises
unsuitable for restoration for continued use and occupancy in Tenant's business,
and (iii) a certificate signed by the Tenant to the effect that termination of
this Lease with respect to such Premises will not be in violation of any
operating or similar agreement then in effect. Such notice to Landlord shall be
accompanied by an irrevocable offer by Tenant to purchase on the Termination
Date any remaining portion of the Premises at a price equal to the greater of
(a) the unencumbered fair market value of the Premises determined by agreement
of the parties hereto, or (b) the Purchase Price specified in the Basic Lease
Information. The costs associated with such conveyance, including transfer taxes
and recording fees, shall be paid by Landlord to the extent the price being paid
for the Premises exceeds the Purchase Price specified in the Basic Lease
Information, and by Tenant to the extent such costs would reduce Landlord's net
receipts below such Purchase Price. Landlord may reject such offer by notice
given to Tenant not later than thirty (30) days after receipt of Tenant's notice
(which offer Landlord may not reject without the first mortgagee's consent if
there is a mortgage then on the Premises which is the subject of such offer to
which Landlord is a party). Unless Landlord shall have rejected such offer in
accordance with this paragraph (with the mortgagee's consent as aforesaid),
Landlord shall be conclusively presumed to have accepted such offer, and, on the
Termination Date, shall convey to Tenant the remaining portion of the Premises
free of liens and encumbrances (except those existing on the Commencement Date
or thereafter created with the express written consent of the Tenant), along
with the right to receive any insurance or condemnation proceeds, as the case
may be.
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(b) If Tenant does not give notice of its intention to terminate this
Lease as provided herein, then this Lease shall continue in full force and
effect, and Tenant shall, at its expense, rebuild, replace or repair any damage
to the Premises caused by such event in conformity with the requirements of
Paragraph 11 so as to restore the Premises (as nearly as practicable) to the
same condition, size, quality of workmanship, and market value thereof
immediately prior to such occurrence.
15. DEFAULT: Events of Default.
The following events, following the expiration of the applicable cure
periods, in this Paragraph are sometimes referred to as an "Event of Default":
(a) If default shall be made in the payment of Fixed Rent and such
default shall continue for five (5) business days after notice from
Landlord (provided that after giving one such notice, any such
default occurring within 12 months shall become an Event of Default
without the giving of notice) or if default shall be made in the
payment of Additional Rent or in the payment of any other sum
required to be paid by Tenant under this Lease or the payment to
Landlord of any other sum due under the terms of any other agreement
between Landlord and Tenant;
(b) If default shall be made in the observance or performance of any of
the other covenants in this Lease which Tenant is required to
observe and perform and such default shall continue for thirty (30)
days after written notice to Tenant, or if a default involves a
hazardous condition and is not cured by Tenant immediately;
provided, however, the time allowed Tenant (except in the instance
of hazardous conditions or conditions which expose Landlord to
criminal liability) within which Tenant is permitted to cure the
same shall be extended for such period as may be necessary for the
curing provided Tenant is continuously, diligently and in good faith
prosecuting such cure;
(c) If any representation or warranty made by Tenant herein or in any
certificate, demand or request made pursuant hereto proves to be
incorrect in any material respect when made;
(d) If the interests of Tenant in this Lease shall be levied on under
execution or other legal process and same is not removed or stayed
within thirty (30) days;
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(e) If any voluntary petition of bankruptcy or for corporate
reorganization or for the appointment of a receiver or any similar
relief shall be filed by Tenant;
(f) If any involuntary petition of bankruptcy shall be filed against
tenant under any Federal or State bankruptcy or insolvency act and
shall not have been dismissed within ninety (90) days of the filing
thereof;
(g) If a receiver shall be appointed for Tenant or any of the property
of Tenant by any court and any such receiver shall not have been
discharged within ninety (90) days from the date of his appointment;
(h) If Tenant shall make an assignment for the benefit of creditors;
(i) If Tenant shall admit, in writing, Tenant's inability to meet
Tenant's debts as they mature;
(j) If Tenant shall abandon the Premises;
(k) If the consolidated net worth of Tenant determined in accordance
with generally accepted accounting principles shall be less than
$75,000,000;
(l) If: (i) there are any outstanding obligations under the Amended and
Restated Credit Agreement, dated as of December 20, 1990, by
and among Tenant, Caterair Chateau Canada Limited, Banque
Paribas (as Administrative Agent) on behalf of certain lenders
(the "Lenders") (as the same has been and may hereafter be
amended or restated or otherwise modified from time to time,
including any refinancing thereof, the "Credit Agreement"),
and so long as Banque Paribas or any other person acting on
behalf of the Lenders (an "Agent") has agreed, with respect to
the Credit Agreement, to give Landlord notice of acceleration
of the maturity thereof contemporaneously with the giving of
any such notice to Tenant, then the acceleration of the
maturity of any amounts due under the Credit Agreement by the
Agent or the Lenders shall constitute an Event of Default
hereunder; or
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(ii) there are no outstanding obligations under the Credit
Agreement, then any default shall occur in the payment of any
outstanding indebtedness of $10,000,000 or more, or such
lesser indebtedness as shall be material to the financial
condition of Tenant;
(m) If a final judgment shall be entered in an amount greater than
$5,000,000 which creates a default under any mortgage, lease or loan
agreement of Tenant, or which affects Landlord's interest in the
Premises; or
(n) If an Event of Default shall occur under any other lease between
Landlord and Tenant dated as of the date hereof.
Landlord may treat the occurrence of any one or more of the foregoing
Events of Default as a breach of this Lease. For so long as such Event of
Default continues the Landlord, at its option and with or without notice or
demand of any kind to Tenant or any other person, but subject to Paragraph 16F
hereof may have any one or more of the remedies provided in this Paragraph 15 or
elsewhere in this lease, in addition to all other remedies and rights provided
at law or in equity.
16. REMEDIES: In the event of any such Event of Default, Landlord may, in
addition to, and not in derogation of any remedies for any preceding breach or
covenant, with or without notice of demand (except as otherwise expressly
provided herein) and without limiting Landlord in the exercise of any right or
remedy which Landlord may have by reason of such default or breach:
A. Immediately or at any time thereafter while such Event of Default
continues, mail a notice of termination addressed to Tenant and proceed pursuant
to and with due process of law, to repossess the same without prejudice to any
remedies which might otherwise be used for arrears of rent or prior to breach of
covenant, and upon such notice as aforesaid this Lease shall terminate, but
Tenant shall remain liable for its default hereunder as hereinafter provided.
Tenant shall have the right to cure any default until the expiration of the
applicable cure period, if any, following notice by Landlord, as specified
above. Where Landlord has given notice as provided for above, no further notice
shall be required to effectuate a termination of the Lease, which termination
shall occur automatically unless the default is cured within the time periods
provided.
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B. Terminate Tenant's right to possession of the Premises by court order
or any lawful means, in which case Tenant's right to possession under this Lease
shall terminate, and Tenant shall immediately surrender possession of the
Premises to Landlord. In such event, Landlord shall be entitled to recover from
Tenant all damages incurred by Landlord by reason of Tenant's default,
including, but not limited to, the cost of recovering possession of the
Premises; reasonable expenses of reletting, including necessary renovation and
alteration of the Premises (which reletting shall be restricted to operations
similar to Tenant's operations, or to warehouse or distribution center
facilities); reasonable attorney's fees and any real estate commissions actually
paid; the worth at the time of award by the court having jurisdiction thereof of
the amount by which the unpaid rent for the balance of the term after the time
of such award exceeds the amount of such rental loss for the same period that
Tenant proves could be reasonably avoided; and that portion of any leasing
commissions paid by Landlord applicable to the unexpired Term of this Lease.
C. Maintain Tenant's right to possession, in which case this Lease shall
continue in effect whether or not Tenant shall have abandoned the Premises. In
such event, Landlord shall be entitled to enforce all of Landlord's rights and
remedies under this Lease, including the right to recover the Rent as it becomes
due hereunder.
D. Pursue any other remedy now or hereafter available to Landlord under
the laws or judicial decisions of the State of Florida. Unpaid installments of
Rent and other unpaid monetary obligations of Tenant under the terms of this
Lease shall bear interest from the date due until paid at the Overdue Rate.
E. At any time after any such termination of this Lease or re-entry or
repossession of the Premises or any part thereof by reason of the occurrence of
an Event of Default, whether or not Landlord shall have collected any current
damages pursuant to Paragraph 16B, Landlord shall have the option to require
payment from Tenant, and Tenant will pay to Landlord on demand, as and for
liquidated and agreed final damages for Tenant's default and in lieu of all
current damages beyond the date of such demand (it being agreed that it would be
impracticable or extremely difficult to fix the actual damages), whichever
amount Landlord shall select:
(a) an amount equal to the Fixed Rent reserved in this Lease and/or
covenanted to be paid for the remainder of the Term (excluding unexercised
Renewal Terms), discounted at the rate of 10% per year to present worth;
or
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(b) 110% of the Purchase Price specified in the Basic Lease
Information.
Landlord shall at the time of such payment under this Paragraph 16E assign and
convey the Premises to Tenant free of liens and encumbrances (except those
existing on the Commencement Date or thereafter created with the express written
consent of Tenant), without further consideration. The costs of such transfer,
including recording fees and transfer taxes shall be paid by Tenant, except
that, if Landlord receives more than 110% of such Purchase Price, Landlord shall
pay the portion of such costs, if any, which result in Landlord receiving at
least 110% of such Purchase Price.
F. Until such time as the Agent shall otherwise notify Landlord or until
such time as there are no longer any obligations outstanding under the Credit
Agreement;
(i) if default shall occur hereunder at any time, written notice to
that effect shall be sent by Landlord to the Agent,
(ii) if such default shall be a default which can be cured by the
payment of money alone, the Agent may remedy such default not later than 5
business days after the receipt of such notice; or
(iii) if such default shall be a default in observing or performing
any other covenant or condition to be observed or performed by Lessee
hereunder, the Agent may remedy such default not later than 30 days after
receipt of such notice provided that such period may be extended under the
circumstances and to the extent provided in Paragraph 15(b).
In either such event, Landlord or Tenant (as the case may be) shall
provide the Agent with any access to the Premises which may be necessary to
effectuate any such cure. In no event shall the Agent be obligated to effectuate
a cure of any default hereunder.
During the cure periods described in clauses (ii) and (iii), Landlord
shall take no action to terminate this Lease or to interfere with the occupancy,
use or enjoyment of the Premises or exercise any other remedies to which it may
be entitled under the Lease.
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17. SUBORDINATION:
(a) Subordination, Non-Disturbance. Tenant agrees at any time hereafter,
and from time to time on demand of Landlord, to promptly execute and deliver to
Landlord any instruments, releases or other documents that may be required for
the purpose of subjecting and subordinating this Lease to the lien of any
mortgage, deed of trust, security instrument, ground or underlying lease or
other document of like nature (hereinafter collectively referred to as
"Mortgage") which at any time may be placed upon the Premises, or any portion
thereof, by Landlord, and to any replacements, renewals, amendments,
modifications, extensions or refinancing thereof, and to each and every advance
made under any Mortgage. It is agreed, nevertheless, that so long as there
exists no Default, such subordination agreement or other instrument, release or
document (herein "Subordination Agreement") shall not interfere with, hinder or
reduce Tenant's right to quiet enjoyment under this Lease, nor the right of
Tenant to continue to occupy the Premises, and all portions thereof, and to
conduct its business thereon in accordance with the covenants, conditions,
provisions, terms and agreements of this Lease. Such Subordination Agreement
shall provide for a nondisturbance of Tenant's rights hereunder provided Tenant
attorns to the holder of such Mortgage. The lien of any such Mortgage shall not
cover Tenant's Trade Fixtures or other personal property located in or on the
Premises.
(b) Mortgagee Protection Clause. In the event of any act or omission of
Landlord constituting a default by Landlord, Tenant shall not exercise any
remedy until Tenant has given Landlord and any mortgagee of the Premises a
thirty (30) day prior written notice of such act or omission, and until a
reasonable period of time to allow Landlord or the mortgagee to remedy such act
or omission shall have elapsed following the giving of such notice. However, if
such act or omission cannot, with due diligence and in good faith, be remedied
within such thirty (30) day period, the Landlord and the mortgagee shall be
allowed such further period of time as may be reasonably necessary provided that
it commences remedying the same with due diligence and in good faith within said
thirty (30) day period. Nothing herein contained shall be construed or
interpreted as requiring any mortgagee to remedy such act or omission.
(c) Attornment. If any mortgagee or other party (a "Purchaser") shall
succeed to the rights of Landlord under this Lease or to ownership of the
Premises, whether through possession or foreclosure of any such mortgage or deed
of trust or of any action or proceeding for the enforcement thereof or of any
sale
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thereunder or the delivery of a deed to the Premises in lieu of foreclosure,
then, upon the written request of such Purchaser so succeeding to landlord's
rights hereunder, provided such Purchaser assumes, in writing, the obligations
of Landlord hereunder accruing on and after the date such Purchaser acquired
title to the Premises, Tenant shall attorn to and recognize such Purchaser as
Tenant's landlord under this Lease, and shall promptly execute and deliver any
instrument that such Purchaser may reasonably request to evidence such
attornment. In the event of any other transfer of Landlord's interest hereunder,
upon the written request of the transferee and Landlord, provided such
transferee assumes, in writing, the obligations of Landlord hereunder accruing
on and after the date of such transfer, Tenant shall attorn to and recognize
such transferee as Tenant's landlord under this lease and shall promptly execute
and deliver any instrument that such transferee and Landlord may reasonably
request to evidence such attornment.
(d) Upon ten business days advance written notice, Tenant agrees to
execute, acknowledge and deliver a document substantially in the form of the
Assignment of Lease attached hereto as Exhibit B from Landlord to a mortgagee
and consented to by Tenant, with such changes therein as may be reasonably
requested by an institutional lender, provided no such change alters the rights
of Tenant hereunder.
18. LANDLORD'S RIGHT OF ENTRY: Upon reasonable notice, from time to time
during normal business hours, such persons as Landlord or any assignee of
Landlord shall designate shall have the right to enter upon the Premises and to
inspect same, exhibit the Premises to prospective purchasers and mortgagees, and
examine Tenant's books and records pertaining to the Premises, insurance
policies, certificates of occupancy and other documents, records and permits in
Tenant's possession with respect to the Premises, all of which shall be
customary and adequate and reasonably satisfactory to Landlord, provided,
however, that such activities by Landlord shall be conducted in such a manner as
not to interfere with the conduct of business by Tenant at the Premises. If no
Event of Default exists hereunder, any such inspections shall be at the expense
of Landlord. If an Event of Default exists hereunder, such inspections shall be
at the reasonable expense of Tenant. During the final one (1) year of the Term,
Landlord shall be entitled to place customary "For Rent" or "For Sale" signs on
the Premises. Such persons as Landlord or any assignee of Landlord shall
designate shall also have the right to enter upon the Premises for the purpose
of making repairs which Landlord is authorized to make under the provisions of
this Lease. In the event of an Event of Default under the Credit Agreement the
Agent shall have the right to
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enter onto the Premises for purposes of removing collateral in which the Agent
holds a perfected first priority security interest, provided that such removal
does not impair the structural integrity of the Premises, and the Agent shall
repair any damage to the Premises caused by such removal.
19. NOTICES: Notices, statements, demands, or other communications
required or permitted to be given, rendered or made by either party to the other
pursuant to this Lease or pursuant to any applicable law or requirement of
public authority, shall be in writing (whether or not so stated elsewhere in
this Lease) and shall be deemed to have been properly given, rendered or made,
when received by overnight delivery or overnight courier delivery or facsimile
transmission with a confirmation copy sent by overnight delivery or by overnight
courier delivery addressed to the other parties as follows:
To Landlord:
TriNet Essential Facilities VIII N, Inc.
Four Embarcadero Center, Suite 3150
San Francisco, California 94111
Attention: Mr. Mark S. Whiting
With a copy to:
Day, Berry & Howard
260 Franklin Street
Boston, Massachusetts 02110
Attention: Lewis A. Burleigh, Esq.
To Tenant:
Caterair International Corporation
7811 Montrose Road
Potomac, Maryland 20854
Attention: Law Department
To Agent:
Banque Paribas
787 Seventh Avenue
New York, New York 10019
Attention: Stephen M. Burns
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Any party listed in this paragraph 19 may, by notices as aforesaid, designate a
different address for addresses for notice, statements, demands or other
communications intended for it.
20. STATUS OF LEASE; FINANCIAL DATA:
A. Upon written request of either party, the other party agrees, within
twenty (20) days, to deliver a written status report of this Lease, in the form
provided on attached Exhibit C, provided that neither party shall be obligated
to provide more than four (4) such status reports per year.
B. Tenant agrees to deliver to Landlord and to any lender or purchaser
designated by Landlord the following information: within 120 days after the end
of each fiscal year of Tenant, an audited balance sheet of Tenant and its
consolidated subsidiaries as at the end of such year, an audited statement of
profits and losses of Tenant and its consolidated subsidiaries for such year,
and an audited statement of change in the financial position of Tenant and its
consolidated subsidiaries for such year, setting forth in each case, in
comparative form, the corresponding figures for the preceding fiscal year in
reasonable detail and scope and certified by independent certified public
accountants of recognized national standing selected by Tenant; and within 60
days after the end of each of the first three fiscal quarters of Tenant a
balance sheet of Tenant and its consolidated subsidiaries as at the end of such
quarter, statements of profits and losses of Tenant and its consolidated
subsidiaries for such quarter and a statement of change in financial position of
Tenant and its consolidated subsidiaries for such quarter, setting forth in each
case, in comparative form, the corresponding figures for the similar quarter of
the preceding year, in reasonable detail and scope, and certified to be true and
complete by a financial officer of Tenant having knowledge thereof; the
foregoing financial statements all being prepared in accordance with generally
accepted accounting principles, consistently applied. So long as Tenant shall
remain a privately-held company, Landlord shall keep any non-public financial
information with respect to Tenant furnished by Tenant confidential and shall
not disclose such information; provided, however, that such information may be
disclosed (i) to its officers, directors, employees, agents, attorneys and
accountants in connection with acting as Landlord under this Lease, (ii) to
lenders or institutional investors in connection with arranging, modifying or
restructuring debt secured by a mortgage lien on the Premises or an assignment
of
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this Lease, so long as any such lender shall execute a confidentiality agreement
agreeing not to disclose such financial information, (iii) to potential
purchasers in connection with the sale of any interest in the Premises, so long
as any such purchaser shall execute a confidentiality agreement agreeing not to
disclose such financial information, (iv) in connection with the enforcement of
Landlord's rights and remedies hereunder, and (v) as may be required by any
governmental or other regulatory entity having jurisdiction or authority over
Landlord, or over any lender or investor.
C. Tenant, upon five (5) business days' advance notice, will permit
Landlord and its professional representatives to visit Tenant's offices and
discuss Tenant's affairs and finances (insofar as they relate to the Premises or
this Lease) with appropriate officers, and will make available such information
as Landlord may reasonably request bearing on the Tenant, Premises or this
Lease, provided that Landlord agrees to maintain the confidentiality of
information denominated as non-public information provided such information may
be provided as required by governmental regulation or court order, and may be
provided on a confidential basis to Landlord's counsel and accountants.
21. MECHANICS' LIENS:
Liens and Right of Contest. (a) Tenant shall not suffer or permit any
mechanic's lien or other lien to be filed or recorded against the Premises,
equipment or materials supplied or claimed to have been supplied to the Premises
at the request of Tenant, or anyone holding the Premises, or any portion
thereof, through or under Tenant. If any such mechanic's lien or other lien
shall at any time be filed or recorded against the Premises, or any portion
thereof, Tenant shall cause the same to be discharged of record within thirty
(30) days after the date of filing or recording of the same. However, in the
event Tenant desires to contest the validity of any lien it shall (i) on or
before thirty (30) days prior to the due date thereof (but in no event later
than 30 days after the filing or recording thereof), notify Landlord, in
writing, that Tenant intends to so contest same; (ii) on or before the due date
thereof, if Landlord reasonably deems Tenant to be financially insecure or if
any mortgagee or Trust Deed holder of Landlord so requires, deposit with
Landlord security (in form and content reasonably satisfactory to Landlord or
Landlord's mortgagee or trust deed holder) for the payment of the full amount of
such lien and, from time to time, deposit additional security or indemnity so
that, at all times, adequate security or indemnity will be available
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for the payment of the full amount of the lien together with all interest,
penalties, costs and charges accrued or accumulated thereon.
If Tenant complies with the foregoing, and Tenant continues, in good
faith, to contest the validity of such lien by appropriate legal proceedings
which shall operate to prevent the collection thereof and the sale or forfeiture
of the Premises, or any part thereof, to satisfy the same, Tenant shall be under
no obligation to pay such lien until such time as the same has been decreed, by
court order, to be a valid lien on the Premises. Any surplus deposit retained by
Landlord, after the payment of the lien shall be repaid to Tenant. Provided that
nonpayment of such lien does not cause Landlord to be in violation of any of its
contractual undertakings, Landlord agrees not to pay such lien during the period
of Tenant's contest. However, if Landlord pays for the discharge of a lien or
any part thereof from funds of Landlord, any amount paid by Landlord, together
with all costs, fees and expenses in connection therewith (including reasonable
attorney's fees of Landlord), together with interest thereon at the Overdue
Rate, shall be repaid by Tenant to Landlord on demand by Landlord. Tenant shall
indemnify and defend Landlord against and save Landlord and the Premises, and
any portion thereof, harmless from and against all losses, costs, damages,
expenses, liabilities, suits, penalties, claims, demands and obligations,
including, without limitation, reasonable attorney's fees, resulting from the
assertion, filing, foreclosure or other legal proceedings with respect to any
such mechanic's lien or other lien or the attempt by Tenant to discharge same as
above provided.
(b) All materialmen, contractors, artisans, engineers, mechanics, laborers
and any other person now or hereafter furnishing any labor, services, materials,
supplies or equipment to Tenant with respect to the Premises, or any portion
thereof, are hereby charged with notice that they must look exclusively to
Tenant to obtain payment for the same. Notice is hereby given that Landlord
shall not be liable for any labor, services, materials, supplies, skill,
machinery, fixtures or equipment furnished or to be furnished to Tenant upon
credit, and that no mechanic's lien or other lien for any such labor, services,
materials, supplies, machinery, fixtures or equipment shall attach to or affect
the estate or interest of Landlord in and to the Premises, or any portion
thereof.
(c) Tenant shall not create, permit or suffer, and, subject to the
provisions of Section 2l(a) hereof, shall promptly
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discharge and satisfy of record, any other lien, encumbrance, charge, security
interest, or other right or interest which, as a result of Tenant's action or
inaction contrary to the provisions hereof, shall be or become a lien,
encumbrance, charge or security interest upon the Premises, or any portion
thereof, or the income therefrom.
22. END OF TERM: (a) Upon the expiration or earlier termination of the
Term of this Lease, Tenant shall surrender the Premises to Landlord in the same
condition and suitable for the same use in which the Premises was originally
received from Landlord except as repaired, rebuilt or altered as required or
permitted by this Lease (and/or except for such casualty damage as Tenant shall
not be required to repair or restore hereunder), and except for normal wear and
tear, and shall surrender all keys to the Premises to Landlord at the place then
fixed for the payment of Fixed Rent and shall inform Landlord of all
combinations on locks, safes and vaults, if any. Except as otherwise provided
herein, Tenant shall at such time remove all of its property (including Tenant's
Trade Fixtures) therefrom and all alterations and improvements placed thereon by
Tenant and not consented to by Landlord, if so requested by Landlord. Tenant
shall repair any damage to the Premises caused by such removal, and any and all
such property not so removed when required shall, at Landlord's option, become
the exclusive property of Landlord or be disposed of by Landlord, at Tenant's
cost and expense, without further notice to or demand upon Tenant.
(b) If the Premises are not surrendered as above set forth, Tenant shall
indemnify, defend and hold Landlord harmless from and against loss or liability
resulting from the delay by Tenant in so surrendering Premises, including,
without limitation any claim made by any succeeding occupant founded on such
delay. Tenant's obligation to observe or perform this covenant shall survive the
expiration or other termination of this Lease. In addition to the foregoing, and
in addition to the Additional Rent, Tenant shall pay to Landlord a sum equal to
150% of the Fixed Rent herein provided during each month or portion thereof for
which Tenant shall remain in possession of the Premises or any part thereof
after the termination of the Term or of Tenant's rights of possession, whether
by lapse of time or otherwise. The provisions of this Paragraph 22(b) shall not
be deemed to limit or constitute a waiver of any other rights or remedies of
Landlord provided herein at law or at equity.
(c) All property of Tenant not removed on or before the last day of the
term of this Lease shall be deemed abandoned.
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Tenant hereby appoints Landlord its agent to remove all property of Tenant,
including Tenant's Trade Fixtures, from the Premises upon termination of this
Lease and to cause its transportation and storage for Tenant's benefit, all at
the sole cost and risk of Tenant and Landlord shall not be liable for damage,
theft, misappropriation or loss thereof and Landlord shall not be liable in any
manner in respect thereto. Tenant shall pay all costs and expenses of such
removal, transportation and storage. Tenant shall reimburse Landlord upon demand
for any expenses incurred by Landlord with respect to removal or storage of
abandoned property and with respect to restoring said Premises to good order,
condition and repair.
(d) Except for surrender upon the expiration or earlier termination of the
term hereof, no surrender to Landlord of this Lease or of the Leased Property
shall be valid or effective unless agreed to and accepted in writing by
Landlord.
(e) Notwithstanding the above, upon the expiration or earlier termination
of the Term of this Lease, if there are any outstanding obligations under the
Credit Agreement, Landlord shall, in the case of an early termination, notify
the Agent thereof and within 30 days after such expiration or receipt of such
notice of early termination, as the case may be, the Agent shall have the right
and Landlord shall provide such access as may be necessary for the Agent to
remove from the Premises the collateral upon which it then has a first priority
lien.
23. ALTERATIONS:
A. At any time during the Term of this Lease, Tenant shall have the right
to make alterations in and to the Premises, provided such alterations are in
compliance with all applicable codes, laws, ordinances, rules and regulations,
and do not materially reduce the then unencumbered fair market value of the
Premises or cause the Premises to violate any terms of this Lease or compromise
the structural integrity of the Improvements.
B. Prior to making any structural alteration the cost of which is
estimated to exceed $100,000, Tenant shall submit to Landlord a plan showing the
nature and extent of such alterations and shall not proceed with such
alterations without Landlord's written consent, which shall not be unreasonably
withheld.
24. MEMORANDUM OF LEASE: The parties agree to promptly execute a
Memorandum of Lease in recordable form and either of
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the parties shall have the right, without notice to the other party, to record
such Memorandum of Lease.
25. SUBLETTING/ASSIGNMENT: Tenant shall have the right to sublease all or
any part of the Premises or assign its interest hereunder, provided that Tenant
shall remain primarily liable under this Lease without regard to any sublease or
assignment, and provided further that any profit realized upon subletting or
assignment shall be the property of Tenant. Tenant shall not mortgage its
interest hereunder and any purported mortgage thereof shall be void.
26. HAZARDOUS MATERIAL:
A. Tenant (i) shall comply, and cause the Premises to comply, with all
Environmental Laws (as hereinafter defined) applicable to the Premises
(including the making of all submissions to governmental authorities required by
Environmental Laws and the carrying out of any remediation program specified by
such authority, (ii) shall prohibit the use of the Premises for the generation,
manufacture, refinement, production, or processing of any Hazardous Material (as
hereinafter defined) or for the storage, handling, transfer or transportation of
any Hazardous Material (other than in connection with the operation, business
and maintenance of the Premises and in commercially reasonable quantities as a
consumer thereof and supplier of consumer products and in compliance with
Environmental Laws), (iii) shall not permit to remain, install or permit the
installation on the Premises of any surface impoundments, underground storage
tanks, or asbestos-containing materials, except for such impoundments, tanks and
asbestos containing material as was on the Premises at the Commencement Date as
disclosed to Landlord by an environmental engineer's written report, provided
such pre-existing items continue to be in compliance with applicable laws and,
to the extent required by Paragraph 22, removed at the end of the Term, and (iv)
shall cause any alterations of the Premises to be done in a way so as to not
expose in an unsafe manner the persons working on or visiting the Premises to
Hazardous Materials and in connection with any such alterations shall remove any
Hazardous Materials present upon the Premises which are not in compliance with
Environmental Laws or which present a danger to persons working on or visiting
the Premises.
B. "Environmental Laws" means the Resource Conservation and Recovery Act
of 1976, as amended, 42 U.S.C. section 6901, et seq. (RCRA), the Comprehensive
Environmental
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Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. section 9601 et seq.
(CERCLA), the Toxic Substance Control Act, as amended, 15 U.S.C. section 2601 et
seq., the Federal Insecticide, Fungicide and Rodenticide Act, as amended, 7
U.S.C. section 136 et seq., and all applicable federal, state and local
environmental laws, ordinances, rules and regulations, as any of the foregoing
may have been or may be from time to time amended, supplemented or supplanted,
and any other federal, state or local laws, ordinances, rules and regulations,
now or hereafter existing relating to regulations or control of Hazardous
Material or materials. The term "Hazardous Materials" as used in this Lease
shall mean substances defined as "hazardous substances", "hazardous materials",
"hazardous wastes" or "toxic substances" in any applicable federal, state or
local statute, rule, regulation or determination, including but not limited to
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. section 9601, et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. section 1801, et seq.; the Resource, Conservation
and Recovery Act of 1976, 42 U.S.C. section 6901, et seq.; and, asbestos, pcb's,
radioactive substances, methane, volatile hydrocarbons, petroleum or petroleum-
derived substances or wastes, radon, industrial solvents or any other material
as may be specified in applicable law or regulations.
C. Except for liability resulting from or arising out of the sole
negligent or willful act of Landlord or its Mortgagee or their agents on or
about the Premises or their successors and assigns, Tenant agrees to protect,
defend, indemnify and hold harmless Landlord, its directors, officers, employees
and agents, and any successors to Landlord's interest in the chain of title to
the Premises, their direct or indirect partners, directors, officers, employees,
and agents, from and against any and all liability, including all foreseeable
and all unforeseeable damages including but not limited to attorney's and
consultant's fees, fines, penalties and civil or criminal damages, directly or
indirectly arising out of the use, generation, storage, treatment, release,
threatened release, presence or disposal of Hazardous Materials from, on, at, to
or under the Premises prior to or during the Term of this Lease, and including,
without limitation, the cost of any required or necessary repair, response
action, remediation, investigation, cleanup or detoxification and the
preparation of any closure or other required plans, whether such action is
required or necessary prior to or following transfer of title to the Premises.
This agreement to indemnify and hold harmless shall be in addition to any other
obligations or liabilities Tenant may
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<PAGE> 44
have to Landlord at common law under all statutes and ordinances or otherwise,
and shall survive following the date of expiration or earlier termination of
this Lease for five years, except where the event giving rise to the liability
for which indemnity is sought arises out of Tenant's acts, in which case the
agreement to indemnify shall survive the expiration or termination of this Lease
without limit of time. Tenant expressly agrees that the representations,
warranties and covenants made and the indemnities stated in this Lease are not
personal to Landlord, and the benefits under this Lease may be assigned to
subsequent parties in interest to the chain of title to the Premises, which
subsequent parties in interest may proceed directly against Tenant to recover
pursuant to this Lease. Tenant, at its expense, may institute appropriate legal
proceedings with respect to environmental matters of the type specified in this
Paragraph 26C or lien for such environmental matters, not involving Landlord or
its Mortgagee as a defendant (unless Landlord or its Mortgagee is the alleged
cause of the damage), conducted in good faith and with due diligence, provided
that such proceedings shall not in any way impair the interests of Landlord or
its Mortgagee under this Lease or contravene the provisions of any First
Mortgage. Counsel to Tenant in such proceedings shall be reasonably approved by
Landlord if Landlord is a defendant in the same proceeding. Landlord shall have
the right to appoint co-counsel, which co-counsel will cooperate with Tenant's
counsel in such proceedings. The fees and expenses of such co-counsel shall be
paid by Landlord, unless such co-counsel are appointed because the interests of
Landlord and Tenant in such proceedings, in such counsel's opinion, are or have
become adverse, or Tenant or Tenant's counsel is not conducting such
proceedings in good faith or with due diligence.
D. Tenant, promptly upon the written request of Landlord from time to
time, but not more than once in any calendar year unless an Event of Default has
occurred and is continuing, shall permit such persons as Landlord or any
assignee of Landlord may designate and (unless an Event of Default has occurred
and is continuing) approved by Tenant, which approval shall not be unreasonably
withheld or delayed ("Site Reviewers") to visit the Premises from time to time
and perform Environmental site investigations and assessments ("Site
Assessments") on the Premises for the purpose of determining whether there
exists on the Premises any environmental condition which may result in any
liability, cost or expense to Landlord or any other owner or occupier of the
Premises relating to Hazardous Material; provided, however, that any such Site
Reviewer in performing any Site Assessment shall not unreasonably interfere
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<PAGE> 45
with the operations or business of Tenant on the Premises. Such Site Assessments
may include both above and below the ground testing for environmental damage or
the presence of Hazardous Material on the Premises and such other tests on the
Premises as may be necessary to conduct the Site Assessments in the opinion of
the Site Reviewers. Tenant shall supply to the Site Reviewers such historical
and operational information regarding the Premises as may be reasonably
requested by the Site Reviewers to facilitate the Site Assessments (other than
information previously supplied in writing to Landlord by Tenant) and shall make
available for meetings with the Site Reviewers appropriate personnel having
knowledge of such matters. The cost of performing and reporting all Site
Assessments shall be paid by Landlord unless an Event of Default has occurred
and is continuing or unless the Site Reviewers discover an environmental
condition causing the Premises to be in noncompliance with applicable
Environmental Laws, in either of which events such cost will be paid by Tenant
within thirty (30) days after demand by Landlord with interest to accrue at the
Overdue Rate. Landlord, promptly after written request by Tenant and payment by
Tenant as aforesaid, shall deliver to Tenant copies of reports, summaries or
other compilations of the results of such Site Assessments. Tenant's sole remedy
for Landlord's breach of the preceding sentence shall be a mandatory injunction,
and not a termination of this Lease or a withholding or reduction of rent. If a
Site Assessment conducted under this Paragraph 26D indicates that the Premises
are in violation of Environmental Laws or otherwise do not conform to the
requirements of this Paragraph 26 at the time the Term is expiring or being
terminated, and such violation or nonconformity is attributable to the Tenant,
the term of this Lease shall at the option of Landlord (exercised by written
notice sent thirty (30) days prior to the expiration or termination of the Term)
be extended for the period of remediation of such violation or nonconformity but
in no event more than two (2) years from the scheduled expiration of the Term.
All of the terms, covenants and conditions of this Lease shall continue in full
force and effect during the period of any such extension, except that the annual
Fixed Rent shall be the fair market rental for the Premises assuming no such
violation or nonconformity has occurred. Such fair market rental shall be
mutually agreed upon by the Landlord and Tenant. In the event that the Landlord
and Tenant are unable in good faith to agree on such fair market rental, the
annual Fixed Rent during the period of any such extension shall be determined by
an independent appraiser without regard to any remaining Renewal Term.
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<PAGE> 46
E. Tenant shall notify Landlord in writing, promptly upon Tenant's
learning thereof, of any:
(a) notice or claim to the effect that Tenant is or may be liable to any
person as a result of the release or threatened release of any Hazardous
Material into the environment;
(b) notice that Tenant is subject to investigation by any governmental
authority evaluating whether any remedial action is needed to respond to the
release or threatened release of any Hazardous Material into the environment;
(c) notice that the Premises is subject to an environmental lien; and
(d) notice of violation to Tenant or awareness by Tenant of a condition
which might reasonably result in a notice of violation of any applicable
Environmental Law that could have a material adverse effect upon the Premises.
27. RIGHT OF FIRST REFUSAL:
During the period ending on the tenth (10th) anniversary of the
Commencement Date, Landlord shall not sell or otherwise transfer its interest in
the Premises or any portion thereof to a third party unless Landlord shall first
have offered to sell the same to Tenant at the price and upon the terms which
were offered to Landlord by, or solicited by Landlord from, such third party
(the "Initiating Offer"). After notification by Landlord of a bona fide written
offer to purchase any or all of the Premises, Tenant shall have ten (10)
business days to accept such offer in writing at a price equal to or greater
than the Initiating Offer price (less any fees and comissions saved by Landlord
because of selling to Tenant), whereupon Tenant shall be legally obligated to
purchase the Premises on the terms of such offer. The right of first refusal
shall not apply in the case of any foreclosure sale of Landlord's interest in
the Premises or any transfer of Landlord's interest in the Premises by way of
merger, consolidation or purchase of substantially all of Landlord's assets or
in the case of any such transfer to any entity controlling, controlled by or
under common control of Landlord, except that Tenant's right of first refusal
shall survive any such transfer, and be binding upon the successor to Landlord's
interest.
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<PAGE> 47
Upon election by Tenant to exercise its Right of First Refusal:
(a) If the Initiating Offer price for the Premises and other property
leased by Tenant from Landlord is less than $11,200,000, Landlord and Tenant
shall enter into a fully binding contract to purchase the Premises within ten
(10) business days of Tenant's exercise of the right of first refusal. Tenant
shall deposit within five (5) business days of signing such contract an amount
in cash or in an irrevocable standby letter of credit (by a bank acceptable to
Landlord) equal to 2% of the agreed upon purchase price. Closing shall occur
within twenty (20) business days of execution of the purchase contract.
(b) If the Initiating Offer price for the Premises and other property
leased by Tenant from Landlord is greater than or equal to $11,200,000, Tenant
shall obtain a financing commitment from one or more lenders within 45 business
days of Tenant's exercise of its right of first refusal. Landlord and Tenant
shall enter into a fully binding contract subject to the above mentioned
financing commitment, to purchase the Premises within ten (10) business days of
Tenant's receipt of the financing commitment. Within five (5) business days of
signing the Purchase Contract, Tenant shall deposit into escrow an amount in
cash or in an irrevocable standby letter of credit (issued by a bank acceptable
to Landlord) equal to 1% of the agreed upon purchase price. Closing shall occur
within 20 business days of Tenant's receipt of its financing commitment.
The right of first refusal shall terminate (a) at the end of the tenth
year of the Term, or (b) if Tenant exercises its right of first refusal or makes
an unsolicited offer to Landlord to purchase any or all of the properties leased
by Landlord to Tenant and fails to complete such purchase.
The provisions of this paragraph shall not apply to any sale by Landlord
into a net-lease investment fund in which Landlord is a general partner for a
period of three (3) years from the Closing.
28. MISCELLANEOUS PROVISIONS:
A. This Lease and all of the covenants and provisions hereof shall inure
to the benefit of, and be binding upon, the parties hereto and the heirs,
personal representatives, successors and assigns of the parties.
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<PAGE> 48
B. The titles and headings appearing in this Lease are for reference only
and shall not be considered a part of this lease or in any way to modify, amend
or affect the provisions thereof.
C. This Lease contains the complete agreement of the parties with
reference to the leasing of the Premises.
D. Any provision or provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof, and the remaining provisions hereof shall nevertheless remain
in full force and effect.
E. Whenever Tenant is required to make payments to Landlord other than
Fixed Rent, such payments shall constitute Additional Rent. Whenever Tenant is
required to make payment for insurance or taxes, Landlord shall have the right
after fifteen (15) days' notice to Tenant, to make the payment for Tenant and to
recover such sums from Tenant as Additional Rent plus interest on such sums at
the Overdue Rate.
F. This Lease may be executed in one or more counterparts, each of which
shall be an original, and all of which shall constitute one and same instrument.
G. The term "Landlord" as used in this Lease shall mean only the owner or
owners at the time in question of the fee title, and in the event of any
transfer of such title or interest, Landlord named in this Lease (and in case of
any subsequent transfers then the grantor) shall be relieved from and after the
date of such transfer of all liability as respects Landlord's obligations
thereafter to be performed, provided that any funds in the hands of Landlord or
the then grantor at the time of such transfer, in which Tenant has an interest,
shall be delivered to the grantee. The obligations contained in this Lease to be
performed by Landlord shall, subject as aforesaid, be binding on Landlord's
successors and assigns, only during their respective periods of ownership.
H. This Lease shall be governed by and construed and enforced in
accordance with and subject to the laws of the State where the Premises are
located.
I. Anything contained herein to the contrary notwithstanding, so long as
Landlord has not entered into any loan agreements affecting the Premises with a
cumulative loan-to-
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<PAGE> 49
value ratio greater than 70%, any claim based on or in respect of any liability
of Landlord under this Lease shall be enforced only against the Premises and not
against any other assets, properties or funds of (a) Landlord or any director,
officer, shareholder, general partner, limited partner, or direct or indirect
partners, employee or agent of Landlord or its general partners (or any legal
representative, heir, estate, successor or assign of any thereof), (b) any
predecessor or successor partnership or corporation (or other entity) of
Landlord or its general partners, either directly or through Landlord or its
predecessor or successor partnership or corporation (or other entity) of
Landlord or its general partners, and (c) any other person or entity.
J. Without the written approval of Landlord and Tenant, no person other
than Landlord (including its direct and indirect partners), Mortgagee, Tenant
and their respective successors and assigns shall have any rights under this
Lease.
K. There shall be no merger of this Lease or the leasehold estate created
hereby by reason of the fact that the same Person may acquire, own or hold,
directly or indirectly, in whole or in part, (a) this Lease or the leasehold
estate created hereby or any interest in this Lease or such leasehold estate,
and (b) the fee estate in the Premises.
L. Notwithstanding anything contained herein to the contrary, the
interests of Tenant and Landlord under this Lease are expressly intended by the
parties hereto to be construed as a leasehold estate held by Tenant and a fee
simple estate held by Landlord, and not as an estate for years held by Tenant or
a remainder interest held by Landlord.
M. The parties hereby recognize that the Agent, on behalf of the Lenders
is an intended third party beneficiary of Paragraphs 15(1), 16F, the Agent, on
behalf of the Lenders of this Lease for so long as there are any obligations
outstanding under the Credit Agreement. The parties shall not amend, change or
modify this provision or, while there are any obligations outstanding under the
Credit Agreement, provisions to which the Agent is an intended third party
beneficiary, without first obtaining the written consent of the Agent.
(Remainder of Page Intentionally Left Blank]
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<PAGE> 50
IN WITNESS WHEREOF, the parties have hereunto set their hands under seal
on the day and year first above written.
TRINET ESSENTIAL FACILITIES VIII N, INC.
Landlord
WITNESS:
/s/Marc F. Malardino /s/Mark Whiting
- --------------------------- ---------------------------
Marc F. Malardino Name: Mark Whiting
Title: President
CATERAIR INTERNATIONAL CORPORATION
Tenant
WITNESS:
/s/ Regina Rolfe By: /s/Harry J. D'Andrea
- --------------------------- ---------------------------
Regina Rolfe Name: HARRY J. D'ANDREA
Title: Executive Vice President,
/s/ Constance L. Freitas Chief Financial Officer &
- --------------------------- Treasurer
Constance L. Freitas
<PAGE> 51
ANNEX I
DEFINITIONS
The following terms shall have the following meanings for all purposes of
this Lease and shall be equally applicable to both the singular and plural forms
of the terms herein defined.
"Additional Rent" means all amounts, liabilities and obligations other
than Fixed Rent which Tenant assumes or agrees to pay under this Lease to
Landlord or others.
"Agent" is defined in Paragraph 15(1) of this Lease.
"Basic Lease Information" means the pages preceding this Lease which are
hereby incorporated by reference.
"Certificates" is defined in Paragraph 11 of this Lease.
"Closing" is defined in Paragraph 3B of this Lease.
"Commencement Date" is defined in Paragraph 3B of this Lease.
"Credit Agreement" is defined in Paragraph 15(1) of this Lease.
"Environmental Laws" is defined in Paragraph 26B of this Lease.
"Event of Default" is defined in Paragraph 15 of this Lease.
"First Mortgage" or "Mortgage" shall mean a first mortgage on the Premises
given by Landlord to the Mortgagee to secure a loan financing or refinancing the
acquisition of the Premises.
"First Mortgage Note" shall mean a promissory note evidencing a loan
secured by a First Mortgage.
"First Renewal Term" is defined in Paragraph 3C of this Lease.
"Fixed Rent" is defined in Paragraph 4 of this Lease.
"Fourth Renewal Term" is defined in Paragraph 3C of this Lease.
"Imposition" means the various tax and other charges referred to in
Paragraph 9.
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<PAGE> 52
"Improvements" is defined in Paragraph 10 of this Lease.
"Initiating Date" is defined in Paragraph 4C of this Lease.
"Initial Term" is defined in Paragraph 3A of this Lease.
"Landlord" is defined in the first Paragraph of this Lease.
"Lease" is defined in the first sentence of this Lease.
"Lease Expiration Date" is defined in Paragraph 3A of this Lease.
"Lenders" is defined in Paragraph 15(1) of this Lease.
"Lookback period" is defined in Paragraph 4C of this Lease.
"Mortgagee" shall mean any first mortgagee with respect to the Premises.
"Overdue Rate" means a rate equal to the prevailing prime rate as shown in
the Wall Street Journal or any equivalent publication, plus 400 basis points.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, trustee(s) of a trust, unincorporated
organization, or government or governmental authority, agency or political
subdivision thereof.
"Permitted Encumbrances" means:
(a) Any liens for taxes, assessments and other governmental charges and
any liens of mechanics, materialmen and laborers for work or
services performed or materials furnished in connection with the
Premises, which are not due and payable;
(b) The easements, rights-of-way, encroachments, encumbrances,
restrictive covenants or other matters in the title set forth in
Schedule B to the policy of owners title insurance (or commitments
therefore) delivered to and accepted by Landlord with respect to the
Premises in connection with the delivery of this Lease as shown on
Exhibit D attached hereto;
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<PAGE> 53
(c) The Lease and the rights of Tenant under this Lease;
"Premises" is defined in Paragraph 1 of this Lease.
"Purchase Price" is defined in the Basic Lease Information.
"Rent" means Fixed Rent and Additional Rent.
"Renewal Term" is defined in Paragraph 3C of this Lease.
"Renewal Term Commencement Date" is defined in Paragraph 3C of this Lease.
"Renewal Term Expiration Date" is defined in Paragraph 3C of this Lease.
"Second Renewal Term" is defined in Paragraph 3C of this Lease.
"Site Reviewers" is defined in Paragraph 26D of this Lease.
"Site Assessments" is defined in Paragraph 26D of this Lease.
"Tenant's Trade Fixtures" means dishwashers, stoves, sinks, refrigerators,
walk-in coolers (to the extent they do not constitute a part of an exterior
wall), underground storage tanks and other fixtures used in Tenant's business
(as opposed to building fixtures customarily found in commercial buildings
without regard to the particular business conducted therein).
"Term" means the Initial Term, together with any Renewal Terms and any
automatic extension of either thereof pursuant to the terms of this Lease.
"Third Renewal Term" is defined in Paragraph 3C of this Lease.
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<PAGE> 54
Exhibit A #479 Orlando, FL
All that certain real property situated in Orange County, State of Florida, and
described as follows:
Commence at a railroad spike marking the Northeast corner of Section 31,
Township 23 South, Range 30 East, Orange County, Florida; thence South 89
degrees 44' 44" West (bearings are based on U.S.C. & G.S. Plane Coordinate
System, East Zone of Florida, 1927 N.A.D.), along the Northerly boundary of said
Section 31 (being also the baseline of McCoy Road) 988.22 feet to a point;
thence South 00 degrees 13' 46" East, 490.00 feet along the West line of Block
"A", CASTLE TERRACE, recorded in Plat Book "V" Page 115, Public Records of
Orange County, Florida, to a point on the South right of way of Collingswood
Drive for a point of beginning; thence continue South 00 degrees 13' 46" East,
836.26 feet to the South line of the West 1/2 of the West 1/2 of the NE 1/4 of
the NE 1/4 of said Section 31; thence South 89 degrees 39' 05" West, 329.20 feet
along said South line; thence North 00 degrees 09' 41" West, 353.16 feet along
the West line of the West 1/2 of the West 1/2 of the NE 1/4 of the NE 1/4 of
said Section 31, thence North 89 degrees 39' 05" East, 289.78 feet; thence North
00 degrees 13' 46" West 483.15 feet; thence North 89 degrees 44' 44" East, 30.00
feet to the point of beginning.
<PAGE> 55
EXHIBIT B
ASSIGNMENT OF LEASE AND AGREEMENT
from
HOLMAN/SHIDLER CORPORATE CAPITAL, INC.
To
------------------
Dated as of _____________
<PAGE> 56
ASSIGNMENT OF LEASE AND AGREEMENT, dated as of ___________, (herein,
together with all supplements and amendments hereto, called this Agreement),
from Holman/Shidler Corporate Capital, Inc. (herein called Assignor), having an
address at Four Embarcadero Center, San Francisco, California 94111 to
______________ having an address at ___________________ (herein, together with
its successors and assigns as assignee, called the Assignee).
To refinance a portion of the cost to Assignor of acquiring a fee simple
interest in the land described in Schedule A hereto and a fee simple interest in
the improvements located thereon (such land together with such improvements
being collectively called the Property), with the execution and delivery hereof,
is borrowing from the Assignee the amount of $_____________ such borrowing being
evidenced by its Note. The Property has been leased by Assignor to Caterair
International Corporation, a Delaware corporation (the Lessee), under a Lease
Agreement, dated as of _______________, 1993 (herein, together with all
supplements and amendments thereto, and any memorandum or short form thereof
entered into for the purpose of recording, registration or filing, called the
Lease) between Assignor, as lessor, and Lessee, as lessee.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt of which is hereby acknowledged, Assignor
agrees as follows:
<PAGE> 57
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1. Assignor, in furtherance of the covenants of the Mortgage and as
security for the payment of the principal of, premium, if any, and interest and
all other sums payable on the Note and of all other sums payable under the
Mortgage, and the performance and observance of the provisions thereof, has
assigned, transferred, conveyed and set over, and by these presents does assign,
transfer, convey and set over to the Assignee, all of Assignor's estate, right,
title and interest in, to and under the Lease together with all rights, powers,
privileges, options and other benefits of Assignor as lessor under the Lease,
including, but not by way of limitation, (i) the immediate and continuing right
to receive and collect all rents, income, revenues, issues, profits, insurance
proceeds, condemnation awards, moneys and security payable or receivable under
the Lease or pursuant to any of the provisions thereof, whether as rents or as
the purchase price of the Property or otherwise (except sums payable directly to
any person other than the lessor thereunder), (ii) the right to accept any offer
by Lessee to purchase the Property, or part thereof, or any award payable in
connection with a taking thereof, (iii) the right and power (which right and
power are coupled with an interest) to execute and deliver, as agent and
attorney-in-fact of Assignor, an appropriate deed or other instrument necessary
to convey the Property, any part thereof or any award payable in connection with
a taking thereof to the Lessee if the Lessee becomes
<PAGE> 58
-3-
obligated to purchase the Property, any part thereof or any award payable in
connection with a taking thereof, (iv) the right to perform all other necessary
or appropriate acts as said agent and attorney-in-fact with respect to any
purchase and conveyance referred to in clause (iii) above, (v) the right to make
all waivers and agreements, (vi) the right to give all notices, consents and
releases, (vii) the right to take any legal action upon the happening of a
default under the Lease including the commencement, conduct and consummation of
proceedings at law or in equity as shall be permitted under any provision of the
Lease or by law or in equity and (viii) the right to do any and all other things
whatsoever which Assignor or any lessor is or may be entitled to do under the
Lease.
2. The assignment made hereby is executed as collateral security, and the
execution and delivery hereof shall not in any way impair or diminish the
obligations of Assignor under the provisions of Lease nor shall any of the
obligations contained in the Lease be imposed upon the Assignee. Upon the
payment of the principal of and premium, if any, and all accrued interest on the
Note and of all other sums payable on the Note and under the Mortgage and the
performance and observance of the provisions thereof, or upon a release of the
Property from the lien of the Mortgage pursuant to the provisions of the
Mortgage, said assignment and all rights herein assigned to the Assignee shall
cease and terminate and all the estate, right, title and interest
<PAGE> 59
-4-
of Assignor in and to the above-described assigned property shall revert to
Assignor, and the Assignee shall, at the request of Assignor, deliver to
Assignor an instrument in recordable form cancelling this Agreement and
reassigning to Assignor the above-described assigned property.
3. Assignor hereby designates the Assignee to receive all payments of
Fixed Rent, Additional Rent, purchase prices and other sums payable to the
lessor under the Lease and to receive duplicate original copies of all notices,
undertakings, demands, statements, documents and other communications which
Lessee is required or permitted to give, make, deliver to or serve upon the
lessor under the Lease. By its acceptance hereof, Assignee agrees that any
moneys received by Assignee hereunder which are in excess of Fixed Rent,
Additional Rent, purchase prices or other amounts payable by the Lessee on or
about the date the same are due and payable, shall be paid to the Assignor or
its order within 10 days of receipt thereof. Assignor hereby directs the Lessee
to deliver to the Assignee, at its address set forth above or at such other
address as the Assignee shall designate, duplicate original copies of all such
notices, undertakings, demands, statements, documents and other communications
and no delivery thereof by the Lessee shall be of any force or effect unless
made to Assignor and also made to the Assignee as herein provided.
<PAGE> 60
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4. Assignor represents to the Assignee that Assignor has not executed any
other assignment of the subject matter of this Assignment which has not been
released or assigned to Assignee other than the Mortgage and that the Lease is
in full force and effect and the Lease is not in default.
5. Assignor agrees that said assignment and the designation and direction
to the Lessee hereinabove set forth are irrevocable (except as expressly
provided in Paragraph 2), and that it will not take any action as lessor under
the Lease or otherwise which is inconsistent with said assignment, or make any
other assignment, designation or direction inconsistent therewith, and that any
assignment, designation or direction inconsistent therewith shall be void.
Assignor will, from time to time upon the request of the Assignee execute all
instruments of further assurance and all such supplemental instruments with
respect to this Agreement as the Assignee may specify.
6. Assignor and Assignee hereby agree, and Assignor hereby agrees and
hereby undertakes to obtain the agreement of Lessee, as follows:
(a) That Lessee consents to the provisions of this Assignment, and
agrees to pay and deliver to Assignee or the last person or entity
designated by Assignee (which designation shall be revocable by
Assignee unless by its terms any such revocation would require the
consent of such designee) all rentals and other sums assigned to
Assignee pursuant to this Agreement, in accordance with the terms of
the Lease, and will not assert any offset, counterclaim, deduction
or defense deferment, abatement or diminution (except as is
expressly provided for in the Lease), in any proceeding brought
under this Agreement or otherwise, whether this
<PAGE> 61
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Assignment shall have been terminated by operation of law or
otherwise and will not, for any reason whatsoever (except as is
expressly provided for in the Lease), seek to recover from Assignee
any moneys paid to Assignee by virtue of this Agreement. That until
the termination of this Agreement: (i) all sums payable by Lessee to
Assignee pursuant to the Lease, as provided for in the preceding
sentence shall be paid in such manner that Assignee shall have
"collected funds" on the date on which such sums are due and
payable, and wired to the account of Assignee at ________ or to such
other address or manner as may be specified by the Assignee by
written notice to Lessee, (ii) Lessee shall deliver to Assignee, at
___________ _______________________ or the person or entity
designated by Assignee duplicate original copies of all notices,
undertakings, demands, statements, documents, other communications,
and other instruments which Lessee may deliver pursuant to the
Lease, and no delivery thereof by Lessee shall be of any force or
effect unless also made to Assignee as herein provided, (iii) any
notice given to Lessee by Assignee or its designee shall be
effective as a notice given to Lessee by Assignor as lessor under
the Lease; provided that in the event Lessee shall receive
conflicting notices, Lessee shall be entitled to rely on any notice
received from Assignee (or its designee), (iv) Assignee shall not by
reason of the assignment hereunder be subject to any liability or
obligation under the Lease prior to foreclosure of the Mortgage and,
(v) any waiver, consent or approval under the Lease shall not be
valid unless approved by Assignee, (vi) no payment of sums or
delivery of notices or other instruments by Lessee shall be of any
force or effect under the Lease (1) unless paid to Assignee or
delivered to Assignee and Assignor, as the case nay be, as provided
above and (2) until actually received by Assignee, and Assignor (if
applicable). Payments made to Assignee (or its designee) pursuant to
this Assignment by Lessee in accordance with the Lease shall
constitute payment of Lessee's obligations under the Lease.
(b) Assignor and Lessee will not unilaterally or by agreement,
subordinate, amend, modify, extend, terminate or otherwise change
any term of the Lease (except as expressly permitted by the Lease)
without the prior written consent thereto of Assignee and any such
attempted subordination, amendment, modification, extension,
termination or change without such consent shall be void. If the
Lease shall be amended as
<PAGE> 62
-7-
permitted hereby, it shall continue to be subject to the provisions
hereof without the necessity of any further act by any of the
parties hereto. Lessee will remain obligated under the Lease in
accordance with its terms, and without the consent of Assignee,
Lessee will not take any action to terminate (except as expressly
permitted by the Lease), rescind or avoid the Lease, notwithstanding
(i) the bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution or other proceeding affecting
Assignor or any assignee of Assignor, (ii) any action with respect
to the Lease which may be taken by any assignee, trustee, or
receiver of Assignor or of any such assignee or by any court in any
such proceedings or (iii) any right of set-off or counterclaim, or
any defense, or any other right or claim, of any person arising
under this Agreement or the Lease.
(c) Until the termination of this Agreement, notice of rejection by
any person of an offer by Lessee pursuant to the Lease to purchase
interests in the Premises (without the prior written consent of
Assignee) shall be void and ineffective unless accompanied by the
written consent of Assignee; and notice of acceptance of any offer
of Lessee to purchase interests in the Premises pursuant to the
Lease shall be deemed validly given for all purposes if given by
Assignee. In addition, notice of rejection of any offer of Lessee to
purchase interests in the Premises pursuant to the Lease shall be
deemed validly given for such purposes if given by Assignee. If
Lessee shall purchase Assignor's interest in the Premises, Lessee
shall accept a deed and other instruments transferring and conveying
such interests which is executed and delivered by Assignee, which
instrument shall be effective to convey the Premises to Lessee with
title as provided in and otherwise in accordance with the Lease,
pursuant to which such deed or instrument is delivered. If Assignee
shall elect to institute any judicial proceeding before transferring
said interests in the Premises, the Lease shall not terminate, but
shall continue in full force and effect until the transfer and
purchase shall have been consummated.
Lessee shall be entitled to rely upon, and entitled to the benefits
of, the provisions of this Paragraph 6. Lessee shall be entitled to rely upon
any actions taken by Assignee in
<PAGE> 63
-8-
accordance with this Agreement and Lessee shall not be required to verify
whether or not Assignee or Assignor has complied with the provisions of this
Agreement. Assignor and Assignee agree, and such consent may provide, that
Lessee shall not be bound by any amendment or modification to this Agreement to
which Lessee shall not have consented in writing. By acceptance of this
Agreement, Assignee agrees that, it shall, upon twenty (20) days notice from
Assignor or from Lessee requesting the same, execute and deliver to the party
requesting the same its certificate stating whether or not, to its actual
knowledge, the Lease and this Agreement are in full force and effect and whether
or not, to its actual knowledge no default has occurred under any thereof.
7. Assignor and Assignee agree that if, on the date of purchase of the
Property by Lessee pursuant to any provision of the Lease, Assignor shall be
unable to convey the Property to Lessee free of all liens, encumbrances,
charges, exceptions and restrictions which (i) have been created by or have
resulted from acts or the failure act of Assignor and not resulting from any act
or failure to act of Lessee and (ii) have not been consented to by Lessee
(except liens and encumbrances required to be discharged by Lessee pursuant to
the Lease), then in any such event, Lessee shall have an option to purchase the
Note. Lessee shall exercise such option by notifying Assignee, in writing, not
later than sixty (60) days after the date of purchase provided
<PAGE> 64
-9-
for under the Lease, of Lessee's intention to purchase the Note on any business
day specified in such notice, at the respective prices equal to the then unpaid
principal amount of the Note, together with the respective interest accrued and
unpaid thereon to the date of such purchase. Lessee shall pay all costs,
expenses and disbursements of Assignor and Assignee in connection with such
purchase and assignment including, but not by way of limitation, the cost of
federal, state and local taxes (except any estate, inheritance, succession or
income taxes of Assignor and Assignee, applicable to the transfer of the Note).
The Note, pursuant to its terms and by virtue of the acceptance hereof by the
Assignee, shall be subject to the provisions of this Paragraph 7. On the date of
purchase of the Note, the holder of the Note shall deliver to Lessee at its
address set forth above, the Note, endorsed (without recourse to such holder) to
Lessee, against receipt by the holder of the Note of the purchase price
therefor. From and after the date of such purchase, the Assignee shall have no
further interest in the Property or the Lease. Lessee, upon such purchase of the
Note, shall be entitled to any and all rights and privileges granted to the
owner of the Note.
8. This Agreement shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and assigns. This Agreement may
be executed in two or more counterparts and shall be deemed to have become
effective when and only when one or more of such counterparts shall have been
<PAGE> 65
-10-
signed by or on behalf of each of the parties hereto, although it shall not be
necessary that any single counterpart be signed by or on behalf of each of the
parties hereto, and all such counterparts shall be deemed to constitute but one
and the same instrument. This Agreement shall be governed by the law of the
state in which the Property is located.
9. The following is Schedule A referred to in this Agreement.
<PAGE> 66
IN WITNESS WHEREOF, Assignor has caused this Agreement to be signed as of
the date first above written.
HOLMAN/SHIDLER CORPORATE CAPITAL, INC.
By: ___________________________________
Name:
Title:
CONSENTED TO:
CATERAIR INTERNATIONAL CORPORATION
By: ______________________________
Name:
Title:
<PAGE> 67
EXHIBIT C
STATUS REPORT
The undersigned, _________________________, a ____________ corporation is the
___________________ under a Lease Agreement (the "Lease"), dated as of ________
1993, between Caterair International Corporation, a Delaware corporation, (the
"Tenant") and TriNet Essential Facilities VIII N, Inc., a Maryland corporation,
as landlord (the "Landlord") of certain real property located in
____________________ as described on attached Exhibit A (the "Premises"). The
undersigned hereby represents, certifies and agrees as follows:
1. The Lease constitutes the entire agreement between the parties with
respect to the Premises and the Improvements and is in full force and effect and
has not been modified, supplemented, canceled or amended in any respect.
2. The term of the Lease commenced on __________ 1993 and continues
through at least ___________, 2018. The Tenant is currently obligated to pay
rent in monthly installments in an amount not less than $________ per month,
which rent obligation is continuing and is not past due or delinquent in any
respect. No installment of rent has been prepaid more than one month in advance.
3. No event has occurred or is continuing which would constitute a default
by either the Tenant or Landlord under the Lease or would constitute such a
default but for the requirement that notice be given or that a period of time
elapse or both. No offset exists with respect to any rents or other sums payable
or to become payable by the Tenant under the Lease.
<PAGE> 68
IN WITNESS WHEREOF, this Certificate has been duly executed and delivered
by the authorized officers of the undersigned as of _______________.
---------------------------
By: _______________________
Name:
Title:
<PAGE> 69
#479 Orlando, FL
EXHIBIT D
1. Liens for taxes and assessments not yet due and payable.
2. Easement in favor of Southern Bell Telephone and Telegraph Company by A.L.
Rollins dated June 27, 1959, contained in Exchange Plant Permit recorded
July 6, 1959, in Official Records Book 567, Page 680, of the Public
Records of Seminole County, Florida.
3. Easement from Marriott Corporation in favor of Florida Power Corporation
contained in Easement dated October 27, 1975, recorded December 17, 1975,
in Official Records Book 2666, Page 802, of the Public Records of Seminole
County, Florida.
4. Reciprocal Non-Exclusive Right of Way Easement between McCoy Bee Line
Properties, Ltd., a Florida limited partnership, and Marriott Corporation,
a Delaware corporation, dated October 27, 1975, filed January 16, 1976, in
Official Records Book 2672, Page 1579, of the Public Records of Seminole
County, Florida.
5. Agreement between Marriott Corporation, a Delaware corporation, and the
City of Orlando dated October 27, 1975, filed October 31, 1975, in
Official Records Book 2656, Page 886, of the Public Records of Seminole
County, Florida.
6. Easement from Marriott Corporation, a Delaware corporation, in favor of
Sidco Realty Corporation, a Florida corporation, recorded July 12, 1989,
in Official Records Book 4096, Page 2547, of the Public Records of Orange
County, Florida
7. Lease between Caterair International Corporation and TriNet Essential
Facilities VIII N, Inc.
<PAGE> 70
EXHIBIT E TO LEASE
Per December 5, 1991 Eckland Reports
<TABLE>
<CAPTION>
Normal Maintenance to be Completed Normal Maintenance to be Completed no
no Later than 2nd Anniversary of Later than 5th Anniversary of
Commencement Date Commencement Date
<S> <C> <C>
LaGuardia - #351 Roof Repairs and Installation of Flood
Coat; Install Sealant and Caulking to Masonry
Walls; Paint Dock Metal Ceiling and Truck Door
Stairs
LaGuardia - #375 Install Pipe Bollards at Track Dock Masonry Tuckpointing at Parapet Walls,
Support Steel & Piers etc.; Repair/Replace Kitchen and Truck Dock
Ceiling Tiles; Repair and Paint Loading
Dock Chairs & Paint Service Doors; General
Roof Repairs and Repair Flashings;
Replacement of Terra Cotta Coping with
Aluminum
Miami-#361 General Roof Repair, Regraveling,
etc.; Cut and Re-cover Roofing Ply
Blisters; Replace Cracked and Broken
Loading Dock Concrete Slab; Replace
Roof, Insulation and Flashing;
Replace 5 HVAC Compressors
Miami-#366 2nd floor Bathroom Repairs; Clean, Replace 5 HVAC Compressors and 2 Air
Prime and Repaint Rust on Roof Handlers; Repair and Retube 2 Hot Water
Exhaust Hoods Boilers
Miami-#702 Prime and Paint Exposed Metal
Downspouts and Scuppers; Repair
Built-up Roof, Insulation and
Flashing
</TABLE>
<PAGE> 71
<TABLE>
<CAPTION>
Normal Maintenance to be Completed Normal Maintenance to be Completed no
no Later than 2nd Anniversary of Later than 5th Anniversary of
Commencement Date Commencement Date
<S> <C> <C>
Seattle-#318 Construction of Additional Roof Drains for
Perimeter Drainage; Replacement of Two
Original Rooftop Heating units
Orlando-#479 Repair and Fill Cracks in Asphalt Pavement,
Repair Apron Cracks, and Reseal and
Restripe Parking Lot; Clean and Retube Hot
Water Boilers
Philadelphia-#376 Repair of Masonry from Truck Impacts
and Dock Repairs; Application of
Silicone Sealant to Exterior Wall
Cracks; Roof Repairs (flood coat,
regravel and skylight)
Reno-#303 Replace Gas Connections with Flexible
Connectors; Clean Kitchen Fan and
Ductwork, Repair HVAC Corrosion
Minneapolis-#397 Replace/Repair Steel Beams New Roof; Woodscreens for Rooftop Units;
Supporting Condensor Units
Caulking of Masonry Wall; Repair of
Downspouts; Tuckpointing of Openings and
Cracks in Mortar Joints
Repair Steel Column Supporting Truck
Dock Roof
Repair of Quarry Tile Floor; Repair of
Asphalt Pavement; Sealcoating of Asphalt
Pavement for Moisture Protection
</TABLE>
<PAGE> 1
EXHIBIT 10.27.1
FIRST AMENDMENT TO
LEASE AGREEMENT
FIRST AMENDMENT TO LEASE AGREEMENT ("First Amendment"), dated as of
September 22, 1995, between TriNet Essential Facilities X, Inc. ("Landlord") and
Caterair International Corporation ("Tenant").
RECITALS
A. Tenant and Landlord have previously entered into that certain
Lease Agreement, dated as of May 15, 1993 (as previously or hereafter amended
from time to time, the "Lease Agreement"), relating to properties set forth on
Exhibit A hereto.
B. The parties hereto desire to amend the Lease Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto agree as follows:
1. DEFINITIONS
1.1 In addition to the terms defined herein, capitalized terms used
in this First Amendment shall have the respective meanings ascribed to them in
the Lease Agreement.
1.2 Annex I to the Lease Agreement is hereby amended by adding the
following terms thereto in their proper alphabetical sequence:
"Consolidated Cash Interest Expense" means, for any period, the
aggregate of all cash interest expense for such period with respect to all
outstanding indebtedness of SCIS and its subsidiaries on a consolidated
basis and Tenant and its subsidiaries on a consolidated basis, determined
in conformity with GAAP.
"Consolidated EBITDA" means, for any period, the sum (without
duplication) of (i) Consolidated Net Income, (ii) to the extent
Consolidated Net Income has been reduced thereby, all income taxes for
such period of SCIS and its subsidiaries on a consolidated basis and
Tenant and its subsidiaries on a consolidated basis paid or accrued in
conformity with GAAP (other than income taxes attributable to
extraordinary or nonrecurring gains or losses), (iii) Consolidated
Interest Expense for such period and (iv) Consolidated Non-cash Charges
for such period of SCIS and its subsidiaries on a consolidated basis and
Tenant and its subsidiaries on a consolidated basis, determined in
conformity with GAAP.
<PAGE> 2
"Consolidated Interest Expense" means, for any period, the sum
(without duplication) of (i) the aggregate of all cash and non-cash
interest expense with respect to all outstanding indebtedness of SCIS and
its subsidiaries on a consolidated basis and Tenant and its subsidiaries
on a consolidated basis, including the net costs associated with interest
swap obligations and capitalized interest, determined in conformity with
GAAP and (ii) the interest component of capitalized lease obligations
paid, accrued and/or scheduled to be paid or accrued during such period by
SCIS and its subsidiaries on a consolidated basis and Tenant and its
subsidiaries on a consolidated basis, determined in conformity with GAAP.
"Consolidated Net Income" means, for any period, the aggregate net
income (or loss) for such period of SCIS and its subsidiaries on a
consolidated basis and Tenant and its subsidiaries on a consolidated
basis, determined in conformity with GAAP; provided, that there shall be
excluded therefrom (a) gains and losses from sales of property or assets
other than in the ordinary course of business, or abandonments or reserves
relating thereto and the related tax effects and (b) items classified as
extraordinary or nonrecurring gains and losses, and the related tax
effects according to GAAP. Notwithstanding the foregoing, in calculating
Consolidated Net Income (i) charges incurred in connection with the
consummation of the transactions contemplated by the Master Agreement
dated as of April 26, 1995, as amended (the "Master Agreement") among Onex
Food Services, Inc., Caterair Holdings Corporation and Tenant (including,
without limitation, (A) severance payments and other employee costs and
(B) external consulting services primarily associated with the
implementation of labor savings programs) shall not be deducted therefrom
and (ii) the goodwill and the increases in amortization and depreciation
resulting from the consummation of the transactions contemplated by the
Master Agreement shall not be deducted therefrom.
"Consolidated Non-cash Charges" means, for any period, the aggregate
depreciation, amortization and other non-cash expenses for such period of
SCIS and its subsidiaries on a consolidated basis and Tenant and its
subsidiaries on a consolidated basis reducing Consolidated Net Income,
determined in conformity with GAAP (excluding any such expenses
constituting an extraordinary item or loss or any such expense which
requires an accrual of or a reserve for cash charges for any future
period).
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of September 22, 1995, including,
without limitation, those set forth in the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other
entity as approved by a significant segment of the accounting profession.
"SCIS" means SC International Services, Inc., a Delaware
corporation.
2
<PAGE> 3
2. WAIVER
Landlord hereby waives any and all defaults existing on the date
hereof arising from Section 8, 15(k) and 15(l) of the Lease Agreement and the
right to exercise any remedies as a consequence thereof.
3. FIRST AMENDMENT TO LEASE AGREEMENT
The Lease Agreement is, effective as of the date hereof, amended as
follows:
3.1 Section 4 of the Lease Agreement is hereby amended and restated
in its entirety to read as follows:
"4. RENTAL:
A. Tenant agrees to pay fixed rent ("Fixed Rent") to Landlord
without notice, by check sent to Landlord at such address as shall be
provided by Landlord to Tenant, provided that such check shall be received
by Landlord in sufficient time that the funds will be received by the
Fixed Rent due date, or to such other persons or place as may be provided
by written notice from the person then entitled to receive the Fixed Rent,
in equal installments in advance on or before the first day of each month
as specified in the Basic Lease Information.
If Fixed Rent is not paid when due, interest shall accrue
thereon at the Overdue Rate until payment is made. Tenant hereby
acknowledges that the late payment by Tenant to Landlord of Fixed Rent,
Additional Rent and other sums due under this Lease will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will
be extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges and late charges which may
be imposed on Landlord by the terms of any mortgage or trust deed covering
the Premises. Accordingly, if any installment of Fixed Rent or any other
sum due to Landlord from Tenant shall not have been received by Landlord
or Landlord's designee within fifteen (15) days after such amount shall be
due, then, without any requirement for notice to Tenant, Tenant shall pay
to Landlord a late charge equal to two percent (2%) of such overdue
amount, together with interest on such overdue amount at the Overdue Rate.
The parties agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by
Tenant. Acceptance of such late charge by Landlord shall in no event
constitute a waiver of Tenant's default with respect to such overdue
amount, nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder; provided that nothing contained herein shall
relieve Landlord of a duty to mitigate damages under applicable law.
3
<PAGE> 4
B. The Fixed Rent for each Renewal Term shall be payable in
equal monthly installments in advance on or before the first day of each
month as provided in the Basic Lease Information.
C. If, on or before the first day of any calendar quarter
commencing on April 1, 1998 up to and including April 1, 2001 (each, an
"Initiating Date"), Tenant delivers a written notice to Landlord (an
"Investment Improvement Notice") stating that Tenant or any of SC
International Services, Inc. ("SCIS"), Sky Chefs, Inc. ("Sky Chefs") Onex
Food Services, Inc. ("OFSI") or Caterair International, Inc. (II) ("CII"
and together with SCIS, Sky Chefs and OFSI, the "Guarantors") currently
has a BBB- or better investment grade credit rating from Standard & Poor's
Corporation and a Baa3 or better investment grade credit rating from
Moody's Investors Service, Inc. for its senior debt obligations, then:
(i) Subject to Section 4.F. hereof, on the first day of the next
calendar quarter following the Initiating Date, the annual
Fixed Rent shall be reset to equal the Fixed Rent on the
Initiating Date less an amount equal to the Purchase Price
multiplied by the lesser of (a) 1.0%, or (b) the difference
between (x) the Fixed Rent on the Initiating Date (calculated
as a percentage of the Purchase Price), and (y) the yield for
10-year Treasury bills plus 275 basis points. The yield for
use in the foregoing calculation will be as shown in the
Treasury Constant Maturity Series in statistical release
H.15(519) of the Federal Reserve Board; or if that release is
unavailable, a comparable publication.
(ii) Subject to Section 4.F. hereof, the annual Fixed Rent
specified in the Basic Lease Information shall be increased at
the end of every 30-month period measured from the Initiating
Date by an amount equal to the annual Fixed Rent prior to such
increase multiplied by the greater of 5.72028% or 56.25% of
the increase in the CPI over the prior 30-month period. Such
increase in the Fixed Rent shall not be greater than
11.632519% of the annual Fixed Rent immediately prior to the
increase.
D. If, on an Initiating Date, Tenant delivers an Investment
Improvement Notice stating that Tenant or any of the Guarantors currently
has an A- or better investment grade credit rating from Standard & Poor's
Corporation and an A3 or better investment grade credit rating from
Moody's Investors Service, Inc. for its senior debt obligations.
(i) Subject to Section 4.F. hereof, on the first day of next
calendar quarter following the Initiating Date, the annual
Fixed Rent shall be reset to equal the Fixed Rent on the
Initiating Date less an amount equal to the Purchase Price
multiplied by the lesser of (a) 2.0%, or (b) the difference
between (x) the Fixed Rent on the Initiating Date (calculated
as a
4
<PAGE> 5
percentage of the Purchase Price) and (y) the yield,
determined as provided above, for 10-year Treasury obligations
plus 225 basis points.
(ii) Subject to Section 4.F. hereof, the annual Fixed Rent
specified in the Basic Lease Information shall be increased at
the end of every 30-month period measured from the Initiating
Date by an amount equal to the annual Fixed Rent prior to such
increase multiplied by the greater of 5.72028% or 56.25% of
the increase in the CPI over the prior 30-month period. Such
increase in the Fixed Rent shall not be greater than
11.632519% of the annual Fixed Rent immediately prior to the
increase.
E. If, on an Initiating Date, Tenant delivers an Investment
Improvement Notice stating that Tenant or any of the Guarantors currently
has either of the required investment grade ratings indicated in
subparagraphs C and D, but not both, then:
(i) Subject to Section 4.F. hereof, on the first day of the next
calendar quarter following the Initiating Date, the annual
Fixed Rent shall be reset to equal the Fixed Rent on the
Initiating Date less an amount equal to the Purchase Price
multiplied by the lesser of (a) 1.5%, or (b) the difference
between (x) the Fixed Rent on the Initiating Date (calculated
as a percentage of the Purchase Price) and (y) the yield,
determined as provided above, for 10-year Treasury obligations
plus 250 basis points.
(ii) Subject to Section 4.F. hereof, the annual Fixed Rent
specified in the Basic Lease Information shall be increased at
the end of every 30-month period measured from the Initiating
Date by an amount equal to the annual Fixed Rent prior to such
increase multiplied by the greater of 5.72028% or 56.25% of
the increase in the CPI over the prior 30-month period. Such
increase in the Fixed Rent shall not be greater than
11.632519% of the annual Fixed Rent immediately prior to the
increase.
In no event shall the calculation required by subparagraphs
C(i), D(i) and E(i) above result in an increase in Fixed Rent."
F. During the 60 calendar day period following an Initiating Date,
Landlord may, in its sole discretion, deliver a written notice (the "Put
Notice") to Tenant stating that Tenant shall have the option to purchase
(the "Put Option Notice") the Premises at a purchase price equal to 110%
of the Purchase Price or to continue to lease the Premises without
reduction in the Fixed Rent. The Put Option Notice shall be given at any
time within the 30 calendar day period commencing on the date of delivery
of a Put Notice by delivery of a written notice (the "Exercise Notice") to
Landlord of Tenant's intention to purchase the Premises. If Landlord or
any of its affiliates shall have delivered a Put Notice under any other
lease between Landlord or any of its affiliates and Tenant or any of its
affiliates, then Tenant must deliver the
5
<PAGE> 6
Exercise Notice under such other leases if it delivers an Exercise Notice
hereunder and must refrain from delivering an Exercise Notice under such
other leases if it does not deliver an Exercise Notice under this Lease.
Upon receipt of an Exercise Notice, Landlord shall be legally obligated
to sell the Premises to Tenant on the terms described above and Tenant
shall be legally obligated to buy the Premises on the terms described
above. The closing of the purchase and sale pursuant to the exercise of
such Option shall occur within 30 business days of delivery of the
Exercise Notice. At such closing, Landlord shall assign to Tenant or its
designee, pursuant to mutually acceptable definitive documentation, all
of the Premises, free and clear of any liens or encumbrances derived from
an act or omission of Landlord and which pursuant to the terms of the
Lease is not required to be discharged by Tenant, upon receipt of payment
of the Option Purchase Price in immediately available funds. Upon
consummation of such purchase and sale, pursuant to the exercise of such
option, this Lease Agreement shall terminate. If Landlord delivers the
Put Notice and the Exercise Notice is not delivered within the 30-day
period commencing on the date of a Put Notice, then the Fixed Rent shall
not be adjusted in accordance with either of Section 4.C, 4.D or 4.E
hereof. Moreover, if an Exercise Notice is delivered but the sale of the
Premises is not closed, then there shall be no reduction or adjustment in
the Fixed Rent.
3.2 Section 15 of the Lease Agreement is hereby amended and
restated in its entirety to read as follows:
"15. DEFAULT: Events of Default
The following events, following the expiration of the
applicable cure periods, in this Paragraph are sometimes referred to as an
"Event of Default":
(a) If default shall be made in the payment of Fixed Rent and such
default shall continue for five (5) business days after notice
from Landlord (provided that after giving one such notice, any
such default occurring within 12 months shall become an Event
of Default without the giving of notice) or if default shall
be made in the payment of Additional Rent or in the payment of
any other sum required to be paid by Tenant under this Lease
or the payment to Landlord of any other sum due under the
terms of any other agreement between Landlord and Tenant;
(b) If default shall be made in the observance or performance of
any of the other covenants in this Lease which Tenant is
required to observe and perform and such default shall
continue for thirty (30) days after written notice to Tenant,
or if a default involves a hazardous condition and is not
cured by Tenant immediately; provided, however, the time
allowed Tenant (except in the instance of hazardous conditions
or conditions which expose Landlord to criminal liability)
within which Tenant is permitted to cure the same shall be
extended for such period as may be
6
<PAGE> 7
necessary for the curing provided Tenant is continuously,
diligently and in good faith prosecuting such cure;
(c) If any representation or warranty made by Tenant herein or in
any certificate, demand or request made pursuant hereto proves
to be incorrect in any material respect when made;
(d) If the interests of Tenant in this Lease shall be levied on
under execution or other legal process and same is not removed
or stayed within thirty (30) days;
(e) If any voluntary petition of bankruptcy or for corporate
reorganization or for the appointment of a receiver or any
similar relief shall be filed by Tenant;
(f) If any involuntary petition of bankruptcy shall be filed
against tenant under any Federal or State bankruptcy or
insolvency act and shall not have been dismissed within ninety
(90) days of the filing thereof;
(g) If a receiver shall be appointed for Tenant or any of the
property of Tenant by any court and any such receiver shall
not have been discharged within ninety (90) days from the date
of his appointment;
(h) If Tenant shall make an assignment for the benefit of
creditors;
(i) If Tenant shall admit, in writing, Tenant's inability to meet
Tenant's debts as they mature;
(j) If Tenant shall abandon the Premises;
(k) If: (i) there are any outstanding obligations under the
Credit Agreement, dated as of September 29, 1995,
by and among Tenant, Onex Food Services, Inc.,
SCIS, Caterair Holdings Corporation, various Banks
(the "Lenders"), Bankers Trust Company, Morgan
Guaranty Trust Company of New York and Goldman,
Sachs & Co., as Co-Arrangers, Goldman, Sachs &
Co., as Documentation Agent, Bankers Trust
Company, as Syndication Agent, and Morgan Guaranty
Trust Company of New York, as Administrative Agent
(the "Agent"), and The Bank of New York, as
Co-Agent (as the same may hereafter be amended or
restated or otherwise modified from time to time,
including any refinancing thereof, the "Credit
Agreement"), then the acceleration of the maturity
of any amounts due under the Credit
7
<PAGE> 8
Agreement by the Agent or the Lenders shall
constitute an Event of Default hereunder; or
(ii) there are no outstanding obligations under the
Credit Agreement, then any default shall occur in
the payment of any outstanding indebtedness of
$10,000,000 or more, or such lesser indebtedness
as shall be material to the financial condition of
Tenant;
(l) If the net worth of SCIS determined in accordance with GAAP
(as defined in the Indenture referred to below) shall be less
than $35,000,000;
(m) If the ratio of (i) Consolidated EBITDA to (ii) Consolidated
Cash Interest Expense, for any 12-month period ending on March
31, June 30, September 30 or December 31 in any year,
commencing with the 12-month period ending on September 30,
1996, shall be less than that set forth below for any of the
following periods:
12-Month Period Ending Ratio
---------------------- -----
9/30/96, 12/31/96, 3/31/97,
6/30/97 or 9/30/97 1.75:1.0
12/31/97 and each March 31,
June 30, September 30 and
December 31 thereafter 2.00:1.0
(n) If a final judgment shall be entered in an amount greater than
$5,000,000 which creates a default under any mortgage, lease
or loan agreement of Tenant, or which affects Landlord's
interest in the Premises; or
(o) If an Event of Default shall occur under any other lease
between Landlord and Tenant dated as of the date hereof.
Landlord may treat the occurrence of any one or more of the
foregoing Events of Default as a breach of this Lease. For so long as such
Event of Default continues the Landlord, at its option and with or without
notice or demand of any kind to Tenant or any other person, but subject to
Paragraph 16F hereof may have any one or more of the remedies provided in
this Paragraph 15 or elsewhere in this lease, in addition to all other
remedies and rights provided at law or in equity."
8
<PAGE> 9
3.3 Section 19 of the Lease Agreement is hereby amended and
restated in its entirety to read as follows:
"19. NOTICES: Notices, statements, demands, or other communications
required or permitted to be given, rendered or made by either party to the
other pursuant to this Lease or pursuant to any applicable law or
requirement of public authority, shall be in writing (whether or not so
stated elsewhere in this Lease) and shall be deemed to have been properly
given, rendered or made, when received by overnight delivery or overnight
courier delivery or facsimile transmission with a confirmation copy sent
by overnight delivery or by overnight courier delivery addressed to the
other parties as follows:
To Landlord:
TriNet Corporate Realty Trust, Inc.
Four Embarcadero Center, Suite 3150
San Francisco, California 94111
Attention: Mr. Mark S. Whiting
With a copy to:
Day, Berry & Howard
260 Franklin Street
Boston, Massachusetts 02110
Attention: Lewis A. Burleigh, Esq.
To Tenant:
Caterair International Corporation
6550 Rock Spring Drive
Bethesda, Maryland 20817
Attention: Law Department
With copies to:
Onex Food Services, Inc.
c/o Sky Chefs, Inc.
524 East Lamar
Arlington, Texas 76011
Attention: President
and
9
<PAGE> 10
Kaye, Scholer, Fierman, Hays & Handler
425 Park Avenue
New York, New York 10022
Attention: Joel I. Greenberg, Esq.
To Agent:
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10264-0060
Attention: Stephen King
With a copy to:
White & Case
1155 Sixth Avenue
30th Floor
New York, New York 10036
Attention: Eric Berg, Esq.
Any party listed in this paragraph 19 may, by notices as aforesaid,
designate a different address for addresses for notice, statements,
demands or other communications intended for it."
3.4 Section 21 of the Lease Agreement is hereby amended and
restated in its entirety to read as follows:
"21. MECHANICS' LIENS:
Liens and Right of Contest. (a) Tenant shall not suffer or
permit any mechanic's lien or other lien to be filed or recorded against
the Premises, equipment or materials supplied or claimed to have been
supplied to the Premises at the request of Tenant, or anyone holding the
Premises, or any portion thereof, through or under Tenant other than the
grant by Tenant of a mortgage or security interest in Tenant's rights
hereunder and the grant by each of Tenant, or CII or Sky Chefs of any or
all of their respective rights under the sublease between Tenant or CII or
Sky Chefs in favor of Agent on behalf of the other Lenders under the
Credit Agreement (the "Credit Agreement Liens"). If any such mechanic's
lien or other lien shall at any time be filed or recorded against the
Premises (other than the Credit Agreement Liens), or any portion thereof,
Tenant shall cause the same to be discharged of record within thirty (30)
days after the date of filing or recording of the same. However, in the
event Tenant desires to contest the validity of any lien it shall (i) on
or before thirty (30) days prior to the due date thereof (but in no event
later than 30 days after the filing or recording thereof), notify
Landlord, in writing, that Tenant intends to so contest same;
10
<PAGE> 11
(ii) on or before the due date thereof, if Landlord reasonably deems
Tenant to be financially insecure or if any mortgagee or Trust Deed holder
of Landlord so requires, deposit with Landlord security (in form and
content reasonably satisfactory to Landlord or Landlord's mortgagee or
trust deed holder) for the payment of the full amount of such lien and,
from time to time, deposit additional security or indemnity so that, at
all times, adequate security or indemnity will be available for the
payment of the full amount of the lien together with all interest,
penalties, costs and charges accrued or accumulated thereon.
If Tenant complies with the foregoing, and Tenant continues,
in good faith, to contest the validity of such lien by appropriate legal
proceedings which shall operate to prevent the collection thereof and the
sale or forfeiture of the Premises, or any part thereof, to satisfy the
same, Tenant shall be under no obligation to pay such lien until such time
as the same has been decreed, by court order, to be a valid lien on the
Premises. Any surplus deposit retained by Landlord, after the payment of
the lien shall be repaid to Tenant. Provided that nonpayment of such lien
does not cause Landlord to be in violation of any of its contractual
undertakings, Landlord agrees not to pay such lien during the period of
Tenant's contest. However, if Landlord pays for the discharge of a lien or
any part thereof from funds of Landlord, any amount paid by Landlord,
together with all costs, fees and expenses in connection therewith
(including reasonable attorney's fees of Landlord), together with
interest thereon at the Overdue Rate, shall be repaid by Tenant to
Landlord on demand by Landlord. Tenant shall indemnify and defend Landlord
against and save Landlord and the Premises, and any portion thereof,
harmless from and against all losses, costs, damages, expenses,
liabilities, suits, penalties, claims, demands and obligations, including,
without limitation, reasonable attorney's fees, resulting from the
assertion, filing, foreclosure or other legal proceedings with respect to
any such mechanic's lien or other lien or the attempt by Tenant to
discharge same as above provided.
(b) All materialmen, contractors, artisans, engineers,
mechanics, laborers and any other person now or hereafter furnishing any
labor, services, materials, supplies or equipment to Tenant with respect
to the Premises, or any portion thereof, are hereby charged with notice
that they must look exclusively to Tenant to obtain payment for the same.
Notice is hereby given that Landlord shall not be liable for any labor,
services, materials, supplies, skill, machinery, fixtures or equipment
furnished or to be furnished to Tenant upon credit, and that no mechanic's
lien or other lien for any such labor, services, materials, supplies,
machinery, fixtures or equipment shall attach to or affect the estate or
interest of Landlord in and to the Premises, or any portion thereof.
(c) Tenant shall not create, permit or suffer, and, subject to
the provisions of Section 21(a) hereof, shall promptly discharge and
satisfy of record, any other lien, encumbrance, charge, security interest,
or other right or interest which, as a result of Tenant's action or
inaction contrary to the provisions hereof, shall be or
11
<PAGE> 12
become a lien, encumbrance, charge or security interest upon the Premises,
or any portion thereof, or the income therefrom; provided that this
Section 21(c) shall not apply to the Credit Agreement Liens."
3.5 Section 25 of the Lease Agreement is hereby amended and
restated in its entirety to read as follows:
"25. SUBLETTING/ASSIGNMENT: Tenant shall have the right to
sublease all or any part of the Premises or assign its interest hereunder,
provided that Tenant shall remain primarily liable under this Lease
without regard to any sublease or assignment, and provided further that
any profit realized upon subletting or assignment shall be the property of
Tenant. Tenant shall not mortgage its interest hereunder and any purported
mortgage thereof shall be void other than the Credit Agreement Liens."
3.6 The Lease Agreement is hereby amended by adding the following at
the end thereof, to read in its entirety as follows:
"29. LEASEHOLD MORTGAGE PROTECTIONS.
(a) Notwithstanding anything to the contrary contained in Section 16F
hereof, in the event a default by Tenant occurs in the performance or observance
of any term, covenant, condition, or agreement on Tenant's part to be performed
under this Lease (other than a term, covenant, condition or agreement requiring
the payment of a sum of money) which cannot practicably be cured by the Agent
without taking possession of the Premises, or if such default is of such a
nature that the same is not susceptible of being cured by the Agent, then
Landlord shall not serve a notice of election to terminate or otherwise exercise
remedies under or in respect of this Lease pursuant to the terms thereof, or
otherwise terminate the leasehold estate or any other estate, right, title or
interest of Tenant hereunder by reason of such default without allowing the
Agent reasonable time (not to exceed 90 days) within which:
(i) In the case of a default which cannot practically be cured by
Tenant without taking possession of the Premises, to obtain
possession of the Premises as mortgagee (through the
appointment of a receiver or otherwise), and, upon obtaining
possession, to commence promptly and diligently prosecute to
completion such action as may be necessary to cure such
default; and
(ii) In the case of a default which is not susceptible of being
cured by the Agent, to commence promptly and diligently
prosecute to completion foreclosure proceedings or to acquire
Tenant's estate hereunder, either in its own name or through a
nominee, by assignment in lieu of foreclosure.
12
<PAGE> 13
The Agent shall not be required to continue to proceed to
obtain possession, or to continue in possession as mortgagee,
of the Premises pursuant to clause (i) above, or to continue
to prosecute foreclosure proceedings pursuant to clause (ii)
above, if and when such default shall be cured. Nothing herein
shall preclude Landlord from exercising any of its rights or
remedies with respect to any other default by Lessee during
any period when Landlord shall be forebearing termination of
this Lease as above provided, but in such event the Agent
shall have all of the rights and protections hereinabove
provided for. If the Agent, or its nominee, or a purchaser at
a foreclosure sale, shall acquire title to Lessee's leasehold
estate hereunder, and shall cure all defaults of Tenant
hereunder which can be cured by the Agent, or by such
purchaser, as the case may be, then the defaults of any prior
holder of Tenant's leasehold estate or any other estate,
right, title or interest hereunder which are not susceptible
of being cured by the Agent (or by such purchaser) shall no
longer be deemed to be defaults hereunder.
(b) In the event (i) this Lease is terminated by reason of Tenant's
default hereunder, or (ii) this Lease is disaffirmed in the event of
Tenant's bankruptcy, then, within ten (10) days after such
termination (which term as used herein shall include a
disaffirmance) Landlord shall give notice to the Agent that this
Lease has been terminated, together with a statement of any and all
sums which would at that time be due under this Lease but for such
termination, and of all other defaults, if any, under this Lease
then known to Landlord, and the Agent, by notice to Landlord,
thereupon may request Landlord to enter into a new lease of the
premises and Landlord shall enter into a new Lease (the "New Lease")
with the Agent (or its nominee), within 60 days after the giving of
such notice by the Agent provided that the Leasehold Mortgagee shall
have cured or caused to be cured any defaults of Tenant existing at
the date of termination that are susceptible of being cured. The New
Lease shall commence and rent and all obligations of the Tenant
under the New Lease shall accrue, as of the date of termination of
this Lease. The term of the New Lease shall continue for the period
which would have constituted the remainder of the term of this Lease
had this Lease not been terminated, and shall be upon all of the
terms, covenants, conditions, conditional limitations, and
agreements contained herein which were in force and effect
immediately prior to the termination of this Lease. The New Lease,
and this covenant, shall be superior to all rights, liens, estates,
titles and interests, other than those to which this Lease shall
have been subject immediately prior to termination and those matters
to which this Lease may, by its terms, become subject. The
provisions of the immediately preceding sentence shall be
self-executing, and Landlord shall have no obligation to do anything
(other than to execute such New Lease as herein provided) to assure
to the Agent or to the tenant under the New Lease good title to the
leasehold estate and the other estates, rights, titles and interests
13
<PAGE> 14
granted hereby. Simultaneously therewith, Landlord shall subject to
any rights of tenant, pay over to the Agent all monies on deposit
with Landlord, if any, which Tenant would have been entitled to use
but for the termination of this Lease for the purposes of and in
accordance with the provisions of the New Lease. The Agent shall,
simultaneously with the delivery of the New Lease, pay to Landlord
(1) all Rent and other sums of money due under this Lease on the
date of termination of this Lease and remaining unpaid; plus (2) all
Rent and other sums of money due under the New Lease for the period
from the date of commencement of the term thereof to the date of
delivery of the New Lease; plus (3) all costs and expenses,
including reasonable attorneys' fees, court costs, and litigation
expenses, incurred by Landlord in connection with termination of
this Lease, the recovery of possession of the Premises, putting the
premises in good condition and repair, and the preparation,
execution and delivery of such New Lease.
(c) If the Agent forecloses upon or otherwise acquires all or part of
Tenant's leasehold interest, the transfer to the Agent shall not require
Landlord's consent and the Agent shall be permitted to transfer the acquired
interest but only with Landlord's prior consent which consent shall not be
unreasonably withheld or delayed and shall thereupon be released from all
liability for the performance or observance of the covenants and conditions in
such Lease contained on Tenant's part to be performed and observed from and
after the date of such assignment; provided that the assignee shall have assumed
such Lease.
(d) Landlord and Tenant shall not enter into any amendments, modifications
or supplements to this Lease without the prior consent of the Agent if such
amendment, modification or supplement could reasonably be expected to have a
material adverse effect on the interest of the Agent under the Lease."
4. REMEDIAL WORKS
4.1 Tenant hereby agrees to perform the necessary remedial work with
respect to the matters described in Mark Malardino's letter to Tenant, dated
September 14, 1995, to complete such work on or before January 31, 1996 and to
deliver on or before September 29, 1995 a cash deposit or a clean irrevocable
letter of credit in favor of Landlord (which letter of credit shall expire on
March 31, 1996, unless otherwise mutually agreed by Tenant and Landlord) in an
aggregate amount of $1,000,000 to secure performance of such remedial work to
the premises identified in the Leases set forth in Schedule 1 hereto. Upon
completion of such remedial work by Tenant, Landlord shall remit the cash
deposit to Tenant or the letter of credit shall expire, as the case may be. If
the remedial work is not substantially completed by Tenant by January 31, 1996,
Landlord may complete such work and may use such cash deposit or draw on the
letter of credit from time to time, in an amount or amounts necessary to
reimburse Landlord for the monies expended by Landlord to perform such work plus
a fee equal to 10% of such cost. Landlord shall deliver to Tenant a written
request to draw on the letter of credit which details the uses of the monies so
expended.
14
<PAGE> 15
Tenant shall respond to such request within five (5) days business days and
permit Landlord to draw on such letter of credit. Landlord shall remit the
balance to Tenant upon completion of such remedial work.
5. REFERENCE TO AND EFFECT ON THE LEASE DOCUMENTS
5.1 Upon the effectiveness of this First Amendment, from and after
the date hereof, each reference in the Lease Agreement to "this Lease
Agreement," "hereunder," "hereof," or words of like import referring to the
Lease Agreement, and each reference in the related documents to "the Lease
Agreement," "thereunder," "thereof" or words of like import shall mean and be a
reference to the Lease Agreement, as amended hereby.
5.2 Except as specifically amended above, the Lease Agreement, and
all related documents are and shall continue to be in full force and effect and
are hereby ratified and confirmed in all respects.
5.3 Except as provided herein, the execution and delivery and
effectiveness of this First Amendment shall not operate as a waiver of any
right, power or remedy of Landlord under the Lease Agreement.
6. MISCELLANEOUS
6.1 This First Amendment may be executed in any number of
counterparts, each of which shall, collectively and separately, constitute one
agreement.
6.2 In all respects, including all matters of construction, validity
and performance, this First Amendment shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York applicable to
contracts made and performed in such state, without regard to principals thereof
regarding conflict of laws, and any applicable laws of the United States of
America.
6.3 THIS FIRST AMENDMENT AND THE LEASE AGREEMENT REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
15
<PAGE> 16
IN WITNESS WHEREOF, this First Amendment has been duly executed and
is effective as of the date first above written.
TRINET ESSENTIAL FACILITIES X, INC.
By: /s/ Charles S. Swanson
-------------------------------
Name: Charles S. Swanson
Title: Vice President
CATERAIR INTERNATIONAL CORPORATION
By: /s/ Michael De Santis
-------------------------------
Name: Michael De Santis
Title: Vice President
16
<PAGE> 17
SCHEDULE I
Each Lease Agreement was made by and between Caterair International Corporation
and the respective Landlord listed below and is dated as of May 15, 1993. The
numbers in parentheses indicate identification numbers located on the Lease
Agreements themselves.
Landlord Property
TriNet Essential Facilities (#368) Burlingame, CA
VIII R, Inc.
TriNet Essential Facilities (#701) Millbrae, CA
VIII R, Inc.
TriNet Essential Facilities (#376) Philadelphia, PA
X, Inc.
TriNet Essential Facilities (#318) Seattle, WA
VIII R, Inc.
TriNet Essential Facilities (#397) Bloomington, MN
VIII R, Inc.
TriNet Essential Facilities (#303) Reno, NV
VIII R, Inc.
TriNet Essential Facilities (#351) Astoria, NY
X, Inc.
TriNet Essential Facilities (#375) Astoria, NY
X, Inc.
TriNet Essential Facilities (#361) Miami, FL
VIII R, Inc.
TriNet Essential Facilities (#366) Miami, FL
VIII R, Inc.
TriNet Essential Facilities (#702) Miami, FL
VIII R, Inc.
TriNet Essential Facilities (#479) Orlando, FL
X, Inc.
<PAGE> 18
EXHIBIT A #479 Orlando, FL
All that certain real property situated in Orange County, State of Florida, and
described as follows:
Commence at a railroad spike marking the Northeast corner of Section 31,
Township 23 South, Range 30 East, Orange County, Florida; thence South 89
degrees 44' 44" West (bearings are based on U.S.C. & G.S. Plane Coordinate
System, East Zone of Florida, 1927 N.A.D.), along the Northerly boundary of said
Section 31 (being also the baseline of McCoy Road) 988.22 feet to a point;
thence South 00 degrees 13' 46" East, 490.00 feet along the West line of Block
"A", CASTLE TERRACE, recorded in Plat Book "V" Page 115, Public Records of
Orange County, Florida, to a point on the South right of way of Collingswood
Drive for a point of beginning; thence continue South 00 degrees 13' 46" East,
836.26 feet to the South line of the West 1/2 of the West 1/2 of the NE 1/4 of
the NE 1/4 of said Section 31; thence South 89 degrees 39' 05" West, 329.20 feet
along said South line; thence North 00 degrees 09' 41" West, 353.16 feet along
the West line of the West 1/2 of the West 1/2 of the NE 1/4 of the NE 1/4 of
said Section 31, thence North 89 degrees 39' 05" East, 289.78 feet; thence North
00 degrees 13' 46" West 483.15 feet; thence North 89 degrees 44' 44" East, 30.00
feet to the point of beginning.
<PAGE> 1
EXHIBIT 10.27.2
SECOND AMENDMENT TO LEASE AGREEMENT
SECOND AMENDMENT TO LEASE AGREEMENT dated as of December 1, 1995 between
TriNet Essential Facilities X, Inc., a Maryland corporation (TriNet) and
Caterair International Corporation, a Delaware corporation (Caterair).
This Second Amendment to Lease Agreement amends and forms a part of the
four separate Lease Agreements, each dated as of May 15, 1993, between TriNet,
as landlord, and Caterair, as tenant, as amended by First Amendment to Lease
Agreement dated as of September 22, 1995, relating to property described on
Exhibit A hereto (collectively, the Lease).
Pursuant to the First Amendment to Lease Agreement, Caterair agreed to
perform certain specified remedial work and delivered a letter of credit drawn
on The Bank of New York in the amount of $1,000,000 to TriNet as security for
the performance of remedial work on the property subject to the Lease and
certain other property leased by Caterair from an affiliate of TriNet.
Caterair proposes to perform substantial renovations to the property
subject to the Lease. Caterair has requested that the deadline for completion of
the remedial work be extended to June 1, 1996.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, TriNet and Caterair hereby agree as follows:
1. TriNet agrees that the deadline for completion of the remedial work
identified in the First Amendment to Lease Agreement will be deferred to June 1,
1996.
2. Caterair agrees that, to the extent such remedial work has not been
completed by June 1, 1996, TriNet may draw on the letter of credit to provide
funds to complete such remedial work and pay itself the fee referred to in
Section 4.1 of the First Amendment to Lease Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
be executed as of the date first above set forth.
TriNet Essential Facilities X, Inc.
By: /s/ JoAnn Chitty
-------------------------------
Name: JoAnn Chitty
Title: Sr. Vice President Asset Management
<PAGE> 2
-2-
Caterair International Corporation
By: /s/ John C. Carr
-------------------------------
Name: John C. Carr
Title: Vice President
Consented To:
SC International Services, Inc.
By: /s/ John C. Carr
-------------------------------
Name: John C. Carr
Title: Vice President
Consented To:
Caterair International, Inc. (II),
lease guarantor
By: /s/ Thomas Statas
-------------------------------
Name: Thomas Statas
Title: Vice President
Consented To:
Sky Chefs, Inc., lease guarantor
By: /s/ P.W. Tolbert
-------------------------------
Name: P.W. Tolbert
Title: Ex. Vice President
<PAGE> 3
-3-
Onex Food Services, Inc., lease guarantor
By: /s/ P.W. Tolbert
-------------------------------
Name: P.W. Tolbert
Title: Ex. Vice President
Morgan Guaranty Trust Company of New
York, as agent, lender to TriNet
By:
-------------------------------
Name:
Title:
<PAGE> 4
#376 Philadelphia, PA
Exhibit A
Block 55 8 19 LOT 114
ALL THAT CERTAIN real estate situated in the 40th Ward of the City of
Philadelphia.
BEGINNING at a point on the Northwesterly side of Escort Street (60 feet wide)
said point being located the following 2 courses and distances as measured along
said Northwesterly side of Escort Street, from the point of tangency of the
curve connecting said Northwesterly side of Escort Street with the Northeasterly
side of Island Avenue (108 feet wide) said curve having a radius of 40 feet and
an arc length of 62.832 feet; extending from said point of tangency (1) North 70
degrees 55 minutes 12 seconds East the distance of 116 feet to a point of
curvature; (2) thence extending Northeastwardly along an arc curving to the left
having a radius of 388 feet the arc length of 93.258 feet to the point of
beginning; thence extending from said point of beginning North 32 degrees 51
minutes 05 seconds West the distance of 237.859 feet to a point; thence
extending North 24 degrees 23 minutes 54 seconds East, the distance of 394.498
feet to a point; thence extending South 54 degrees 37 minutes 17 seconds East
the distance of 296.575 feet to a point on the Northwesterly side of the
aforementioned Escort Street (cul-de-sac); thence extending along said side of
Escort Street (cul-de-sac) in a Southwestwardly direction along an arc curving
to the left having a radius of 62 feet an arc length of 44.659 feet to a point
of reverse curvature; thence extending Southwestwardly along an arc curving to
the right having a radius of 62 feet an arc length of 45.560 feet to a point of
tangency; thence extending along the aforementioned Northwesterly side of Escort
Street South 36 degrees 12 minutes 43.02 seconds West the distance of 254.568
feet to point of curvature; thence continuing along said side of Escort Street
on a line curving to the right having a radius of 388 feet an arc length of
141.781 feet to the first mentioned point and place of beginning.
BEING NO. 8401 Escort Street.
BEING the same premises which Marriott Corporation, a Delaware Corp. by Deed
dated 12/15/1989 and recorded 1/11/1990 in Philadelphia County, in Deed Book
[Illegible] 1534 page 340 conveyed unto Caterair International Corporation, a
Delaware corporation, in fee, its successors and assigns.
<PAGE> 5
EXHIBIT A #375 Astoria, NY
PARCEL A (LOT 51 & 53)
ALL that certain real estate situated in the Borough and County of Queens, City
and State of New York, bounded and described as follows:
BEGINNING at the corner formed by the northwesterly side of 49th Street, as
legally opened and widened by The City of New York, and the southerly side of
Astoria Boulevard South, as legally opened and widened;
THENCE southwesterly, along the northwesterly side of 49th Street, 182.91 feet;
THENCE northwesterly at right angles to the northwesterly side of 49th Street,
109.04 feet
THENCE northeasterly along a line forming an interior angle of 94 degrees 16
minutes 18 seconds with the last mentioned course, 73.43 feet;
THENCE easterly along a line forming an interior angle of 109 degrees 38 minutes
46 seconds with the last mentioned course, 44.38 feet;
THENCE northeasterly along a line forming an interior angle of 248 degrees 09
minutes 48 seconds with the last mentioned course, 50.95 feet to the southerly
side of Astoria Boulevard South;
THENCE easterly along the southerly side of Astoria Boulevard South 86.08 feet
to the northwesterly side of 49th Street to the point or place of beginning.
PARCEL B (LOT 59)
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough and County of Queens, City and State of New York, bounded and described
as follows:
BEGINNING at a point on the northwesterly side of 49th street (formerly 19th
Avenue and Cabinet Street), distant 182.91 feet southwesterly from the corner
formed by the intersection of northwesterly side of 49th Street with the
southerly side of Brooklyn Queens Expressway (formerly Astoria Boulevard and
Flushing Avenue);
RUNNING THENCE northwesterly at right angles to the northwesterly side of 49th
Street, 109.04 feet;
<PAGE> 6
THENCE southerly on a line forming an interior angle of 85 degrees 43 minutes 41
seconds with the preceding course, 94.42 feet to land now or formerly of M.
Toomey;
THENCE easterly along the said land now or formerly of M. Toomey and on a line
forming an interior angle of 85 degrees 19 minutes 45 seconds with the preceding
course, 35.03 feet;
THENCE southerly still along said land now or formerly of M. Toomey and on a
line forming an interior angle of 276 degrees 51 minutes 41 seconds with the
preceding course, 1.38 feet;
THENCE easterly still along the said land now or formerly of M. Toomey and on a
line forming an interior angle of 83 degrees 33 minutes 49 seconds with the
preceding course, 68.10 feet to the northwesterly side of 49th Street;
THENCE northeasterly along the northwesterly side of 49th Street, 80 feet the
point or place of beginning.
<PAGE> 7
EXHIBIT A #351 Astoria, NY
All that certain real property situated in the Borough and County of Queens,
City and State of New York, bounded and described as follows:
BEGINNING at the corner formed by the intersection of the southerly side of 19th
Avenue, formerly Riker Avenue, 80 feet wide and the westerly side of 46th
Street, formerly 16th Avenue and Titus Street, 70 feet wide, as said street and
avenue are shown on The Final Section Map of The Topographical Bureau of The
City of New York, Borough of Queens;
RUNNING THENCE southerly along the westerly side of 46th Street, 350 feet;
THENCE westerly parallel with the southerly side of 19th Avenue, 200.02 feet to
the easterly side of 45th Street, formerly 15th Avenue and Luyster Street, 70
feet wide as said 45th Street is shown on The Final Section Map of The
Topographical Bureau of The City of New York, Borough of Queens;
RUNNING THENCE northerly along the easterly side of 45th Street, 350 feet to the
corner formed by the intersection of said easterly side of 45th Street and the
said southerly side of 19th Avenue; and
RUNNING THENCE easterly along the southerly side of said 19th Avenue, 200.02
feet to the corner the point or place of beginning.
<PAGE> 8
Exhibit A #479 Orlando, FL
All that certain real property situated in Orange County, State of Florida, and
described as follows:
Commence at a railroad spike marking the Northeast corner of Section 31,
Township 23 South, Range 30 East, Orange County, Florida; thence South 89
degrees 44' 44" West (bearings are based on U.S.C. & G.S. Plane Coordinate
System, East Zone of Florida, 1927 N.A.D.), along the Northerly boundary of said
Section 31 (being also the baseline of McCoy Road) 988.22 feet to a point;
thence South 00 degrees 13' 46" East, 490.00 feet along the West line of Block
"A", CASTLE TERRACE, recorded in Plat Book "V" Page 115, Public Records of
Orange County, Florida, to a point on the South right of way of Collingswood
Drive for a point of beginning; thence continue South 00 degrees 13' 46" East,
836.26 feet to the South line of the West 1/2 of the West 1/2 of the NE 1/4 of
the NE 1/4 of said Section 31; thence South 89 degrees 39' 05" West, 329.20 feet
along said South line; thence North 00 degrees 09' 41" West, 353.16 feet along
the West line of the West 1/2 of the West 1/2 of the NE 1/4 of the NE 1/4 of
said Section 31, thence North 89 degrees 39' 05" East, 289.78 feet; thence North
00 degrees 13' 46" West 483.15 feet; thence North 89 degrees 44' 44" East, 30.00
feet to the point of beginning.
<PAGE> 1
EXHIBIT 10.27.3
THIRD AMENDMENT TO LEASE AGREEMENT
THIRD AMENDMENT TO LEASE AGREEMENT dated as of June 1, 1996 between TriNet
Essential Facilities X, Inc., a Maryland corporation (TriNet), and Caterair
International Corporation, a Delaware corporation (Caterair).
This Third Amendment to Lease Agreement amends and forms a part of the
four separate Lease Agreements, each dated as of May 15, 1993, between TriNet,
as landlord, and Caterair, as tenant, as amended by First Amendment to Lease
Agreement dated as of September 22, 1995, and as amended by Second Amendment to
Lease Agreement dated as of December 1, 1995 relating to property described on
Exhibit A hereto (collectively, the Lease).
Pursuant to the First Amendment to Lease Agreement, Caterair agreed to
perform certain specified remedial work and delivered a letter of credit drawn
on The Bank of New York in the amount of $1,000,000 to TriNet as security for
the performance of remedial work on the property subject to the Lease and
certain other property leased by Caterair from an affiliate of TriNet. Pursuant
to the Second Amendment to Lease Agreement, the date for completion of such
remedial work was extended to June 1, 1996. Caterair has requested that the
deadline for completion of the remedial work be extended to November 15, 1996
and that the amount of the letter of credit be reduced to $500,000.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, TriNet and Caterair hereby agree as follows:
1. Section 4.1 of the First Amendment to Lease Agreement is hereby amended
and restated in its entirety as follows:
4.1 Tenant hereby agrees to perform the necessary remedial work to the
premises identified in the Leases set forth in Schedule 1 hereto with respect to
the matters described in Mark Malardino's letter to Tenant, dated September 14,
1995, and to complete such work on or before November 15, 1996. Tenant has
delivered to Landlord a clean irrevocable letter of credit identified as The
Bank of New York's Letter of Credit Ref. No. S00034339, which letter of credit
had an expiry date of July 31, 1996 and a face amount of $1,000,000 (the "Letter
of Credit") to secure performance of such remedial work. Landlord and Tenant
agree that on July 31, 1996, the Letter of Credit shall be amended to extend the
expiry date to December 31, 1996 and to reduce the face amount thereof to
$500,000 (the "Amended Letter of Credit"). Upon completion of such remedial work
by Tenant, Landlord shall return the Amended Letter of Credit to Tenant. If the
remedial work is not substantially completed by November 15, 1996, Landlord may
complete such work and may use such cash deposit or draw on the Amended Letter
of Credit from time to time, in an amount or amounts necessary to reimburse
Landlord for the monies expended by Landlord to perform such work plus a fee
equal to 10% of such cost. Landlord shall deliver to Tenant a written request to
draw on the Amended Letter of Credit which details the uses of the moneys so
<PAGE> 2
expended. Tenant shall respond to such request within five (5) business days and
permit Landlord to draw on the Amended Letter of Credit. Landlord shall remit
the balance to Tenant upon completion of such remedial work.
2. Attached hereto as Exhibit A is a copy of a July 29, 1996 amendment to
The Bank of New York letter of credit ref. no. S00034339, which has the effect
of reducing the available to credit to $500,000 and extending the expiration
date to December 31, 1996. TriNet consents to such amendment and agrees to
notify The Bank of New York of such consent.
3. This Third Amendment to Lease Agreement may be executed by each party
on a separate counterpart, and such counterparts shall together constitute a
single instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
Lease Agreement to be executed as of the date first above set forth.
TriNet Essential Facilities X, Inc.
By: /s/ JoAnn Chitty
--------------------------------
Name: JoAnn Chitty
Title: Sr. Vice President-Asset Management
Caterair International Corporation
By: /s/ Terry W. Roueche
--------------------------------
Name: Terry W. Roueche
Title: Assistant Secretary
<PAGE> 3
Schedule 1
#376 Philadelphia, PA
BLOCK 55 S 19 LOT 114
ALL THAT CERTAIN real estate situated in the 40th Ward of the City of
Philadelphia.
BEGINNING at a point on the Northwesterly side of Escort Street (60 feet wide)
said point being located the following 2 courses and distances as measured along
said Northwesterly side of Escort Street, from the point of tangency of the
curve connecting said Northwesterly side of Escort Street with the Northeasterly
side of Island Avenue (108 feet wide) said curve having a radius of 40 feet and
an arc length of 62.832 feet; extending from said point of tangency (1) North 70
degrees 55 minutes 12 seconds East the distance of 116 feet to a point of
curvature; (2) thence extending Northeastwardly along an arc curving to the left
having a radius of 388 feet the arc length of 93.258 feet to the point of
beginning; thence extending from said point of beginning North 32 degrees 51
minutes 05 seconds West the distance of 237.859 feet to a point; thence
extending North 24 degrees 23 minutes 54 seconds East, the distance of 394.498
feet to a point; thence extending South 54 degrees 37 minutes 17 seconds East
the distance of 296.575 feet to a point on the Northwesterly side of the
aforementioned Escort Street (cul-de-sac); thence extending along said side of
Escort Street (cul-de-sac) in a Southwestwardly direction along an arc curving
to the left having a radius of 62 feet an arc length of 44.659 feet to a point
of reverse curvature; thence extending Southwestwardly along an arc curving to
the right having a radius of 62 feet an arc length of 45.560 feet to a point of
tangency; thence extending along the aforementioned Northwesterly side of Escort
Street South 36 degrees 12 minutes 43.02 seconds West the distance of 254.568
feet to point of curvature; thence continuing along said side of Escort Street
on a line curving to the right having a radius of 388 feet an arc length of
141.781 feet to the first mentioned point and place of beginning.
BEING NO. 8401 Escort Street.
Being the same premises which Marriott Corporation, a Delaware Corp. by Deed
dated 12/15/1989 and recorded 1/11/1990 in Philadelphia County, in Deed Book
FHS 1534 page 340 conveyed unto Caterair International Corporation, a Delaware
corporation, in fee, its successors and assigns.
<PAGE> 4
#375 Astoria, NY
PARCEL A (LOT 51 & 53)
ALL that certain real estate situated in the Borough and County of Queens, City
and State of New York, bounded and described as follows:
BEGINNING at the corner formed by the northwesterly side of 49th Street, as
legally opened and widened by The City of New York, and the southerly side of
Astoria Boulevard South, as legally opened and widened;
THENCE southwesterly, along the northwesterly side of 49th Street, 182.91 feet;
THENCE northwesterly at right angles to the northwesterly side of 49th Street,
109.04 feet
THENCE northeasterly along a line forming an interior angle of 94 degrees 16
minutes 18 seconds with the last mentioned course, 73.43 feet;
THENCE easterly along a line forming an interior angle of 109 degrees 38 minutes
46 seconds with the last mentioned course, 44.38 feet;
THENCE northeasterly along a line forming an interior angle of 248 degrees 09
minutes 48 seconds with the last mentioned course, 50.95 feet to the southerly
side of Astoria Boulevard South;
THENCE easterly along the southerly side of Astoria Boulevard South 86.08 feet
to the northwesterly side of 49th Street to the point or place of beginning.
PARCEL B (LOT 59)
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough and County of Queens, City and State of New York, bounded and described
as follows:
BEGINNING at a point on the northwesterly side of 49th Street (formerly 19th
Avenue and Cabinet Street), distant 182.91 feet southwesterly from the corner
formed by the intersection of northwesterly side of 49th Street with the
southerly side of Brooklyn Queens Expressway (formerly Astoria Boulevard and
Flushing Avenue);
RUNNING THENCE northwesterly at right angles to the northwesterly side of 49th
Street, 109.04 feet;
<PAGE> 5
THENCE southerly on a line forming an interior angle of 85 degrees 43 minutes 41
seconds with the preceding course, 94.42 feet to land now or formerly of M.
Toomey;
THENCE easterly along the said land now or formerly of M. Toomey and on a line
forming an interior angle of 85 degrees 19 minutes 45 seconds with the preceding
course, 35.03 feet;
THENCE southerly still along said land now or formerly of M. Toomey and on a
line forming an interior angle of 276 degrees 51 minutes 41 seconds with the
preceding course, 1.38 feet;
THENCE easterly still along the said land now or formerly of M. Toomey and on a
line forming an interior angle of 83 degrees 33 minutes 49 seconds with the
preceding course, 68.10 feet to the northwesterly side of 49th Street;
THENCE northeasterly along the northwesterly side of 49th Street, 80 feet the
point or place of beginning.
<PAGE> 6
#351 Astoria, NY
All that certain real property situated in the Borough and County of Queens,
City and State of New York, bounded and described as follows:
BEGINNING at the corner formed by the intersection of the southerly side of 19th
Avenue, formerly Riker Avenue, 80 feet wide and the westerly side of 46th
Street, formerly 16th Avenue and Titus Street, 70 feet wide, as said street and
avenue are shown on The Final Section Map of The Topographical Bureau of The
City of New York, Borough of Queens;
BEGINNING THENCE southerly along the westerly side of 46th Street, 350 feet;
THENCE westerly parallel with the southerly side of 19th Avenue, 200.02 feet to
the easterly side of 45th Street, formerly 15th Avenue and Luyster Street, 70
feet wide as said 45th Street is shown on The Final Section Map on The
Topographical Bureau of The City of New York, Borough of Queens;
RUNNING THENCE northerly along the easterly side of 45th Street, 350 feet to the
corner formed by the intersection of said easterly side of 45th Street and the
said southerly side of 19th Avenue; and
RUNNING THENCE easterly along the southerly side of said 19th Avenue, 200.02
feet to the corner the point or place of beginning.
<PAGE> 7
#479 Orlando, FL
All that certain real property situated in Orange County, State of Florida, and
described as follows:
Commence at a railroad spike marking the Northeast corner of Section 31,
Township 23 South, Range 30 East, Orange County, Florida; thence South 89
degrees 44' 44" West (bearings are based on U.S.C. & G.S. Plane Coordinate
System, East Zone of Florida, 1927 N.A.D.), along the Northerly boundary of said
Section 31 (being also the baseline of McCoy Road) 988.22 feet to a point;
thence South 00 degrees 13' 46" East, 490.00 feet along the West line of Block
"A", CASTLE TERRACE, recorded in Plat Book "V" Page 115, Public Records of
Orange County, Florida, to a point on the South right of way of Collingswood
Drive for a point of beginning; thence continue South 00 degrees 13' 46" East,
836.26 feet to the South line of the West 1/2 of the West 1/2 of the NE 1/4 of
the NE 1/4 of said Section 31; thence South 89 degrees 39' 05" West, 329.20 feet
along said South line; thence North 00 degrees 09' 41" West, 353.16 feet along
the West line of the West 1/2 of the West 1/2 of the NE 1/4 of the NE 1/4 of
said Section 31, thence North 89 degrees 39' 05" East, 289.78 feet; thence North
00 degrees 13' 46" West 483.15 feet; thence North 89 degrees 44' 44" East, 30.00
feet to the point of beginning.
<PAGE> 1
EXHIBIT 10.27.4
FOURTH AMENDMENT TO LEASE AGREEMENT
FOURTH AMENDMENT TO LEASE AGREEMENT dated as of December 23, 1996 between
TriNet Essential Facilities X, Inc., a Maryland corporation (TriNet), and
Caterair International Corporation, a Delaware corporation (Caterair).
This Fourth Amendment to Lease Agreement amends and forms a part of the
four separate Lease Agreements, each dated as of May 15, 1993, between TriNet,
as landlord, and Caterair, as tenant, as amended by First Amendment to Lease
Agreement dated as of September 22, 1995, as amended by Second Amendment to
Lease Agreement dated as of December 1, 1995 and as amended by Third Amendment
to Lease Agreement dated as of June 1, 1996 relating to property described on
Exhibit A hereto (collectively, the Lease).
Pursuant to the First Amendment to Lease Agreement, Caterair agreed to
perform certain specified remedial work and delivered a letter of credit drawn
on The Bank of New York in the amount of $1,000,000 to TriNet as security for
the performance of remedial work on the property subject to the Lease and
certain other property leased by Caterair from an affiliate of TriNet. Pursuant
to the Second Amendment to Lease Agreement, the date for completion of such
remedial work was extended to June 1, 1996. Pursuant to the Third Amendment to
Lease Agreement, the date for completion of such remedial work was extended to
November 15, 1996 and the amount of the letter of credit was reduced to
$500,000. Caterair has requested that the deadline for completion of the
remedial work be extended to April 30, 1997 and that the letter of credit be
reduced to $100,000.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, TriNet and Caterair hereby agree as follows:
1. Section 4.1 of the First Amendment to Lease Agreement is hereby amended
and restated in its entirety as follows:
4.1 Tenant hereby agrees to perform the necessary remedial work to the premises
identified in the Leases set forth in Schedule 1 hereto with respect to the
matters described in Mark Malardino's letter to Tenant, dated September 14,
1995, and to complete such work on or before April 30, 1997. Tenant has
delivered to Landlord a clean irrevocable letter of credit identified as The
Bank of New York's Letter of Credit Ref. No. S00034339 to secure performance of
such remedial work; such letter of credit was amended on July 29, 1996 to reduce
the available credit to $500,000 and to extend the expiration date to December
31, 1996. Tenant shall cause the letter of credit as so amended to be further
amended to reduce the available credit to $100,000 and to extend its expiration
date to June 30, 1997 (the "Amended Letter of Credit"). Upon completion of such
remedial work by Tenant, Landlord shall return the Amended Letter of Credit to
Tenant. If the remedial work is not substantially completed by April 30, 1997,
Landlord may draw on the Amended Letter of Credit from time to time to fund the
cost or estimated cost of such work plus
<PAGE> 2
a management fee equal to 10% of such cost. Landlord shall remit any unspent
balance to Tenant upon completion of such remedial work.
2. Attached hereto as Exhibit A is a copy of a December 24, 1996 amendment
to The Bank of New York letter of credit no. S00034339, which has the effect of
reducing the available credit to $100,000 and extending the expiration date to
June 30, 1997. TriNet consents to such amendment and agrees to notify The Bank
of New York of such consent.
3. This Fourth Amendment to Lease Agreement may be executed by each party
on a separate counterpart, and such counterparts shall together constitute a
single instrument.
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment
to Lease Agreement to be executed as of the date first above set forth.
TriNet Essential Facilities X, Inc.
By: /s/ Jo Ann Chitty
---------------------------------
Name: Jo Ann Chitty
Title: Senior Vice President Asset
Management
Caterair International Corporation
By: /s/ Terry W. Roueche
---------------------------------
Name: Terry W. Roueche
Title: Assistant Secretary
<PAGE> 4
Schedule 1
#376 Philadelphia, PA
BLOCK 55 S 19 LOT 114
ALL THAT CERTAIN real estate situated in the 40th Ward of the City of
Philadelphia.
BEGINNING at a point on the Northwesterly side of Escort Street (60 feet wide)
said point being located the following 2 courses and distances as measured along
said Northwesterly side of Escort Street, from the point of tangency of the
curve connecting said Northwesterly side of Escort Street with the Northeasterly
side of Island Avenue (108 feet wide) said curve having a radius of 40 feet and
an arc length of 62.832 feet; extending from said point of tangency (1) North 70
degrees 55 minutes 12 seconds East the distance of 116 feet to a point of
curvature; (2) thence extending Northeastwardly along an arc curving to the left
having a radius of 388 feet the arc length of 93.258 feet to the point of
beginning; thence extending from said point of beginning North 32 degrees 51
minutes 05 seconds West the distance of 237.859 feet to a point; thence
extending North 24 degrees 23 minutes 54 seconds East, the distance of 394.498
feet to a point; thence extending South 54 degrees 37 minutes 17 seconds East
the distance of 296.575 feet to a point on the Northwesterly side of the
aforementioned Escort Street (cul-de-sac); thence extending along said side of
Escort Street (cul-de-sac) in a Southwestwardly direction along an arc curving
to the left having a radius of 62 feet an arc length of 44.659 feet to a point
of reverse curvature; thence extending Southwestwardly along an arc curving to
the right having a radius of 62 feet an arc length of 45.560 feet to a point of
tangency; thence extending along the aforementioned Northwesterly side of Escort
Street South 36 degrees 12 minutes 43.02 seconds West the distance of 254.568
feet to point of curvature; thence continuing along said side of Escort Street
on a line curving to the right having a radius of 388 feet an arc length of
141.781 feet to the first mentioned point and place of beginning.
BEING NO. 8401 Escort Street.
Being the same premises which Marriott Corporation, a Delaware Corp. by Deed
dated 12/15/1989 and recorded 1/11/1990 in Philadelphia County, in Deed Book FHS
1534 page 340 conveyed unto Caterair International Corporation, a Delaware
corporation, in fee, its successors and assigns.
<PAGE> 5
#375 Astoria, NY
PARCEL A (LOT 51 & 53)
ALL that certain real estate situated in the Borough and County of Queens, City
and State of New York, bounded and described as follows:
BEGINNING at the corner formed by the northwesterly side of 49th Street, as
legally opened and widened by The City of New York, and the southerly side of
Astoria Boulevard South, as legally opened and widened;
THENCE southwesterly, along the northwesterly side of 49th Street, 182.91 feet;
THENCE northwesterly at right angles to the northwesterly side of 49th Street,
109.04 feet
THENCE northeasterly along a line forming an interior angle of 94 degrees 16
minutes 18 seconds with the last mentioned course, 73.44 feet;
THENCE easterly along a line forming an interior angle of 109 degrees 38 minutes
46 seconds with the last mentioned course, 44.38 feet;
THENCE northeasterly along a line forming an interior angle of 248 degrees 09
minutes 48 seconds with the last mentioned course, 50.95 feet to the southerly
side of Astoria Boulevard South;
THENCE easterly along the southerly side of Astoria Boulevard South 86.08 feet
to the northwesterly side of 49th Street to the point or place of beginning.
PARCEL B (LOT 59)
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough and County of Queens, City and State of New York, bounded and described
as follows:
BEGINNING at a point on the northwesterly side of 49th Street (formerly 19th
Avenue and Cabinet Street), distant 182.91 feet southwesterly from the corner
formed by the intersection of northwesterly side of 49th Street with the
southerly side of Brooklyn Queens Expressway (formerly Astoria Boulevard and
Flushing Avenue);
RUNNING THENCE northwesterly at right angles to the northwesterly side of 49th
Street, 109.04 feet;
<PAGE> 6
THENCE southerly on a line forming an interior angle of 85 degrees 43 minutes 41
seconds with the preceding course, 94.42 feet to land now or formerly of M.
Toomey;
THENCE easterly along the said land now or formerly of M. Toomey and on a line
forming an interior angle of 85 degrees 19 minutes 45 seconds with the preceding
course, 35.03 feet;
THENCE southerly still along said land now or formerly of M. Toomey and on a
line forming an interior angle of 276 degrees 51 minutes 41 seconds with the
preceding course, 1.38 feet;
THENCE easterly still along the said land now or formerly of M. Toomey and on a
line forming an interior angle of 83 degrees 33 minutes 49 seconds with the
preceding course, 68.10 feet to the northwesterly side of 49th Street;
THENCE northeasterly along the northwesterly side of 49th Street, 80 feet the
point or place of beginning.
<PAGE> 7
#351 Astoria, NY
All that certain real property situated in the Borough and County of Queens,
City and State of New York, bounded and described as follows:
BEGINNING at the corner formed by the intersection of the southerly side of 19th
Avenue, formerly Riker Avenue, 80 feet wide and the westerly side of 46th
Street, formerly 16th Avenue and Titus Street, 70 feet wide, as said street and
avenue are shown on The Final Section Map of The Topographical Bureau of The
City of New York, Borough of Queens;
BEGINNING THENCE southerly along the westerly side of 46th Street, 350 feet;
THENCE westerly parallel with the southerly side of 19th Avenue, 200.02 feet to
the easterly side of 45th Street, formerly 15th Avenue and Luyster Street, 70
feet wide as said 45th Street is shown on The Final Section Map on The
Topographical Bureau of The City of New York, Borough of Queens;
RUNNING THENCE northerly along the easterly side of 45th Street, 350 feet to the
corner formed by the intersection of said easterly side of 45th Street and the
said southerly side of 19th Avenue; and
RUNNING THENCE easterly along the southerly side of said 19th Avenue, 200.02
feet to the corner the point or place of beginning.
<PAGE> 8
#479 Orlando, FL
All that certain real property situated in Orange County, State of Florida, and
described as follows:
Commence at a railroad spike marking the Northeast corner of Section 31,
Township 23 South, Range 30 East, Orange County, Florida; thence South 89
degrees 44' 44" West (bearings are based on U.S.C. & G.S. Plane Coordinate
System, East Zone of Florida, 1927 N.A.D.), along the Northerly boundary of said
Section 31 (being also the baseline of McCoy Road) 988.22 feet to a point;
thence South 00 degrees 13' 46" East, 490.00 feet along the West line of Block
"A", CASTLE TERRACE, recorded in Plat Book "V" Page 115, Public Records of
Orange County, Florida, to a point on the South right of way of Collingswood
Drive for a point of beginning; thence continue South 00 degrees 13' 46" East,
836.26 feet to the South line of the West 1/2 of the West 1/2 of the NE 1/4 of
the NE 1/4 of said Section 31; thence South 89 degrees 39' 05" West, 329.20 feet
along said South line; thence North 00 degrees 09' 41" West, 353.16 feet along
the West line of the West 1/2 of the West 1/2 of the NE 1/4 of the NE 1/4 of
said Section 31, thence North 89 degrees 39' 05" East, 289.78 feet; thence North
00 degrees 13' 46" West 483.15 feet; thence North 89 degrees 44' 44" East, 30.00
feet to the point of beginning.
<PAGE> 9
[LETTERHEAD OF THE BANK OF NEW YORK]
OUR. NO. CORRESPONDENT'S REF. NO.
S00034339 TRINET CORP RLTY
DATE
DECEMBER 24 1996
BENEFICIARY: APPLICANT:
TRINET CORPORATE REALTY TRUST, SC INTERNATIONAL SERVICES, INC.
INC., 4 EMBARCADERO CENTER 524 EAST LAMAR BOULEVARD
SUITE 3150, SAN FRANCISCO, CA 94111 ARLINGTON, TX 76011
ATTN: DEBORAH PAUL
DATE OF ORIGINAL ISSUE: AMENDMENT DATE:
MAY 23 1996 DECEMBER 24 1996
GENTLEMEN/LADIES:
THE ABOVE MENTIONED INSTRUMENT INCLUDING ANY PREVIOUS AMENDMENTS, IS AMENDED AS
FOLLOWS:
CREDIT AMOUNT DECREASED BY **USD400,000.00**
MAKING NEW CREDIT AMOUNT TOTAL **USD100,000.00**
EXTEND EXPIRATION DATE JUNE 30, 1997.
THIS AMENDMENT WILL ONLY BECOME OPERATIVE UPON OUR RECEIPT OF YOUR WRITTEN
CONSENT TO IT'S TERMS. PLEASE INDICATE YOUR CONSENT OR REJECTION BY SIGNING AND
RETURNING THE ATTACHED COPY OF THIS AMENDMENT.
MAY WE PLEASE HAVE YOUR RESPONSE AS SOON AS POSSIBLE.
IF THIS AMENDMENT IS TO BE REJECTED, BENEFICIARY'S SIGNED STATEMENT TO THAT
EFFECT IS REQUIRED.
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
THIS AMENDMENT IS TO BE CONSIDERED AS PART OF THE ABOVE CREDIT AND MUST BE
ATTACHED THERETO.
ALL OTHER CONDITIONS REMAIN UNCHANGED.
YOURS VERY TRULY,
/s/ [ILLEGIBLE]
- --------------------
AUTHORIZED SIGNATURE
<PAGE> 1
EXHIBIT 10.27.5
FIFTH AMENDMENT TO LEASE AGREEMENT
FIFTH AMENDMENT TO LEASE AGREEMENT dated as of June 23, 1997 between
TriNet Essential Facilities X, Inc., a Maryland corporation (TriNet), and
Caterair International Corporation, a Delaware corporation (Caterair).
This Fifth Amendment to Lease Agreement amends and forms a part of the
four separate Lease Agreements, each dated as of May 15, 1993, between TriNet,
as landlord, and Caterair, as tenant, as amended by First Amendment to Lease
Agreement dated as of September 22, 1995, as amended by Second Amendment to
Lease Agreement dated as of December 1, 1995, as amended by Third Amendment to
Lease Agreement dated as of June 1, 1996, and as amended by Fourth Amendment to
Lease dated as of December 23, 1996 relating to property described on Exhibit A
hereto (collectively, the Lease).
Pursuant to the First Amendment to Lease Agreement, Caterair agreed to
perform certain specified remedial work and delivered a letter of credit drawn
on The Bank of New York in the amount of $1,000,000 to TriNet as security for
the performance of remedial work on the property subject to the Lease and
certain other property leased by Caterair from an affiliate of TriNet. Pursuant
to the Second Amendment to Lease Agreement, the date for completion of such
remedial work was extended to June 1, 1996. Pursuant to the Third Amendment to
Lease Agreement, the date for completion of such remedial work was extended to
November 15, 1996 and the amount of the letter of credit was reduced to
$500,000. Pursuant to the Fourth Amendment to Lease, the amount of the letter of
credit was reduced to $100,000 and the date for completion of such remedial work
was extended to April 30, 1997. Caterair has requested that the date for
completion of the remedial work be extended to October 31, 1997.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, TriNet and Caterair hereby agree as follows:
1. Section 4.1 of the First Amendment to Lease Agreement is hereby amended
and restated in its entirety as follows:
4.1 Tenant hereby agrees to perform the necessary remedial work to the premises
identified in the Leases set forth in Schedule 1 hereto with respect to the
matters described in Mark Malardino's letter to Tenant, dated September 14,
1995, and to complete such work on or before October 31, 1997. Tenant has
delivered to Landlord a clean irrevocable letter of credit identified as The
Bank of New York's Letter of Credit Ref. No. S00034339 to secure performance of
such remedial work; such letter of credit was amended on July 29, 1996 to reduce
the available credit to $500,000 and to extend the expiration date to December
31, 1996; such letter of credit was amended to reduce the available credit to
$100,000 and to extend its expiration date to June 30, 1997; Tenant shall cause
such letter of credit to be further amended to extend its expiration date to
November 28, 1997 (the "Amended Letter of Credit"). Upon completion of such
remedial work
<PAGE> 2
by Tenant, Landlord shall return the Amended Letter of Credit to Tenant. If the
remedial work is not substantially completed by October 31, 1997, Landlord may
draw on the Amended Letter of Credit from time to time to fund the cost or
estimated cost of such work plus a management fee equal to 10% of such cost.
Landlord shall remit any unspent balance to Tenant upon completion of such
remedial work.
2. Attached hereto as Exhibit A is a copy of a June __, 1997 amendment to
The Bank of New York letter of credit no. S00034339, which has the effect of
extending the expiration date to November 28, 1997 and making the letter of
credit assignable by TriNet. TriNet consents to such amendment and agrees to
notify The Bank of New York of such consent.
3. This Fifth Amendment to Lease Agreement may be executed by each party
on a separate counterpart, and such counterparts shall together constitute a
single instrument.
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to
Lease Agreement to be executed as of the date first above set forth.
TriNet Essential Facilities X, Inc.
By:/s/Jo Ann Chitty
---------------------------------
Name:
Title:
Caterair International Corporation
By:/s/ Terry Roueche
---------------------------------
Name: Terry Roueche
Title: Assistant Secretary
<PAGE> 1
EXHIBIT 10.27.6
SIXTH AMENDMENT TO LEASE
SIXTH AMENDMENT TO LEASE (this "Sixth Amendment"), dated as of August 22,
1997, with effect as of the Effective Date (as defined) between TriNet Essential
Facilities X, Inc., a Maryland corporation ("TriNet"), and Caterair
International Corporation, a Delaware corporation ("Tenant"). Capitalized terms
used herein but not otherwise defined have the respective meanings ascribed to
such terms in the Lease (as hereinafter defined).
This Sixth Amendment amends and forms a part of the four separate Lease
Agreements, each dated as of May 15, 1993, between TriNet, as landlord, and
Tenant, as tenant, as amended by First Amendment to Lease Agreement (the "First
Amendment"), dated as of September 22, 1995, as amended by Second Amendment to
Lease Agreement, dated as of December 1, 1995, as amended by Third Amendment to
Lease Agreement date as of June 1, 1996, as amended by Fourth Amendment to Lease
Agreement, dated as of December 2, 1996, and as amended by Fifth Amendment to
Lease Agreement, dated as of June 23, 1997 (collectively, and as further
amended, supplemented or modified, the "Lease").
The parties hereto desire to further amend the Lease, upon the terms and
subject to the conditions set forth in this Sixth Amendment.
Simultaneously with the execution and delivery of this Sixth Amendment,
Tenant is entering into that certain Sixth Amendment to Lease, dated the date
hereof, in a form substantially identical to this Sixth Amendment with TriNet
Essential Facilities VIII R, Inc. (the "Other Sixth Amendment").
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Amendments to Lease.
1.1 Annex I to the Lease is hereby amended, effective as of the Effective
Date, by adding the following terms thereto in their proper alphabetical
sequence:
"Revolving Credit Agreement" means that certain Amended and Restated
Credit Agreement, dated as of September 29, 1995, and amended and restated
as of August __, 1997, among SC International Services, Inc., as borrower,
Onex Food Services, Inc., Caterair Holdings Corporation, Tenant, the
guarantors named therein, the lenders party thereto from time to time,
Bankers Trust Company and J.P. Morgan Securities Inc., as co-arrangers,
Bankers Trust Company, as syndication agent, the Bank of New York, as
co-agent, and Morgan Guaranty Trust Company of New York, as administrative
agent, as such Amended and Restated Credit Agreement may
<PAGE> 2
be amended, restated, supplemented, modified, refunded or refinanced from
time to time whether pursuant to a bank credit agreement or other most
senior debt financing agreement containing a leverage ratio covenant.
1.2 Section 4 of the Lease is hereby deleted and restated in its entirety,
effective as of the Effective Date, as follows:
"4. RENTAL:
A. Tenant agrees to pay fixed rent ("Fixed Rent") to Landlord
without notice, by check sent to Landlord at such address as shall be
provided by Landlord to Tenant, provided that such check shall be received
by Landlord in sufficient time that the funds will be received by the
Fixed Rent due date, or to such other persons or place as may be provided
by written notice from the person then entitled to receive the Fixed Rent,
in equal installments in advance on or before the first day of each month
as specified in the Basic Lease Information.
If Fixed Rent is not paid when due, interest shall accrue
thereon at the Overdue Rate until payment is made. Tenant hereby
acknowledges that the late payment by Tenant to Landlord of Fixed Rent,
Additional Rent and other sums due under this Lease will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will
be extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges and late charges which may
be imposed on Landlord by the terms of any mortgage or trust deed covering
the Premises. Accordingly, if any installment of Fixed Rent or any other
sum due to Landlord from Tenant shall not have been received by Landlord
or Landlord's designee within fifteen (15) days after such amount shall be
due, then, without any requirement for notice to Tenant, Tenant shall pay
to Landlord a late charge equal to two percent (2%) of such overdue
amount, together with interest on such overdue amount at the Overdue Rate.
The parties agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by
Tenant. Acceptance of such late charge by Landlord shall in no event
constitute a waiver of Tenant's default with respect to such overdue
amount, nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder; provided that nothing contained herein shall
relieve Landlord of a duty to mitigate damages under applicable law.
B. The Fixed Rent for each Renewal Term shall be payable in
equal monthly installments in advance on or before the first day of each
month as provided in the Basic Lease Information.
1.3 Section 15 of the Lease is hereby amended and restated in its
entirety, effective as of the Effective Date, to read as follows:
2
<PAGE> 3
"15. DEFAULT: Events of Default.
The following events, following the expiration of the
applicable cure periods, in this Paragraph are sometimes referred to as an
"Event of Default":
(a) If default shall be made in the payment of Fixed Rent and such
default shall continue for five (5) business days after notice
from Landlord (provided that after giving one such notice, any
such default occurring within 12 months shall become an Event
of Default without the giving of notice) or if default shall
be made in the payment of Additional Rent or in the payment of
any other sum required to be paid by Tenant under this Lease
or the payment to Landlord of any other sum due under the
terms of any other agreement between Landlord and Tenant;
(b) If default shall be made in the observance or performance of
any of the other covenants in this Lease which Tenant is
required to observe and perform and such default shall
continue for thirty (30) days after written notice to Tenant,
or if a default involves a hazardous condition and is not
cured by Tenant immediately; provided, however, the time
allowed Tenant (except in the instance of hazardous conditions
or conditions which expose Landlord to criminal liability)
within which Tenant is permitted to cure the same shall be
extended for such period as may be necessary for the curing
provided Tenant is continuously, diligently and in good faith
prosecuting such cure;
(c) If any representation or warranty made by Tenant herein or in
any certificate, demand or request made pursuant hereto proves
to be incorrect in any material respect when made;
(d) If the interests of Tenant in this Lease shall be levied on
under execution or other legal process and same is not removed
or stayed within thirty (30) days;
(e) If any voluntary petition of bankruptcy or for corporate
reorganization or for the appointment of a receiver or any
similar relief shall be filed by Tenant;
(f) If any involuntary petition of bankruptcy shall be filed
against tenant under any Federal or State bankruptcy or
insolvency act and shall not have been dismissed within ninety
(90) days of the filing thereof;
3
<PAGE> 4
(g) If a receiver shall be appointed for Tenant or any of the
property of Tenant by any court and any such receiver shall
not have been discharged within ninety (90) days from the date
of his appointment;
(h) If Tenant shall make an assignment for the benefit of
creditors;
(i) If Tenant shall admit, in writing, Tenant's inability to meet
Tenant's debts as they mature;
(j) If Tenant shall abandon the Premises;
(k) If: (i) there are any outstanding obligations under the
Revolving Credit Agreement, then the acceleration
of the maturity of any amounts due under the
Revolving Credit Agreement by the Agent or the
Lenders (each as defined therein) shall constitute
an Event of Default hereunder; or
(ii) there are no outstanding obligations under the
Revolving Credit Agreement, then any default shall
occur in the payment of any outstanding
indebtedness of $10,000,000 or more, or such lesser
indebtedness as shall be material to the financial
condition of Tenant;
(l) If BOTH (i) none of Tenant, SC International Services, Inc.,
Sky Chefs, Inc., Onex Food Services, Inc. or Caterair
International, Inc. (II) has a BBB- or better investment grade
credit rating from Standard & Poors Corporation and a Baa3 or
better investment grade rating from Moody's Investors Service,
Inc. for its senior debt obligations, AND (ii) there shall
have occurred and be continuing under the Revolving Credit
Agreement a breach in the observance of Section 9.09 thereof
(Combined Leverage Ratio), or any successor or replacement
provision thereto which is intended to measure leverage (e.g.,
debt to EBITDA) on a substantially similar basis (as such
Section 9.09 or any such successor provision may from time to
time be amended or modified); provided, that a waiver by a
creditor of compliance with any such covenant (as opposed to
an amendment of such covenant) shall not be binding upon
Landlord; and provided further, that if at any time the
Revolving Credit Agreement does not contain a covenant
limiting the leverage ratio, then, for the purposes of this
Lease, the leverage ratio last in effect prior to its
elimination shall be deemed in effect;
4
<PAGE> 5
(m) If the ratio of (i) Consolidated EBITDA to (ii) Consolidated
Cash Interest Expense, for any 12-month period ending on March
31, June 30, September 30 or December 31 in any year,
commencing with the 12-month period ending on September 30,
1996, shall be less than that set forth below for any of the
following periods:
12-Month Period Ending Ratio
---------------------- -----
9/30/96, 12/31/96, 3/31/97,
6/30/97 or 9/30/97 1.75:1.0
12/31/97 and each March 31,
June 30, September 30 and
December 31 thereafter 2.00:1.0
(n) If a final judgment shall be entered in an amount greater than
$5,000,000 which creates a default under any mortgage, lease
or loan agreement of Tenant, or which affects Landlord's
interest in the Premises; or
(o) If an Event of Default shall occur under any other lease
between Landlord and Tenant dated as of the date hereof.
Landlord may treat the occurrence of any one or more of the
foregoing Events of Default as a breach of this Lease. For so long as such
Event of Default continues the Landlord, at its option and with or without
notice or demand of any kind to Tenant or any other person, but subject to
Paragraph 16F hereof may have any one or more of the remedies provided in
this Paragraph 15 or elsewhere in this lease, in addition to all other
remedies and rights provided at law or in equity."
2. Consideration.
2.1 The consideration for Tenant's agreement to enter into this Sixth
Amendment shall be aggregate consideration of $375,000 (the "Amendment Fee")
payable by TriNet to Tenant on the Effective Date via wire transfer of
immediately available funds to an account designated by Tenant or by such other
means of payment as may be notified to TriNet by Tenant in writing.
3. Conditions Precedent. This Sixth Amendment and the amendments to the
Lease contemplated herein shall become effective (without any further action
being necessary by the parties) upon fulfillment of each of the following
conditions precedent (such date referred to herein as the "Effective Date"):
5
<PAGE> 6
3.1 The Amended and Restated Credit Agreement (the "Revolving Credit
Agreement"), dated as of September 29, 1995, and amended and restated as of
August ___, 1997, among SC International Services, Inc., as borrower, Onex Food
Services, Inc., Caterair Holdings Corporation, Caterair, the guarantors named
therein, the lenders party thereto from time to time, Bankers Trust Company and
J.P. Morgan Securities Inc., as co-arrangers, Bankers Trust Company, as
syndication agent, the Bank of New York, as co-agent, and Morgan Guaranty Trust
Company of New York, as administrative agent shall be executed and delivered by
the parties thereto;
3.2 The Revolving Credit Agreement, as executed and delivered by the
parties thereto, shall contain a provision that is substantially similar to the
provision set forth on Annex A hereto;
3.3 Tenant shall have delivered to TriNet, upon the satisfaction of the
conditions set forth in Sections 3.1 and 3.2, a certificate in substantially the
form of Annex B hereto as to the satisfaction of such conditions (the
"Certificate"); and
3.4 TriNet shall have paid to Tenant, on a date in October 1997, the
Amendment Fee, as set forth in Section 2.1 hereof.
4. Miscellaneous.
4.1 Notification of Change. Tenant will notify Landlord within ten (10)
business days after entering into any agreement which modifies, amends or
replaces Section 9.09 of the Revolving Credit Agreement as originally in effect,
and will provide Landlord with a true and complete copy of such agreement.
4.2 Certificate of Compliance. From and after the Effective Date, Tenant
will deliver to Landlord within 60 days after the end of each of the first three
fiscal quarters and within 120 days after the end of each fiscal year a
certificate, signed by a financial officer of Tenant having knowledge thereof,
setting forth the calculations by which compliance or non-compliance with the
leverage covenant is established and including therewith copies of the relevant
financial statements in connection with such calculations.
4.3 Tenant will use its best efforts to cause SC International Services,
Inc. to perform its obligations under Section 4(a) of that certain Guaranty,
dated as of September 22, 1995, by SC International Services, Inc., Onex Food
Services, Inc., Sky Chefs, Inc. and Caterair International, Inc. (II).
4.4 Simultaneously with the execution and delivery of this Sixth
Amendment, TriNet is executing and delivering to Tenant a waiver of Tenants
compliance with the "net worth" covenant set forth in Section 15(l) of the
Lease, which waiver is effective from the date of the delivery of the
Certificate through and including the Effective Date.
6
<PAGE> 7
4.5 This Sixth Amendment may be executed in any number of counterparts,
each of which shall constitute and original, and all of which together shall
constitute one and the same instrument.
4.6 In all respects, including all matters of construction, validity and
performance, this Sixth Amendment shall be governed by, and construed and
enforced in accordance with the laws of the State of New York applicable to
contracts made and performed in such state without regard to principles thereof
regarding conflicts of laws, and any applicable laws of the United States of
America.
4.7 This Sixth Amendment and the Lease supersede all prior agreements
(whether written or oral) between the parties with respect to the subject matter
thereof, represent the final agreement between the parties with respect thereto,
and may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements between the parties.
4.8 Neither party may assign or otherwise transfer its rights or
obligations hereunder.
4.9 Except as specifically amended above, the Lease, and all related
documents are and shall continue to be in full force and effect and are hereby
ratified and confirmed in all respects.
4.10 Tenant hereby agrees, upon receipt of the Amendment Fee, as
contemplated by Sections 2.1 and 3.4 hereof, to promptly execute and deliver to
TriNet a receipt, dated the date of receipt of such payement, acknowledging
receipt by Tenand thereof.
7
<PAGE> 8
IN WITNESS WHEREOF, this Sixth Amendment has been duly executed by the
parties hereto, and is effective as of the date first above written.
CATERAIR INTERNATIONAL CORPORATION
By: /s/ Terry Roueche
--------------------------------
Terry Roueche
Vice President
TRINET ESSENTIAL FACILITIES X, INC.
By: /s/ Mark S. Whiting
--------------------------------
Mark S. Whiting
Chief Executive Officer
8
<PAGE> 9
Annex A
Section 9.09
(Leverage Covenant)
9
<PAGE> 10
9.09 Combined Leverage Ratio. The Borrower and Caterair will not permit
the Combined Leverage Ratio at any time during a period set forth below to be
greater than the ratio set forth opposite such period below:
Period Ratio
------ -----
Fiscal quarter ending September 30, 1997 4.75:1.00
Fiscal quarter ending December 31, 1997 4.75:1.00
Fiscal quarter ending March 31, 1998 4.75:1.00
Fiscal quarter ending June 30, 1998 4.75:1.00
Fiscal quarter ending September 30, 1998 4.75:1.00
Fiscal quarter ending December 31, 1998 4.75:1.00
Fiscal quarter ending March 31, 1999 4.75:1.00
Fiscal quarter ending June 30, 1999 4.75:1.00
Fiscal quarter ending September 30, 1999 4.75:1.00
October 1, 1999 through and including December 30, 1999 4.75:1.00
December 31, 1999 through and including March 31, 2000 4.50:1.00
Fiscal quarter ending June 30, 2000 4.50:1.00
Fiscal quarter ending September 30, 2000 4.50:1.00
October 1, 2000 through and including December 30, 2000 4.50:1.00
December 31, 2000 through and including March 31, 2001 4.00:1.00
Fiscal quarter ending June 30, 2001 4.00:1.00
Fiscal quarter ending September 30, 2001 4.00:1.00
October 1, 2001 through and including December 30, 2001 4.00:1.00
December 31, 2001 and thereafter 3.50:1.00
-84-
<PAGE> 11
Annex B
CATERAIR INTERNATIONAL CORPORATION
CERTIFICATE AS TO CONDITIONS PRECEDENT
Reference is hereby made to that certain Sixth Amendment to Lease
Agreement (the "Sixth Amendment"), dated as of August 22, 1997, between TriNet
Essential Facilities, [VIII R] [X], Inc. ("TriNet") and Caterair International
Corporation ("Caterair"). Capitalized terms used but not otherwise defined in
this Certificate have the respective meanings ascribed to such terms in the
Sixth Amendment.
This Certificate is the certificate contemplated pursuant to Section 3.3
of the Sixth Amendment, and is being delivered pursuant to such Section 3.3.
As of the date hereof, each of the conditions precedent set forth in
Section 3.1 and 3.2 of the Sixth Amendment to the effectiveness of the
amendments to the Lease contemplated by the Sixth Amendment have occurred.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as to
Conditions Precedent as of the ___ day of __________, 1997.
CATERAIR INTERNATIONAL CORPORATION
By:
--------------------------------
Name:
Title:
10
<PAGE> 1
EXHIBIT 10.27.7
LIMITED WAIVER
TRINET ESSENTIAL FACILITIES X, INC. ("TriNet") is entering into this
Limited Waiver as of August 22, 1997 (but effective only upon delivery of the
Certificate hereinafter mentioned and thereupon with no further action by the
parties being necessary) with respect to the four separate Lease Agreements,
each dated as of May 15, 1993 between TriNet, as landlord, and Caterair
International Corporation ("Tenant"), as tenant, as amended by First Amendment
to Lease Agreement dated as of September 22, 1995, the Second Amendment to Lease
Agreement dated as of December 1, 1995, the Third Amendment to Lease Agreement
dated as of June 1, 1996, the Fourth Amendment to Lease Agreement dated as of
December 2, 1996 and the Fifth Amendment to Lease Agreement dated as of June
23, 1997 (collectively, the "Leases).
PRELIMINARY STATEMENT
Paragraph 15(l) of the Leases establishes a net worth test for Tenant (the
Net Worth Test"), the violation of which constitutes an Event of Default under
the Leases. Tenant intends to enter into a series of transactions which will
likely cause it to violate the Net Worth Test. Landlord and Tenant propose to
enter into a further amendment to the Leases, to be effective at a future date
(the "Contemplated Amendment"), which will remove the Net Worth Test and
substitute certain other tests in its place Based on Tenant's certificate to the
effect that the conditions set forth in section 3.1 and 3.2 of the current draft
of the Contemplated Amendment have been satisfied (the "Certificate"), TriNet is
prepared to waive such default under paragraph 15(1) of the Lease until the
effectiveness of the Contemplated Amendment.
AGREEMENTS
NOW THEREFORE, in consideration of the agreements herein made, the parties
hereto hereby agree as follows, each agreement herein being contingent upon each
other agreement:
TriNet hereby waives any breach of, and compliance by Tenant with, the Net
Worth Test contained in paragraph 15(1) of the Leases and any Event of Default
that would result therefrom for the period commencing on the date hereof and
ending on the effectiveness of the Contemplated Amendment.
2. The foregoing waiver shall not be construed as waiving any other
default or Event of Default under the Leases.
<PAGE> 2
IN WITNESS WHEREOF, TriNet has caused this Limited Waiver to be duly
executed as of the date first above set forth to be effective only upon delivery
to TriNet of the Certificate (and thereupon with no further action by the
parties being necessary).
TriNet Essential Facilities X, Inc.
By: /s/ Mark S. Whiting
------------------------
-2-
<PAGE> 1
THIS LEASE, made and entered into as of May 15, 1993 (together with all
amendments and supplements hereto, this "Lease"), by and between TRINET
ESSENTIAL FACILITIES VIII R, INC. a Maryland corporation with offices at Four
Embarcadero Center, San Francisco, California 94111 (together, with any
successor or assigns, hereinafter called the "Landlord") and CATERAIR
INTERNATIONAL CORPORATION, a Delaware corporation, with offices at 7811 Montrose
Road, Potomac, Maryland 20854 (together with any permitted successor or assigns,
hereinafter called the "Tenant"). Capitalized terms used herein not otherwise
defined shall have the meanings specified in Annex I hereto.
WITNESSETH
In consideration of the covenants and agreements herein contained, the
parties hereto mutually agree as follows:
1. DEMISE OF PREMISES: Landlord hereby demises and leases to Tenant and
Tenant hereby leases and rents from Landlord the Premises, in its "as is"
condition, subject to the existing state of title (without express or implied
warranty of Landlord with respect to the condition or fitness of the Premises
for a particular use or title thereto), consisting of the land parcel more
particularly described in Exhibit A attached hereto and incorporated herein by
reference and located at Bloomington, Minnesota and the buildings, structures,
improvements now or hereafter located on said land and fixtures (other than
Tenant's Trade Fixtures) erected thereon, parking areas and driveways, together
with any easements, rights, and appurtenances in connection therewith or
belonging thereto all being collectively hereinafter referred to as "the
Premises". No easement for light, air or view is included with or appurtenant to
the Premises. Any diminution or shutting off of light, air or view by any
structure which may hereafter be erected (whether or not constructed by
Landlord) shall in no way affect this Lease or impose any liability on Landlord.
2. USE: Tenant shall use and occupy the Premises for any lawful
nonresidential purposes so long as such use does not diminish, deteriorate, or
alter (except as permitted by Paragraph 23) the physical structure of the
Premises, normal wear and tear excepted. Tenant shall not use or occupy the
same, or knowingly permit them to be used or occupied, contrary to any statute,
rule, order, ordinance, requirement or regulation applicable thereto, or in any
manner which would violate any certificate of occupancy affecting the same or
which would make void or voidable any insurance then in force with respect
thereto or which would make it impossible to obtain fire or other insurance
thereon required to be furnished hereunder by Tenant, or which would cause
structural injury to the Premises or cause the value or usefulness of the
Premises, or any portion thereof, to substantially diminish (normal wear and
tear excepted), or which would constitute a public or private nuisance or waste,
and
<PAGE> 2
Tenant agrees that it will promptly, upon discovery of any such use, take all
necessary steps to compel the discontinuance of such use. Tenant shall not use,
suffer or permit the Premises, or any portion thereof, to be used by Tenant,
third party or the public, as such, without restriction or in such manner as
might reasonably tend to impair Landlord's title to the Premises, or in such
manner as might reasonably make possible a claim or claims of adverse usage or
adverse possession by the public, as such, or third persons, or of implied
dedication of the Premises, or any portion thereof. Nothing contained in this
Lease and no action or inaction by Landlord shall be deemed or construed to mean
that Landlord has granted to Tenant any right, power or permission to do any act
or make any agreement that may create, or give rise to or be the foundation for
any such right, title, interest, lien, charge or other encumbrance upon the
estate of the Landlord in the Premises.
3. TERM:
A. The initial term of this Lease (the "Initial Term") shall be for
a minimum period of twenty-five (25) years, which term shall begin on the
Commencement Date (as that term is hereinafter defined) and shall end on the
last day of the month in which the twenty-fifth anniversary of the Commencement
Date occurs, subject (in the event that the Initiating Date occurs after the
fifth anniversary of the Commencement Date) to automatic extension to the date
that is the 20th anniversary of the Initiating Date and subject to extension
pursuant to Paragraph 26D (the "Lease Expiration Date").
B. The term "Commencement Date" shall mean June 3, 1993 (the
"Closing").
C. Tenant shall have the right, at its option, to renew this Lease,
for four (4) renewal terms (each, a "Renewal Term") of five (5) years each
(individually, the First, Second, Third and Fourth Renewal Terms). The First
Renewal Term shall commence on the day after the Lease Expiration Date and shall
terminate on the fifth (5th) anniversary of the Lease Expiration Date. Each of
the Second, Third and Fourth Renewal Terms shall commence on the day after the
date of expiration of the immediately preceding Renewal Term and shall terminate
on the fifth (5th) anniversary of the termination of the immediately preceding
Renewal Term. (Each such Renewal Term commencement date shall be referred to
herein as the "Renewal Term Commencement Date" with respect to the related
Renewal Term and each such Renewal Term expiration date shall be referred to
herein as the "Renewal Term Expiration Date" with respect to the related Renewal
Term.) The option to renew the Term of this Lease as
-2-
<PAGE> 3
described above shall be by written notice to Landlord at least 18 months prior
to the Lease Expiration Date or 12 months prior to the Renewal Term Expiration
Date of the then current term, as the case may be. Subject to the provisions of
Paragraph 4, the terms and conditions of this Lease shall apply to any Renewal
Term with the same force and effect as if such Renewal Term had originally been
included in the term of the Lease. The right of Tenant to have any renewal of
the Term of this Lease shall be conditioned upon Tenant not being then in
default under the Lease beyond the applicable cure periods and upon the Lease
being in full force and effect as of the Renewal Term Commencement Date. All of
the terms, covenants and conditions of this Lease shall continue in full force
and effect during the Renewal Term, except that the minimum rent shall be as
provided for in Paragraph 4. The Initial Term, together with any Renewal Terms,
shall constitute the "Term" of this Lease.
4. RENTAL:
A. Tenant agrees to pay fixed rent ("Fixed Rent") to Landlord without
notice, by check sent to Landlord at such address as shall be provided by
Landlord to Tenant, provided that such check shall be received by Landlord in
sufficient time that the funds will be received by the Fixed Rent due date, or
to such other persons or place as may be provided by written notice from the
person then entitled to receive the Fixed Rent, in equal installments in advance
on or before the first day of each month as specified in the Basic Lease
Information.
If Fixed Rent is not paid when due, interest shall accrue thereon at the
Overdue Rate until payment is made. Tenant hereby acknowledges that late payment
by Tenant to Landlord of Fixed Rent, Additional Rent and other sums due under
this Lease will cause Landlord to incur costs not contemplated by this Lease,
the exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges and late
charges which may be imposed on Landlord by the terms of any mortgage or trust
deed covering the Premises. Accordingly, if any installment of Fixed Rent or any
other sum due to Landlord from Tenant shall not have been received by Landlord
or Landlord's designee within fifteen (15) days after such amount shall be due,
then, without any requirement for notice to Tenant, Tenant shall pay to Landlord
a late charge equal to two percent (2%) of such overdue amount, together with
interest on such overdue amount at the Overdue Rate. The parties agree that
such late charge represents a fair and reasonable estimate of the costs
Landlord will incur by reason of late payment by Tenant. Acceptance of such late
charge by Landlord shall in no event constitute a waiver of Tenant's
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default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder; provided that
nothing contained herein shall relieve Landlord of a duty to mitigate damages
under applicable law.
B. The Fixed Rent for each Renewal Term shall be payable in equal monthly
installments in advance on or before the first day of each month as provided in
the Basic Lease Information.
C. If, at any time from the first day of the month following the fourth
anniversary of the Commencement Date through the last day of the month in which
the seventh anniversary of the Commencement Date occurs (the "Initiating Date"),
Tenant obtains a BBB- or better investment grade credit rating from Standard &
Poors Corporation and a Baa3 or better investment grade credit rating from
Moody's Investors Services, Inc. for its senior debt obligations, and such
investment grade credit ratings are maintained for 12 consecutive months (the
"Lookback Period"), then:
(i) on the first day of the month following the Lookback Period, the
annual Fixed Rent shall be reset to equal the Fixed Rent on the
Initiating Date less an amount equal to the Purchase Price
multiplied by the lesser of (a) 1.0%, or (b) the difference between
(x) the Fixed Rent on the Initiating Date (calculated as a
percentage of the Purchase Price), and (y) the yield for 10-year
Treasury bills plus 275 basis points. The yield for use in the
foregoing calculation will be as shown in the Treasury Constant
Maturity Series in statistical release H.15(519) of the Federal
Reserve Board; or if that release is unavailable, a comparable
publication.
(ii) the annual Fixed Rent specified in the Basic Lease Information shall
be increased at the end of every 30-month period measured from the
Initiating Date by an amount equal to the annual Fixed Rent prior to
such increase multiplied by the greater of 5.72028% or 56.25% of the
increase in the CPI over the prior 30-month period. Such increase in
the Fixed Rent shall not be greater than 11.632519% of the annual
Fixed Rent immediately prior to the increase.
D. If at any time from the first day of the month following the Initiating
Date, Tenant obtains an A- or better investment grade credit rating from
Standard & Poors corporation and an A3 or better investment grade credit rating
from Moody's Investors Services, Inc. for its senior debt obligations, and
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such investment grade credit ratings are maintained during the Lookback Period,
then:
(i) on the first day of the month following the Lookback Period, the
annual Fixed Rent shall be reset to equal the Fixed Rent on the
Initiating Date less an amount equal to the Purchase Price
multiplied by the lesser of (a) 2.0%, or (b) the difference between
(x) the Fixed Rent on the Initiating Date (calculated as a
percentage of the Purchase Price) and (y) the yield, determined as
provided above, for 10-year Treasury obligations plus 225 basis
points.
(ii) the annual Fixed Rent specified in the Basic Lease Information shall
be increased at the end of every 30-month period measured from the
Initiating Date by an amount equal to the annual Fixed Rent prior to
such increase multiplied by the greater of 5.72028% or 56.25% of the
increase in the CPI over the prior 30-month period. Such increase in
the Fixed Rent shall not be greater than 11.632519% of the annual
Fixed Rent immediately prior to the increase.
E. If, at any time from the first day of the month following the
Initiating Date, Tenant obtains either of the required investment grade ratings
indicated in subparagraphs C and D, but not both and such investment grade
credit ratings are maintained during the Lookback Period, then:
(i) on the first day of the month following the Lookback Period, the
annual Fixed Rent shall be reset to equal the Fixed Rent on the
Initiating Date less an amount equal to the Purchase Price
multiplied by the lesser of (a) 1.5%, or (b) the difference between
(x) the Fixed Rent on the Initiating Date (calculated as a
percentage of the Purchase Price) and (y) the yield, determined as
provided above, for 10-year Treasury obligations plus 250 basis
points.
(ii) the annual Fixed Rent specified in the Basic Lease Information shall
be increased at the end of every 30-month period measured from the
Initiating Date by an amount equal to the annual Fixed Rent prior to
such increase multiplied by the greater of 5.72028% or 56.25% of the
increase in the CPI over the prior 30-month period. Such increase in
the Fixed Rent shall not be greater than 11.632519% of the annual
Fixed Rent immediately prior to the increase.
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In no event shall the calculation required by subparagraphs C(i), D(i) and
E(i) above result in an increase in Fixed Rent.
5. NET LEASE; NON-TERMINABILITY: (a) This is an absolutely net lease and
the Fixed Rent, Additional Rent and all other sums payable hereunder by Tenant,
whether as the purchase price for the Premises or otherwise, shall be paid
without notice (except as expressly provided herein), demand, setoff,
counterclaim, abatement, suspension, deduction or defense.
(b) This Lease shall not terminate, nor shall Tenant have any right to
terminate this Lease (except as provided in Paragraph 14), nor shall Tenant be
entitled to any abatement or reduction of rent hereunder (except as otherwise
expressly provided herein), nor shall the obligations of Tenant under this Lease
be affected, by reason of (i) any damage to or destruction of all or any part of
the Premises from whatever cause, (ii) subject to Paragraph 14, the taking of
the Premises or any portion thereof by condemnation, requisition or otherwise,
(iii) the prohibition, limitation or restriction of Tenant's use of all or any
part of the Premises, or any interference with such use, (iv) any eviction by
paramount title or otherwise, (v) Tenant's acquisition or ownership of all or
any part of the Premises otherwise than as expressly provided herein, (vi) any
default on the part of Landlord under this Lease, or under any other agreement
to which Landlord and Tenant may be parties, (vii) the failure of Landlord to
deliver possession of the Premises on the commencement of the term hereof or
(viii) any other cause whether similar or dissimilar to the foregoing, any
present or future law to the contrary notwithstanding. It is the intention of
the parties hereto that the obligations of Tenant hereunder shall be separate
and independent covenants and agreements, that the Fixed Rent, the Additional
Rent and all other sums payable by Tenant hereunder shall continue to be payable
in all events and that the obligations of Tenant hereunder shall continue
unaffected unless the requirement to pay or perform the same shall have been
terminated pursuant to any express provision of this Lease.
(c) Tenant agrees that it will remain obligated under this Lease in
accordance with its terms, and that it will not take any action to terminate,
rescind or avoid this Lease, notwithstanding (i) the bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution or
winding-up or other proceeding affecting Landlord or its successor in interest,
or (ii) any action with respect to this Lease which may be taken by any trustee
or receiver of Landlord or its successor in interest or by any court in any such
proceeding.
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<PAGE> 7
(d) Tenant waives all rights which may now or hereafter be conferred by
law (i) to quit, terminate or surrender this Lease or the Premises or any part
thereof, or (ii) to any abatement, suspension, deferment or reduction of the
Fixed Rent, Additional Rent or any other sums payable under this Lease, except
as otherwise expressly provided herein. It is not the intent of the parties
hereto to restrict in any way Tenant's other remedies, whether at common law or
under statute.
6. QUIET ENJOYMENT; SALE TO COMPETITORS:
(a) Landlord covenants with Tenant, that upon the payment of the Fixed
Rent and Additional Rent and the performance in all material respects of all the
terms of this Lease, Tenant shall at all times during the Term, peaceably and
quietly enjoy the Premises without any disturbance from Landlord or from any
person claiming by, through, or under Landlord.
(b) So long as Tenant is not in any material default under this Lease,
Landlord shall not sell all or any portion of the Premises to any entity
engaged, either directly or indirectly, in the airline food service industry
without Tenant's prior written consent, provided however, that this provision
shall not apply if such entity is a passive owner unable to exercise control
over the operation of the Premises, or during the continuance of an Event of
Default.
7. UTILITY BILLS:
Tenant shall pay as Additional Rent before they become delinquent
any water, sewer, gas, fuel, electricity, light, heat power and all other
utility bills for the Premises and the business conducted thereon.
8. REPAIRS AND MAINTENANCE:
(a) Tenant shall, at its own sole cost and expense, keep the
Premises in good order and condition, normal wear and tear and damage covered by
insurance excepted, at all times on and after commencement of the Term to and
including the date of the termination of the Term, by lapse of time or
otherwise. Tenant shall promptly and adequately repair the Premises and all its
component parts, and replace or repair all landscaping and all damaged or broken
fixtures, other than trade fixtures, and appurtenances.
In addition, Tenant shall timely and properly maintain all of the Premises
including, but not necessarily limited to, mechanical systems, electrical
systems, plumbing and sewage
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systems, foundations and floor slabs, glazing systems, structural steel, masonry
walls and wall enclosures, and water tightness of all curtain walls by a
qualified stationary engineer or otherwise, in accordance with the greater
standard of
(i) the customary maintenance by prudent operators in the
industry;
(ii) that which is necessary so as not to void, diminish, or impair
any warranty for such component from time to time in effect;
and
(iii) that which is necessary to preserve and protect the useful
life of such component, ordinary wear and tear excepted.
In addition, Tenant shall maintain and repair, or cause others to maintain and
repair or replace, as the case may be, the roof, and repair any material defect
in materials or workmanship relating to the foundation, columns, and structural
steel which comprise a part of the Premises. Landlord, not more frequently than
annually during the Term (except in the event of an emergency or extraordinary
condition), may cause independent private inspectors, qualified in the specific
discipline, to make inspections of any building and building systems on the
Premises or segments thereof to determine Tenant's compliance under this
Section.
If the Tenant does not timely or properly perform repairs as above
provided, Landlord may, but is not required to, after twenty (20) days' notice
to Tenant, make such repairs, replacements or maintenance in a reasonably
diligent fashion, and Tenant shall pay Landlord forthwith upon being billed for
same by Landlord the cost thereof plus all overhead, general conditions, fees
and other costs or expenses arising from Landlord's involvement with such
repairs, replacements and maintenance.
Landlord may, but shall not be required to, enter the Premises personally
or through independent contractors at all reasonable times upon reasonable
notice (except in the case of an emergency) to inspect the Premises, and to make
such repairs, alterations, improvements and additions to the Premises or to any
equipment or fixtures located on the Premises as Landlord deems reasonably
necessary and which Tenant failed to do as required in this Lease.
(b) It is intended by Tenant and Landlord that Landlord shall have
no obligation, in any manner whatsoever, to repair or maintain the Premises (or
the equipment therein),
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whether structural or nonstructural, all of which obligations are intended, as
between Landlord and Tenant, to be those of Tenant. Tenant expressly waives the
benefit of any statute now or in the future in effect which would otherwise
afford Tenant the right to make repairs at Landlord's expense or to terminate
this Lease because of Landlord's failure to keep the Premises in good order,
condition and repair.
(c) Prior to the commencement of the Lease Landlord received an
engineering study of the Premises performed by Eckland Consultants Inc. Exhibit
E attached hereto shows a list of those matters which must be corrected. Tenant
agrees to correct the matters listed on Exhibit E, at Tenant's sole cost and
expense, to be completed no later than the dates set forth on Exhibit E.
9. IMPOSITIONS: (a) Tenant covenants and agrees to pay, during the
Term, as Additional Rent, before any fine, penalty, interest or cost may be
added thereto for the nonpayment thereof, all real estate taxes, special
assessments, utility bills referred to in Paragraph 7, street lighting, excise
levies, licenses, permits, inspection fees, other governmental charges, and all
other charges or burdens of whatsoever kind and nature (including costs, fees,
and expenses of complying with any restrictive covenants or similar agreements
to which the Premises are subject incurred in the use, occupancy, operation,
leasing or possession of the Premises (excluding any income taxes on the Fixed
Rent imposed on Landlord, it being the intent of the parties hereto that any tax
on the net income derived from the Fixed Rent payable in respect to the Premises
imposed by any governmental authority shall be paid by Landlord), without
particularizing by any known name or by whatever name hereafter called, and
whether any of the foregoing be general or special, ordinary or extraordinary,
foreseen or unforseen, which at any time during the Term may be payable. Tenant
shall pay all special (or similar) assessments or installments thereof
(including interest thereon) for public improvements or benefits which, during
the Term shall be laid, assessed, levied or imposed upon or become a lien upon
the Premises and which are payable during the Term, or any portion thereof;
provided, however, that if by law any special assessment is payable or, at the
option of the party obligated to make such payment, may be paid in installments
(whether or not interest shall accrue on the unpaid balance of such special
assessment), Tenant may pay the same, together with any interest accrued on the
unpaid balance of such special assessment in installments as the same
respectively become payable and before any fine, penalty, interest or cost may
be added thereto for the nonpayment of any such installment and
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the interest thereon. Tenant shall pay all real estate taxes, whether heretofore
or hereafter levied or assessed upon the Premises, or any portion thereof, which
are due and payable during the Term. At the end of the Term of the Lease,
Tenant's obligation to pay such taxes shall be prorated in the event the tax
period and the Term are not coextensive.
(b) Except for any tax on the net income derived from the Fixed Rent, if
at any time during the Term, any method of taxation shall be such that there
shall be levied, assessed or imposed on the Landlord, or on the Fixed Rent or
Additional Rent, or on the Premises, or any portion thereof, a capital levy,
gross receipts tax or other tax on the rents received therefrom, or a franchise
tax, or an assessment, gross levy or charge measured by or based in whole or in
part upon such gross Rents, Tenant, to the extent permitted by law, covenants to
pay and discharge the same, it being the intention of the parties hereto that
the Fixed Rent to be paid hereunder shall be paid to Landlord absolutely net
without deduction or charge of any nature whatsoever, foreseeable or
unforeseeable, ordinary or extraordinary, or of any nature, kind, or
description, except as otherwise expressly provided in this Lease.
(c) Tenant covenants to furnish Landlord, within thirty (30) days after
the date upon which any Imposition or other tax, assessment, levy or charge is
payable by Tenant, official receipts of the appropriate taxing authority, or
other appropriate proof satisfactory to Landlord, evidencing the payment of the
same. The certificate, advice or bill of the appropriate official designated by
law to make or issue the same or to receive payment of any Imposition may be
relied upon by Landlord as sufficient evidence that such Imposition, is due and
unpaid at the time of making or issuance of such certificate, advice or bill.
(d) Upon the occurrence of an Event of Default and after the conclusion of
any cure period following an Event of Default hereunder, Tenant shall pay to
Landlord, at Landlord's written demand, the known or estimated yearly real
estate taxes and assessments, payable with respect to the Premises in monthly
payments equal to one-twelfth (1/12) of the known or estimated yearly real
estate taxes and assessments, next payable with respect to the Premises. From
time to time, after a default hereunder, Landlord may re-estimate the amount of
real estate taxes and assessments, and in such event Landlord shall notify
Tenant, in writing, of such re-estimate and fix future monthly installments for
the remaining period prior to the next tax and assessment due date in an amount
sufficient to pay the re-
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estimated amount over the balance of such period after giving credit for
payments made by Tenant on the previous estimate.
If the total monthly payments made by Tenant pursuant to this Section
shall exceed the amount of payments necessary for said taxes and assessments,
such excess over $1,000.00 shall be promptly paid to the Tenant and the balance
shall be credited on subsequent monthly payments of the same nature. However, if
the total of such monthly payments so made under this paragraph shall be
insufficient to pay such taxes and assessments when due, then Tenant shall pay
to Landlord such amount as may be necessary to make up the deficiency. All such
deposits made by Tenant pursuant to this Paragraph 9(d) shall be deposited in a
federally insured institution reasonably satisfactory to Landlord and Tenant,
and all interest earned thereon shall accrue to the benefit of Tenant. Payment
by Tenant of real estate taxes, assessments, under this Paragraph shall be
considered as performance of such obligation under the provisions of Paragraph
9(a) hereof.
10. DESTRUCTION OF OR DAMAGE TO PREMISES:
(a) Tenant covenants that in case of damage to or destruction of any
or all of the buildings, structures and improvements (collectively, the
"Improvements") upon the Premises by fire or any other cause, insured or
uninsured, Tenant will promptly, at its sole cost and expense, restore, repair,
replace or rebuild the Improvements so damaged or destroyed as nearly as
practicable to the condition, quality and class thereof immediately prior to
such damage or destruction, or with such changes or alterations as Tenant shall
elect to make in conformity with Paragraph 23 of this Lease. This Lease shall
continue, with Fixed Rent and Additional Rent unabated. In performing its
obligations under this Paragraph 10, Tenant shall be entitled to insurance
proceeds under the terms and conditions set forth in Paragraph 11 hereof.
Landlord shall have the right to approve the plans and specifications for the
work of repair, replacement or rebuilding, such approval not to be unreasonably
withheld or delayed. Tenant shall diligently obtain all necessary permits for
such work or repair and shall maintain builder risk insurance in amounts
reasonably satisfactory to Landlord until completion of such work. Such
restoration, repairs, replacement or rebuilding shall be commenced promptly and
prosecuted with diligence, subject to unavoidable delays and force majeure.
(b) If all or substantially all of the Premises are destroyed as a
result of fire or other casualty, then the provisions of Paragraph 14 shall
apply.
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11. INSURANCE, HOLD HARMLESS AND INDEMNIFICATION:
(a) Tenant at its sole cost and expense shall obtain and
continuously maintain in full force and effect during the Term "All-Risk"
policies of property insurance including damage by fire and the perils commonly
covered under the special causes of loss, and also including the perils of
earthquake and flood, covering real and personal property and loss of business
income, including all of the Improvements, alterations, additions and changes on
or at the Premises, which insurance shall be for the benefit of Landlord (as an
additional insured and loss payee) and Tenant, as their interests may appear,
and also protecting the insurable interests of any other entity the Landlord may
designate from time to time, including but not limited to mortgagee(s) or trust
deed holder(s), additional insured(s), loss payee(s), or others (hereinafter
referred to as "Property Insurance").
Such Property Insurance shall:
(i) be written with companies licensed to do business in the State
where the Premises are located, having a current A.M. Best
rating of A- or better and a current A.M. Best Financial Size
Category of VII or better;
(ii) insure the interest of Landlord's mortgagee(s) or trust deed
holder(s) additional insured(s), loss payee(s), or other
entities Landlord may designate from time to time, under
standard mortgagee clauses, lender's loss payable
endorsements, or other prescribed forms, effective as of the
Commencement Date; and
(iii) be maintained continuously throughout the Term hereof; and
(iv) provide for a deductible no greater than $100,000,000 per
occurrence for the peril of flood, and a deductible no greater
than $25,000 per occurrence for all other perils (other than
earthquake). For losses to any unit of insurance caused by
earthquake in Minnesota, a deductible no greater than 2% of
the value of such unit of insurance (subject to a minimum
deductible not exceeding $1000,000 per occurrence) shall
apply. For the purposes of applying the earthquake deductible,
a unit of insurance shall consist of all the
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following items taken as a whole: (a) each separate building
or structure, (b) the contents of each separate building or
structure, and (c) 12 months business income (net profit or
loss before income taxes that would have been earned or
incurred, including payroll) attributable to each separate
building. To the extent such coverage is either not
commercially available at logical cost (i.e., in terms of
availability, standard industry practice and cost
effectiveness) or Tenant desires to increase the amount of the
deductible, the deductible pursuant to this Paragraph
11(a)(iv) may be increased subject to Landlord's and Tenant's
mutual agreement, such agreement not to be unreasonably
withheld.
At all times, the Property Insurance coverage shall be in an amount equal
to one hundred percent (100%) of the then "Full Replacement Cost" of the
Improvements, alterations, additions and changes on or at the Premises. Full
Replacement Cost shall be interpreted to mean the cost of repairing or replacing
the improvements, alterations, additions and changes on or at the Premises with
property of like kind and quality, determined at the time of loss, without
deduction for depreciation or wear and tear, and it shall include a reasonable
sum for architectural, engineering, legal, interest charges, permit fees,
administrative and supervisory fees connected with the restoration or
replacement of such Improvements in the event of damage thereto or destruction
thereof. Any co-insurance penalty, deductible, or self-insured retention
applicable shall be the sole responsibility of, and shall be paid by, Tenant.
(b) During the Term, Tenant, at its sole cost and expense, but for the
benefit of Landlord, (as an additional insured) and also protecting the
insurable interests of any other entity the Landlord may designate from time to
time, including but not limited to Landlord's mortgagee(s) or trust deed holder,
additional insured(s), loss payee(s), or other entities Landlord may designate
from time to time, shall obtain and continuously maintain, in full force and
effect, the following insurance coverage written with companies licensed to do
business in the State where the Premises are located, having a current A.M. Best
Rating of A- or better and a current A.M. Best Financial Size Category of VII or
better or, if such companies are not rated by A.M. Best, then companies of
equivalent size and conditions:
(i) Commercial general liability insurance or comprehensive
general liability insurance with broad form comprehensive
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liability endorsement, applying to Premises and operations
(including coverage for property damage resulting from the
explosion, collapse, and underground hazards), products and
completed operations, contractual liability, broad form
property damage, and personal injury, all with a minimum
combined single limit of $l,000,000.00 each occurrence and
$2,000,000.00 general aggregate per location.
(ii) Automobile Liability applying to any owned, hired and
non-owned automobiles, with a minimum combined single limit of
$1,000,000.00 each accident.
(iii) umbrella liability with a minimum combined single limit of
$25,000,000.00 each occurrence and a minimum aggregate limit
per location of $25,000,000.00
(iv) Such other insurance which is commercially available at
logical (i.e., in terms of availability, standard industry
practice and cost effectiveness) cost, and in such amounts as
may from time to time be required by Landlord, against other
insurable hazards or occurrences which at the time are
commonly insured against in the case of premises, operations,
and/or buildings or improvements similar in nature,
construction, design, general location, use, and/or occupancy,
to those on the Premises.
(c) Tenant shall maintain a policy or policies of statutory workers'
compensation insurance covering all employees in amounts required by applicable
state law and employers' liability with minimum limits of $100,000.00 each
accident, $100,000.00 disease-each employee, and $100,000.00 disease-policy
limit.
(d) Each policy of insurance required under this Paragraph 11 shall have
attached thereto
(i) an endorsement that such policy shall not be cancelled or
materially changed without at least sixty (60) days prior
written notice to Landlord, except in the case of non-payment
of premium, in
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which case there shall be at least ten (10) days prior written
notice; and
(ii) A Lender's Loss Payable Endorsement Form 438BFU (with respect
to insurance described in Paragraph 11(a)).
To the extent the foregoing endorsements are not obtainable in precisely
the form prescribed, Tenant shall obtain reasonably similar endorsements. All
policies of insurance shall be written in such form and shall be distributed in
such companies as shall be satisfactory to Landlord. Certificates of Insurance
(ACORD 25-S) and Evidence of Property Insurance (ACORD 27) (collectively, the
"Certificates") shall be delivered to Landlord accompanied by, or Tenant shall
provide, as appropriate, evidence satisfactory to Landlord that the premiums
thereon have been paid currently. Such Certificates and evidence of payment
shall be delivered to Landlord on or before the Commencement Date. Prior to the
expiration of such policies, Certificates of all renewal or replacement
policies, plus evidence of current premium payment, shall be delivered to
Landlord not less than thirty (30) days prior to the expiration of the then
current policy term. Insurance binders evidencing the binding of policies of
insurance or the renewals thereof for the coverage specified shall be accepted
in the event such Certificates are not available at the time in question, for a
temporary duration, pending policy issuance. Within thirty (30) days of written
request, Tenant shall cause Certificates to be delivered to Landlord, or deliver
a letter to Landlord from the underwriter(s) stating the reasons for the delay,
and stipulating when Certificates will be available. In no event shall the
insurance for the coverage specified be allowed to lapse. Copies of Tenant's
insurance policies shall be made available for inspection by Landlord or its
designee or Mortgagee or Mortgagee's designee during normal business hours at
Tenant's address.
Nothing in this Paragraph 11 shall prevent Tenant from taking out
insurance of the kind and in the amount provided for under the preceding
paragraphs under a blanket insurance policy or policies which may cover other
properties owned, operated, leased or occupied by Tenant as well as the
Premises.
Such policy of blanket insurance shall specify the amount exclusively
allocated to the Premises, or in lieu thereof, Tenant shall furnish Landlord and
the holder of any mortgage or trust deed with a written statement from the
insurer's authorized representative or broker specifying the values reported for
the Premises at inception for premium determination purposes.
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Further, such policies of blanket insurance shall, as respects the Premises,
contain the various provisions required of such an insurance policy by the
foregoing provisions of this Paragraph 11.
(e) In the event of loss or damage to the Premises or in the event of any
claim in connection with the injury to death of any person or the damage of any
property arising out of or occurring at the Premises or arising out of
operations at the Premises, Tenant shall promptly notify Landlord thereof in
writing, and shall prepare and present timely claims to the appropriate insurers
on behalf of Tenant, Landlord and any assignee or mortgagee of Landlord.
(f) The proceeds of any property claim for damage to the premises, net of
any collection expenses, shall be paid to or deposited with either a bank or
trust company having an office in the State of Minnesota and designated by
Landlord (herein called the "Proceeds Trustee") in the name of the Proceeds
Trustee as trustee for Landlord and Tenant and disbursed in the manner
hereinafter provided. In the event Landlord mortgages the Premises with a first
mortgage, the mortgagee thereunder (regardless of its location) may, at its
option, be appointed Proceeds Trustee for so long as such first mortgage remains
outstanding. Insurance proceeds shall be deposited in an interest bearing
account (if available) and interest shall be distributed to Tenant upon
completion of said installation, repair, replacement or rebuilding, provided no
default has occurred and is continuing hereunder. All checks drawn on said
account shall be co-signed by the Proceeds Trustee and Tenant. Insurance
proceeds shall be disbursed to Tenant by the Proceeds Trustee upon receipt by
Landlord and Proceeds Trustee of the following:
(i) A certificate signed by a licensed architect or engineer selected by
Tenant, subject to the approval of Landlord (such approval not to be
unreasonably withheld or delayed) and also signed by Tenant, dated
not more than thirty (30) days prior to the application for such
disbursement, setting forth in substance the following:
a. that the sum then requested to be disbursed either has been
paid by Tenant or is justly due to contractors,
subcontractors, materialmen, engineers, architects or other
persons (whose names and addresses shall be stated) who have
rendered and furnished certain labor and materials for the
work; giving a brief description of such services rendered and
materials placed in use on the Premises and the
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principal subdivisions or categories thereof and the amounts
so paid or due to each of said persons in respect thereof, and
stating the progress of the work up to the date of said
certificate;
b. that the sum then requested to be disbursed, plus all sums
previously disbursed, does not exceed the cost of the work as
actually accomplished up to the date of such certificate (less
ten percent (10%) of such cost which shall be retained by the
Proceeds Trustee to be disbursed following completion of the
work to be done by the named contractor);
c. that, to the best of their knowledge, except for the amounts,
if any, stated in said certificate pursuant to the foregoing
clause (i) of this paragraph to be due for services or
materials, there is no outstanding indebtedness known to the
person signing the certificate, after due inquiry, which is
then due and payable for work, labor, services and materials
in connection with the work, which, if unpaid, might become
the basis of a vendor's, mechanic's laborer's, materialman's
statutory or similar lien upon Tenant's leasehold estate or
Tenant's or Landlord's interest in the Premises or any part
thereof; and
d. that the amount remaining in the possession of the Proceeds
Trustee after disbursement of the sum then requested at least
equals the estimated unpaid costs to complete the work (and if
insufficient funds remain, Tenant shall deposit additional
funds with the Proceeds Trustee sufficient to enable the
architect or engineer to make the foregoing certification).
(ii) A certificate signed by Tenant, dated not more than thirty (30) days
prior to the application for such disbursement, setting forth in substance that,
to the best knowledge of Tenant, after due inquiry:
a. all materials and all property described in the certificate
are free and clear of all liens and encumbrances, except such
as may secure indebtedness due to persons (whose names and
addresses and the several amounts due them shall
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be stated) specified in said certificate, which liens and
encumbrances will be discharged upon payment of such
indebtedness and encumbrances to which this Lease is subject;
and
b. that no default hereunder has occurred which has not been
remedied.
(iii) Evidence reasonably satisfactory to the Proceeds Trustee and
Landlord showing that there has not been filed or recorded with respect to
Tenant's leasehold estate or Tenant's or Landlord's interest in the Premises or
any part thereof any vendor's, mechanic's, design professional's, laborer's or
materialman's statutory or similar lien which has not been discharged of record,
except such as will be discharged upon payment of the amount then requested to
be disbursed.
(iv) Lien waivers from each person entitled to a mechanics' or
materialmen's lien against the Premises by reason of such work.
(v) Upon compliance with the foregoing provisions, the Proceeds Trustee
shall, out of the deposited sums, disburse to the persons named in the
certificate furnished the respective amounts stated in said certificate to be
due to them and/or shall disburse to Tenant the amount stated in said
certificate to have been paid by Tenant.
(vi) At any time after the completion in full of the work, the whole
balance of the deposited sums not theretofore disbursed pursuant to the
foregoing provisions of this paragraph 11(f) shall be disbursed to or upon the
order of Tenant, upon receipt by the Proceeds Trustee of:
a. a certificate signed by Tenant, dated not more than thirty
(30) days prior to the application for such disbursement,
setting forth in substance the following:
(1) that the work has been completed in full;
(2) that all amounts which Tenant is or may be entitled to
have disbursed under the foregoing provisions of this
Paragraph 11(f) on account of services rendered or
materials furnished in connection with the work and
placed in use on the Premises have been disbursed under
said provisions;
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(3) that all amounts for whose payment Tenant is or may
become liable in respect of the work have been paid in
full except to the extent, if any, of any retainage and
which retainage shall be applied to the final payments
of the amounts due; and
(4) that no default has occurred hereunder which has not
been remedied;
b. a copy of the final plans and specifications of the
improvements on the Premises, which plans and specifications
shall be delivered to Landlord;
c. an official search or a certificate of a title company
reasonably satisfactory to the Proceeds Trustee showing that
there has not been filed with respect to Tenant's leasehold
estate or Tenant's or Landlord's interest in the Premises or
any part thereof, any vendor's, mechanic's, laborer's or
materialman's statutory or similar lien which has not been
discharged of record;
d. a certificate of completion signed by the supervising
architect or engineer referred to in Paragraph 11(f)(i) above;
and
e. a certificate of occupancy or equivalent governmental
approval.
No such damage or destruction shall release Tenant from any
obligation hereunder for Fixed Rent, Additional Rent or other sums payable under
this Lease.
Any insurance proceeds remaining after completion of the
reconstruction as specified in Paragraph 11(f)(vi) above shall be paid to
Tenant.
(g) To the fullest extent permitted by law, Tenant shall protect, defend,
indemnify and hold Landlord, its direct or indirect partners, and any and all
respective members, partners, executive officers, directors, stockholders,
agents and employees of the aforementioned, any mortgagee and their respective
successors and assigns and any other individual or entity to whom a duty is owed
(collectively, the Landlord Group) harmless from and against any and all claims,
losses, and judgments, liabilities, damages, causes of action, costs and
expenses (including, without limitation, reasonable attorney's fees and
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reasonable investigative and discovery costs), arising from Tenant's use of the
Premises (including all common areas) and the ways adjoining the Premises, or
from the conduct of Tenant's business or from any activity, work or things done,
permitted or suffered by Tenant in or about the Premises (including all common
areas) and the ways adjoining the Premises, or elsewhere and shall further
protect, defend, indemnify and hold Landlord Group harmless from and against any
and all claims, losses, judgments, liabilities, damages, causes of action, costs
and expenses (including, without limitation, reasonable attorney's fees and
reasonable investigative and discovery costs), arising from any breach or
default in the performance of any obligation on Tenant's part to be performed
under the terms of this Lease, or arising from any negligence (active, passive,
or otherwise), willful misconduct, acts, or omissions of Tenant, or any of
Tenant's agents, contractors or subcontractors, employees, servants, customers,
invitees, subtenants, any other individual or entity, and from and against all
costs and expenses (including, without limitation, reasonable attorney's fees
and reasonable investigative and discovery costs) actually incurred, in the
defense of any such claim or any action or proceeding brought thereon; and in
case any action or proceeding be brought against a member of Landlord Group by
reason of any such claim, Tenant upon notice from any member of Landlord Group
shall defend the same at Tenant's expense by counsel reasonably satisfactory to
Landlord Group or selected by the insurance carrier. Tenant, as a material part
of the consideration to Landlord, assumes all risk of damage to property or
injury to or death of persons, in, upon or about the Premises arising from any
cause and Tenant waives all claims in respect thereof against Landlord unless
caused by the willful or sole negligent act of Landlord, its direct or indirect
partners, or the respective members, partners, executive officers, directors,
stockholders, agents and employees of the aforementioned.
12. GOVERNMENTAL ORDERS; COVENANTS; LANDLORD CURE; PERMITTED CONTEST:
A. Tenant shall throughout the Term promptly comply or cause compliance
with or remove or cure any violation of any and all present and future laws,
including, without limitation, the American with Disabilities Act of 1990, as
the same may be amended from time to time, ordinances (zoning or otherwise),
orders, rules, regulations and requirements of all Federal, State, municipal and
other governmental bodies having jurisdiction over the Premises and the
appropriate departments, commissions, boards and officers thereof, and the
orders, rules and regulations of the Board of Fire Underwriters where the
Premises are situated, or any other body now or hereafter
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constituted exercising lawful or valid authority over the Premises, or any
portion thereof, or the sidewalks, curbs, roadways, alleys or entrances adjacent
or appurtenant thereto, or exercising authority with respect to the use or
manner of use of the Premises, or such adjacent or appurtenant facilities, and
whether the compliance, curing or removal of any such violation and the costs
and expenses necessitated thereby shall have been foreseen or unforeseen,
ordinary or extraordinary, and whether or not the same shall be presently within
the contemplation of Landlord or Tenant or shall involve any change in
governmental policy, or require structural or extraordinary repairs, alterations
or additions by Tenant and irrespective of the amount of the costs thereof.
Tenant, at its sole cost and expense, shall comply with all agreements,
contracts, easements, restrictions, reservations or covenants, if any, running
with the land, or hereafter created by Tenant or consented to, in writing, by
Tenant or requested, in writing, by Tenant. Tenant shall also comply with,
observe and perform all provisions and requirements of all policies of insurance
at any time in force with respect to the Premises and required to be obtained
and maintained under the terms of Paragraph 11 hereof and shall comply with all
development permits issued by governmental authorities issued in connection with
development of the Premises.
B. If Tenant shall at any time fail to pay any Imposition in accordance
with the provisions of Paragraph 9, or to take out, pay for, maintain and
deliver any of the insurance policies or certificates of insurance provided for
in Paragraph 11, or shall fail to make any other payment or perform any other
act on its part to be made or performed, then Landlord, after ten (10) days
prior written notice to Tenant (or without notice in case of emergency), and
without waiving or releasing Tenant from any obligation of Tenant contained in
this Lease, may, but shall be under no obligation to do so,
(i) pay after said ten (10) days' written notice to Tenant, any
Imposition payable by Tenant pursuant to the provisions of
Paragraph 9;
(ii) take out, pay for and maintain any of the insurance policies
provided for in this Lease; or
(iii) make any other payment or perform any other act on Tenant's
part to be paid or performed hereunder, except that any time
permitted to Tenant to perform any act required to be
performed by Tenant
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hereunder shall be extended for such period as may be
necessary to effectuate such performance provided Tenant is
continuously, diligently and in good faith prosecuting such
performance.
Landlord may enter upon the Premises for any such purpose and take all such
action therein or thereon as may be necessary therefor and all such action taken
by Landlord shall be in a reasonably diligent fashion. All sums so paid by
Landlord and all costs and expenses, including reasonable attorney's fees,
incurred by Landlord in connection with the performance of any such act,
together with interest thereon at the Overdue Rate, shall be paid by Tenant to
Landlord on demand. Landlord shall not be limited in the proof of any damages
which Landlord may claim against Tenant arising out of or by reason of Tenant's
failure to provide and keep in force insurance as aforesaid, to the amount of
the insurance premium or premiums not paid or incurred by Tenant, and which
would have been payable upon such insurance, but Landlord shall also be entitled
to recover, as damages for such breach, the uninsured amount of any loss (to the
extent of any deficiency between the dollar limits of insurance required by the
provisions of this Lease and the dollar limits of the insurance actually carried
by Tenant), damages, costs and expenses of suit, including reasonable attorney's
fees, suffered or incurred by reason of damage to or destruction of the
Premises, or any portion thereof or other damage or loss which Tenant is
required to insure against hereunder, occurring during any period when Tenant
shall have failed or neglected to provide insurance as aforesaid.
C. If Tenant desires to contest the validity, amount, propriety, or
accuracy of any Imposition, Tenant shall notify Landlord of same which notice
shall state the nature of the Imposition being contested and the grounds for
such contest. Within fifteen (15) days of Landlord's receipt of such notice
Landlord will notify Tenant that (i) Landlord will contest the Imposition in
question, or (ii) that Landlord consents to the contest by Tenant. If Landlord
fails to so notify Tenant, it shall be presumed that Landlord has elected (ii).
If Landlord agrees to the contest the Imposition, it may do so on the grounds
described in Tenant's notice, and all the costs, expenses, fees or other
obligations incurred by Landlord in conducting such challenge shall be deemed
Additional Rent hereunder. If Landlord, either actively or by default, elects
(ii) above, Tenant shall have the right, at its own expense, to contest the
amount, propriety, accuracy, or validity, in whole or in part, of any Imposition
by appropriate proceedings diligently conducted in good faith, but only after
payment of such
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Imposition, unless non-payment, would not cause a lien to be filed against title
to the Premises or would otherwise jeopardize title to the Premises or Tenant's
leasehold interest therein; in which event, notwithstanding the provisions of
Paragraph 9(a) hereof, Tenant may postpone or defer payment of such Imposition.
However, if Landlord reasonably deems Tenant to be financially unsound, Tenant
shall deposit with Landlord cash or a certificate of deposit payable to Landlord
issued by a national bank or Federal savings and loan association in the amount
of the Impositions so contested and unpaid, together with all interest and
penalties which may accrue, in Landlord's reasonable judgment, in connection
therewith, and all charges that may or might be assessed against or become a
charge on the Premises, or any portion thereof, during the pendency of such
proceedings. If, during the continuance of such proceedings, Landlord shall,
from time to time, reasonably deem the amount deposited, as aforesaid,
insufficient, Tenant shall, upon demand of Landlord, make additional deposits of
such additional sums of money or such additional certificates of deposit as
Landlord may reasonably request. Upon failure of Tenant to make such additional
deposits, the amount theretofore deposited may be applied by Landlord to the
payment, removal and discharge of such Imposition, and the interest, fines and
penalties in connection therewith, and any costs, fees (including reasonable
attorney's fees) and other liability (including reasonable costs incurred by
Landlord) accruing in any such proceedings.
Upon the termination of any such proceedings, Tenant shall pay the amount
of such Imposition or part thereof, if any, as finally determined in such
proceedings, the payment of which may have been deferred during the prosecution
of such proceedings, together with any costs, fees, including attorney's fees,
interest, penalties, fines and other liability in connection therewith. Upon
such payment, Landlord shall return all amounts or certificates of deposit
deposited with it in respect to the contest of such Imposition, as aforesaid
along with any interest earned thereon as a result of an investment thereof, at
Tenant's request and expense, in a Federally insured security or account.
However, at the written direction of Tenant, Landlord shall make such payment
out of the funds on deposit with Landlord and the balance, if any, shall be
returned to Tenant. Tenant shall be entitled to the refund of any Imposition,
penalty, fine and interest thereon received by Landlord which have been paid by
Tenant or which have been paid by Landlord but for which Landlord has been
previously reimbursed in full by Tenant.
Landlord shall not be required to join in any proceedings referred to in
this Paragraph 12(C) unless the provisions of any law, rule or regulations at
the time in effect shall require
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that such proceedings be brought by or in the name of Landlord, in which event
Landlord shall join in such proceedings or permit the same to be brought in
Landlord's name upon compliance with such conditions as Landlord may reasonably
require. Landlord shall not ultimately be subject to any liability for the
payment of any fees, including attorney's fees, costs and expenses in connection
with such proceedings and Tenant agrees to bear the entire obligations therefor.
Tenant agrees to pay all such fees (including reasonable attorney's fees), costs
and expenses or, on demand, to make reimbursement to Landlord for such payment.
During the time when any such certificate of deposit is on deposit with
Landlord, and prior to the time when the same is returned to Tenant or applied
against the payment, removal or discharge of Impositions, as above provided,
Tenant shall be entitled to receive all interest paid thereon. Cash deposits
shall bear interest as above provided if the investment thereof is so requested
by Tenant.
13. EMINENT DOMAIN:
(a) If less than substantially all of the Premises shall be taken
for public or quasi-public purposes, having a material impact on Tenant's
operations, Tenant will promptly, at its sole cost and expense, restore, repair,
replace or rebuild the improvements so taken as nearly as practicable to the
condition, quality and class thereof immediately prior to such taking, or with
such changes or alterations as Tenant shall elect to make in conformity with
Paragraph 23 of this Lease. In performing its obligations, Tenant shall be
entitled to condemnation proceeds under the same terms and conditions set forth
for casualty proceeds in Paragraph 11 hereof. Any condemnation proceeds in
excess of the amount claimed by any lender of Landlord, and such amounts as are
made available to Tenant for restoration or repair of the Premises, shall be the
sole and exclusive property of Landlord. Tenant shall have the right to
participate in condemnation proceedings with Landlord, and shall be entitled to
receive any separate award made by the condemning authority in respect of
business interruption or business relocations.
(b) If the Landlord is entitled to condemnation proceeds as
describing the next to last sentence of Paragraph 13(a), each installment of
Fixed Rent thereafter payable hereunder shall be reduced by a fraction thereof,
the numerator of which shall be the proceeds retained by Landlord and the
denominator of which shall be the Purchase Price specified in the Basic Lease
Information.
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(c) If all or substantially all of the Premises shall be taken for
public or quasi-public purposes, then the provisions of Paragraph 14 of this
Lease shall apply.
14. TERMINATION OF LEASE:
(a) If all or substantially all of the Premises are either destroyed
as a result of fire or other casualty, or taken for public or quasi-public
purposes, or if the Tenant or Landlord is served an eminent domain petition to
take all or substantially all of the Premises for public or quasi-public
purposes, and the Premises are therefore rendered unsuitable for restoration for
continued use and occupancy in Tenant's business, then Tenant shall, not later
than thirty (30) days after such occurrence, deliver to Landlord (i) notice of
its desire to terminate this Lease with respect to the Premises on the next due
date for the Fixed Rent payment, (the "Termination Date") which occurs not less
than 45 days after the delivery of such notice and (ii) a certificate of the
President or Vice President of Tenant describing the event giving rise to such
termination and stating that Tenant has determined that such event has rendered
the Premises unsuitable for restoration for continued use and occupancy in
Tenant's business, and (iii) a certificate signed by the Tenant to the effect
that termination of this Lease with respect to such Premises will not be in
violation of any operating or similar agreement then in effect. Such notice to
Landlord shall be accompanied by an irrevocable offer by Tenant to purchase on
the Termination Date any remaining portion of the Premises at a price equal to
the greater of (a) the unencumbered fair market value of the Premises determined
by agreement of the parties hereto, or (b) the Purchase Price specified in the
Basic Lease Information. The costs associated with such conveyance, including
transfer taxes and recording fees, shall be paid by Landlord to the extent the
price being paid for the Premises exceeds the Purchase Price specified in the
Basic Lease Information, and by Tenant to the extent such costs would reduce
Landlord's net receipts below such Purchase Price. Landlord may reject such
offer by notice given to Tenant not later than thirty (30) days after receipt of
Tenant's notice (which offer Landlord may not reject without the first
mortgagee's consent if there is a mortgage then on the Premises which is the
subject of such offer to which Landlord is a party). Unless Landlord shall have
rejected such offer in accordance with this paragraph (with the mortgagee's
consent as aforesaid), Landlord shall be conclusively presumed to have accepted
such offer, and, on the Termination Date, shall convey to Tenant the remaining
portion of the Premises free of liens and encumbrances (except those existing on
the Commencement Date or thereafter created with the express
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written consent of the Tenant), along with the right to receive any insurance or
condemnation proceeds, as the case may be.
(b) If Tenant does not give notice of its intention to terminate
this Lease as provided herein, then this Lease shall continue in full force and
effect, and Tenant shall, at its expense, rebuild, replace or repair any damage
to the Premises caused by such event in conformity with the requirements of
Paragraph 11 so as to restore the Premises (as nearly as practicable) to the
same condition, size, quality of workmanship, and market value thereof
immediately prior to such occurrence.
15. DEFAULT: Events of Default.
The following events, following the expiration of the applicable
cure periods, in this Paragraph are sometimes referred to as an "Event of
Default":
(a) If default shall be made in the payment of Fixed Rent and such
default shall continue for five (5) business days after notice from
Landlord (provided that after giving one such notice, any such
default occurring within 12 months shall become an Event of Default
without the giving of notice) or if default shall be made in the
payment of Additional Rent or in the payment of any other sum
required to be paid by Tenant under this Lease or the payment to
Landlord of any other sum due under the terms of any other agreement
between Landlord and Tenant;
(b) If default shall be made in the observance or performance of any of
the other covenants in this Lease which Tenant is required to
observe and perform and such default shall continue for thirty (30)
days after written notice to Tenant, or if a default involves a
hazardous condition and is not cured by Tenant immediately;
provided, however, the time allowed Tenant (except in the instance
of hazardous conditions or conditions which expose Landlord to
criminal liability) within which Tenant is permitted to cure the
same shall be extended for such period as may be necessary for the
curing provided Tenant is continuously, diligently and in good faith
prosecuting such cure;
(c) If any representation or warranty made by Tenant herein or in any
certificate, demand or request made pursuant
hereto proves to be incorrect in any material respect when made;
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(d) If the interests of Tenant in this Lease shall be levied on under
execution or other legal process and same is not removed or stayed
within thirty (30) days;
(e) If any voluntary petition of bankruptcy or for corporate
reorganization or for the appointment of a receiver or any similar
relief shall be filed by Tenant;
(f) If any involuntary petition of bankruptcy shall be filed against
tenant under any Federal or State bankruptcy or insolvency act and
shall not have been dismissed within ninety (90) days of the filing
thereof;
(g) If a receiver shall be appointed for Tenant or any of the property
of Tenant by any court and any such receiver shall not have been
discharged within ninety (90) days from the date of his appointment;
(h) If Tenant shall make an assignment for the benefit of creditors;
(i) If Tenant shall admit, in writing, Tenant's inability to meet
Tenant's debts as they mature;
(j) If Tenant shall abandon the Premises;
(k) If the consolidated net worth of Tenant determined in accordance
with generally accepted accounting principles shall be less than
$75,000,000;
(1) If: (i) there are any outstanding obligations under the Amended
and Restated Credit Agreement, dated as of December 20,
1990, by and among Tenant, Caterair Chateau Canada
Limited, Banque Paribas (as Administrative Agent) on
behalf of certain lenders (the "Lenders") (as the same
has been and may hereafter be amended or restated or
otherwise modified from time to time, including any
refinancing thereof, the "Credit Agreement"), and so
long as Banque Paribas or any other person acting on
behalf of the Lenders (an "Agent") has agreed, with
respect to the Credit Agreement, to give Landlord notice
of acceleration of the maturity thereof
contemporaneously with the giving of any such notice to
Tenant, then the acceleration of the maturity of any
amounts
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due under the Credit Agreement by the Agent or the
Lenders shall constitute an Event of Default hereunder;
or
(ii) there are no outstanding obligations under the Credit
Agreement, then any default shall occur in the payment of any
outstanding indebtedness of $10,000,000 or more, or such lesser
indebtedness as shall be material to the financial condition of
Tenant;
(m) If a final judgment shall be entered in an amount greater than
$5,000,000 which creates a default under any mortgage, lease or loan
agreement of Tenant, or which affects Landlord's interest in the
Premises; or
(n) If an Event of Default shall occur under any other lease between
Landlord and Tenant dated as of the date hereof.
Landlord may treat the occurrence of any one or more of the
foregoing Events of Default as a breach of this Lease. For so long as such Event
of Default continues the Landlord, at its option and with or without notice or
demand of any kind to Tenant or any other person, but subject to Paragraph 16F
hereof may have any one or more of the remedies provided in this Paragraph 15 or
elsewhere in this lease, in addition to all other remedies and rights provided
at law or in equity.
16. REMEDIES: In the event of any such Event of Default, Landlord may, in
addition to, and not in derogation of any remedies for any preceding breach or
covenant, with or without notice of demand (except as otherwise expressly
provided herein) and without limiting Landlord in the exercise of any right or
remedy which Landlord may have by reason of such default or breach:
A. Immediately or at any time thereafter while such Event of Default
continues, mail a notice of termination addressed to Tenant and proceed pursuant
to and with due process of law, to repossess the same without prejudice to any
remedies which might otherwise be used for arrears of rent or prior to breach of
covenant, and upon such notice as aforesaid this Lease shall terminate, but
Tenant shall remain liable for its default hereunder as hereinafter provided.
Tenant shall have the right to cure any default until the expiration of the
applicable cure period, if any, following notice by Landlord, as specified
above. Where Landlord has given notice as provided for above, no further notice
shall be required to effectuate a termination of the
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Lease, which termination shall occur automatically unless the default is cured
within the time periods provided.
B. Terminate Tenant's right to possession of the Premises by court
order or any lawful means, in which case Tenant's right to possession under this
Lease shall terminate, and Tenant shall immediately surrender possession of the
Premises to Landlord. In such event, Landlord shall be entitled to recover from
Tenant all damages incurred by Landlord by reason of Tenant's default,
including, but not limited to, the cost of recovering possession of the
Premises; reasonable expenses of reletting, including necessary renovation and
alteration of the Premises (which reletting shall be restricted to operations
similar to Tenant's operations, or to warehouse or distribution center
facilities); reasonable attorney's fees and any real estate commissions actually
paid; the worth at the time of award by the court having jurisdiction thereof of
the amount by which the unpaid rent for the balance of the term after the time
of such award exceeds the amount of such rental loss for the same period that
Tenant proves could be reasonably avoided; and that portion of any leasing
commissions paid by Landlord applicable to the unexpired Term of this Lease.
C. Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant shall have abandoned the
Premises. In such event, Landlord shall be entitled to enforce all of Landlord's
rights and remedies under this Lease, including the right to recover the Rent as
it becomes due hereunder.
D. Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the State of Minnesota, including,
without limitation, unlawful detainer proceedings pursuant to Minnesota Statute
Section 566. Unpaid installments of Rent and other unpaid monetary obligations
of Tenant under the terms of this Lease shall bear interest from the date due
until paid at the Overdue Rate.
E. At any time after any such termination of this Lease or re-entry
or repossession of the Premises or any part thereof by reason of the occurrence
of an Event of Default, whether or not Landlord shall have collected any current
damages pursuant to Paragraph 16B, Landlord shall have the option to require
payment from Tenant, and Tenant will pay to Landlord on demand, as and for
liquidated and agreed final damages for Tenant's default and in lieu of all
current damages beyond the date of such demand (it being agreed that it would be
impracticable or extremely difficult to fix the actual damages), whichever
amount Landlord shall select:
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(a) an amount equal to the Fixed Rent reserved in this Lease and/or
covenanted to be paid for the remainder of the Term (excluding unexercised
Renewal Terms), discounted at the rate of 10% per year to present worth;
or
(b) 110% of the Purchase Price specified in the Basic Lease
Information.
Landlord shall at the time of such payment under this Paragraph 16E assign and
convey the Premises to Tenant free of liens and encumbrances (except those
existing on the Commencement Date or thereafter created with the express written
consent of Tenant), without further consideration. The costs of such transfer,
including recording fees and transfer taxes shall be paid by Tenant, except
that, if Landlord receives more than 110% of such Purchase Price, Landlord shall
pay the portion of such costs, if any, which result in Landlord receiving at
least 110% of such Purchase Price.
F. Until such time as the Agent shall otherwise notify Landlord or
until such time as there are no longer any obligations outstanding under the
Credit Agreement;
(i) if default shall occur hereunder at any time, written notice to
that effect shall be sent by Landlord to the Agent,
(ii) if such default shall be a default which can be cured by the
payment of money alone, the Agent may remedy such default not later than 5
business days after the receipt of such notice; or
(iii) if such default shall be a default in observing or performing
any other covenant or condition to be observed or performed by Lessee
hereunder, the Agent may remedy such default not later than 30 days after
receipt of such notice provided that such period may be extended under the
circumstances and to the extent provided in Paragraph 15(b).
In either such event, Landlord or Tenant (as the case may be) shall
provide the Agent with any access to the Premises which may be necessary to
effectuate any such cure. In no event shall the Agent be obligated to effectuate
a cure of any default hereunder.
During the cure periods described in clauses (ii) and (iii),
Landlord shall take no action to terminate this Lease or to interfere with the
occupancy, use or enjoyment of the Premises
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or exercise any other remedies to which it may be entitled under the Lease.
17. SUBORDINATION:
(a) Subordination, Non-Disturbance. Tenant agrees at any time hereafter,
and from time to time on demand of Landlord, to promptly execute and deliver to
Landlord any instruments, releases or other documents that may be required for
the purpose of subjecting and subordinating this Lease to the lien of any
mortgage, deed of trust, security instrument, ground or underlying lease or
other document of like nature (hereinafter collectively referred to as
"Mortgage") which at any time may be placed upon the Premises, or any portion
thereof, by Landlord, and to any replacements, renewals, amendments,
modifications, extensions or refinancing thereof, and to each and every advance
made under any Mortgage. It is agreed, nevertheless, that so long as there
exists no Default, such subordination agreement or other instrument, release or
document (herein "Subordination Agreement") shall not interfere with, hinder or
reduce Tenant's right to quiet enjoyment under this Lease, nor the right of
Tenant to continue to occupy the Premises, and all portions thereof, and to
conduct its business thereon in accordance with the covenants, conditions,
provisions, terms and agreements of this Lease. Such Subordination Agreement
shall provide for a nondisturbance of Tenant's rights hereunder provided Tenant
attorns to the holder of such Mortgage. The lien of any such Mortgage shall not
cover Tenant's Trade Fixtures or other personal property located in or on the
Premises.
(b) Mortgagee Protection Clause. In the event of any act or omission of
Landlord constituting a default by Landlord, Tenant shall not exercise any
remedy until Tenant has given Landlord and any mortgagee of the Premises a
thirty (30) day prior written notice of such act or omission, and until a
reasonable period of time to allow Landlord or the mortgagee to remedy such act
or omission shall have elapsed following the giving of such notice. However, if
such act or omission cannot, with due diligence and in good faith, be remedied
within such thirty (30) day period, the Landlord and the mortgagee shall be
allowed such further period of time as may be reasonably necessary provided that
it commences remedying the same with due diligence and in good faith within said
thirty (30) day period. Nothing herein contained shall be construed or
interpreted as requiring any mortgagee to remedy such act or omission.
(c) Attornment. If any mortgagee or other party (a "Purchaser") shall
succeed to the rights of Landlord under this Lease or to ownership of the
Premises, whether through possession
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or foreclosure of any such mortgage or deed of trust or of any action or
proceeding for the enforcement thereof or of any sale thereunder or the delivery
of a deed to the Premises in lieu of foreclosure, then, upon the written request
of such Purchaser so succeeding to landlord's rights hereunder, provided such
Purchaser assumes, in writing, the obligations of Landlord hereunder accruing on
and after the date such Purchaser acquired title to the Premises, Tenant shall
attorn to and recognize such Purchaser as Tenant's landlord under this Lease,
and shall promptly execute and deliver any instrument that such Purchaser may
reasonably request to evidence such attornment. In the event of any other
transfer of Landlord's interest hereunder, upon the written request of the
transferee and Landlord, provided such transferee assumes, in writing, the
obligations of Landlord hereunder accruing on and after the date of such
transfer, Tenant shall attorn to and recognize such transferee as Tenant's
landlord under this lease and shall promptly execute and deliver any instrument
that such transferee and Landlord may reasonably request to evidence such
attornment.
(d) Upon ten business days advance written notice, Tenant agrees to
execute, acknowledge and deliver a document substantially in the form of the
Assignment of Lease attached hereto as Exhibit B from Landlord to a mortgagee
and consented to by Tenant, with such changes therein as may be reasonably
requested by an institutional lender, provided no such change alters the rights
of Tenant hereunder.
18. LANDLORD'S RIGHT OF ENTRY: Upon reasonable notice, from time to time
during normal business hours, such persons as Landlord or any assignee of
Landlord shall designate shall have the right to enter upon the Premises and to
inspect same, exhibit the Premises to prospective purchasers and mortgagees, and
examine Tenant's books and records pertaining to the Premises, insurance
policies, certificates of occupancy and other documents, records and permits in
Tenant's possession with respect to the Premises, all of which shall be
customary and adequate and reasonably satisfactory to Landlord, provided,
however, that such activities by Landlord shall be conducted in such a manner as
not to interfere with the conduct of business by Tenant at the Premises. If no
Event of Default exists hereunder, any such inspections shall be at the expense
of Landlord. If an Event of Default exists hereunder, such inspections shall be
at the reasonable expense of Tenant. During the final one (1) year of the Term,
Landlord shall be entitled to place customary "For Rent" or "For Sale" signs on
the Premises. Such persons as Landlord or any assignee of Landlord shall
designate shall also have the right to enter upon the Premises for the purpose
of making repairs which Landlord is authorized to make under the
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provisions of this Lease. In the event of an Event of Default under the Credit
Agreement the Agent shall have the right to enter onto the Premises for purposes
of removing collateral in which the Agent holds a perfected first priority
security interest, provided that such removal does not impair the structural
integrity of the Premises, and the Agent shall repair any damage to the Premises
caused by such removal.
19. NOTICES: Notices, statements, demands, or other communications
required or permitted to be given, rendered or made by either party to the other
pursuant to this Lease or pursuant to any applicable law or requirement of
public authority, shall be in writing (whether or not so stated elsewhere in
this Lease) and shall be deemed to have been properly given, rendered or made,
when received by overnight delivery or overnight courier delivery or facsimile
transmission with a confirmation copy sent by overnight delivery or by overnight
courier delivery addressed to the other parties as follows:
To Landlord:
TriNet Essential Facilities VIII R, Inc.
Four Embarcadero Center, Suite 3150
San Francisco, California 94111
Attention: Mr. Mark S. Whiting
With a copy to:
Day, Berry & Howard
260 Franklin Street
Boston, Massachusetts 02110
Attention: Lewis A. Burleigh, Esq.
To Tenant:
Caterair International Corporation
7811 Montrose Road
Potomac, Maryland 20854
Attention: Law Department
To Agent:
Banque Paribas
787 Seventh Avenue
New York, New York 10019
Attention: Stephen M. Burns
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Any party listed in this paragraph 19 may, by notices as aforesaid, designate a
different address for addresses for notice, statements, demands or other
communications intended for it.
20. STATUS OF LEASE; FINANCIAL DATA:
A. Upon written request of either party, the other party agrees,
within twenty (20) days, to deliver a written status report of this Lease, in
the form provided on attached Exhibit C, provided that neither party shall be
obligated to provide more than four (4) such status reports per year.
B. Tenant agrees to deliver to Landlord and to any lender or
purchaser designated by Landlord the following information: within 120 days
after the end of each fiscal year of Tenant, an audited balance sheet of Tenant
and its consolidated subsidiaries as at the end of such year, an audited
statement of profits and losses of Tenant and its consolidated subsidiaries for
such year, and an audited statement of change in the financial position of
Tenant and its consolidated subsidiaries for such year, setting forth in each
case, in comparative form, the corresponding figures for the preceding fiscal
year in reasonable detail and scope and certified by independent certified
public accountants of recognized national standing selected by Tenant; and
within 60 days after the end of each of the first three fiscal quarters of
Tenant a balance sheet of Tenant and its consolidated subsidiaries as at the end
of such quarter, statements of profits and losses of Tenant and its consolidated
subsidiaries for such quarter and a statement of change in financial position of
Tenant and its consolidated subsidiaries for such quarter, setting forth in each
case, in comparative form, the corresponding figures for the similar quarter of
the preceding year, in reasonable detail and scope, and certified to be true and
complete by a financial officer of Tenant having knowledge thereof; the
foregoing financial statements all being prepared in accordance with generally
accepted accounting principles, consistently applied. So long as Tenant shall
remain a privately-held company, Landlord shall keep any non-public financial
information with respect to Tenant furnished by Tenant confidential and shall
not disclose such information; provided, however, that such information may be
disclosed (i) to its officers, directors, employees, agents, attorneys and
accountants in connection with acting as Landlord under this Lease, (ii) to
lenders or institutional investors in connection with arranging, modifying or
restructuring debt
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secured by a mortgage lien on the Premises or an assignment of this Lease, so
long as any such lender shall execute a confidentiality agreement agreeing not
to disclose such financial information, (iii) to potential purchasers in
connection with the sale of any interest in the Premises, so long as any such
purchaser shall execute a confidentiality agreement agreeing not to disclose
such financial information, (iv) in connection with the enforcement of
Landlord's rights and remedies hereunder, and (v) as may be required by any
governmental or other regulatory entity having jurisdiction or authority over
Landlord, or over any lender or investor.
C. Tenant, upon five (5) business days advance notice, will permit
Landlord and its professional representatives to visit Tenant's offices and
discuss Tenant's affairs and finances (insofar as they relate to the Premises or
this Lease) with appropriate officers, and will make available such information
as Landlord may reasonably request bearing on the Tenant, Premises or this
Lease, provided that Landlord agrees to maintain the confidentiality of
information denominated as non-public information provided such information may
be provided as required by governmental regulation or court order, and may be
provided on a confidential basis to Landlord's counsel and accountants.
21. MECHANICS' LIENS:
Liens and Right of Contest. (a) Tenant shall not suffer or permit
any mechanic's lien or other lien to be filed or recorded against the Premises,
equipment or materials supplied or claimed to have been supplied to the Premises
at the request of Tenant, or anyone holding the Premises, or any portion
thereof, through or under Tenant. If any such mechanic's lien or other lien
shall at any time be filed or recorded against the Premises, or any portion
thereof, Tenant shall cause the same to be discharged of record within thirty
(30) days after the date of filing or recording of the same. However, in the
event Tenant desires to contest the validity of any lien it shall (i) on or
before thirty (30) days prior to the due date thereof (but in no event later
than 30 days after the filing or recording thereof), notify Landlord, in
writing, that Tenant intends to so contest same; (ii) on or before the due date
thereof, if Landlord reasonably deems Tenant to be financially insecure or if
any mortgagee or Trust Deed holder of Landlord so requires, deposit with
Landlord security (in form and content reasonably satisfactory to Landlord or
Landlord's mortgagee or trust deed holder) for the payment of the full amount of
such lien and, from time to time, deposit additional security or indemnity so
that,
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at all times, adequate security or indemnity will be available for the payment
of the full amount of the lien together with all interest, penalties, costs and
charges accrued or accumulated thereon.
If Tenant complies with the foregoing, and Tenant continues, in good
faith, to contest the validity of such lien by appropriate legal proceedings
which shall operate to prevent the collection thereof and the sale or forfeiture
of the Premises, or any part thereof, to satisfy the same, Tenant shall be under
no obligation to pay such lien until such time as the same has been decreed, by
court order, to be a valid lien on the Premises. Any surplus deposit retained by
Landlord, after the payment of the lien shall be repaid to Tenant. Provided that
nonpayment of such lien does not cause Landlord to be in violation of any of its
contractual undertakings, Landlord agrees not to pay such lien during the period
of Tenant's contest. However, if Landlord pays for the discharge of a lien or
any part thereof from funds of Landlord, any amount paid by Landlord, together
with all costs, fees and expenses in connection therewith (including reasonable
attorney's fees of Landlord), together with interest thereon at the Overdue
Rate, shall be repaid by Tenant to Landlord on demand by Landlord. Tenant shall
indemnify and defend Landlord against and save Landlord and the Premises, and
any portion thereof, harmless from and against all losses, costs, damages,
expenses, liabilities, suits, penalties, claims, demands and obligations,
including, without limitation, reasonable attorney's fees, resulting from the
assertion, filing, foreclosure or other legal proceedings with respect to any
such mechanic's lien or other lien or the attempt by Tenant to discharge same as
above provided.
(b) All materialmen, contractors, artisans, engineers, mechanics, laborers
and any other person now or hereafter furnishing any labor, services, materials,
supplies or equipment to Tenant with respect to the Premises, or any portion
thereof, are hereby charged with notice that they must look exclusively to
Tenant to obtain payment for the same. Notice is hereby given that Landlord
shall not be liable for any labor, services, materials, supplies, skill,
machinery, fixtures or equipment furnished or to be furnished to Tenant upon
credit, and that no mechanic's lien or other lien for any such labor, services,
materials, supplies, machinery, fixtures or equipment shall attach to or affect
the estate or interest of Landlord in and to the Premises, or any portion
thereof.
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(c) Tenant shall not create, permit or suffer, and, subject to the
provisions of Section 21(a) hereof, shall promptly discharge and satisfy of
record, any other lien, encumbrance, charge, security interest, or other right
or interest which, as a result of Tenant's action or inaction contrary to the
provisions hereof, shall be or become a lien, encumbrance, charge or security
interest upon the Premises, or any portion thereof, or the income therefrom.
22. END OF TERM: (a) Upon the expiration or earlier termination of the
Term of this Lease, Tenant shall surrender the Premises to Landlord in the same
condition and suitable for the same use in which the Premises was originally
received from Landlord except as repaired, rebuilt or altered as required or
permitted by this Lease (and/or except for such casualty damage as Tenant shall
not be required to repair or restore hereunder), and except for normal wear and
tear, and shall surrender all keys to the Premises to Landlord at the place then
fixed for the payment of Fixed Rent and shall inform Landlord of all
combinations on locks, safes and vaults, if any. Except as otherwise provided
herein, Tenant shall at such time remove all of its property (including Tenant's
Trade Fixtures) therefrom and all alterations and improvements placed thereon by
Tenant and not consented to by Landlord, if so requested by Landlord. Tenant
shall repair any damage to the Premises caused by such removal, and any and all
such property not so removed when required shall, at Landlord's option, become
the exclusive property of Landlord or be disposed of by Landlord, at Tenant's
cost and expense, without further notice to or demand upon Tenant.
(b) If the Premises are not surrendered as above set forth, Tenant
shall indemnify, defend and hold Landlord harmless from and against loss or
liability resulting from the delay by Tenant in so surrendering Premises,
including, without limitation any claim made by any succeeding occupant founded
on such delay. Tenant's obligation to observe or perform this covenant shall
survive the expiration or other termination of this Lease. In addition to the
foregoing, and in addition to the Additional Rent, Tenant shall pay to Landlord
a sum equal to 150% of the Fixed Rent herein provided during each month or
portion thereof for which Tenant shall remain in possession of the Premises or
any part thereof after the termination of the Term or of Tenant's rights of
possession, whether by lapse of time or otherwise. The provisions of this
Paragraph 22(b) shall not be deemed to limit or constitute a waiver of any other
rights or remedies of Landlord provided herein at law or at equity.
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(c) All property of Tenant not removed on or before the last day of
the term of this Lease shall be deemed abandoned. Tenant hereby appoints
Landlord its agent to remove all property of Tenant, including Tenant's Trade
Fixtures, from the Premises upon termination of this Lease and to cause its
transportation and storage for Tenant's benefit, all at the sole cost and risk
of Tenant and Landlord shall not be liable for damage, theft, misappropriation
or loss thereof and Landlord shall not be liable in any manner in respect
thereto. Tenant shall pay all costs and expenses of such removal, transportation
and storage. Tenant shall reimburse Landlord upon demand for any expenses
incurred by Landlord with respect to removal or storage of abandoned property
and with respect to restoring said Premises to good order, condition and repair.
(d) Except for surrender upon the expiration or earlier termination
of the term hereof, no surrender to Landlord of this Lease or of the Leased
Property shall be valid or effective unless agreed to and accepted in writing by
Landlord.
(e) Notwithstanding the above, upon the expiration or earlier
termination of the Term of this Lease, if there are any outstanding obligations
under the Credit Agreement, Landlord shall, in the case of an early termination,
notify the Agent thereof and within 30 days after such expiration or receipt of
such notice of early termination, as the case may be, the Agent shall have the
right and Landlord shall provide such access as may be necessary for the Agent
to remove from the Premises the collateral upon which it then has a first
priority lien.
23. ALTERATIONS:
A. At any time during the Term of this Lease, Tenant shall have the
right to make alterations in and to the Premises, provided such alterations are
in compliance with all applicable codes, laws, ordinances, rules and
regulations, and do not materially reduce the then unencumbered fair market
value of the Premises or cause the Premises to violate any terms of this Lease
or compromise the structural integrity of the Improvements.
B. Prior to making any structural alteration the cost of which is
estimated to exceed $100,000, Tenant shall submit to Landlord a plan showing the
nature and extent of such alterations and shall not proceed with such
alterations without Landlord's written consent, which shall not be unreasonably
withheld.
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24. MEMORANDUM OF LEASE: The parties agree to promptly execute a
Memorandum of Lease in recordable form and either of the parties shall have the
right, without notice to the other party, to record such Memorandum of Lease.
25. SUBLETTING/ASSIGNMENT: Tenant shall have the right to sublease all or
any part of the Premises or assign its interest hereunder, provided that Tenant
shall remain primarily liable under this Lease without regard to any sublease or
assignment, and provided further that any profit realized upon subletting or
assignment shall be the property of Tenant. Tenant shall not mortgage its
interest hereunder and any purported mortgage thereof shall be void.
26. HAZARDOUS MATERIAL:
A. Tenant (i) shall comply, and cause the Premises to comply, with
all Environmental Laws (as hereinafter defined) applicable to the Premises
(including the making of all submissions to governmental authorities required by
Environmental Laws and the carrying out of any remediation program specified by
such authority, (ii) shall prohibit the use of the Premises for the generation,
manufacture, refinement, production, or processing of any Hazardous Material (as
hereinafter defined) or for the storage, handling, transfer or transportation of
any Hazardous Material (other than in connection with the operation, business
and maintenance of the Premises and in commercially reasonable quantities as a
consumer thereof and supplier of consumer products and in compliance with
Environmental Laws), (iii) shall not permit to remain, install or permit the
installation on the Premises of any surface impoundments, underground storage
tanks, or asbestos-containing materials, except for such impoundments, tanks and
asbestos containing material as was on the Premises at the Commencement Date as
disclosed to Landlord by an environmental engineer's written report, provided
such pre-existing items continue to be in compliance with applicable laws and,
to the extent required by Paragraph 22, removed at the end of the Term, and (iv)
shall cause any alterations of the Premises to be done in a way so as to not
expose in an unsafe manner the persons working on or visiting the Premises to
Hazardous Materials and in connection with any such alterations shall remove any
Hazardous Materials present upon the Premises which are not in compliance with
Environmental Laws or which present a danger to persons working on or visiting
the Premises.
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B. "Environmental Laws" means the Resource Conservation and Recovery
Act of 1976, as amended, 42 U.S.C. Sections 6901, et seq. (RCRA), the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
Sections 9601 et seq. (CERCLA), the Toxic Substance Control Act, as amended, 15
U.S.C. Sections 2601 et seq., the Federal Insecticide, Fungicide and Rodenticide
Act, as amended, 7 U.S.C. Sections 136 et seq., and all applicable federal,
state and local environmental laws, ordinances, rules and regulations, as any of
the foregoing may have been or may be from time to time amended, supplemented or
supplanted, and any other federal, state or local laws, ordinances, rules and
regulations, now or hereafter existing relating to regulations or control of
Hazardous Material or materials. The term "Hazardous Materials" as used in this
Lease shall mean substances defined as "hazardous substances", "hazardous
materials", "hazardous wastes" or "toxic substances" in any applicable federal,
state or local statute, rule, regulation or determination, including but not
limited to the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. Sections 9601, et seq.; the Hazardous
Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; the Resource,
Conservation and Recovery Act of l976, 42 U.S.C. Sections 6901, et seq.; and,
asbestos, pcb's, radioactive substances, methane, volatile hydrocarbons,
petroleum or petroleum-derived substances or wastes, radon, industrial solvents
or any other material as may be specified in applicable law or regulations.
C. Except for liability resulting from or arising out of the sole
negligent or willful act of Landlord or its Mortgagee or their agents on or
about the Premises or their successors and assigns, Tenant agrees to protect,
defend, indemnify and hold harmless Landlord, its directors, officers, employees
and agents, and any successors to Landlord's interest in the chain of title to
the Premises, their direct or indirect partners, directors, officers, employees,
and agents, from and against any and all liability, including all foreseeable
and all unforeseeable damages including but not limited to attorney's and
consultant's fees, fines, penalties and civil or criminal damages, directly or
indirectly arising out of the use, generation, storage, treatment, release,
threatened release, presence or disposal of Hazardous Materials from, on, at, to
or under the Premises prior to or during the Term of this Lease, and including,
without limitation, the cost of any required or necessary repair, response
action, remediation, investigation, cleanup or detoxification and the
preparation of any closure or other required plans, whether such action is
required or
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necessary prior to or following transfer of title to the Premises. This
agreement to indemnify and hold harmless shall be in addition to any other
obligations or liabilities Tenant may have to Landlord at common law under all
statutes and ordinances or otherwise, and shall survive following the date of
expiration or earlier termination of this Lease for five years, except where the
event giving rise to the liability for which indemnity is sought arises out of
Tenant's acts, in which case the agreement to indemnify shall survive the
expiration or termination of this Lease without limit of time. Tenant expressly
agrees that the representations, warranties and covenants made and the
indemnities stated in this Lease are not personal to Landlord, and the benefits
under this Lease may be assigned to subsequent parties in interest to the chain
of title to the Premises, which subsequent parties in interest may proceed
directly against Tenant to recover pursuant to this Lease. Tenant, at its
expense, may institute appropriate legal proceedings with respect to
environmental matters of the type specified in this Paragraph 26C or lien for
such environmental matters, not involving Landlord or its Mortgagee as a
defendant (unless Landlord or its Mortgagee is the alleged cause of the damage),
conducted in good faith and with due diligence, provided that such proceedings
shall not in any way impair the interests of Landlord or its Mortgagee under
this Lease or contravene the provisions of any First Mortgage. Counsel to Tenant
in such proceedings shall be reasonably approved by Landlord if Landlord is a
defendant in the same proceeding. Landlord shall have the right to appoint
co-counsel, which co-counsel will cooperate with Tenant's counsel in such
proceedings. The fees and expenses of such co-counsel shall be paid by Landlord,
unless such co-counsel are appointed because the interests of Landlord and
Tenant in such proceedings, in such counsel's opinion, are or have become
adverse, or Tenant or Tenant's counsel is not conducting such proceedings in
good faith or with due diligence.
D. Tenant, promptly upon the written request of Landlord from time
to time, but not more than once in any calendar year unless an Event of Default
has occurred and is continuing, shall permit such persons as Landlord or any
assignee of Landlord may designate and (unless an Event of Default has occurred
and is continuing) approved by Tenant, which approval shall not be unreasonably
withheld or delayed ("Site Reviewers") to visit the Premises from time to time
and perform Environmental site investigations and assessments ("Site
Assessments") on the Premises for the purpose of determining whether there
exists on the Premises any environmental condition which may result in any
liability, cost or expense to Landlord or
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any other owner or occupier of the Premises relating to Hazardous Material;
provided, however, that any such Site Reviewer in performing any Site Assessment
shall not unreasonably interfere with the operations or business of Tenant on
the Premises. Such Site Assessments may include both above and below the ground
testing for environmental damage or the presence of Hazardous Material on the
Premises and such other tests on the Premises as may be necessary to conduct the
Site Assessments in the opinion of the Site Reviewers. Tenant shall supply to
the Site Reviewers such historical and operational information regarding the
Premises as may be reasonably requested by the Site Reviewers to facilitate the
Site Assessments (other than information previously supplied in writing to
Landlord by Tenant) and shall make available for meetings with the Site
Reviewers appropriate personnel having knowledge of such matters. The cost of
performing and reporting all Site Assessments shall be paid by Landlord unless
an Event of Default has occurred and is continuing or unless the Site Reviewers
discover an environmental condition causing the Premises to be in noncompliance
with applicable Environmental Laws, in either of which events such cost will be
paid by Tenant within thirty (30) days after demand by Landlord with interest to
accrue at the Overdue Rate. Landlord, promptly after written request by Tenant
and payment by Tenant as aforesaid, shall deliver to Tenant copies of reports,
summaries or other compilations of the results of such Site Assessments.
Tenant's sole remedy for Landlord's breach of the preceding sentence shall be a
mandatory injunction, and not a termination of this Lease or a withholding or
reduction of rent. If a Site Assessment conducted under this Paragraph 26D
indicates that the Premises are in violation of Environmental Laws or otherwise
do not conform to the requirements of this Paragraph 26 at the time the Term is
expiring or being terminated, and such violation or nonconformity is
attributable to the Tenant, the term of this Lease shall at the option of
Landlord (exercised by written notice sent thirty (30) days prior to the
expiration or termination of the Term) be extended for the period of remediation
of such violation or nonconformity but in no event more than two (2) years from
the scheduled expiration of the Term. All of the terms, covenants and conditions
of this Lease shall continue in full force and effect during the period of any
such extension, except that the annual Fixed Rent shall be the fair market
rental for the Premises assuming no such violation or nonconformity has
occurred. Such fair market rental shall be mutually agreed upon by the Landlord
and Tenant. In the event that the Landlord and Tenant are unable in good faith
to agree on such fair market rental, the annual Fixed Rent during the period of
any such extension shall be determined by an
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independent appraiser without regard to any remaining Renewal Term.
E. Tenant shall notify Landlord in writing, promptly upon Tenant's
learning thereof, of any:
(a) notice or claim to the effect that Tenant is or may be liable to
any person as a result of the release or threatened release of any Hazardous
Material into the environment;
(b) notice that Tenant is subject to investigation by any
governmental authority evaluating whether any remedial action is needed to
respond to the release or threatened release of any Hazardous Material into the
environment;
(c) notice that the Premises is subject to an environmental lien;
and
(d) notice of violation to Tenant or awareness by Tenant of a
condition which might reasonably result in a notice of violation of any
applicable Environmental Law that could have a material adverse effect upon the
Premises.
27. RIGHT OF FIRST REFUSAL:
During the period ending on the tenth (10th) anniversary of the
Commencement Date, Landlord shall not sell or otherwise transfer its interest in
the Premises or any portion thereof to a third party unless Landlord shall first
have offered to sell the same to Tenant at the price and upon the terms which
were offered to Landlord by, or solicited by Landlord from, such third party
(the "Initiating Offer"). After notification by Landlord of a bona fide written
offer to purchase any or all of the Premises, Tenant shall have ten (10)
business days to accept such offer in writing at a price equal to or greater
than the Initiating Offer price (less any fees and commissions saved by Landlord
because of selling to Tenant), whereupon Tenant shall be legally obligated to
purchase the Premises on the terms of such offer. The right of first refusal
shall not apply in the case of any foreclosure sale of Landlord's interest in
the Premises or any transfer of Landlord's interest in the Premises by way of
merger, consolidation or purchase of substantially all of Landlord's assets or
in the case of any such transfer to any entity controlling, controlled by or
under common control of Landlord, except that Tenant's right of first refusal
shall survive any
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such transfer, and be binding upon the successor to Landlord's interest.
Upon election by Tenant to exercise its Right of First Refusal:
(a) If the Initiating Offer price for the Premises and other property
leased by Tenant from Landlord is less than $11,200,000, Landlord and Tenant
shall enter into a fully binding contract to purchase the Premises within ten
(10) business days of Tenant's exercise of the right of first refusal. Tenant
shall deposit within five (5) business days of signing such contract an amount
in cash or in an irrevocable standby letter of credit (by a bank acceptable to
Landlord) equal to 2% of the agreed upon purchase price. Closing shall occur
within twenty (20) business days of execution of the purchase contract.
(b) If the Initiating Offer price for the Premises and other property
leased by Tenant from Landlord is greater than or equal to $11,200,000, Tenant
shall obtain a financing commitment from one or more lenders within 45 business
days of Tenant's exercise of its right of first refusal. Landlord and Tenant
shall enter into a fully binding contract subject to the above mentioned
financing commitment, to purchase the Premises within ten (10) business days of
Tenant's receipt of the financing commitment. Within five (5) business days of
signing the Purchase Contract, Tenant shall deposit into escrow an amount in
cash or in an irrevocable standby letter of credit (issued by a bank acceptable
to Landlord) equal to 1% of the agreed upon purchase price. Closing shall occur
within 20 business days of Tenant's receipt of its financing commitment.
The right of first refusal shall terminate (a) at the end of the tenth
year of the Term, or (b) if Tenant exercises its right of first refusal or makes
an unsolicited offer to Landlord to purchase any or all of the properties leased
by Landlord to Tenant and fails to complete such purchase.
The provisions of this paragraph shall not apply to any sale by Landlord
into a net-lease investment fund in which Landlord is a general partner for a
period of three (3) years from the Closing.
28. MISCELLANEOUS PROVISIONS:
A. This Lease and all of the covenants and provisions hereof shall
inure to the benefit of, and be binding upon, the
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<PAGE> 45
parties hereto and the heirs, personal representatives, successors and assigns
of the parties.
B. The titles and headings appearing in this Lease are for reference
only and shall not be considered a part of this lease or in any way to modify,
amend or affect the provisions thereof.
C. This Lease contains the complete agreement of the parties with
reference to the leasing of the Premises.
D. Any provision or provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof, and the remaining provisions hereof shall nevertheless remain
in full force and effect.
E. Whenever Tenant is required to make payments to Landlord other
than Fixed Rent, such payments shall constitute Additional Rent. Whenever Tenant
is required to make payment for insurance or taxes, Landlord shall have the
right after fifteen (15) days notice to Tenant, to make the payment for Tenant
and to recover such sums from Tenant as Additional Rent plus interest on such
sums at the Overdue Rate.
F. This Lease may be executed in one or more counterparts, each of
which shall be an original, and all of which shall constitute one and same
instrument.
G. The term "Landlord" as used in this Lease shall mean only the
owner or owners at the time in question of the fee title, and in the event of
any transfer of such title or interest, Landlord named in this Lease (and in
case of any subsequent transfers then the grantor) shall be relieved from and
after the date of such transfer of all liability as respects Landlord's
obligations thereafter to be performed, provided that any funds in the hands of
Landlord or the then grantor at the time of such transfer, in which Tenant has
an interest, shall be delivered to the grantee. The obligations contained in
this Lease to be performed by Landlord shall, subject as aforesaid, be binding
on Landlord's successors and assigns, only during their respective periods of
ownership.
H. This Lease shall be governed by and construed and enforced in
accordance with and subject to the laws of the State where the Premises are
located.
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<PAGE> 46
I. Anything contained herein to the contrary notwithstanding, so
long as Landlord has not entered into any loan agreements affecting the Premises
with a cumulative loan-to-value ratio greater than 70%, any claim based on or in
respect of any liability of Landlord under this Lease shall be enforced only
against the Premises and not against any other assets, properties or funds of
(a) Landlord or any director, officer, shareholder, general partner, limited
partner, or direct or indirect partners, employee or agent of Landlord or its
general partners (or any legal representative, heir, estate, successor or assign
of any thereof), (b) any predecessor or successor partnership or corporation (or
other entity) of Landlord or its general partners, either directly or through
Landlord or its predecessor or successor partnership or corporation (or other
entity) of Landlord or its general partners, and (c) any other person or entity.
J. Without the written approval of Landlord and Tenant, no person
other than Landlord (including its direct and indirect partners), Mortgagee,
Tenant and their respective successors and assigns shall have any rights under
this Lease.
K. There shall be no merger of this Lease or the leasehold estate
created hereby by reason of the fact that the same Person may acquire, own or
hold, directly or indirectly, in whole or in part, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate, and (b) the fee estate in the Premises.
L. Notwithstanding anything contained herein to the contrary, the
interests of Tenant and Landlord under this Lease are expressly intended by the
parties hereto to be construed as a leasehold estate held by Tenant and a fee
simple estate held by Landlord, and not as an estate for years held by Tenant or
a remainder interest held by Landlord.
M. The parties hereby recognize that the Agent, on behalf of the
Lenders is an intended third party beneficiary of paragraphs 15(1), 16F, the
Agent, on behalf of the Lenders of this Lease for so long as there are any
obligations outstanding under the Credit Agreement. The parties shall not amend,
change or modify this provision or, while there are any obligations outstanding
under the Credit Agreement, provisions to which the Agent is an intended third
party beneficiary, without first obtaining the written consent of the Agent.
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<PAGE> 47
[Remainder of Page Intentionally Left Blank]
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<PAGE> 48
IN WITNESS WHEREOF, the parties have hereunto set their hands under seal
on the day and year first above written.
TRINET ESSENTIAL FACILITIES VIII R, INC.
Landlord
By: /s/ Mark S. Whiting
------------------------------
Name: Mark S. Whiting
Title: President
CATERAIR INTERNATIONAL CORPORATION
Tenant
By: /s/ John C. Carr
------------------------------
Name: JOHN C. CARR
Title: Vice President
<PAGE> 49
ANNEX I
DEFINITIONS
The following terms shall have the following meanings for all purposes of
this Lease and shall be equally applicable to both the singular and plural forms
of the terms herein defined.
"Additional Rent" means all amounts, liabilities and obligations other
than Fixed Rent which Tenant assumes or agrees to pay under this Lease to
Landlord or others.
"Agent" is defined in Paragraph l5 (l) of this Lease.
"Basic Lease Information" means the pages preceding this Lease which are
hereby incorporated by reference.
"Certificates" is defined in Paragraph 11 of this Lease.
"Closing" is defined in Paragraph 3B of this Lease.
"Commencement Date" is defined in Paragraph 3B of this Lease.
"Credit Agreement" is defined in Paragraph 15 (l) of this Lease.
"Environmental Laws" is defined in Paragraph 26B of this Lease.
"Event of Default" is defined in Paragraph 15 of this Lease.
"First Mortgage" or "Mortgage" shall mean a first mortgage on the Premises
given by Landlord to the Mortgagee to secure a loan financing or refinancing the
acquisition of the Premises.
"First Mortgage Note" shall mean a promissory note evidencing a loan
secured by a First Mortgage.
"First Renewal Term" is defined in Paragraph 3C of this Lease.
"Fixed Rent" is defined in Paragraph 4 of this Lease.
"Fourth Renewal Term" is defined in Paragraph 3C of this Lease.
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<PAGE> 50
"Imposition" means the various tax and other charges referred to in
Paragraph 9.
"Improvements" is defined in Paragraph 10 of this Lease.
"Initiating Date" is defined in Paragraph 4C of this Lease.
"Initial Term" is defined in Paragraph 3A of this Lease.
"Landlord" is defined in the first Paragraph of this Lease.
"Lease" is defined in the first sentence of this Lease.
"Lease Expiration Date" is defined in Paragraph 3A of this Lease.
"Lenders" is defined in Paragraph 15(l) of this Lease.
"Lookback period" is defined in Paragraph 4C of this Lease.
"Mortgagee" shall mean any first mortgagee with respect to the Premises.
"Overdue Rate" means a rate equal to the prevailing prime rate as shown in
the Wall Street Journal or any equivalent publication, plus 400 basis points.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, trustee(s) of a trust, unincorporated
organization, or government or governmental authority, agency or political
subdivision thereof.
"Permitted Encumbrances" means:
(a) Any liens for taxes, assessments and other governmental charges
and any liens of mechanics, materialmen and laborers for work or
services performed or materials furnished in connection with the
Premises, which are not due and payable;
(b) The easements, rights-of-way, encroachments, encumbrances,
restrictive covenants or other matters in the title set forth in
Schedule B to the policy of owners title insurance (or commitments
therefore) delivered to and accepted by Landlord with respect to
-2-
<PAGE> 51
the Premises in connection with the delivery of this Lease as shown
on Exhibit D attached hereto;
(c) The Lease and the rights of Tenant under this Lease;
"Premises" is defined in Paragraph 1 of this Lease.
"Purchase Price" is defined in the Basic Lease Information.
"Rent" means Fixed Rent and Additional Rent.
"Renewal Term" is defined in Paragraph 3C of this Lease.
"Renewal Term Commencement Date" is defined in Paragraph 3C of this Lease.
"Renewal Term Expiration Date" is defined in Paragraph 3C of this Lease.
"Second Renewal Term" is defined in Paragraph 3C of this Lease.
"Site Reviewers" is defined in Paragraph 26D of this Lease.
"Site Assessments" is defined in Paragraph 26D of this Lease.
"Tenant's Trade Fixtures" means dishwashers, stoves, sinks, refrigerators,
walk-in coolers (to the extent they do not constitute a part of an exterior
wall), underground storage tanks and other fixtures used in Tenant's business
(as opposed to building fixtures customarily found in commercial buildings
without regard to the particular business conducted therein).
"Term" means the Initial Term, together with any Renewal Terms and any
automatic extension of either thereof pursuant to the terms of this Lease.
"Third Renewal Term" is defined in Paragraph 3C of this Lease.
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<PAGE> 52
#397Bloomington, MN
Exhibit A
All that certain real property situated in the County of Hennepin, State
of Minnesota, and described as follows:
Lot 1, Block 1, Watson's Bloomington Addition, according to the plat
thereof on file or of record in the office of the Registrar of Titles in
and for said Hennpin County, Minnesota.
<PAGE> 53
EXHIBIT B
ASSIGNMENT OF LEASE AND AGREEMENT
from
HOLMAN/SHIDLER CORPORATE CAPITAL, INC.
To
___________
Dated as of _________
<PAGE> 54
ASSIGNMENT OF LEASE AND AGREEMENT, dated as of _______, (herein, together
with all supplements and amendments hereto, called this Agreement), from
Holman/Shidler Corporate Capital, Inc. (herein called Assignor), having an
address at Four Embarcadero Center, San Francisco, California 94111 to
___________ having an address at ______ (herein, together with its successors
and assigns as assignee, called the Assignee).
To refinance a portion of the cost to Assignor of acquiring a fee simple
interest in the land described in Schedule A hereto and a fee simple interest in
the improvements located thereon (such land together with such improvements
being collectively called the Property), with the execution and delivery hereof,
is borrowing from the Assignee the amount of $_____________ such borrowing being
evidenced by its Note. The Property has been leased by Assignor to Caterair
International Corporation, a Delaware corporation (the Lessee), under a Lease
Agreement, dated as of _________, 1993 (herein, together with all supplements
and amendments thereto, and any memorandum or short form thereof entered into
for the purpose of recording, registration or filing, called the Lease) between
Assignor, as lessor, and Lessee, as lessee.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt of which is hereby acknowledged, Assignor
agrees as follows:
<PAGE> 55
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1. Assignor, in furtherance of the covenants of the Mortgage and as
security for the payment of the principal of, premium, if any, and interest and
all other sums payable on the Note and of all other sums payable under the
Mortgage, and the performance and observance of the provisions thereof, has
assigned, transferred, conveyed and set over, and by these presents does assign,
transfer, convey and set over to the Assignee, all of Assignor's estate, right,
title and interest in, to and under the Lease together with all rights, powers,
privileges, options and other benefits of Assignor as lessor under the Lease,
including, but not by way of limitation, (i) the immediate and continuing right
to receive and collect all rents, income, revenues, issues, profits, insurance
proceeds, condemnation awards, moneys and security payable or receivable under
the Lease or pursuant to any of the provisions thereof, whether as rents or as
the purchase price of the Property or otherwise (except sums payable directly to
any person other than the lessor thereunder), (ii) the right to accept any offer
by Lessee to purchase the Property, or part thereof, or any reward payable in
connection with a taking thereof, (iii) the right and power (which right and
power are coupled with an interest) to execute and deliver, as agent and
attorney-in-fact of Assignor, an appropriate deed or other instrument necessary
to convey the Property, any part thereof or any award payable in connection with
a taking thereof to the Lessee if the Lessee becomes
<PAGE> 56
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obligated to purchase the Property, any part thereof or any award payable in
connection with a taking thereof, (iv) the right to perform all other necessary
or appropriate acts as said agent and attorney-in-fact with respect to any
purchase and conveyance referred to in clause (iii) above, (v) the right to make
all waivers and agreements, (vi) the right to give all notices, consents and
releases, (vii) the right to take any legal action upon the happening of a
default under the Lease including the commencement, conduct and consummation of
proceedings at law or in equity as shall be permitted under any provision of the
Lease or by law or in equity and (viii) the right to do any and all other things
whatsoever which Assignor or any lessor is or may be entitled to do under the
Lease.
2. The assignment made hereby is executed as collateral security, and the
execution and delivery hereof shall not in any way impair or diminish the
obligations of Assignor under the provisions of Lease nor shall any of the
obligations contained in the Lease be imposed upon the Assignee. Upon the
payment of the principal of and premium, if any, and all accrued interest on the
Note and of all other sums payable on the Note and under the Mortgage and the
performance and observance of the provisions thereof, or upon a release of the
Property from the lien of the Mortgage pursuant to the provisions of the
Mortgage, said assignment and all rights herein assigned to the Assignee shall
cease and terminate and all the estate, right, title and interest
<PAGE> 57
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of Assignor in and to the above-described assigned property shall revert to
Assignor, and the Assignee shall, at the request of Assignor, deliver to
Assignor an instrument in recordable form cancelling this Agreement and
reassigning to Assignor the above-described assigned property.
3. Assignor hereby designates the Assignee to receive all payments of
Fixed Rent, Additional Rent, purchase prices and other sums payable to the
lessor under the Lease and to receive duplicate original copies of all notices,
undertakings, demands, statements, documents and other communications which
Lessee is required or permitted to give, make, deliver to or serve upon the
lessor under the Lease. By its acceptance hereof, Assignee agrees that any
moneys received by Assignee hereunder which are in excess of Fixed Rent,
Additional Rent, purchase prices or other amounts payable by the Lessee on or
about the date the same are due and payable, shall be paid to the Assignor or
its order within 10 days of receipt thereof. Assignor hereby directs the Lessee
to deliver to the Assignee, at its address set forth above or at such other
address as the Assignee shall designate, duplicate original copies of all such
notices, undertakings, demands, statements, documents and other communications
and no delivery thereof by the Lessee shall be of any force or effect unless
made to Assignor and also made to the Assignee as herein provided.
<PAGE> 58
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4. Assignor represents to the Assignee that Assignor has not executed any
other assignment of the subject matter of this Assignment which has not been
released or assigned to Assignee other than the Mortgage and that the Lease is
in full force and effect and the Lease is not in default.
5. Assignor agrees that said assignment and the designation and direction
to the Lessee hereinabove set forth are irrevocable (except as expressly
provided in Paragraph 2), and that it will not take any action as lessor under
the Lease or otherwise which is inconsistent with said assignment, or make any
other assignment, designation or direction inconsistent therewith, and that any
assignment, designation or direction inconsistent therewith shall be void.
Assignor will, from time to time upon the request of the Assignee execute all
instruments of further assurance and all such supplemental instruments with
respect to this Agreement as the Assignee may specify.
6. Assignor and Assignee hereby agree, and Assignor hereby agrees and
hereby undertakes to obtain the agreement of Lessee, as follows:
(a) That Lessee consents to the provisions of this Assignment, and
agrees to pay and deliver to Assignee or the last person or entity
designated by Assignee (which designation shall be revocable by
Assignee unless by its terms any such revocation would require the
consent of such designee) all rentals and other sums assigned to
Assignee pursuant to this Agreement, in accordance with the terms of
the Lease, and will not assert any offset, counterclaim, deduction
or defense deferment, abatement or diminution (except as is
expressly provided for in the Lease), in any proceeding brought
under this Agreement or otherwise, whether this
<PAGE> 59
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Assignment shall have been terminated by operation of law or
otherwise and will not, for any reason whatsoever (except as is
expressly provided for in the Lease), seek to recover from the
Assignee any moneys paid to Assignee by virtue of this Agreement.
That until the termination of this Agreement: (i) all sums payable
by Lessee to Assignee pursuant to the Lease, as provided for in the
preceding sentence, shall be paid in such manner that Assignee shall
have "collected funds" on the date on which such sums are due and
payable, and wired to the account of Assignee at ________ or to such
other address or manner as may be specified by the Assignee by
written notice to Lessee, (ii) Lessee shall deliver to Assignee, at
_____________________ or the person or entity designated by Assignee
duplicate original copies of all notices, undertakings, demands,
statements, documents, other communications, and other instruments
which Lessee may deliver pursuant to the Lease, and no delivery
thereof by Lessee shall be of any force or effect unless also made
to Assignee as herein provided, (iii) any notice given to Lessee by
Assignee or its designee shall be effective as a notice given to
Lessee by Assignor as lessor under the Lease; provided that in the
event Lessee shall receive conflicting notices, Lessee shall be
entitled to rely on any notice received from Assignee (or its
designee), (iv) Assignee shall not by reason of the assignment
hereunder be subject to any liability or obligation under the Lease
prior to foreclosure of the Mortgage and, (v) any waiver, consent or
approval under the Lease shall not be valid unless approved by
Assignee, (vi) no payment of sums or delivery of notices or other
instruments by Lessee shall be of any force or effect under the
Lease (1) unless paid to Assignee or delivered to Assignee and
Assignor, as the case may be, as provided above and (2) until
actually received by Assignee, and Assignor (if applicable).
Payments made to Assignee (or its designee) pursuant to this
Assignment by Lessee in accordance with the Lease shall constitute
payment of Lessee's obligations under the Lease.
(b) Assignor and Lessee will not unilaterally or by agreement,
subordinate, amend, modify, extend, terminate or otherwise change
any term of the Lease (except as expressly permitted by the Lease)
without the prior written consent thereto of Assignee and any such
attempted subordination, amendment, modification, extension,
termination or change without such consent shall be void. If the
Lease shall be amended as
<PAGE> 60
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permitted hereby, it shall continue to be subject to the provisions
hereof without the necessity of any further act by any of the
parties hereto. Lessee will remain obligated under the Lease in
accordance with its terms, and without the consent of Assignee,
Lessee will not take any action to terminate (except as expressly
permitted by the Lease), rescind or avoid the Lease, notwithstanding
(i) the bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution or other proceeding affecting
Assignor or any assignee of Assignor, (ii) any action with respect
to the Lease which may be taken by any assignee, trustee, or
receiver of Assignor or of any such assignee or by any court in any
such proceedings or (iii) any right of set-off or counterclaim, or
any defense, or any other right or claim, of any person arising
under this Agreement or the Lease.
(c) Until the termination of this Agreement, notice of rejection by
any person of an offer by Lessee pursuant to the Lease to purchase
interests in the Premises (without the prior written consent of
Assignee) shall be void and ineffective unless accompanied by the
written consent of Assignee; and notice of acceptance of any offer
of Lessee to purchase interests in the Premises pursuant to the
Lease shall be deemed validly given for all purposes if given by
Assignee. In addition, notice of rejection of any offer of Lessee to
purchase interests in the Premises pursuant to the Lease shall be
deemed validly given for all purposes if given by Assignee. If
Lessee shall purchase Assignor's interest in the Premises, Lessee
shall accept a deed and other instruments transferring and conveying
such interests which is executed and delivered by Assignee, which
instrument shall be effective to convey the Premises to Lessee with
title as provided in and otherwise in accordance with the Lease,
pursuant to which such deed or instrument is delivered. If Assignee
shall elect to institute any judicial proceeding before transferring
said interests in the Premises, the Lease shall not terminate, but
shall continue in full force and effect until the transfer and
purchase shall have been consummated.
Lessee shall be entitled to rely upon, and entitled to the benefits
of, the provisions of this Paragraph 6. Lessee shall be entitled to rely upon
any actions taken by Assignee in
<PAGE> 61
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accordance with this Agreement and Lessee shall not be required to verify
whether or not Assignee or Assignor has complied with the provisions of this
Agreement. Assignor and Assignee agree, and such consent may provide, that
Lessee shall not be bound by any amendment or modification to this Agreement to
which Lessee shall not have consented in writing. By acceptance of this
Agreement, Assignee agrees that, it shall, upon twenty (20) days notice from
Assignor or from Lessee requesting the same, execute and deliver to the party
requesting the same its certificate stating whether or not, to its actual
knowledge, the Lease and this Agreement are in full force and effect and whether
or not, to its actual knowledge no default has occurred under any thereof.
7. Assignor and Assignee agree that if, on the date of purchase of the
Property by Lessee pursuant to any provision of the Lease, Assignor shall be
unable to convey the Property to Lessee free of all liens, encumbrances,
charges, exceptions and restrictions which (i) have been created by or have
resulted from acts or the failure act of Assignor and not resulting from any
act or failure to act of Lessee and (ii) have not been consented to by Lessee
(except liens and encumbrances required to be discharged by Lessee pursuant to
the Lease), then in any such event, Lessee shall have an option to purchase the
Note. Lessee shall exercise such option by notifying Assignee, in writing, not,
later than sixty (60) days after the date of purchase provided
<PAGE> 62
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for under the Lease, of Lessee's intention to purchase the Note on any business
day specified in such notice, at the respective prices equal to the then unpaid
principal amount of the Note, together with the respective interest accrued and
unpaid thereon to the date of such purchase. Lessee shall pay all costs,
expenses and disbursements of Assignor and Assignee in connection with such
purchase and assignment including, but not by way of limitation, the cost of
federal, state and local taxes (except any estate, inheritance, succession or
income taxes of Assignor and Assignee, applicable to the transfer of the Note).
The Note, pursuant to its terms and by virtue of the acceptance hereof by the
Assignee, shall be subject to the provisions of this Paragraph 7. On the date of
purchase of the Note, the holder of the Note shall deliver to Lessee at its
address set forth above, the Note, endorsed (without recourse to such holder) to
Lessee, against receipt by the holder of the Note of the purchase price
therefor. From and after the date of such purchase, the Assignee shall have no
further interest in the Property or the Lease. Lessee, upon such purchase of the
Note, shall be entitled to any and all rights and privileges granted to the
owner of the Note.
8. This Agreement shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and assigns. This Agreement may
be executed in two or more counterparts and shall be deemed to have become
effective when and only when one or more of such counterparts shall have been
<PAGE> 63
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signed by or on behalf of each of the parties hereto, although it shall not be
necessary that any single counterpart be signed by or on behalf of each of the
parties hereto, and all such counterparts shall be deemed to constitute but one
and the same instrument. This Agreement shall be governed by the law of the
state in which the Property is located.
9. The following is Schedule A referred to in this Agreement.
<PAGE> 64
IN WITNESS WHEREOF, Assignor has caused this Agreement to be signed as of
the date first above written.
HOLMAN/SHIDLER CORPORATE CAPITAL, INC.
By:
--------------------------------------
Name:
Title:
CONSENTED TO:
CATERAIR INTERNATIONAL CORPORATION
By:
--------------------------------------
Name:
Title:
<PAGE> 65
EXHIBIT C
STATUS REPORT
The undersigned, _________________________, a ____________ corporation is the
______ under a Lease Agreement (the "Lease"), dated as of ________ 1993, between
Caterair International Corporation, a Delaware corporation, (the "Tenant") and
TriNet Essential Facilities VIII R, Inc., a Maryland corporation, as landlord
(the "Landlord") of certain real property located in ________ as described on
attached Exhibit A (the "Premises"). The undersigned hereby represents,
certifies and agrees as follows:
1. The Lease constitutes the entire agreement between the parties with
respect to the Premises and the Improvements and is in full force and effect and
has not been modified, supplemented, canceled or amended in any respect.
2. The term of the Lease commenced on __________ 1993 and continues
through at least ___________, 2018. The Tenant is currently obligated to pay
rent in monthly installments in an amount not less than $_____ per month, which
rent obligation is continuing and is not past due or delinquent in any respect.
No installment of rent has been prepaid more than one month in advance.
3. No event has occurred or is continuing which would constitute a default
by either the Tenant or Landlord under the Lease or would constitute such a
default but for the requirement that notice be given or that a period of time
elapse or both. No offset exists with respect to any rents or other sums payable
or to become payable by the Tenant under the Lease.
<PAGE> 66
IN WITNESS WHEREOF, this Certificate has been duly executed and delivered
by the authorized officers of the undersigned as of _______________.
------------------------------------------
By:
--------------------------------------
Name:
Title:
<PAGE> 67
#397 Minneapolis, MN
Exhibit D
1. Real estate taxes for and payable in 1993 and thereafter, such taxes not
yet being delinquent.
2. Levied and pending special assessments hereafter levied. Liens for special
assessments not yet due and payable. There are currently no levied or
pending assessments now of record.
3. Easement for street purposes over the North 10 feet of premises from Fred
O. Watson Co., a Minnesota corporation in favor of City of Bloomington,
dated July 26, 1968, recorded July 30, 1968, as Document No. 916177, Files
of Registrar of Titles.
4. Easement from Bloomington Properties, Inc., a Delaware corporation, in
favor of Fred O. Watson Co., a Minnesota corporation, dated July 29, 1968,
recorded July 30, 1968, as evidenced by Document No. 916178, Files of
Registrar of Titles.
5. The following items appear as encroachments on the survey dated November
23, 1992, by BRW, Inc.:
(a) Cyclone fences over Southerly and Easterly boundaries.
(b) Bituminous surface over Southerly boundary.
(c) Railroad spur tracks over Westerly and Southerly boundaries lying
outside of easement described in Number 4.
(d) Parking area into easements, Document No. 961677 and over Northerly
set-back line.
(e) Buried telephone line over Northeasterly corner.
6. Lease between Caterair International Corporation and TriNet Essential
Facilities VIII R, Inc.
<PAGE> 68
EXHIBIT E TO LEASE
Per December 5, 1991 Eckland Reports
Normal Maintenance Normal Maintenance
to be Completed no to be Completed no
Later than 2nd Later than 5th
Anniversary of Anniversary of
Commencement Date Commencement Date
------------------ -------------------
LaGuardia - #351 Roof Repairs and
Installation of
Flood Coat; Install
Sealant and Caulking
to Masonry Walls;
Paint Dock Metal
Ceiling and Truck
Door Stairs
LaGuardia - #375 Install Pipe Masonry Tuckpointing
Bollards at Track at Parapet Walls,
Dock Support Steel & etc.; Repair/Replace
Piers Kitchen and Truck
Dock Ceiling Tiles;
Repair and Paint
Loading Dock Chairs
& Paint Service
Doors; General Roof
Repairs and Repair
Flashings;
Replacement of Terra
Cotta Coping with
Aluminum
Miami - #361 General Roof Repair,
Regraveling, etc.;
Cut and Re-cover
Roofing Ply
Blisters; Replace
Cracked and Broken
Loading Dock
Concrete Slab;
Replace Roof,
Insulation and
Flashing; Replace 5
HVAC Compressors
Miami - #366 2nd Floor Bathroom Replace 5 HVAC
Repairs; Clean, Compressors and 2
Prime and Repaint Air Handlers; Repair
Rust on Roof Exhaust and Retube 2 Hot
Hoods Water Boilers
Miami - #702 Prime and Paint
Exposed Metal
Downspouts and
Scuppers; Repair
Built-up Roof,
Insulation and
Flashing
<PAGE> 69
Normal Maintenance Normal Maintenance
to be Completed no to be Completed no
Later than 2nd Later than 5th
Anniversary of Anniversary of
Commencement Date Commencement Date
------------------ -------------------
Seattle - #318 Construction of
Additional Roof
Drains for Perimeter
Drainage;
Replacement of Two
Original Rooftop
Heating units
Orlando - #479 Repair and Fill
Cracks in Asphalt
Pavement, Repair
Apron Cracks, and
Reseal and Restripe
Parking Lot; Clean
and Retube Hot Water
Boilers
Philadelphia - #376 Repair of Masonry
from Truck Impacts
and Dock Repairs;
Application of
Silicone Sealant to
Exterior Wall
Cracks; Roof Repairs
(flood coat,
regravel and
skylight)
Reno - #303 Replace Gas
Connections with
Flexible Connectors;
Clean Kitchen Fan
and Ductwork, Repair
HVAC Corrosion
Minneapolis - #397 Replace/Repair Steel New Roof;
Beams Supporting Woodscreens for
Condensor Units Rooftop Units;
Caulking of Masonry
Wall; Repair of
Downspouts;
Tuckpointing of
Openings and Cracks
in Mortar Joints
Repair Steel Column
Supporting Truck
Dock Roof
Repair of Quarry
Tile Floor; Repair
of Asphalt Pavement;
Sealcoating of
Asphalt Pavement for
Moisture Protection
<PAGE> 1
EXHIBIT 10.28.1
FIRST AMENDMENT TO
LEASE AGREEMENT
FIRST AMENDMENT TO LEASE AGREEMENT ("First Amendment"), dated as of
September 22, 1995, between TriNet Essential Facilities VIII R, Inc.
("Landlord") and Caterair International Corporation ("Tenant").
RECITALS
A. Tenant and Landlord have previously entered into that certain
Lease Agreement, dated as of May 15, 1993 (as previously or hereafter amended
from time to time, the "Lease Agreement"), relating to properties set forth on
Exhibit A hereto.
B. The parties hereto desire to amend the Lease Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto agree as follows:
1. DEFINITIONS
1.1 In addition to the terms defined herein, capitalized terms used
in this First Amendment shall have the respective meanings ascribed to them in
the Lease Agreement.
1.2 Annex I to the Lease Agreement is hereby amended by adding the
following terms thereto in their proper alphabetical sequence:
"Consolidated Cash Interest Expense" means, for any period, the
aggregate of all cash interest expense for such period with respect to all
outstanding indebtedness of SCIS and its subsidiaries on a consolidated
basis and Tenant and its subsidiaries on a consolidated basis, determined
in conformity with GAAP.
"Consolidated EBITDA" means, for any period, the sum (without
duplication) of (i) Consolidated Net Income, (ii) to the extent
Consolidated Net Income has been reduced thereby, all income taxes for
such period of SCIS and its subsidiaries on a consolidated basis and
Tenant and its subsidiaries on a consolidated basis paid or accrued in
conformity with GAAP (other than income taxes attributable to
extraordinary or nonrecurring gains or losses), (iii) Consolidated
Interest Expense for such period and (iv) Consolidated Non-Cash Charges
for such period of SCIS and its subsidiaries on a consolidated basis and
Tenant and its subsidiaries on a consolidated basis, determined in
conformity with GAAP.
<PAGE> 2
"Consolidated Interest Expense" means, for any period, the sum
(without duplication) of (i) the aggregate of all cash and non-cash
interest expense with respect to all outstanding indebtedness of SCIS and
its subsidiaries on a consolidated basis and Tenant and its subsidiaries
on a consolidated basis, including the net costs associated with interest
swap obligations and capitalized interest, determined in conformity with
GAAP and (ii) the interest component of capitalized lease obligations
paid, accrued and/or scheduled to be paid or accrued during such period by
SCIS and its subsidiaries on a consolidated basis and Tenant and its
subsidiaries on a consolidated basis, determined in conformity with GAAP.
"Consolidated Net Income" means, for any period, the aggregate net
income (or loss) for such period of SCIS and its subsidiaries on a
consolidated basis and Tenant and its subsidiaries on a consolidated
basis, determined in conformity with GAAP; provided that there shall be
excluded therefrom (a) gains and losses from sales of property or assets
other than in the ordinary course of business, or abandonments or reserves
relating thereto and the related tax effects and (b) items classified as
extraordinary or nonrecurring gains and losses, and the related tax
effects according to GAAP. Notwithstanding the foregoing, in calculating
Consolidated Net Income (i) charges incurred in connection with the
consummation of the transactions contemplated by the Master Agreement
dated as of April 26, 1995, as amended (the "Master Agreement") among Onex
Food Services, Inc., Caterair Holdings Corporation and Tenant (including,
without limitation, (A) severance payments and other employee costs and
(B) external consulting services primarily associated with the
implementation of labor savings programs) shall not be deducted therefrom
and (ii) the goodwill and the increases in amortization and depreciation
resulting from the consummation of the transactions contemplated by the
Master Agreement shall not be deducted therefrom.
"Consolidated Non-cash Charges" means, for any period, the aggregate
depreciation, amortization and other non-cash expenses for such period of
SCIS and its subsidiaries on a consolidated basis and Tenant and its
subsidiaries on a consolidated basis reducing Consolidated Net Income,
determined in conformity with GAAP (excluding any such expenses
constituting an extraordinary item or loss or any such expense which
requires an accrual of or a reserve for cash charges for any future
period).
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of September 22, 1995, including,
without limitation, those set forth in the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other
entity as approved by a significant segment of the accounting profession.
"SCIS" means SC International Services, Inc., a Delaware
corporation.
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<PAGE> 3
2. WAIVER
Landlord hereby waives any and all defaults existing on the date
hereof arising from Section 8, 15(k) and 15(l) of the Lease Agreement and the
right to exercise any remedies as a consequence thereof.
3. FIRST AMENDMENT TO LEASE AGREEMENT
The Lease Agreement is, effective as of the date hereof, amended as
follows:
3.1 Section 4 of the Lease Agreement is hereby amended and restated
in its entirety to read as follows:
"4. RENTAL:
A. Tenant agrees to pay fixed rent ("Fixed Rent") to Landlord
without notice, by check sent to Landlord at such address as shall be
provided by Landlord to Tenant, provided that such check shall be received
by Landlord in sufficient time that the funds will be received by the
Fixed Rent due date, or to such other persons or place as may be provided
by written notice from the person then entitled to receive the Fixed Rent,
in equal installments in advance on or before the first day of each month
as specified in the Basic Lease Information.
If Fixed Rent is not paid when due, interest shall accrue
thereon at the Overdue Rate until payment is made. Tenant hereby
acknowledges that the late payment by Tenant to Landlord of Fixed Rent,
Additional Rent and other sums due under this Lease will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will
be extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges and late charges which may
be imposed on Landlord by the terms of any mortgage or trust deed covering
the Premises. Accordingly, if any installment of Fixed Rent or any other
sum due to Landlord from Tenant shall not have been received by Landlord
or Landlord's designee within fifteen (15) days after such amount shall be
due, then, without any requirement for notice to Tenant, Tenant shall pay
to Landlord a late charge equal to two percent (2%) of such overdue
amount, together with interest on such overdue amount at the Overdue Rate.
The parties agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by
Tenant. Acceptance of such late charge by Landlord shall in no event
constitute a waiver of Tenant's default with respect to such overdue
amount, nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder; provided that nothing contained herein shall
relieve Landlord of a duty to mitigate damages under applicable law.
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<PAGE> 4
B. The Fixed Rent for each Renewal Term shall be payable in
equal monthly installments in advance on or before the first day of each
month as provided in the Basic Lease Information.
C. If, on or before the first day of any calendar quarter
commencing on April 1, 1998 up to and including April 1, 2001 (each, an
"Initiating Date"), Tenant delivers a written notice to Landlord (an
"Investment Improvement Notice") stating that Tenant or any of SC
International Services, Inc. ("SCIS"), Sky Chefs, Inc. ("Sky Chefs") Onex
Food Services, Inc. ("OFSI") or Caterair International, Inc. (II) ("CII"
and together with SCIS, Sky Chefs and OFSI, the "Guarantors") currently
has a BBB-or better investment grade credit rating from Standard & Poor's
Corporation and a Baa3 or better investment grade credit rating from
Moody's Investors Service, Inc. for its senior debt obligations, then:
(i) Subject to Section 4.F. hereof, on the first day of the next
calendar quarter following the Initiating Date, the annual
Fixed Rent shall be reset to equal the Fixed Rent on the
Initiating Date less an amount equal to the Purchase Price
multiplied by the lesser of (a) 1.0%, or (b) the difference
between (x) the Fixed Rent on the Initiating Date (calculated
as a percentage of the Purchase Price), and (y) the yield for
10-year Treasury bills plus 275 basis points. The yield for
use in the foregoing calculation will be as shown in the
Treasury Constant Maturity Series in statistical release
H.15(519) of the Federal Reserve Board; or if that release is
unavailable, a comparable publication.
(ii) Subject to Section 4.F. hereof, the annual Fixed Rent
specified in the Basic Lease Information shall be increased at
the end of every 30-month period measured from the Initiating
Date by an amount equal to the annual Fixed Rent prior to such
increase multiplied by the greater of 5.72028% or 56.25% of
the increase in the CPI over the prior 30-month period. Such
increase in the Fixed Rent shall not be greater than
11.632519% of the annual Fixed Rent immediately prior to the
increase.
D. If, on an Initiating Date, Tenant delivers an Investment
Improvement Notice stating that Tenant or any of the Guarantors currently
has an A-or better investment grade credit rating from Standard & Poor's
Corporation and an A3 or better investment grade credit rating from
Moody's Investors Service, Inc. for its senior debt obligations.
(i) Subject to Section 4.F. hereof, on the first day of next
calendar quarter following the Initiating Date, the annual
Fixed Rent shall be reset to equal the Fixed Rent on the
Initiating Date less an amount equal to the Purchase Price
multiplied by the lesser of (a) 2.0%, or (b) the difference
between (x) the Fixed Rent on the Initiating Date (calculated
as a
4
<PAGE> 5
percentage of the Purchase Price) and (y) the yield,
determined as provided above, for 10-year Treasury obligations
plus 225 basis points.
(ii) Subject to Section 4.F. hereof, the annual Fixed Rent
specified in the Basic Lease Information shall be increased at
the end of every 30-month period measured from the Initiating
Date by an amount equal to the annual Fixed Rent prior to such
increase multiplied by the greater of 5.72028% or 56.25% of
the increase in the CPI over the prior 30-month period. Such
increase in the Fixed Rent shall not be greater than
11.632519% of the annual Fixed Rent immediately prior to the
increase.
E. If, on an Initiating Date, Tenant delivers an Investment
Improvement Notice stating that Tenant or any of the Guarantors currently
has either of the required investment grade ratings indicated in
subparagraphs C and D, but not both, then:
(i) Subject to Section 4.F. hereof, on the first day of the next
calendar quarter following the Initiating Date, the annual
Fixed Rent shall be reset to equal the Fixed Rent on the
Initiating Date less an amount equal to the Purchase Price
multiplied by the lesser of (a) 1.5%, or (b) the difference
between (x) the Fixed Rent on the Initiating Date (calculated
as a percentage of the Purchase Price) and (y) the yield,
determined as provided above, for 10-year Treasury
obligations plus 250 basis points.
(ii) Subject to Section 4.F. hereof, the annual Fixed Rent
specified in the Basic Lease Information shall be increased at
the end of every 30-month period measured from the Initiating
Date by an amount equal to the annual Fixed Rent prior to such
increase multiplied by the greater of 5.72028% or 56.25% of
the increase in the CPI over the prior 30-month period. Such
increase in the Fixed Rent shall not be greater than
11.632519% of the annual Fixed Rent immediately prior to the
increase.
In no event shall the calculation required by subparagraphs
C(i), D(i) and E(i) above result in an increase in Fixed Rent."
F. During the 60 calendar day period following an Initiating Date,
Landlord may, in its sole discretion, deliver a written notice (the "Put
Notice") to Tenant stating that Tenant shall have the option to purchase
(the "Put Option Notice") the Premises at a purchase price equal to 110%
of the Purchase Price or to continue to lease the Premises without
reduction in the Fixed Rent. The Put Option Notice shall be given at any
time within the 30 calendar day period commencing on the date of delivery
of a Put Notice by delivery of a written notice (the "Exercise Notice") to
Landlord of Tenant's intention to purchase the Premises. If Landlord or
any of its affiliates shall have delivered a Put Notice under any other
Lease between Landlord or any of its affiliates and Tenant or any of its
affiliates, then Tenant must deliver the
5
<PAGE> 6
Exercise Notice under such other leases if it delivers an Exercise Notice
hereunder and must refrain from delivering an Exercise Notice under such
other Leases if it does not deliver an Exercise Notice under this Lease.
Upon receipt of an Exercise Notice, Landlord shall be legally obligated to
sell the Premises to Tenant on the terms described above and Tenant shall
be legally obligated to buy the Premises on the terms described above. The
closing of the purchase and sale pursuant to the exercise of such Option
shall occur within 30 business days of delivery of the Exercise Notice. At
such closing, Landlord shall assign to Tenant or its designee, pursuant to
mutually acceptable definitive documentation, all of the Premises, free
and clear of any liens or encumbrances derived from an act or omission of
Landlord and which pursuant to the terms of the Lease is not required to
be discharged by Tenant, upon receipt of payment of the Option Purchase
Price in immediately available funds. Upon consummation of such purchase
and sale, pursuant to the exercise of such option, this Lease Agreement
shall terminate. If Landlord delivers the Put Notice and the Exercise
Notice is not delivered within the 30-day period commencing on the date of
a Put Notice, then the Fixed Rent shall not be adjusted in accordance with
either of Section 4.C, 4.D or 4.E hereof. Moreover, if an Exercise Notice
is delivered but the sale of the Premises is not closed, then there shall
be no reduction or adjustment in the Fixed Rent.
3.2 Section 15 of the Lease Agreement is hereby amended and restated
in its entirety to read as follows:
"15. DEFAULT: Events of Default.
The following events, following the expiration of the
applicable cure periods, in this Paragraph are sometimes referred to as an
"Event of Default":
(a) If default shall be made in the payment of Fixed Rent and such
default shall continue for five (5) business days after notice
from Landlord (provided that after giving one such notice, any
such default occurring within 12 months shall become an Event
of Default without the giving of notice) or if default shall
be made in the payment of Additional Rent or in the payment of
any other sum required to be paid by Tenant under this Lease
or the payment to Landlord of any other sum due under the
terms of any other agreement between Landlord and Tenant;
(b) If default shall be made in the observance or performance of
any of the other covenants in this Lease which Tenant is
required to observe and perform and such default shall
continue for thirty (30) days after written notice to Tenant,
or if a default involves a hazardous condition and is not
cured by Tenant immediately; provided, however, the time
allowed Tenant (except in the instance of hazardous conditions
or conditions which expose Landlord to criminal liability)
within which Tenant is permitted to cure the same shall be
extended for such period as may be
6
<PAGE> 7
necessary for the curing provided Tenant is continuously,
diligently and in good faith prosecuting such cure;
(c) If any representation or warranty made by Tenant herein or in
any certificate, demand or request made pursuant hereto proves
to be incorrect in any material respect when made;
(d) If the interests of Tenant in this Lease shall be levied on
under execution or other legal process and same is not removed
or stayed within thirty (30) days;
(e) If any voluntary petition of bankruptcy or for corporate
reorganization or for the appointment of a receiver or any
similar relief shall be filed by Tenant;
(f) If any involuntary petition of bankruptcy shall be filed
against tenant under any Federal or State bankruptcy or
insolvency act and shall not have been dismissed within ninety
(90) days of the filing thereof;
(g) If a receiver shall be appointed for Tenant or any of the
property of Tenant by any court and any such receiver shall
not have been discharged within ninety (90) days from the date
of his appointment;
(h) If Tenant shall make an assignment for the benefit of
creditors;
(i) If Tenant shall admit, in writing, Tenant's inability to meet
Tenant's debts as they mature;
(j) If Tenant shall abandon the Premises;
(k) If: (i) there are any outstanding obligations under the
Credit Agreement, dated as of September 29, 1995,
by and among Tenant, Onex Food Services, Inc.,
SCIS, Caterair Holdings Corporation, various Banks
(the "Lenders"), Bankers Trust Company, Morgan
Guaranty Trust Company of New York and Goldman,
Sachs & Co., as Co-Arrangers, Goldman, Sachs &
Co., as Documentation Agent, Bankers Trust
Company, as Syndication Agent, and Morgan Guaranty
Trust Company of New York, as Administrative Agent
(the "Agent"), and The Bank of New York, as
Co-Agent (as the same may hereafter be amended or
restated or otherwise modified from time to time,
including any refinancing thereof, the "Credit
Agreement"), then the acceleration of the maturity
of any amounts due under the Credit
7
<PAGE> 8
Agreement by the Agent or the Lenders shall
constitute an Event of Default hereunder; or
(ii) there are no outstanding obligations under the
Credit Agreement, then any default shall occur in
the payment of any outstanding indebtedness of
$10,000,000 or more, or such lesser indebtedness
as shall be material to the financial condition of
Tenant;
(l) If the net worth of SCIS determined in accordance with GAAP
(as defined in the Indenture referred to below) shall be less
than $35,000,000;
(m) If the ratio of (i) Consolidated EBITDA to (ii) Consolidated
Cash Interest Expense, for any 12-month period ending on March
31, June 30, September 30 or December 31 in any year,
commencing with the 12-month period ending on September 30,
1996, shall be less than that set forth below for any of the
following periods:
12-Month Period Ending Ratio
---------------------- -----
9/30/96, 12/31/96, 3/31/97,
6/30/97 or 9/30/97 1.75:1.0
12/31/97 and each March 31,
June 30, September 30 and
December 31 thereafter 2.00:1.0
(n) If a final judgment shall be entered in an amount greater than
$5,000,000 which creates a default under any mortgage, lease
or loan agreement of Tenant, or which affects Landlord's
interest in the Premises; or
(o) If an Event of Default shall occur under any other lease
between Landlord and Tenant dated as of the date hereof.
Landlord may treat the occurrence of any one or more of the
foregoing Events of Default as a breach of this Lease. For so long as such
Event of Default continues the Landlord, at its option and with or without
notice or demand of any kind to Tenant or any other person, but subject to
Paragraph 16F hereof may have any one or more of the remedies provided in
this Paragraph 15 or elsewhere in this lease, in addition to all other
remedies and rights provided at law or in equity."
8
<PAGE> 9
3.3 Section 19 of the Lease Agreement is hereby amended and restated
in its entirety to read as follows:
"19. NOTICES: Notices, statements, demands, or other communications
required or permitted to be given, rendered or made by either party to the
other pursuant to this Lease or pursuant to any applicable law or
requirement of public authority, shall be in writing (whether or not so
stated elsewhere in this Lease) and shall be deemed to have been properly
given, rendered or made, when received by overnight delivery or overnight
courier delivery or facsimile transmission with a confirmation copy sent
by overnight delivery or by overnight courier delivery addressed to the
other parties as follows:
To Landlord:
TriNet Corporate Realty Trust, Inc.
Four Embarcadero Center, Suite 3150
San Francisco, California 94111
Attention: Mr. Mark S. Whiting
With a copy to:
Day, Berry & Howard
260 Franklin Street
Boston, Massachusetts 02110
Attention: Lewis A. Burleigh, Esq.
To Tenant:
Caterair International Corporation
6550 Rock Spring Drive
Bethesda, Maryland 20817
Attention: Law Department
With copies to:
Onex Food Services, Inc.
do Sky Chefs, Inc.
524 East Lamar
Arlington, Texas 76011
Attention: President
and
9
<PAGE> 10
Kaye, Scholer, Fierman, Hays & Handler
425 Park Avenue
New York, New York 10022
Attention: Joel I. Greenberg, Esq.
To Agent:
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10264-0060
Attention: Stephen King
With a copy to:
White & Case
1155 Sixth Avenue
30th Floor
New York, New York 10036
Attention: Eric Berg, Esq.
Any party listed in this paragraph 19 may, by notices as aforesaid,
designate a different address for addresses for notice, statements,
demands or other communications intended for it."
3.4 Section 21 of the Lease Agreement is hereby amended and restated
in its entirety to read as follows:
"21. MECHANICS' LIENS:
Liens and Right of Contest. (a) Tenant shall not suffer or
permit any mechanic's lien or other lien to be filed or recorded against
the Premises, equipment or materials supplied or claimed to have been
supplied to the Premises at the request of Tenant, or anyone holding the
Premises, or any portion thereof, through or under Tenant other than the
grant by Tenant of a mortgage or security interest in Tenant's rights
hereunder and the grant by each of Tenant, or CII or Sky Chefs of any or
all of their respective rights under the sublease between Tenant or CII or
Sky Chefs in favor of Agent on behalf of the other Lenders under the
Credit Agreement (the "Credit Agreement Liens"). If any such mechanic's
lien or other lien shall at any time be filed or recorded against the
Premises (other than the Credit Agreement Liens), or any portion thereof,
Tenant shall cause the same to be discharged of record within thirty (30)
days after the date of filing or recording of the same. However, in the
event Tenant desires to contest the validity of any lien it shall (i) on
or before dirty (30) days prior to the due date thereof (but in no event
later than 30 days after the filing or recording thereof), notify
Landlord, in writing, that Tenant intends to so contest same;
10
<PAGE> 11
(ii) on or before the due date thereof, if Landlord reasonably deems
Tenant to be financially insecure or if any mortgagee or Trust Deed holder
of Landlord so requires, deposit with Landlord security (in form and
content reasonably satisfactory to Landlord or Landlord's mortgagee or
trust deed holder) for the payment of the full amount of such lien and,
from time to time, deposit additional security or indemnity so that, at
all times, adequate security or indemnity will be available for the
payment of the full amount of the lien together with all interest,
penalties, costs and charges accrued or accumulated thereon.
If Tenant complies with the foregoing, and Tenant continues,
in good faith, to contest the validity of such lien by appropriate legal
proceedings which shall operate to prevent the collection thereof and the
sale or forfeiture of the Premises, or any part thereof, to satisfy the
same, Tenant shall be under no obligation to pay such lien until such time
as the same has been decreed, by court order, to be a valid lien on the
Premises. Any surplus deposit retained by Landlord, after the payment of
the lien shall be repaid to Tenant. Provided that nonpayment of such lien
does not cause Landlord to be in violation of any of its contractual
undertakings, Landlord agrees not to pay such lien during the period of
Tenant's contest. However, if Landlord pays for the discharge of a lien or
any part thereof from funds of Landlord, any amount paid by Landlord,
together with all costs, fees and expenses in connection therewith
(including reasonable attorney's fees of Landlord), together with interest
thereon at the Overdue Rate, shall be repaid by Tenant to Landlord on
demand by Landlord. Tenant shall indemnify and defend Landlord against and
save Landlord and the Premises, and any portion thereof, harmless from and
against all losses, costs, damages, expenses, liabilities, suits,
penalties, claims, demands and obligations, including, without limitation,
reasonable attorney's fees, resulting from the assertion, filing,
foreclosure or other legal proceedings with respect to any such mechanic's
lien or other lien or the attempt by Tenant to discharge same as above
provided.
(b) All materialmen, contractors, artisans, engineers,
mechanics, laborers and any other person now or hereafter furnishing any
labor, services, materials, supplies or equipment to Tenant with respect
to the Premises, or any portion thereof, are hereby charged with notice
that they must look exclusively to Tenant to obtain payment for the same.
Notice is hereby given that Landlord shall not be liable for any labor,
services, materials, supplies, skill, machinery, fixtures or equipment
furnished or to be furnished to Tenant upon credit, and that no mechanic's
lien or other lien for any such labor, services, materials, supplies,
machinery, fixtures or equipment shall attach to or affect the estate or
interest of Landlord in and to the Premises, or any portion thereof.
(c) Tenant shall not create, permit or suffer, and, subject to
the provisions of Section 21(a) hereof, shall promptly discharge and
satisfy of record, any other lien, encumbrance, charge, security interest,
or other right or interest which, as a result of Tenant's action or
inaction contrary to the provisions hereof, shall be or
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<PAGE> 12
become a lien, encumbrance, charge or security interest upon the Premises,
or any portion thereof, or the income therefrom; provided that this
Section 21(c) shall not apply to the Credit Agreement Liens."
3.5 Section 25 of the Lease Agreement is hereby amended and restated
in its entirety to read as follows:
"25. SUBLETTING/ASSIGNMENT: Tenant shall have the right to
sublease all or any part of the Premises or assign its interest hereunder,
provided that Tenant shall remain primarily liable under this Lease
without regard to any sublease or assignment, and provided further that
any profit realized upon subletting or assignment shall be the property of
Tenant. Tenant shall not mortgage its interest hereunder and any purported
mortgage thereof shall be void other than the Credit Agreement Liens."
3.6 The Lease Agreement is hereby amended by adding the following at
the end thereof, to read in its entirety as follows:
"29. LEASEHOLD MORTGAGE PROTECTIONS.
(a) Notwithstanding anything to the contrary contained in Section 16F
hereof, in the event a default by Tenant occurs in the performance or observance
of any term, covenant, condition, or agreement on Tenant's part to be performed
under this Lease (other than a term, covenant, condition or agreement requiring
the payment of a sum of money) which cannot practicably be cured by the Agent
without taking possession of the Premises, or if such default is of such a
nature that the same is not susceptible of being cured by the Agent, then
Landlord shall not serve a notice of election to terminate or otherwise exercise
remedies under or in respect of this Lease pursuant to the terms thereof, or
otherwise terminate the leasehold estate or any other estate, right, title or
interest of Tenant hereunder by reason of such default without allowing the
Agent reasonable time (not to exceed 90 days) within which:
(i) In the case of a default which cannot practically be cured by
Tenant without taking possession of the Premises, to obtain
possession of the Premises as mortgagee (through the
appointment of a receiver or otherwise), and, upon obtaining
possession, to commence promptly and diligently prosecute to
completion such action as may be necessary to cure such
default; and
(ii) In the case of a default which is not susceptible of being
cured by the Agent, to commence promptly and diligently
prosecute to completion foreclosure proceedings or to acquire
Tenant's estate hereunder, either in its own name or through a
nominee, by assignment in lieu of foreclosure.
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<PAGE> 13
The Agent shall not be required to continue to proceed to
obtain possession, or to continue in possession as mortgagee,
of the Premises pursuant to clause (i) above, or to continue
to prosecute foreclosure proceedings pursuant to clause (ii)
above, if and when such default shall be cured. Nothing herein
shall preclude Landlord from exercising any of its rights or
remedies with respect to any other default by Lessee during
any period when Landlord shall be forebearing termination of
this Lease as above provided, but in such event the Agent
shall have all of the rights and protections hereinabove
provided for. If the Agent, or its nominee, or a purchaser at
a foreclosure sale, shall acquire title to Lessee's leasehold
estate hereunder, and shall cure all defaults of Tenant
hereunder which can be cured by the Agent, or by such
purchaser, as the case may be, then the defaults of any prior
holder of Tenant's leasehold estate or any other estate,
right, title or interest hereunder which are not susceptible
of being cured by the Agent (or by such purchaser) shall no
longer be deemed to be defaults hereunder.
(b) In the event (i) this Lease is terminated by reason of Tenant's
default hereunder, or (ii) this Lease is disaffirmed in the event of
Tenant's bankruptcy, then, within ten (10) days after such
termination (which term as used herein shall include a
disaffirmance) Landlord shall give notice to the Agent that this
Lease has been terminated, together with a statement of any and all
sums which would at that time be due under this Lease but for such
termination, and of all other defaults, if any, under this Lease
then known to Landlord, and the Agent, by notice to Landlord,
thereupon may request Landlord to enter into a new lease of the
premises and Landlord shall enter into a new Lease (the "New Lease")
with the Agent (or its nominee), within 60 days after the giving of
such notice by the Agent provided that the Leasehold Mortgagee shall
have cured or caused to be cured any defaults of Tenant existing at
the date of termination that are susceptible of being cured. The New
Lease shall commence and rent and all obligations of the Tenant
under the New Lease shall accrue, as of the date of termination of
this Lease. The term of the New Lease shall continue for the period
which would have constituted the remainder of the term of this Lease
had this Lease not been terminated, and shall be upon all of the
terms, covenants, conditions, conditional limitations, and
agreements contained herein which were in force and effect
immediately prior to the termination of this Lease. The New Lease,
and this covenant, shall be superior to all rights, liens, estates,
titles and interests, other than those to which this Lease shall
have been subject immediately prior to termination and those matters
to which this Lease may, by its terms, become subject. The
provisions of the immediately preceding sentence shall be
self-executing, and Landlord shall have no obligation to do anything
(other than to execute such New Lease as herein provided) to assure
to the Agent or to the tenant under the New Lease good title to the
leasehold estate and the other estates, rights, titles and interests
13
<PAGE> 14
granted hereby. Simultaneously therewith, Landlord shall subject to
any rights of tenant, pay over to the Agent all monies on deposit
with Landlord, if any, which Tenant would have been entitled to use
but for the termination of this Lease for the purposes of and in
accordance with the provisions of the New Lease. The Agent shall,
simultaneously with the delivery of the New Lease, pay to Landlord
(1) all Rent and other sums of money due under this Lease on the
date of termination of this Lease and remaining unpaid; plus (2) all
Rent and other sums of money due under the New Lease for the period
from the date of commencement of the term thereof to the date of
delivery of the New Lease; plus (3) all costs and expenses,
including reasonable attorneys' fees, court costs, and litigation
expenses, incurred by Landlord in connection with termination of
this Lease, the recovery of possession of the Premises, putting the
premises in good condition and repair, and the preparation,
execution and delivery of such New Lease.
(c) If the Agent forecloses upon or otherwise acquires all or part of
Tenant's leasehold interest, the transfer to the Agent shall not require
Landlord's consent and the Agent shall be permitted to transfer the acquired
interest but only with Landlord's prior consent which consent shall not be
unreasonably withheld or delayed and shall thereupon be released from all
liability for the performance or observance of the covenants and conditions in
such Lease contained on Tenant's part to be performed and observed from and
after the date of such assignment; provided that the assignee shall have assumed
such Lease.
(d) Landlord and Tenant shall not enter into any amendments, modifications
or supplements to this Lease without the prior consent of the Agent if such
amendment, modification or supplement could reasonably be expected to have a
material adverse effect on the interest of the Agent under the Lease."
4. REMEDIAL WORKS
4.1 Tenant hereby agrees to perform the necessary remedial work with
respect to the matters described in Mark Malardino's letter to Tenant, dated
September 14, 1995, to complete such work on or before January 31, 1996 and to
deliver on or before September 29, 1995 a cash deposit or a clean irrevocable
letter of credit in favor of Landlord (which letter of credit shall expire on
March 31, 1996, unless otherwise mutually agreed by Tenant and Landlord) in an
aggregate amount of $1,000,000 to secure performance of such remedial work to
the premises identified in the Leases set forth in Schedule 1 hereto. Upon
completion of such remedial work by Tenant, Landlord shall remit the cash
deposit to Tenant or the letter of credit shall expire, as the case may be. If
the remedial work is not substantially completed by Tenant by January 31, 1996,
Landlord may complete such work and may use such cash deposit or draw on the
letter of credit from time to time, in an amount or amounts necessary to
reimburse Landlord for the monies expended by Landlord to perform such work plus
a fee equal to 10% of such cost. Landlord shall deliver to Tenant a written
request to draw on the letter of credit which details the uses of the monies so
expended.
14
<PAGE> 15
Tenant shall respond to such request within five (5) days business days and
permit Landlord to draw on such letter of credit. Landlord shall remit the
balance to Tenant upon completion of such remedial work.
5. REFERENCE TO AND EFFECT ON THE LEASE DOCUMENTS
5.1 Upon the effectiveness of this First Amendment, from and after
the date hereof, each reference in the Lease Agreement to "this Lease
Agreement," "hereunder," "hereof," or words of like import referring to the
Lease Agreement, and each reference in the related documents to "the Lease
Agreement," "thereunder," "thereof", or words of like import shall mean and be a
reference to the Lease Agreement, as amended hereby.
5.2 Except as specifically amended above, the Lease Agreement, and
all related documents are and shall continue to be in full force and effect and
are hereby ratified and confirmed in all respects.
5.3 Except as provided herein, the execution and delivery and
effectiveness of this First Amendment shall not operate as a waiver of any
right, power or remedy of Landlord under the Lease Agreement.
6. MISCELLANEOUS
6.1 This First Amendment may be executed in any number of
counterparts, each of which shall, collectively and separately, constitute one
agreement.
6.2 In all respects, including all matters of construction, validity
and performance, this First Amendment shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York applicable to
contracts made and performed in such state, without regard to principals thereof
regarding conflict of laws, and any applicable laws of the United States of
America.
6.3 THIS FIRST AMENDMENT AND THE LEASE AGREEMENT REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
15
<PAGE> 16
IN WITNESS WHEREOF, this First Amendment has been duly executed and
is effective as of the date first above written.
TRINET ESSENTIAL FACILITIES VIII R, INC.
By: /s/ Charles S. Swanson
------------------------------------
Name: Charles S. Swanson
Title: Vice President
CATERAIR INTERNATIONAL CORPORATION
By: /s/ John C. Carr
------------------------------------
Name: John C. Carr
Title: Vice President
16
<PAGE> 17
SCHEDULE I
Each Lease Agreement was made by and between Caterair International Corporation
and the respective Landlord listed below and is dated as of May 15, 1993. The
numbers in parentheses indicate identification numbers located on the Lease
Agreements themselves.
Landlord Property
TriNet Essential Facilities (#368) Burlingame, CA
VIII R, Inc.
TriNet Essential Facilities (#701) Millbrae, CA
VIII R, Inc.
TriNet Essential Facilities (#376) Philadelphia, PA
X, Inc.
TriNet Essential Facilities (#318) Seattle, WA
VIII R, Inc.
TriNet Essential Facilities (#397) Bloomington, MN
VIII R, Inc.
TriNet Essential Facilities (#303) Reno, NV
VIII R, Inc.
TriNet Essential Facilities (#351) Astoria, NY
X, Inc.
TriNet Essential Facilities (#375) Astoria, NY
X, Inc.
TriNet Essential Facilities (#361) Miami, FL
VIII R, Inc.
TriNet Essential Facilities (#366) Miami, FL
VIII R, Inc.
TriNet Essential Facilities (#702) Miami, FL
VIII R, Inc.
TriNet Essential Facilities (#479) Orlando, FL
X, Inc.
<PAGE> 1
EXHIBIT 10.28.2
SECOND AMENDMENT TO LEASE AGREEMENT
SECOND AMENDMENT TO LEASE AGREEMENT dated as of December 1, 1995 between
TriNet Essential Facilities VIII R, Inc., a Maryland corporation (TriNet) and
Caterair International Corporation, a Delaware corporation (Caterair).
This Second Amendment to Lease Agreement amends and forms a part of the
eight separate Lease Agreements, each dated as of May 15, 1993, between TriNet,
as landlord, and Caterair, as tenant, as amended by First Amendment to Lease
Agreement dated as of September 22, 1995, relating to property described on
Exhibit A hereto (collectively, the Lease).
Pursuant to the First Amendment to Lease Agreement, Caterair agreed to
perform certain specified remedial work and delivered a letter of credit drawn
on The Bank of New York in the amount of $1,000,000 to TriNet as security for
the performance of remedial work on the property subject to the Lease and
certain other property leased by Caterair from an affiliate of TriNet.
Caterair proposes to perform substantial renovations to the property
subject to the Lease. Caterair has requested that the deadline for completion of
the remedial work be extended to June 1, 1996.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, TriNet and Caterair hereby agree as follows:
1. TriNet agrees that the deadline for completion of the remedial work
identified in the First Amendment to Lease Agreement will be deferred to June 1,
1996.
2. Caterair agrees that, to the extent such remedial work has not been
completed by June 1, 1996, TriNet may draw on the letter of credit to provide
funds to complete such remedial work and pay itself the fee referred to in
Section 4.1 of the First Amendment to Lease Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
be executed as of the date first above set forth.
TriNet Essential Facilities VIII R, Inc.
By: /s/ JoAnn Chitty
--------------------------------------------
Name: JoAnn Chitty
Title: Sr. Vice President Asset Management
<PAGE> 2
-2-
Caterair International Corporation
By: /s/ John C. Carr
------------------------------------
Name: John C. Carr
Title: Vice President
Consented To:
SC International Services, Inc.
By: /s/ John C. Carr
------------------------------------
Name: John C. Carr
Title: Vice President
Consented To:
Caterair International, Inc. (II),
lease guarantor
By: /s/ Thomas Statas
------------------------------------
Name: Thomas Statas
Title: Vice President
Consented To:
Sky Chefs, Inc., lease guarantor
By: /s/ P. W. Tolbert
------------------------------------
Name: P. W. Tolbert
Title: Ex. Vice President
<PAGE> 3
-3-
Onex Food Services, Inc., lease guarantor
By: /s/ P. W. Tolbert
------------------------------------
Name: P. W. Tolbert
Title: Ex. Vice President
Morgan Guaranty Trust Company of New
York, as agent, lender to TriNet
By:
------------------------------------
Name:
Title:
<PAGE> 4
#368 Burlingame, CA
Exhibit A
Parcel A as shown on that certain parcel map filed in the office of the County
Recorder of San Mateo County, State of California on November 2, 1970 in Book 11
of Parcel Maps at page 19.
<PAGE> 5
#397Bloomington, MN
Exhibit A
All that certain real property situated in the County of Hennepin, State
of Minnesota, and described as follows:
Lot 1, Block 1, Watson's Bloomington Addition, according to the plat
thereof on file or of record in the office of the Registrar of Titles in
and for said Hennepin County, Minnesota.
<PAGE> 6
Exhibit A #361 Miami, FL
Lot 213, GRAPELAND HEIGHTS THIRD SECTION, according to the Plat thereof,
recorded in Plat Book 17, page 15, of the Public Records of Dade County,
Florida, and Tracts 12 and 13 of GRAPELAND HEIGHTS THIRD SECTION REVISED,
according to the Plat thereof, recorded in Plat Book 31, Page 53 of the Public
Records of Dade County, Florida.
AND the North 1/2 of the following described parcel of land;
A portion of the right-of-way of Northwest 23rd Street between Northwest 35th
Avenue and Northwest 36th Avenue in Section 28, Township 53 South, Range 41
East, Dade County, Florida, and being more particularly described as follows:
Begin at the centerline intersection of Northwest 36th Avenue with northwest
23rd Street as shown on the Plat of revised Plat of Grapeland Heights Third
Section, as recorded in Plat Book 31, Page 53 of the Public Records of Dade
County, Florida, and run North along the centerline of said Northwest 36th
Avenue for 25.00 feet; thence North 89(degree) 28' 10" East along the Northerly
right-of-way line of the aforesaid Northwest 23rd Street for 35.00 feet; thence
North along the Easterly right-of-way line of said Northwest 36th Avenue for
25.23 feet to a point of cusp; thence Southeasterly along a circular curve to
the left, having a radius of 25.00 feet and a central angle of 90(degree) 31'
50" for an arc distance of 39.50 feet to a point of tangency; thence North
89(degree) 28' 10" East along the Northerly right-of-way line of the aforesaid
Northwest 23rd Street for 366.83 feet to a point of curvature; thence
Northeasterly along a circular curve to the left, having a radius of 25.00 feet
and a central angle of 89(degree) 25' 57" for an arc distance of 39.02 feet;
thence South 0(degree) 02' 13" West along the Westerly right-of-way line of the
aforesaid Northwest 35th Avenue for 100.00 feet up to a point of cusp; thence
Northwesterly along a circular curve to the left, having a radius of 25.00 feet
and a central angle of 90(degree) 34' 03" for an arc distance of 39.52 feet to a
point of tangency, thence South 89(degree) 28' 10" West along the Southerly
right-of-way line of the aforementioned Northwest 23rd Street, for 426.53 feet;
thence North along the centerline of the aforesaid Northwest 36th Avenue for
25.00 feet to the Point of Beginning, lying and being in Dade County, Florida.
<PAGE> 7
Exhibit A #366 Miami, FL
Lots 154-160 inclusive, Lots 178-184 inclusive of GRAPELAND HEIGHTS THIRD
SECTION, recorded in Plat Book 17, Page 15, of the Public Records of Dade
County, Florida.
Also described as Tract 7 of the revised Plat of GRAPELAND HEIGHTS THIRD
SECTION, recorded in Plat Book 31, Page 53, of the Public Records of Dade
County, Florida.
<PAGE> 8
Exhibit A #303 Reno, NV
All that certain real property situated in the City of Reno, County of Washoe,
State of Nevada, more particularly described as follows:
Parcel B of Parcel Map No. 358 for A. LEVY and J. ZENTNER CO., according to the
map thereof, filed in the office of the county recorder of Washoe County, State
of Nevada, on December 21, 1976, as File No. 440513, Official Records.
<PAGE> 9
Basic #318
EXHIBIT A
TO LEASE DATED THE 1st DAY OF January, ____, 1971
DESCRIPTION OF LEASED PREMISES
All that certain tract of land located at 18850 28th Avenue South,
Seattle, Washington 98188 ......................................................
together with the improvements now or hereafter to be constructed thereon in
accordance with the provisions of the foregoing Lease and all alley rights, if
any, easements, rights of way and other appurtenances now or hereafter, during
the term of said Lease, appertaining thereunto; said land being more
particularly described as follows:
That portion of the Southeast One-quarter of the Southeast One-quarter of
Section 33, Township 23 North, Range 4 East, W. M. described as follows:
Beginning at the northwest corner of the Southeast One-quarter of the
Southeast One-quarter of said Section 33; thence South 89 (degree) 33'30" East
20.00 feet; thence South 1 (degree) 48'23" West 385.00 feet to the True Point of
Beginning; thence South 89 (degree) 33'30" East 256.00 feet; thence South 1
(degree) 48'23" West 25.92 feet; thence North 89 (degree) 33'30" West 7.24 feet;
thence South 3 (degree) 19'16" West 199.24 feet; thence South 89 (degree) 33'30"
East 12.51 feet; thence South 1 (degree) 48'23" West 158.55 feet; thence North
89 (degree)33'30" West 256.00 feet; thence North 1 (degree) 48'23" East 383.52
feet to the True Point of Beginning; Situate in County of King, State of
Washington.
<PAGE> 10
#701 Millbrae, CA
Exhibit A
PARCEL A
A portion of Lot 2 in Block 5 as shown on that certain map entitled, "UNIT NO.
4, MILLSDALE INDUSTRIAL PARK, MILLBRAE, SAN MATEO COUNTY, CALIFORNIA," filed in
the office of the County Recorder of San Mateo County, State of California on
April 21, 1955 in Book 42 of Maps at page 10, more particularly described as
follows:
BEGINNING at point on the Northwesterly line of Adrian Road, said point being
the most Easterly corner of said Lot 2, as shown on the above described map;
thence from said point of beginning along said Northwesterly line of Adrian
Road, South 53 (degree) 11' 36" West 302.70 feet; thence leaving said line at
right angles, North 36 (degree) 48' 24" West 197.16 feet to a point on the
Northerly line of said Lot 2; thence along said line North 86 (degree) 16' 19"
East 361.25 feet to the point of beginning.
PARCEL B
A portion of Lot 2 in Block 5 as shown on that certain map entitled "UNIT NO. 4,
MILLSDALE INDUSTRIAL PARK, MILLBRAE, SAN MATEO COUNTY, CALIFORNIA", fi1ed in the
office of the County Recorder of San Mateo County, State of California on April
21, 1955 in Book 42 of Maps at page 10, more particularly described as follows:
BEGINNING at the most Southerly corner of said Lot 2, as shown on the above
mentioned map; thence along the Southeasterly line of said lot and the
Northwesterly line of Adrian Road, North 53 (degree) 11' 36" East 100 feet;
thence leaving said Southeasterly lot line and Northwesterly line of Adrian
Road, North 36 (degree) 48' 24" West 197.l6 feet to the Northerly line of said
Lot 2; thence along said Northerly line South 86 (degree) 16' 19" West 119.34
feet to the most Westerly corner of said lot; thence along the southwesterly
line of the said Lot 2, South 36 (degree) 48' 24" East 262.30 feet to the point
of beginning.
<PAGE> 11
Exhibit A #702 Miami
PARCEL I:
Lots 5, 6, 25 and 26 of LE JEUNE TERMINALS 2ND ADDITION, according to the Plat
thereof, recorded in Plat Book 48, Page 55, of the Public Records of Dade
County, Florida.
<PAGE> 1
EXHIBIT 10.28.3
THIRD AMENDMENT TO LEASE AGREEMENT
THIRD AMENDMENT TO LEASE AGREEMENT dated as of June 1, 1996 between TriNet
Essential Facilities VIII R, Inc., a Maryland corporation (TriNet), and Caterair
International Corporation, a Delaware corporation (Caterair).
This Third Amendment to Lease Agreement amends and forms a part of the
eight separate Lease Agreements, each dated as of May 15, 1993, between TriNet,
as landlord, and Caterair, as tenant, as amended by First Amendment to Lease
Agreement dated as of September 22, 1995, and as amended by Second Amendment to
Lease Agreement dated as of December 1, 1995 relating to property described on
Exhibit A hereto (collectively, the Lease).
Pursuant to the First Amendment to Lease Agreement, Caterair agreed to
perform certain specified remedial work and delivered a letter of credit drawn
on The Bank of New York in the amount of $1,000,000 to TriNet as security for
the performance of remedial work on the property subject to the Lease and
certain other property leased by Caterair from an affiliate of TriNet. Pursuant
to the Second Amendment to Lease Agreement, the date for completion of such
remedial work was extended to June 1, 1996. Caterair has requested that the
deadline for completion of the remedial work be extended to November 15, 1996
and that the amount of the letter of credit be reduced to $500,000.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, TriNet and Caterair hereby agree as follows:
1. Section 4.1 of the First Amendment to Lease Agreement is hereby amended
and restated in its entirety as follows:
4.1 Tenant hereby agrees to perform the necessary remedial work to the premises
identified in the Leases set forth in Schedule 1 hereto with respect to the
matters described in Mark Malardino's letter to Tenant, dated September 14,
1995, and to complete such work on or before November 15, 1996. Tenant has
delivered to Landlord a clean irrevocable letter of credit identified as The
Bank of New York's Letter of Credit Ref. No. S00034339, which letter of credit
had an expiry date of July 31, 1996 and a face amount of $1,000,000 (the "Letter
of Credit"), to secure performance of such remedial work. Landlord and Tenant
agree that on July 31, 1996, the Letter of Credit shall be amended to extend the
expiry date to December 31, 1996 and to reduce the face amount thereof to
$500,000 (the "Amended Letter of Credit"). Upon completion of such remedial work
by Tenant, Landlord shall return the Amended Letter of Credit to Tenant. If the
remedial work is not substantially completed by November 15, 1996, Landlord may
complete such work and may use such cash deposit or draw on the Amended Letter
of Credit from time to time, in an amount or amounts necessary to reimburse
Landlord for the monies expended by Landlord to perform such work plus a fee
equal to 10% of such cost. Landlord shall deliver to Tenant a written request to
draw on the Amended Letter of Credit which details the uses of the moneys so
<PAGE> 2
expended. Tenant shall respond to such request within five (5) business days and
permit Landlord to draw on the Amended Letter of Credit. Landlord shall remit
the balance to Tenant upon completion of such remedial work.
2. Attached hereto as Exhibit A is a copy of a July 29, 1996 amendment to
The Bank of New York letter of credit ref. no. S00034339, which has the effect
of reducing the available to credit to $500,000 and extending the expiration
date to December 31, 1996. TriNet consents to such amendment and agrees to
notify The Bank of New York of such consent.
3. This Third Amendment to Lease Agreement may be executed by each party
on a separate counterpart, and such counterparts shall together constitute a
single instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
Lease Agreement to be executed as of the date first above set forth.
TriNet Essential Facilities VIII R, Inc.
By: /s/ Jo Ann Chitty
--------------------------
Name: Jo Ann Chitty
Title: Sr. Vice President - Asset
Management
Caterair International Corporation
By: /s/ Terry W. Roueche
--------------------------
Name: Terry W. Roueche
Title: Assistant Secretary
<PAGE> 3
#397 Bloomington, MN
All that certain real property situated in the County of Hennepin, State
of Minnesota, and described as follows:
Lot 1, Block 1, Watson's Bloomington Addition, according to the plat
thereof on file or of record in the office of the Registrar of Titles in
and for said Hennepin County, Minnesota.
<PAGE> 4
#361 Miami, FL
Lot 213, GRAPELAND HEIGHTS THIRD SECTION, according to the Plat thereof,
recorded in Plat Book 17, Page 15, of the Public Records of Dade County,
Florida, and Tracts 12 and 13 of GRAPELAND HEIGHTS THIRD SECTION REVISED,
according to the Plat thereof, recorded in Plat Book 31, Page 53 of the Public
Records of Dade County, Florida.
AND the North 1/2 of the following described parcel of land;
A portion of the right-of-way of Northwest 23rd Street between Northwest 35th
Avenue and Northwest 36th Avenue in Section 28, Township 53 South, Range 41
East, Dade County, Florida, and being more particularly described as follows:
Begin at the centerline intersection of Northwest 36th Avenue with northwest
23rd Street as shown on the Plat of revised Plat of Grapeland Heights Third
Section, as recorded in Plat Book 31, Page 53 of the Public Records of Dade
County, Florida, and run North along the centerline of said Northwest 36th
Avenue for 25.00 feet; thence North 89 (degree) 28' 10" East along the Northerly
right-of-way line of the aforesaid Northwest 23rd Street for 35.00 feet; thence
North along the Easterly right-of-way line of said Northwest 36th Avenue for
25.23 feet to a point of cusp; thence Southeasterly along the circular curve to
the left, having a radius of 25.00 feet and a central angle of 90 (degree) 31'
50" for an arc distance of 39.50 feet to a point of tangency; thence North 89
(degree) 28' 10" East along the Northerly right-of-way line of the aforesaid
Northwest 23rd Street for 366.83 feet to a point of curvature; thence
Northeasterly along a circular curve to the left, having a radius of 25.00 feet
and a central angle of 89 (degree) 25' 57" for an arc distance of 39.02 feet;
thence South 0 (degree) 02' 13" West along the Westerly right-of-way line of the
aforesaid Northwest 35th Avenue for 100.00 feet up to a point of cusp; thence
Northwesterly along a circular curve to the left, having a radius of 25.00 feet
and a central angle of 90 (degree) 34' 03" for an arc distance of 39.52 feet to
a point of tangency; thence South 89 (degree) 28' 10" West along the Southerly
right-of-way line of the aforementioned Northwest 23rd Street, for 426.53 feet;
thence North along the centerline of the aforesaid Northwest 36th Avenue for
25.00 feet to the Point of Beginning, lying and being in Dade County, Florida.
<PAGE> 5
#366 Miami, FL
Lots 154-160 inclusive, Lots 178-184 inclusive of GRAPELAND HEIGHTS THIRD
SECTION, recorded in Plat Book 17, Page 15, of the Public Records of Dade
County, Florida.
Also described as Tract 7 of the revised Plat of GRAPELAND HEIGHTS THIRD
SECTION, recorded in Plat Book 31, Page 53, of the Public Records of Dade
County, Florida.
<PAGE> 6
#303 Reno, NV
All that certain real property situated in the City of Reno, County of Washoe,
State of Nevada, more particularly described as follows:
Parcel B of Parcel Map No. 358 for A. LEVY and J. ZENTNER CO., according to the
map thereof, filed in the office of the county recorder of Washoe County, State
of Nevada, on December 21, 1976, as File No. 440513, Official Records.
<PAGE> 7
#318
TO LEASE DATED THE 1st DAY OF January, _____, 1971
DESCRIPTION OF LEASED PREMISES
All that certain tract of land located at 18850 28th Avenue South,
Seattle, Washington 98188 ......................................................
together with the improvements now or hereafter to be constructed thereon in
accordance with the provisions of the foregoing Lease and all alley rights, if
any, easements, rights of way and other appurtenances now or hereafter, during
the term of said Lease, appertaining thereunto; said land being more
particularly described as follows:
That portion or the Southeast One-quarter of the Southeast One-quarter or
Section 33, Township 23 North, Range 4 East, W. M. described as follows:
Beginning at the northwest corner of the Southeast One-quarter of the
Southeast One-quarter of said Section 33; thence South 89 (degree) 33'30" East
20.00 feet; thence South 1 (degree) 48'23" West 385.00 feet to the True Point of
Beginning; thence South 89 (degree)33'30" East 256.00 feet; thence South
1 (degree) 48'23" West 25.92 feet; thence North 89 (degree) 33'30" West 7.24
feet; thence South 3 (degree) 19'16" West 199.24 feet; thence South 89 (degree)
33'30" East 12.51 feet; thence South 1 (degree) 48'23" West 158.55 feet; thence
North 89 (degree) 33'30" West 256.00 feet; thence North 1 (degree) 48'23" East
383.52 feet to the True Point of Beginning; Situate in County of King, State of
Washington.
<PAGE> 8
#701 Millbrae, CA
PARCEL A
A portion of Lot 2 in Block 5 as shown on that certain map entitled, "UNIT NO. 4
MILLSDALE INDUSTRIAL PARK, MILLBRAE, SAN MATEO COUNTY, CALIFORNIA", filed in the
office of the County Recorder of San Mateo County, State of California on April
21, 1955 in Book 42 of Maps at page 10, more particularly described as follows:
BEGINNING at a point on the Northwesterly line of Adrian Road, said point being
the most Easterly corner of said Lot 2, as shown on the above described map;
thence from said point of beginning along said Northwesterly line of Adrian
Road, South 53 (degree) 11' 36" West 302.70 feet; thence leaving said line at
right angles, North 36 (degree) 48' 24" West 197.16 feet to a point on the
Northerly line of said Lot 2; thence along said line North 86 (degree) 16' 19"
East 361.25 feet to the point of beginning.
PARCEL B
A portion of Lot 2 in Block 5 as shown on that certain map entitled "UNIT NO. 4,
MILLSDALE INDUSTRIAL PARK, MILLBRAE, SAN MATEO COUNTY, CALIFORNIA", filed in the
office of the County Recorder of San Mateo County, State of California on April
21, 1955 in Book 42 of Maps at page 10, more particularly described as follows:
BEGINNING at the most Southerly corner of said Lot 2, as shown on the above
mentioned map; thence along the Southeasterly line of said lot and the
Northwesterly line of Adrian Road, North 53 (degree) 11' 36" East 100 feet;
thence leaving said Southeasterly lot line and Northeasterly line of Adrian
Road, North 36 (degree) 48' 24" West 197.l6 feet to the Northerly line of said
Lot 2; thence along said Northerly line South 86 (degree) 16' 19" West 119.34
feet to the most Westerly corner of said lot; thence along the southwesterly
line of the said Lot 2, South 36 (degree) 48' 24" East 262.30 feet to the point
of beginning.
<PAGE> 9
Exhibit A #702 Miami, FL
PARCEL I:
Lots 5, 6, 25 and 26 of LE JEUNE TERMINALS 2ND ADDITION, according to the Plat
thereof, recorded in Plat Book 48, Page 55, of the Public Records of Dade
County, Florida.
<PAGE> 10
[LETTERHEAD OF BANK OF NEW YORK]
OUR. NO. CORRESPONDENT'S REF. NO.
S00034339 TRINET CORP RLTY
DATE
JULY 29 1996
BENEFICIARY: APPLICANT:
TRINET CORPORATE REALTY TRUST, SC INTERNATIONAL SERVICES, INC.
INC., 4 EMBARCADERO CENTER 524 EAST LAMAR BOULEVARD
SUITE 3150, SAN FRANCISCO, CA 94111 ARLINGTON, TX 76011
ATTN: DEBORAH PAUL
DATE OF ORIGINAL ISSUE: AMENDMENT DATE:
MAY 23 1996 JULY 29 1996
GENTLEMEN/LADIES:
THE ABOVE MENTIONED INSTRUMENT INCLUDING ANY PREVIOUS AMENDMENTS, IS AMENDED AS
FOLLOWS:
LATEST EXPIRATION DATE DECEMBER 31, 1996.
CREDIT AMOUNT REDUCED BY **USD500,000.00** NEW CREDIT AMOUNT TOTAL
**USD500,000.00**
THIS AMENDMENT WILL ONLY BECOME OPERATIVE UPON OUR RECEIPT OF YOUR WRITTEN
CONSENT TO IT'S TERMS. PLEASE INDICATE YOUR CONSENT BY SIGNING AND RETURNING THE
ATTACHED COPY OF THIS AMENDMENT.
MAY WE PLEASE HAVE YOUR RESPONSE AS SOON AS POSSIBLE.
IF THIS AMENDMENT IS TO BE REJECTED, BENEFICIARY'S SIGNED STATEMENT TO THAT
EFFECT IS REQUIRED.
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED. THIS AMENDMENT IS TO BE
CONSIDERED AS PART OF THE ABOVE CREDIT AND MUST BE ATTACHED THERETO.
ALL OTHER CONDITIONS REMAIN UNCHANGED.
YOURS VERY TRULY,
/s/ [ILLEGIBLE]
- --------------------
AUTHORIZED SIGNATURE
<PAGE> 1
EXHIBIT 10.28.4
FOURTH AMENDMENT TO LEASE AGREEMENT
FOURTH AMENDMENT TO LEASE AGREEMENT dated as of December 23, 1996 between
TriNet Essential Facilities VIIIR, Inc., a Maryland corporation (TriNet), and
Caterair International Corporation, a Delaware corporation (Caterair).
This Fourth Amendment to Lease Agreement amends and forms a part of the
eight separate Lease Agreements, each dated as of May 15, 1993, between TriNet,
as landlord, and Caterair, as tenant, as amended by First Amendment to Lease
Agreement dated as of September 22, 1995, as amended by Second Amendment to
Lease Agreement dated as of December 1, 1995 and as amended by Third Amendment
to Lease Agreement dated as of June 1, 1996 relating to property described on
Exhibit A hereto (collectively, the Lease).
Pursuant to the First Amendment to Lease Agreement, Caterair agreed to
perform certain specified remedial work and delivered a letter of credit drawn
on The Bank of New York in the amount of $1,000,000 to TriNet as security for
the performance of remedial work on the property subject to the Lease and
certain other property leased by Caterair from an affiliate of TriNet. Pursuant
to the Second Amendment to Lease Agreement, the date for completion of such
remedial work was extended to June 1, 1996. Pursuant to the Third Amendment to
Lease Agreement, the date for completion of such remedial work was extended to
November 15, 1996 and the amount of the letter of credit was reduced to
$500,000. Caterair has requested that the deadline for completion of the
remedial work be extended to April 30, 1997 and that the letter of credit be
reduced to $100,000..
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, TriNet and Caterair hereby agree as follows:
1. Section 4.1 of the First Amendment to Lease Agreement is hereby amended
and restated in its entirety as follows:
4.1 Tenant hereby agrees to perform the necessary remedial work to the premises
identified in the Leases set forth in Schedule 1 hereto with respect to the
matters described in Mark Malardino's letter to Tenant, dated September 14,
1995, and to complete such work on or before April 30, 1997. Tenant has
delivered to Landlord a clean irrevocable letter of credit identified as The
Bank of New York's Letter of Credit Ref. No. S00034339 to secure performance of
such remedial work; such letter of credit was amended on July 29, 1996 to reduce
the available credit to $500,000 and to extend the expiration date to December
31, 1996. Tenant shall cause the letter of credit as so amended to be further
amended to reduce the available credit to $100,000 and to extend its expiration
date to June 30, 1997 (the "Amended Letter of Credit"). Upon completion of such
remedial work by Tenant, Landlord shall return the Amended Letter of Credit to
Tenant. If the remedial work is not substantially completed by April 30, 1997,
Landlord may draw on the Amended Letter of Credit from time to time to fund the
cost or estimated cost of such work plus
<PAGE> 2
a management fee equal to 10% of such cost. Landlord shall remit any unspent
balance to Tenant upon completion of such remedial work.
2. Attached hereto as Exhibit A is a copy of a December 24, 1996 amendment
to The Bank of New York letter of credit no. S00034339, which has the effect of
reducing the available credit to $100,000 and extending the expiration date to
June 30, 1997. TriNet consents to such amendment and agrees to notify The Bank
of New York of such consent.
3. This Fourth Amendment to Lease Agreement may be executed by each party
on a separate counterpart, and such counterparts shall together constitute a
single instrument.
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment
to Lease Agreement to be executed as of the date first above set forth.
TriNet Essential Facilities VIIIR, Inc.
By: /s/ Jo Ann Chitty
------------------
Name: Jo Ann Chitty
Title: Senior Vice President Asset
Management
Caterair International Corporation
By: /s/ Terry W. Roueche
--------------------------
Name: Terry W. Roueche
Title: Assistant Secretary
<PAGE> 4
Schedule 1 #366 Burlingame, CA
Parcel A as shown on that certain parcel map filed in the office of the County
Recorder of San Mateo County, State of California on November 2, 1970 in Book 11
of Parcel Maps at page 19.
<PAGE> 5
#397 Bloomington, MN
All that certain real property situated in the County of Hennepin, State
of Minnesota, and described as follows:
Lot 1, Block 1, Watson's Bloomington Addition, according to the plat
thereof on file or of record in the office of the Registrar of Titles in
and for said Hennepin County, Minnesota.
<PAGE> 6
#361 Miami, FL
Lot 213, GRAPELAND HEIGHTS THIRD SECTION, according to the Plat thereof,
recorded in Plat Book 17, Page 15, of the Public Records of Dade County,
Florida, and Tracts 12 and 13 of GRAPELAND HEIGHTS THIRD SECTION REVISED,
according to the Plat thereof, recorded in Plat Book 31, Page 53 of the Public
Records of Dade County, Florida.
AND the North 1/2 of the following described parcel of land;
A portion of the right-of-way of Northwest 23rd Street between Northwest 35th
Avenue and Northwest 36th Avenue in Section 28, Township 53 South, Range 41
East, Dade County, Florida, and being more particularly described as follows:
Begin at the centerline intersection of Northwest 36th Avenue with northwest
23rd Street as shown on the Plat of revised Plat of Grapeland Heights Third
Section, as recorded in Plat Book 31, Page 53 of the Public Records of Dade
County, Florida, and run North along the centerline of said Northwest 36th
Avenue for 25.00 feet; thence North 89 (degree) 28' 10" East along the Northerly
right-of-way line of the aforesaid Northwest 23rd Street for 35.00 feet; thence
North along the Easterly right-of-way line of said Northwest 36th Avenue for
25.23 feet to a point of cusp; thence Southeasterly along the circular curve to
the left, having a radius of 25.00 feet and a central angle of 90 (degree) 31'
50" for an arc distance of 39.50 feet to a point of tangency; thence North 89
(degree) 28' 10" East along the Northerly right-of-way line of the aforesaid
Northwest 23rd Street for 366.83 feet to a point of curvature; thence
Northeasterly along a circular curve to the left, having a radius of 25.00 feet
and a central angle of 89 (degree) 25' 57" for an arc distance of 39.02 feet;
thence South 0 (degree) 02' 13" West along the Westerly right-of-way line of the
aforesaid Northwest 35th Avenue for 100.00 feet up to a point of cusp; thence
Northwesterly along a circular curve to the left, having a radius of 25.00 feet
and a central angle of 90 (degree) 34' 03" for an arc distance of 39.52 feet to
a point of tangency; thence South 89 (degree) 28' 10" West along the Southerly
right-of-way line of the aforementioned Northwest 23rd Street, for 426.53
feet; thence North along the centerline of the aforesaid Northwest 36th Avenue
for 25.00 feet to the Point of Beginning, lying and being in Dade County,
Florida.
<PAGE> 7
#366 Miami, FL
Lots 154-160 inclusive, Lots 178-184 inclusive of GRAPELAND HEIGHTS THIRD
SECTION, recorded in Plat Book 17, Page 15, of the Public Records of Dade
County, Florida.
Also described as Tract 7 of the revised Plat of GRAPELAND HEIGHTS THIRD
SECTION, recorded in Plat Book 31, Page 53, of the Public Records of Dade
County, Florida.
<PAGE> 8
#303 Reno, NV
All that certain real property situated in the City of Reno, County of Washoe,
State of Nevada, more particularly described as follows:
Parcel B of Parcel Map No. 358 for A. LEVY and J. ZENTNER CO., according to the
map thereof, filed in the office of the county recorder of Washoe County, State
of Nevada, on December 21, 1976, as File No. 440513, Official Records.
<PAGE> 9
# 318
TO LEASE DATED THE 1st DAY OF January, ____, 1971
DESCRIPTION OF LEASED PREMISES
All that certain tract of land located at 18850 28th Avenue South,
Seattle, Washington 98188 ......................................................
together with the improvements now or hereafter to be constructed thereon in
accordance with the provisions of the foregoing Lease and all alley rights, if
any, easements, rights of way and other appurtenances now or hereafter, during
the term of said Lease, appertaining thereunto; said land being more
particularly described as follows:
That portion of the Southeast One-quarter of the Southeast One-quarter of
Section 33, Township 23 North, Range 4 East, W. M. described as follows:
Beginning at the northwest corner of the Southeast One-quarter of the
Southeast One-quarter of said Section 33; thence South 89 (degree) 33'30" East
20.00 feet; thence South 1 (degree) 48'23" West 385.00 feet to the True Point of
Beginning; thence South 89 (degree) 33'30" East 256.00 feet; thence South 1
(degree) 48'23" West 25.92 feet; thence North 89 (degree) 33'30" West 7.24 feet;
thence South 3 (degree) 19'16" West 199.24 feet; thence South 89 (degree) 33'30"
East 12.51 feet; thence South 1 (degree) 48'23" West 158.55 feet; thence North
89 (degree)33'30" West 256.00 feet; thence North 1 (degree) 48'23" East 383.52
feet to the True Point of Beginning; Situate in County of King, State of
Washington.
<PAGE> 10
#701 Millbrae, CA
PARCEL A
A portion of Lot 2 in Block 5 as shown on that certain map entitled, "UNIT NO.
4, MILLSDALE INDUSTRIAL PARK, MILLBRAE, SAN MATEO COUNTY, CALIFORNIA," filed in
the office of the County Recorder of San Mateo County, State of California on
April 21, 1955 in Book 42 of Maps at page 10, more particularly described as
follows:
BEGINNING at point on the Northwesterly line of Adrian Road, said point being
the most Easterly corner of said Lot 2, as shown on the above described map;
thence from said point of beginning along said Northwesterly line of Adrian
Road, South 53 (degree) 11' 36" West 302.70 feet; thence leaving said line at
right angles, North 36 (degree) 48' 24" West 197.16 feet to a point on the
Northerly line of said Lot 2; thence along said line North 86 (degree) 16' 19"
East 361.25 feet to the point of beginning.
PARCEL B
A portion of Lot 2 in Block 5 as shown on that certain map entitled "UNIT NO. 4,
MILLSDALE INDUSTRIAL PARK, MILLBRAE, SAN MATEO COUNTY, CALIFORNIA", fi1ed in the
office of the County Recorder of San Mateo County, State of California on April
21, 1955 in Book 42 of Maps at page 10, more particularly described as follows:
BEGINNING at the most Southerly corner of said Lot 2, as shown on the above
mentioned map; thence along the Southeasterly line of said lot and the
Northwesterly line of Adrian Road, North 53 (degree) 11' 36" East 100 feet;
thence leaving said Southeasterly lot line and Northwesterly line of Adrian
Road, North 36 (degree) 48' 24" West 197.l6 feet to the Northerly line of said
Lot 2; thence along said Northerly line South 86 (degree) 16' 19" West 119.34
feet to the most Westerly corner of said lot; thence along the southwesterly
line of the said Lot 2, South 36 (degree) 48' 24" East 262.30 feet to the point
of beginning.
<PAGE> 11
Exhibit A #702 Miami, FL
Lots 5, 6, 25 and 26 or LE JEUNE TERMINALS 2ND ADDITION, according to the Plat
thereof, recorded in Plat Book 48, Page 55, of the Public Records of Dade
County, Florida.
<PAGE> 12
[LETTERHEAD OF BANK OF NEW YORK]
OUR. NO. CORRESPONDENT'S REF. NO.
S00034339 TRINET CORP RLTY
DATE
DECEMBER 24 1996
BENEFICIARY: APPLICANT:
TRINET CORPORATE REALTY TRUST, SC INTERNATIONAL SERVICES, INC.
INC., 4 EMBARCADERO CENTER 524 EAST LAMAR BOULEVARD
SUITE 3150, SAN FRANCISCO, CA 94111 ARLINGTON, TX 76011
ATTN: DEBORAH PAUL
DATE OF ORIGINAL ISSUE: AMENDMENT DATE:
MAY 23 1996 DECEMBER 24 1996
GENTLEMEN/LADIES:
THE ABOVE MENTIONED INSTRUMENT INCLUDING ANY PREVIOUS AMENDMENTS, IS AMENDED AS
FOLLOWS:
CREDIT AMOUNT DECREASED BY **USD400,000.00** MAKING NEW CREDIT AMOUNT TOTAL
**USD100,000.00**
EXTEND EXPIRATION DATE JUNE 30, 1997.
THIS AMENDMENT WILL ONLY BECOME OPERATIVE UPON OUR RECEIPT OF YOUR WRITTEN
CONSENT TO IT'S TERMS. PLEASE INDICATE YOUR CONSENT OR REJECTION BY SIGNING AND
RETURNING THE ATTACHED COPY OF THIS AMENDMENT.
MAY WE PLEASE HAVE YOUR RESPONSE AS SOON AS POSSIBLE.
IF THIS AMENDMENT IS TO BE REJECTED, BENEFICIARY'S SIGNED STATEMENT TO THAT
EFFECT IS REQUIRED.
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED. THIS AMENDMENT IS TO BE
CONSIDERED AS PART OF THE ABOVE CREDIT AND MUST BE ATTACHED THERETO.
ALL OTHER CONDITIONS REMAIN UNCHANGED.
YOURS VERY TRULY,
/s/ [ILLEGIBLE]
- --------------------
AUTHORIZED SIGNATURE
<PAGE> 1
EXHIBIT 10.28.5
FIFTH AMENDMENT TO LEASE AGREEMENT
FIFTH AMENDMENT TO LEASE AGREEMENT dated as of June 23, 1997 between
TriNet Essential Facilities VIIIR, Inc., a Maryland corporation (TriNet), and
Caterair International Corporation, a Delaware corporation (Caterair).
This Fifth Amendment to Lease Agreement amends and forms a part of the
eight separate Lease Agreements, each dated as of May 15, 1993, between TriNet,
as landlord, and Caterair, as tenant, as amended by First Amendment to Lease
Agreement dated as of September 22, 1995, as amended by Second Amendment to
Lease Agreement dated as of December 1, 1995, as amended by Third Amendment to
Lease Agreement dated as of June 1, 1996, and as amended by Fourth Amendment to
Lease dated as of December 23, 1996 relating to property described on Exhibit A
hereto (collectively, the Lease).
Pursuant to the First Amendment to Lease Agreement, Caterair agreed to
perform certain specified remedial work and delivered a letter of credit drawn
on The Bank of New York in the amount of $1,000,000 to TriNet as security for
the performance of remedial work on the property subject to the Lease and
certain other property leased by Caterair from an affiliate of TriNet. Pursuant
to the Second Amendment to Lease Agreement, the date for completion of such
remedial work was extended to June 1, 1996. Pursuant to the Third Amendment to
Lease Agreement, the date for completion of such remedial work was extended to
November 15, 1996 and the amount of the letter of credit was reduced to
$500,000. Pursuant to the Fourth Amendment to Lease, the date for completion of
such remedial work was extended to April 30, 1997 and the amount of the letter
of credit was reduced to $100,000. Caterair has requested that the date for
completion of the remedial work be extended to October 31, 1997.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, TriNet and Caterair hereby agree as follows:
1. Section 4.1 of the First Amendment to Lease Agreement is hereby amended
and restated in its entirety as follows:
4.1 Tenant hereby agrees to perform the necessary remedial work to the premises
identified in the Leases set forth in Schedule 1 hereto with respect to the
matters described in Mark Malardino's letter to Tenant, dated September 14,
1995, and to complete such work on or before October 31, 1997. Tenant has
delivered to Landlord a clean irrevocable letter of credit identified as The
Bank of New York's Letter of Credit Ref. No. S00034339 to secure performance of
such remedial work; such letter of credit was amended on July 29, 1996 to reduce
the available credit to $500,000 and to extend the expiration date to December
31, 1996; such letter of credit was further amended to reduce the available
credit to $100,000 and to extend its expiration date to June 30, 1997; Tenant
shall cause such letter of credit to be further amended to extend its expiration
date to November 28, 1997 (the "Amended Letter of Credit"). Upon completion of
<PAGE> 2
such remedial work by Tenant, Landlord shall return the Amended Letter of Credit
to Tenant. If the remedial work is not substantially completed by October 31,
1997, Landlord may draw on the Amended Letter of Credit from time to time to
fund the cost or estimated cost of such work plus a management fee equal to 10%
of such cost. Landlord shall remit any unspent balance to Tenant upon completion
of such remedial work.
2. Attached hereto as Exhibit A is a copy of a June ___, 1997 amendment to
The Bank of New York letter of credit no. S00034339, which has the effect of
extending the expiration date to November 28, 1997 and making such letter of
credit assignable by TriNet. TriNet consents to such amendment and agrees to
notify The Bank of New York of such consent.
3. This Fifth Amendment to Lease Agreement may be executed by each party
on a separate counterpart, and such counterparts shall together constitute a
single instrument.
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to
Lease Agreement to be executed as of the date first above set forth.
TriNet Essential Facilities VIIIR, Inc.
By: /s/ Jo Ann Chitty
--------------------------
Name:
Title:
Caterair International Corporation
By: /s/ Terry Roueche
--------------------------
Name: Terry Roueche
Title: Assistant Secretary
<PAGE> 1
EXHIBIT 10.28.6
SIXTH AMENDMENT TO LEASE
SIXTH AMENDMENT TO LEASE (this "Sixth Amendment"), dated as of August 22,
1997, with effect as of the Effective Date (as defined), between TriNet
Essential Facilities VIII R, Inc., a Maryland corporation ("TriNet"), and
Caterair International Corporation, a Delaware corporation ("Tenant").
Capitalized terms used herein but not otherwise defined have the respective
meanings ascribed to such terms in the Lease (as hereinafter defined).
This Sixth Amendment amends and forms a part of the eight separate Lease
Agreements, each dated as of May 15, 1993; between TriNet, as landlord, and
Tenant, as tenant, as amended by First Amendment to Lease Agreement (the "First
Amendment"), dated as of September 22, 1995, as amended by Second Amendment to
Lease Agreement, dated as of December 1, 1995, as amended by Third Amendment to
Lease Agreement date as of June 1, 1996, as amended by Fourth Amendment to Lease
Agreement, dated as of December 2, 1996, and as amended by Fifth Amendment to
Lease Agreement, dated as of June 23, 1997 (collectively, and as further
amended, supplemented or modified, the "Lease").
The parties hereto desire to further amend the Lease, upon the terms and
subject to the conditions set forth in this Sixth Amendment.
Simultaneously with the execution and delivery of this Sixth Amendment,
Tenant is entering into that certain Sixth Amendment to Lease, dated the date
hereof, in a form substantially identical to this Sixth Amendment with TriNet
Essential Facilities X, Inc. (the "Other Sixth Amendment").
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Amendments to Lease.
1.1 Annex I to the Lease is hereby amended, effective as of the Effective
Date, by adding the following terms thereto in their proper alphabetical
sequence:
"Revolving Credit Agreement" means that certain Amended and Restated
Credit Agreement, dated as of September 29, 1995, and amended and restated
as of August __, 1997, among SC International Services, Inc., as borrower,
Onex Food Services, Inc., Caterair Holdings Corporation, Tenant, the
guarantors named therein, the lenders party thereto from time to time,
Bankers Trust Company and J.P. Morgan Securities Inc., as co-arrangers,
Bankers Trust Company, as syndication agent, the Bank of New York, as
co-agent, and Morgan Guaranty Trust Company of New York, as administrative
agent, as such Amended and Restated Credit Agreement may
<PAGE> 2
be amended, restated, supplemented, modified, refunded or refinanced from
time to time whether pursuant to a bank credit agreement or other most
senior debt financing agreement containing a leverage ratio covenant.
1.2 Section 4 of the Lease is hereby deleted and restated in its entirety,
effective as of the Effective Date as follows:
"4. RENTAL:
A. Tenant agrees to pay fixed rent ("Fixed Rent") to Landlord
without notice, by check sent to Landlord at such address as shall be
provided by Landlord to Tenant, provided that such check shall be received
by Landlord in sufficient time that the funds will be received by the
Fixed Rent due date, or to such other persons or place as may be provided
by written notice from the person then entitled to receive the Fixed Rent,
in equal installments in advance on or before the first day of each month
as specified in the Basic Lease Information.
If Fixed Rent is not paid when due, interest shall accrue
thereon at the Overdue Rate until payment is made. Tenant hereby
acknowledges that the late payment by Tenant to Landlord of Fixed Rent,
Additional Rent and other sums due under this Lease will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will
be extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges and late charges, which may
be imposed on Landlord by the terms of any mortgage or trust deed covering
the Premises. Accordingly, if any installment of Fixed Rent or any other
sum due to Landlord from Tenant shall not have been received by Landlord
or Landlord's designee within fifteen (15) days after such amount shall be
due, then, without any requirement for notice to Tenant, Tenant shall pay
to Landlord a late charge equal to two percent (2%) of such overdue
amount, together with interest on such overdue amount at the Overdue Rate.
The parties agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by
Tenant. Acceptance of such late charge by Landlord shall in no event
constitute a waiver of Tenant's default with respect to such overdue
amount, nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder; provided that nothing contained herein shall
relieve Landlord of a duty to mitigate damages under applicable law.
B. The Fixed Rent for each Renewal Term shall be payable in
equal monthly installments in advance on or before the first day of each
month as provided in the Basic Lease Information.
1.3 Section 15 of the Lease is hereby amended and restated in its
entirety, effective as of the Effective Date, to read as follows:
2
<PAGE> 3
"15. DEFAULT: Events of Default.
The following events, following the expiration of the
applicable cure periods, in this Paragraph are sometimes referred to as an
"Event of Default":
(a) If default shall be made in the payment of Fixed Rent and such
default shall continue for five (5) business days after notice
from Landlord (provided that after giving one such notice, any
such default occurring within 12 months shall become an Event
of Default without the giving of notice) or if default shall
be made in the payment of Additional Rent or in the payment of
any other sum required to be paid by Tenant under this Lease
or the payment to Landlord of any other sum due under the
terms of any other agreement between Landlord and Tenant;
(b) If default shall be made in the observance or performance of
any of the other covenants in this Lease which Tenant is
required to observe and perform and such default shall
continue for thirty (30) days after written notice to Tenant,
or if a default involves a hazardous condition and is not
cured by Tenant immediately; provided, however, the time
allowed Tenant (except in the instance of hazardous conditions
or conditions which expose Landlord to criminal liability)
within which Tenant is permitted to cure the same shall be
extended for such period as may be necessary for the curing
provided Tenant is continuously, diligently and in good faith
prosecuting such cure;
(c) If any representation or warranty made by Tenant herein or in
any certificate, demand or request made pursuant hereto proves
to be incorrect in any material respect when made;
(d) If the interests of Tenant in this Lease shall be levied on
under execution or other legal process and same is not removed
or stayed within thirty (30) days;
(e) If any voluntary petition of bankruptcy or for corporate
reorganization or for the appointment of a receiver or any
similar relief shall be filed by Tenant;
(f) If any involuntary petition of bankruptcy shall be filed
against tenant under any Federal or State bankruptcy or
insolvency act and shall not have been dismissed within ninety
(90) days of the filing thereof;
3
<PAGE> 4
(g) If a receiver shall be appointed for Tenant or any of the
property of Tenant by any court and any such receiver shall
not have been discharged within ninety (90) days from the date
of his appointment;
(h) If Tenant shall make an assignment for the benefit of
creditors;
(i) If Tenant shall admit, in writing, Tenant's inability to meet
Tenant's debts as they mature;
(j) If Tenant shall abandon the Premises;
(k) If: (i) there are any outstanding obligations under the
Revolving Credit Agreement, then the acceleration
of the maturity of any amounts due under the
Revolving Credit Agreement by the Agent or the
Lenders (each as defined therein) shall constitute
an Event of Default hereunder; or
(ii) there are no outstanding obligations under the
Revolving Credit Agreement, then any default shall
occur in the payment of any outstanding
indebtedness of $10,000,000 or more, or such
lesser indebtedness as shall be material to the
financial condition of Tenant;
(l) If BOTH (i) none of Tenant, SC International Services, Inc.,
Sky Chefs, Inc., Onex Food Services, Inc. or Caterair
International, Inc. (II) has a BBB- or better investment grade
credit rating from Standard & Poors Corporation and a Baa3 or
better investment grade rating from Moody's Investors Service,
Inc. for its senior debt obligations, AND (ii) there shall
have occurred and be continuing under the Revolving Credit
Agreement a breach in the observance of Section 9.09 thereof
(Combined Leverage Ratio), or any successor or replacement
provision thereto which is intended to measure leverage (e.g.,
debt to EBITDA) on a substantially similar basis (as such
Section 9.09 or any such successor provision may from time to
time be amended or modified); provided, that a waiver by a
creditor of compliance with any such covenant (as opposed to
an amendment of such covenant) shall not be binding upon
Landlord; and provided further, that if at any time the
Revolving Credit Agreement does not contain a covenant
limiting the leverage ratio, then, for the purposes of this
Lease, the leverage ratio last in effect prior to its
elimination shall be deemed in effect;
4
<PAGE> 5
(m) If the ratio of (i) Consolidated EBITDA to (ii) Consolidated
Cash Interest Expense, for any 12-month period ending on March
31, June 30, September 30 or December 31 in any year,
commencing with the 12-month period ending on September 30,
1996, shall be less than that set forth below for any of the
following periods:
12-Month Period Ending Ratio
---------------------- -----
9/30/96,12/31/96, 3/31/97,
6/30/97 or 9/30/97 1.75:1.0
12/31/97 and each March 31,
June 30, September 30 and
December 31 thereafter 2.00:1.0
(n) If a final judgment shall be entered in an amount greater than
$5,000,000 which creates a default under any mortgage, lease
or loan agreement of Tenant, or which affects Landlord's
interest in the Premises; or
(o) If an Event of Default shall occur under any other lease
between Landlord and Tenant dated as of the date hereof.
Landlord may treat the occurrence of any one or more of the
foregoing Events of Default as a breach of this Lease. For so long as such
Event of Default continues the Landlord, at its option and with or without
notice or demand of any kind to Tenant or any other person, but subject to
Paragraph 16F hereof may have any one or more of the remedies provided in
this Paragraph 15 or elsewhere in this lease, in addition to all other
remedies and rights provided at law or in equity."
2. Consideration.
2.1 The consideration for Tenant's agreement to enter into this Sixth
Amendment shall be aggregate consideration of $375,000 (the "Amendment Fee")
payable by TriNet to Tenant on the Effective Date via wire transfer of
immediately available funds to an account designated by Tenant or by such other
means of payment as may be notified to TriNet by Tenant in writing.
3. Conditions Precedent. This Sixth Amendment and the amendments to the
Lease contemplated herein shall become effective (without any further action
being necessary by the parties) upon fulfillment of each of the following
conditions precedent (such date referred to herein as the "Effective Date"):
5
<PAGE> 6
3.1 The Amended and Restated Credit Agreement (the "Revolving Credit
Agreement"), dated as of September 29, 1995, and amended and restated as of
August __, 1997, among SC International Services, Inc., as borrower, Onex Food
Services, Inc., Caterair Holdings Corporation, Caterair, the guarantors named
therein, the lenders party thereto from time to time, Bankers Trust Company and
J.P. Morgan Securities Inc., as co-arrangers, Bankers Trust Company, as
syndication agent, the Bank of New York, as co-agent, and Morgan Guaranty Trust
Company of New York, as administrative agent shall be executed and delivered by
the parties thereto;
3.2 The Revolving Credit Agreement, as executed and delivered by the
parties thereto, shall contain a provision that is substantially similar to the
provision set forth on Annex A hereto;
3.3 Tenant shall have delivered to TriNet, upon the satisfaction of the
conditions set forth in Sections 3.1 and 3.2 hereof, a certificate in
substantially the form of Annex B hereto as to the satisfaction of such
conditions (the "Certificate"); and
3.4 TriNet shall have paid to Tenant, on a date in October, 1997, the
Amendment Fee, as set forth in Section 2.1 hereof.
4. Miscellaneous.
4.1 Notification of Change. Tenant will notify Landlord within ten (10)
business days after entering into any agreement which modifies, amends or
replaces Section 9.09 of the Revolving Credit Agreement as originally in effect,
and will provide Landlord with a true and complete copy of such agreement.
4.2 Certificate of Compliance. From and after the Effective Date, Tenant
will deliver to Landlord within 60 days after the end of each of the first three
fiscal quarters and within 120 days after the end of each fiscal year a
certificate, signed by a financial officer of Tenant having knowledge thereof,
setting forth the calculations by which compliance or non-compliance with the
leverage covenant is established and including therewith copies of the relevant
financial statements in connection with such calculations.
4.3 Tenant will use its best efforts to cause SC International Services,
Inc. to perform its obligations under Section 4(a) of that certain Guaranty,
dated as of September 22, 1995, by SC International Services, Inc., Onex Food
Services, Inc., Sky Chefs, Inc. and Caterair International, Inc. (II).
4.4 Simultaneously with the execution and delivery of this Sixth
Amendment, TriNet is executing and delivering to Tenant a waiver of Tenants
compliance with the "net worth" covenant set forth in Section 15(l) of the
Lease, which waiver is effective from the date of delivery of the Certificate
through and including the Effective Date.
6
<PAGE> 7
4.5 This Sixth Amendment may be executed in any number of counterparts,
each of which shall constitute and original, and all of which together shall
constitute one and the same instrument.
4.6 In all respects, including all matters of construction, validity and
performance, this Sixth Amendment shall be governed by, and construed and
enforced in accordance with the laws of the State of New York applicable to
contracts made and performed in such state without regard to principles thereof
regarding conflicts of laws, and any applicable laws of the United States of
America.
4.7 This Sixth Amendment and the Lease supersede all prior agreements
(whether written or oral) between the parties with respect to the subject matter
thereof, represent the final agreement between the parties with respect thereto,
and may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements between the parties.
4.8 Neither party may assign or otherwise transfer its rights or
obligations hereunder.
4.9 Except as specifically amended above, the Lease, and all related
documents are and shall continue to be in full force and effect and are hereby
ratified and confirmed in all respects.
4.10 Tenant hereby agrees, upon receipt of the Amendment Fee, as
contemplated by Sections 2.1 and 3.4 hereof, to promptly execute and deliver to
TriNet a receipt, dated the date of receipt of such payement, acknowledging
receipt by Tenant thereof.
7
<PAGE> 8
IN WITNESS WHEREOF, this Sixth Amendment has been duly executed by the
parties hereto, and is effective as of the date first above written.
CATERAIR INTERNATIONAL CORPORATION
By: /s/ Terry Roueche
--------------------------------
Terry Roueche
Vice President
TRINET ESSENTIAL FACILITIES VIII R, INC.
By: /s/ Mark S. Whiting
--------------------------------
Mark S. Whiting
President and Chief Executive Officer
8
<PAGE> 9
Annex A
Section 9.O9
(Leverage Covenant)
9
<PAGE> 10
9.09 Combined Leverage Ratio. The Borrower and Caterair will not
permit the Combined Leverage Ratio at any time during a period set forth below
to be greater than the ratio set forth opposite such period below:
Period Ratio
------ -----
Fiscal quarter ending September 30, 1997 4.75:1.00
Fiscal quarter ending December 31, l997 4.75.1.00
Fiscal quarter ending March 31, 1998 4.75:1.00
Fiscal quarter ending June 30, 1998 4.75:1.00
Fiscal quarter ending September 30, 1998 4.75:1.00
Fiscal quarter ending December 31, 1998 4.75:1.00
Fiscal quarter ending March 31, 1999 4.75:1.00
Fiscal quarter ending June 30, 1999 4.75:1.00
Fiscal quarter ending September 30, 1999 4.75:1.00
October 1, 1999 through and including December 30, 1999 4.75:1.00
December 31, 1999 through and including March 31, 2000 4.50:1.00
Fiscal quarter ending June 30, 2000 4.50:1.00
Fiscal quarter ending September 30, 2000 4.50:1.00
October 1, 2000 through and including December 30, 2000 4.50:1.00
December 31, 2000 through and including March 31, 2001 4.00:1.00
Fiscal quarter ending June 30, 2001 4.00:1.00
Fiscal quarter ending September 30, 2001 4.00:1.00
October 1, 2001 through and including December 30, 2001 4.00:1.00
December 31, 2001 and thereafter 3.50:1.00
-84-
<PAGE> 11
Annex B
CATERAIR INTERNATIONAL CORPORATION
CERTIFICATE AS TO CONDITIONS PRECEDENT
Reference is hereby made to that certain Sixth Amendment to Lease
Agreement (the "Sixth Amendment"), dated as of August 22, 1997, between TriNet
Essential Facilities, [VIII R][X], Inc. ("TriNet") and Caterair International
Corporation ("Caterair"). Capitalized terms used but not otherwise defined in
this Certificate have the respective meanings ascribed to such terms in the
Sixth Amendment.
This Certificate is the certificate contemplated pursuant to Section 3.3
of the Sixth Amendment, and is being delivered pursuant to such Section 3.3.
As of the date hereof, each of the conditions precedent set forth in
Section 3.1 and 3.2 of the Sixth Amendment to the effectiveness of the
amendments to the Lease contemplated by the Sixth Amendment have occurred.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as to
Conditions Precedent as of the ___ day of ____________, 1997.
CATERAIR INTERNATIONAL CORPORATION
By:
-----------------------------
Name:
Title:
10
<PAGE> 1
EXHIBIT 10.28.7
LIMITED WAIVER
TRINET ESSENTIAL FACILITIES VIIIR, INC. ("TriNet") is entering into this
Limited Waiver as of August 22, 1997 (but effective only upon delivery of the
Certificate hereinafter mentioned and thereupon with no further action by the
parties being necessary) with respect to the eight separate Lease Agreements,
each dated as of May 15, 1993 between TriNet, as landlord, and Caterair
International Corporation ("Tenant"), as tenant, as amended by First Amendment
to Lease Agreement dated as of September 22, 1995, the Second Amendment to Lease
Agreement dated as of December 1, 1995, the Third Amendment to Lease Agreement
dated as of June 1, 1996, the Fourth Amendment to Lease Agreement dated as of
December 2, 1996 and the Fifth Amendment to Lease Agreement dated as of June 23,
1997 (collectively, the "Leases).
PRELIMINARY STATEMENT
Paragraph 15(l) of the Leases establishes a net worth test for Tenant (the
Net Worth Test"), the violation of which constitutes an Event of Default under
the Leases. Tenant intends to enter into a series of transactions which will
likely cause it to violate the Net Worth Test. Landlord and Tenant propose to
enter into a further amendment to the Leases, to be effective at a future date
(the "Contemplated Amendment"), which will remove the Net Worth Test and
substitute certain other tests in its place. Based on Tenant's certificate to
the effect that the conditions set forth in section 3.1 and 3.2 of the current
draft of the Contemplated Amendment have been satisfied (the "Certificate"),
TriNet is prepared to waive such default under paragraph 15(l) of the Lease
until the effectiveness of the Contemplated Amendment.
AGREEMENTS
NOW THEREFORE, in consideration of the agreements herein made, the parties
hereto hereby agree as follows, each agreement herein being contingent upon each
other agreement:
1. TriNet hereby waives any breach of, and compliance by Tenant with, the
Net Worth Test contained in paragraph 15(l) of the Leases and any Event of
Default that would result therefrom for the period commencing on the date hereof
and ending on the effectiveness of the Contemplated Amendment.
2. The foregoing waiver shall not be construed as waiving any other
default or Event of Default under the Leases.
<PAGE> 2
IN WITNESS WHEREOF, TriNet has caused this Limited Waiver to be duly
executed as of the date first above set forth to be effective only upon delivery
to TriNet of the Certificate (and thereupon with no further action by the
parties being necessary).
TriNet Essential Facilities VIIIR, Inc.
By: /s/ Mark S. Whiting
-----------------------------------
-2-
<PAGE> 1
EXHIBIT 10.29
GUARANTY
This Guaranty (the "Guaranty") is made as of the 22nd day of
September, 1995 by SC International Services, Inc. ("SCIS"), Sky Chefs, Inc.
("Sky Chefs"), Onex Food Services, Inc. ("OFSI") and Caterair International,
Inc. (II) ("CII", together with SCIS, Sky Chefs and OFSI, the "Guarantors" and
individually, the "Guarantor") for the benefit of TriNet Essential Facilities
VIII R, Inc. ("Landlord").
R E C I T A L S
WHEREAS, Landlord and Caterair International Corporation ("Tenant")
have entered into a Lease Agreement (the "Original Lease Agreement") as
described on, and relating to the properties set forth in, Exhibit A hereto;
WHEREAS, as a condition to entering into an amendment to the
Original Lease Agreement with Tenant (the Original Lease Agreement as so amended
the "Lease"), and to induce Landlord to do so, Landlord has required that
Guarantors guarantee the payment of rent and any and all other sums and charges
payable by Tenant under the Lease and guarantee the full and timely performance
of all of the obligations, covenants and terms to be performed by Tenant under
the Lease, in accordance with the terms of this Guaranty; and
WHEREAS, OFSI, Tenant and Caterair Holdings Corporation have entered
into a Master Agreement, dated as of April 26, 1995, and, in consideration of
the transactions contemplated therein, Guarantors have agreed to enter into this
Guaranty;
NOW, THEREFORE, in consideration of Landlord's agreement to amend
the Original Lease Agreement and as a material inducement to Landlord to do so,
Guarantors covenant and agree with Landlord as follows:
1. Definitions. Unless otherwise expressly provided in this Guaranty
or unless capitalized only for grammatical reasons, capitalized terms used in
this Guaranty shall have the meanings assigned to them in the Original Lease
Agreement.
2. Guaranty. (a) Guarantors hereby jointly and severally
unconditionally guarantee the due and punctual payment and performance of rent
and any and all other sums and charges payable by Tenant under the Lease and the
full and timely performance of all of Tenant's obligations, covenants and terms
to be performed or observed by Tenant under the Lease.
(b) If Tenant shall default in the payment of any rent or
other sums or charges to be paid by Tenant or the performance or observance of
any of the obligations, covenants or terms to be observed or performed by Tenant
under the Lease, Guarantors shall pay such rent and other sums and charges to
Landlord with any arrears thereof, and shall perform and fulfill all of such
obligations, covenants and terms.
<PAGE> 2
3. Continuing Guaranty.
(a) This Guaranty shall be enforceable against each of the
Guarantors without the necessity for any suit or proceedings on Landlord's part
of any kind or nature whatsoever against Tenant, and without the necessity of
any notice of nonpayment or nonperformance (except as may be required under the
Lease), or nonobservance of any notice of acceptance of this Guaranty or of any
other notice of demand to which each Guarantor might otherwise be entitled, all
of which each Guarantor hereby expressly waives; and each of the Guarantors
hereby expressly agrees that the validity of this Guaranty and the obligations
of each Guarantor hereunder shall in nowise be terminated, affected, diminished
or impaired by reason of the assertion or the failure to assert by Landlord
against Tenant of any of the rights or remedies reserved to Landlord pursuant to
the provisions of the Lease.
(b) This Guaranty shall be a continuing Guaranty, and the
liability of each Guarantor hereunder shall in no way be affected, modified or
diminished by reason of any assignment by Tenant, or by reason of any dealings
or transactions or matter or thing occurring between Landlord and Tenant, or by
reason of any bankruptcy, insolvency, reorganization, arrangement, assignment
for the benefit of creditors, receivership or trusteeship affecting Tenant,
whether or not notice thereof or of any thereof is given to Guarantors.
Guarantors agree that, in the event of the rejection or disaffirmance of the
Lease by Tenant or Tenant's trustee in bankruptcy pursuant to bankruptcy law or
any other law affecting creditor rights, Guarantors shall, if Landlord so
requests, select one of the Guarantors, reasonably satisfactory to Landlord, to
have all of the rights and obligations of Tenant under the Lease and such
Guarantor shall assume all obligations and liabilities of Tenant under the
Lease, to the same extent as if such Guarantor had become originally named
instead of Tenant as a party to such document and there had been no such
rejection or disaffirmance, and such Guarantor shall affirm such assumption in
writing at the request of Landlord upon or after such rejection or
disaffirmance. Such Guarantor, upon such assumption, shall have all rights of
Tenant under the Lease.
(c) Each Guarantor hereby consents that the obligations and
liabilities of Tenant under the Lease may, from time to time, be renewed,
extended, amended, modified, compromised, released or waived by Landlord, all
without notice to or assent by Guarantors, and each Guarantor shall remain bound
hereunder in respect of the obligations of Tenant under the Lease as same shall
have been renewed, extended, modified, compromised, released or waived. A
Guarantor's obligations hereunder shall not terminate notwithstanding that such
Guarantor has transferred its interest in Tenant to another entity or person.
4. Miscellaneous.
(a) SCIS shall deliver to Landlord the following information:
within 120 days after the end of each fiscal year of SCIS, an audited balance
sheet of SCIS and its consolidated subsidiaries as at the end of such year, an
audited statement of profits and losses of SCIS and its consolidated
subsidiaries for such year, and an audited statement of change in the financial
position of SCIS and its consolidated subsidiaries for such year, setting forth
in each case, in comparative form, the corresponding figures for the preceding
fiscal year in
2
<PAGE> 3
reasonable detail and scope and certified by independent certified public
accountants of recognized national standing selected by SCIS; and within 60 days
after the end of each of the first three fiscal quarters of SCIS, a balance
sheet of SCIS and its consolidated subsidiaries as at the end of such quarter,
statements of profits and losses of SCIS and its consolidated subsidiaries for
such quarter and a statement of change in financial position of SCIS and its
consolidated subsidiaries for such quarter, setting forth in each case, in
comparative form, the corresponding figures for the similar quarter of the
preceding year, in reasonable detail and scope, and certified to be true and
complete by a financial officer of SCIS having knowledge thereof; the foregoing
financial statements all being prepared in accordance with generally accepted
accounting principles consistently applied. If SCIS ceases to be a public
company subject to federal securities law reporting requirements, Landlord shall
keep any non-public financial information with respect to SCIS furnished by SCIS
confidential and shall not disclose such information; provided, however, that
such information may be disclosed (i) to its officers, directors, employees,
agents, attorneys and accountants in connection with acting as Landlord under
the Lease, (ii) to lenders or institutional investors in connection with
arranging, moving or restructuring debt secured by a mortgage lien on the
Premises or an assignment of the Lease, so long as any such lender or investor
shall execute a confidentiality agreement agreeing not to disclose such
financial information, (iii) to potential purchasers in connection with the sale
of any interest in the Premises, so long as any such purchaser shall execute a
confidentiality agreement agreeing not to disclose such financial information,
(iv) in connection with the enforcement of Landlord's rights and remedies
hereunder, and (v) as may be required by any governmental or other regulatory
entity having jurisdiction or authority over Landlord, or over any lender or
investor.
(b) SCIS, upon five business days advance notice, will permit
Landlord and its professional representatives to visit SCIS's offices and
discuss SCIS's affairs and finances (insofar as they relate to the Premises or
the Lease) with appropriate officers, and will make available such information
as Landlord may reasonably request bearing on SCIS, the Premises or the Lease,
provided that Landlord agrees to maintain the confidentiality of information
denoted as non-public information except that such information may be provided
as required by governmental regulation or court order and may be provided on a
confidential basis to Landlord's counsel and accountants.
(c) All of Landlord's rights and remedies under the Lease or
under this Guaranty are intended to be distinct, separate and cumulative and no
such right or remedy therein or herein mentioned is intended to be in exclusion
of or a waiver of any of the others.
(d) Whenever used in this Guaranty, the terms Guarantor,
Landlord, and Tenant shall include the respective successors and assigns of the
party named as such, including any successor or assign resulting from any
merger, consolidation or sale of assets.
(e) As a further inducement to Landlord to make and enter into
the amendment to the Original Lease Agreement and in consideration thereof,
Landlord and Guarantors covenant and agree that in any action or proceeding
brought on, under or by virtue of this Guaranty, Landlord and Guarantors shall
and do hereby waive trial by jury.
3
<PAGE> 4
(f) Guarantors shall pay all reasonable legal expenses
incurred by Landlord to enforce this Guaranty, provided Landlord provides
evidence of such fees and expenses to Guarantor.
(g) This Guaranty shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has executed this Guaranty
as of this day written above.
SC INTERNATIONAL SERVICES, INC.
By: /s/ Thomas J. Lee
--------------------------------------
Name:
Title:
SKY CHEFS, INC.
By: /s/ Thomas J. Lee
--------------------------------------
Name:
Title:
ONEX FOOD SERVICES, INC. .
By: /s/ Thomas J. Lee
--------------------------------------
Name:
Title:
CATERAIR INTERNATIONAL, INC. (II)
By: /s/ Thomas J. Lee
--------------------------------------
Name:
Title:
4
<PAGE> 5
EXHIBIT A
Each Lease Agreement was made by and between Caterair International Corporation
and TriNet Essentials Facilities VIII R, Inc. and is dated as of May 15,
1993. The numbers in parentheses indicate identification numbers located on the
Lease Agreements themselves.
Property
(#368) Burlingame, CA
(#701) Millbrae, CA
(#318) Seattle, WA
(#397) Bloomington, MN
(#303) Reno, NV
(#361) Miami, FL
(#366) Miami, FL
(#702) Miami, FL
<PAGE> 1
EXHIBIT 10.30
GUARANTY
This Guaranty (the "Guaranty") is made as of the 22nd day of
September, 1995 by SC International Services, Inc. ("SCIS"), Sky Chefs, Inc.
("Sky Chefs"), Onex Food Services, Inc. ("OFSI") and Caterair International,
Inc. (II)("CII", together with SCIS, Sky Chefs and OFSI, the "Guarantors" and
individually, the "Guarantor") for the benefit of TriNet Essential Facilities X,
Inc. ("Landlord").
RECITALS
WHEREAS, Landlord and Caterair International Corporation ("Tenant")
have entered into a Lease Agreement (the "Original Lease Agreement") as
described on, and relating to the properties set forth in, Exhibit A hereto;
WHEREAS, as a condition to entering into an amendment to the
Original Lease Agreement with Tenant (the Original Lease Agreement as so amended
the "Lease"), and to induce Landlord to do so, Landlord has required that
Guarantors guarantee the payment of rent and any and all other sums and charges
payable by Tenant under the Lease and guarantee the full and timely performance
of all of the obligations, covenants and terms to be performed by Tenant under
the Lease, in accordance with the terms of this Guaranty; and
WHEREAS, OFSI, Tenant and Caterair Holdings Corporation have entered
into a Master Agreement, dated as of April 26, 1995, and, in consideration of
the transactions contemplated therein, Guarantors have agreed to enter into this
Guaranty;
NOW, THEREFORE, in consideration of Landlord's agreement to amend
the Original Lease Agreement and as a material inducement to Landlord to do so,
Guarantors covenant and agree with Landlord as follows:
1. Definitions. Unless otherwise expressly provided in this Guaranty
or unless capitalized only for grammatical reasons, capitalized terms used in
this Guaranty shall have the meanings assigned to them in the Original Lease
Agreement.
2. Guaranty. (a) Guarantors hereby jointly and severally
unconditionally guarantee the due and punctual payment and performance of rent
and any and all other sums and charges payable by Tenant under the Lease and the
full and timely performance of all of Tenant's obligations, covenants and terms
to be performed or observed by Tenant under the Lease.
(b) If Tenant shall default in the payment of any rent or
other sums or charges to be paid by Tenant or the performance or observance of
any of the obligations, covenants or terms to be observed or performed by Tenant
under the Lease, Guarantors shall pay such rent and other sums and charges to
Landlord with any arrears thereof, and shall perform and fulfill all of such
obligations, covenants and terms.
<PAGE> 2
3. Continuing Guaranty.
(a) This Guaranty shall be enforceable against each of the
Guarantors without the necessity for any suit or proceedings on Landlord's part
of any kind or nature whatsoever against Tenant, and without the necessity of
any notice of nonpayment or nonperformance (except as may be required under the
Lease), or nonobservance of any notice of acceptance of this Guaranty or of any
other notice of demand to which each Guarantor might otherwise be entitled, all
of which each Guarantor hereby expressly waives; and each of the Guarantors
hereby expressly agrees that the validity of this Guaranty and the obligations
of each Guarantor hereunder shall in nowise be terminated, affected, diminished
or impaired by reason of the assertion or the failure to assert by Landlord
against Tenant of any of the rights or remedies reserved to Landlord pursuant to
the provisions of the Lease.
(b) This Guaranty shall be a continuing Guaranty, and the
liability of each Guarantor hereunder shall in no way be affected, modified or
diminished by reason of any assignment by Tenant, or by reason of any dealings
or transactions or matter or thing occurring between Landlord and Tenant, or by
reason of any bankruptcy, insolvency, reorganization, arrangement, assignment
for the benefit of creditors, receivership or trusteeship affecting Tenant,
whether or not notice thereof or of any thereof is given to Guarantors.
Guarantors agree that, in the event of the rejection or disaffirmance of the
Lease by Tenant or Tenant's trustee in bankruptcy pursuant to bankruptcy law or
any other law affecting creditor rights, Guarantors shall, if Landlord so
requests, select one of the Guarantors, reasonably satisfactory to Landlord, to
have all of the rights and obligations of Tenant under the Lease and such
Guarantor shall assume all obligations and liabilities of Tenant under the
Lease, to the same extent as if such Guarantor had become originally named
instead of Tenant as a party to such document and there had been no such
rejection or disaffirmance, and such Guarantor shall affirm such assumption in
writing at the request of Landlord upon or after such rejection or
disaffirmance. Such Guarantor, upon such assumption, shall have all rights of
Tenant under the Lease.
(c) Each Guarantor hereby consents that the obligations and
liabilities of Tenant under the Lease may, from time to time, be renewed,
extended, amended, modified, compromised, released or waived by Landlord, all
without notice to or assent by Guarantors, and each Guarantor shall remain bound
hereunder in respect of the obligations of Tenant under the Lease as same shall
have been renewed, extended, modified, compromised, released or waived. A
Guarantor's obligations hereunder shall not terminate notwithstanding that such
Guarantor has transferred its interest in Tenant to another entity or person.
4. Miscellaneous
(a) SCIS shall deliver to Landlord the following information:
within 120 days after the end of each fiscal year of SCIS, an audited balance
sheet of SCIS and its consolidated subsidiaries as at the end of such year, an
audited statement of profits and losses of SCIS and its consolidated
subsidiaries for such year, and an audited statement of change in the financial
position of SCIS and its consolidated subsidiaries for such year, setting forth
in each case, in comparative form, the corresponding figures for the preceding
fiscal year in
2
<PAGE> 3
reasonable detail and scope and certified by independent certified public
accountants of recognized national standing selected by SCIS; and within 60 days
after the end of each of the first three fiscal quarters of SCIS, a balance
sheet of SCIS and its consolidated subsidiaries as at the end of such quarter,
statements of profits and losses of SCIS and its consolidated subsidiaries for
such quarter and a statement of change in financial position of SCIS and its
consolidated subsidiaries for such quarter, setting forth in each case, in
comparative form, the corresponding figures for the similar quarter of the
preceding year, in reasonable detail and scope, and certified to be true and
complete by a financial officer of SCIS having knowledge thereof; the foregoing
financial statements all being prepared in accordance with generally accepted
accounting principles consistently applied. If SCIS ceases to be a public
company subject to federal securities law reporting requirements, Landlord shall
keep any non-public financial information with respect to SCIS furnished by SCIS
confidential and shall not disclose such information; provided, however, that
such information may be disclosed (i) to its officers, directors, employees,
agents, attorneys and accountants in connection with acting as Landlord under
the Lease, (ii) to lenders or institutional investors in connection with
arranging, modifying or restructuring debt secured by a mortgage lien on the
Premises or an assignment of the Lease, so long as any such lender or investor
shall execute a confidentiality agreement agreeing not to disclose such
financial information, (iii) to potential purchasers in connection with the sale
of any interest in the Premises, so long as any such purchaser shall execute a
confidentiality agreement agreeing not to disclose such financial information,
(iv) in connection with the enforcement of Landlord's rights and remedies
hereunder, and (v) as may be required by any governmental or other regulatory
entity having jurisdiction or authority over Landlord, or over any lender or
investor.
(b) SCIS, upon five business days advance notice, will permit
Landlord and its professional representatives to visit SCIS's offices and
discuss SCIS's affairs and finances (insofar as they relate to the Premises or
the Lease) with appropriate officers, and will make available such information
as Landlord may reasonably request bearing on SCIS, the Premises or the Lease,
provided that Landlord agrees to maintain the confidentiality of information
denominated as non-public information except that such information may be
provided as required by governmental regulation or court order and may be
provided on a confidential basis to Landlord's counsel and accountants.
(c) All of Landlord's rights and remedies under the Lease or
under this Guaranty are intended to be distinct, separate and cumulative and no
such right or remedy therein or herein mentioned is intended to be in exclusion
of or a waiver of any of the others.
(d) Whenever used in this Guaranty, the terms Guarantor,
Landlord, and Tenant shall include the respective successors and assigns of the
party named as such, including any successor or assign resulting from any
merger, consolidation or sale of assets.
(e) As a further inducement to Landlord to make and enter into
the amendment to the Original Lease Agreement and in consideration thereof,
Landlord and Guarantors covenant and agree that in any action or proceeding
brought on, under or by virtue of this Guaranty, Landlord and Guarantors shall
and do hereby waive trial by jury.
3
<PAGE> 4
(f) Guarantors shall pay all reasonable legal expenses
incurred by Landlord to enforce this Guaranty, provided Landlord provides
evidence of such fees and expenses to Guarantors.
(g) This Guaranty shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of
this day written above.
SC INTERNATIONAL SERVICES, INC.
By: /s/ Thomas J. Lee
---------------------------
Name:
Title:
SKY CHEFS, INC.
By: /s/ Thomas J. Lee
---------------------------
Name:
Title:
ONEX FOOD SERVICES, INC.
By: /s/ Thomas J. Lee
---------------------------
Name:
Title:
CATERAIR INTERNATIONAL, INC. (II)
By: /s/ Thomas J. Lee
---------------------------
Name:
Title:
4
<PAGE> 5
EXHIBIT A
Each Lease Agreement was made by and between Caterair International Corporation
and TriNet Essential Facilities X, Inc. and is dated as of May 15, 1993. The
numbers in parentheses indicate identification numbers located on the Lease
Agreements themselves.
Property
(#376) Philadelphia, PA
(#351) Astoria, NY
(#375) Astoria, NY
(#479) Orlando, FL
5
<PAGE> 1
EXHIBIT 10.38
ACQUISITION AGREEMENT
BETWEEN
LSG LUFTHANSA SERVICE USA CORPORATION
AND
SKY CHEFS, INC.
November 30, 1995
<PAGE> 2
ACQUISITION AGREEMENT
This ACQUISITION AGREEMENT ("Agreement") is made and entered into this
30th day of November, 1995, by and between LSG LUFTHANSA SERVICE USA CORPORATION
("LSG"), a corporation organized under the laws of the State of Delaware, and
SKY CHEFS, INC. ("Sky Chefs"), a corporation organized under the laws of the
State of Delaware. Each of LSG and Sky Chefs may be referred to herein as a
"Party" and both may be referred to herein as "the Parties."
R E C I T A L S
WHEREAS, LSG operates flight kitchen catering facilities at the San
Francisco International Airport and the Miami International Airport; and
WHEREAS, LSG desires to sell all of its business and assets in these
facilities to Sky Chefs, and Sky Chefs desires to acquire all of LSG's business
and assets in these facilities;
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, and agreements, and upon the terms and subject to the
conditions hereinafter set forth, the Parties do hereby agree, intending to be
legally bound, as follows:
ARTICLE I
DEFINITIONS
ASSETS shall have the meaning set forth in Article 2.1.
CATERAIR means Caterair International Corporation, a corporation
organized under the laws of the State of Delaware.
CLOSING shall have the meaning set forth in Article 4.1.
CUSTOMER CONTRACTS shall have the meaning set forth in Article 2.2.
DISSOLUTION AGREEMENT means the Dissolution Agreement, dated January
21, 1994, between LSG and Caterair, dissolving the LSG-Caterair joint venture.
EQUIPMENT LEASE AGREEMENT means the Equipment Lease Agreement, dated
1990, between Caterair and the LSG-Caterair
<PAGE> 3
joint venture. This agreement was subsequently assigned to LSG in the
Dissolution Agreement.
KITCHEN LEASE AGREEMENTS mean the Kitchen Lease Agreements, each dated
January 15, 1990, between Caterair and the LSG-Caterair joint venture, for the
kitchen catering facilities at San Francisco International Airport and Miami
International Airport. These agreements were subsequently assigned to LSG in the
Dissolution Agreement.
KITCHENS mean the airline kitchen catering facilities that LSG operates
at the San Francisco International Airport and the Miami International Airport.
MANAGEMENT SERVICES AGREEMENT means the Management Services Agreement,
dated January 12, 1995, between LSG and Sky Chefs.
MIA means Miami International Airport.
MIA ASBESTOS LIABILITY means, as described in Section 5.10 of the
Dissolution Agreement, and expressly assumed by Caterair therein, any liability
with respect to the underground storage tanks at the MIA Kitchen and the
presence of asbestos containing material within the MIA Kitchen.
PHH FLEET AMERICA LEASE AGREEMENT means the PHH Fleet America Truck
Lease Assumption Agreement, dated January 21, 1994, between LSG, Caterair, and
PHH Fleet America.
SFO means San Francisco International Airport.
TERMINATION AGREEMENT shall have the meaning set forth in Article 3.2.
ARTICLE 2
ACQUISITION OF ASSETS; ASSUMPTION OF LIABILITIES
2.1 PURCHASE AND SALE OF ASSETS
At the Closing, LSG shall grant, sell, convey, assign, transfer and
deliver to Sky Chefs, and Sky Chefs shall purchase from LSG, upon and subject to
the terms and conditions of this Agreement, each in reliance on the
representations, warranties and covenants of the other party contained herein,
all right, title and interest of LSG in the following Assets, free and clear of
all encumbrances, liens, or other restrictions on transfer (other than those
caused or incurred by Sky Chefs after January 12, 1995):
- 2 -
<PAGE> 4
1. all machinery, equipment tools, furniture, furnishings,
leasehold improvements, goods, other tangible personal
property including, without limitation, the items set forth on
Schedule 2.1 attached hereto;
2. all supplies and inventories at or ordered for delivery to the
Kitchens;
3. to the extent permitted by applicable law or the terms of
relevant instruments, all rights under any instrument,
registration, license, certificate of occupancy, other permit
or approval of any nature, or other similar document,
commitment, arrangement, undertaking, practice or
authorization relating to the Kitchens; and
4. all rights to any insurance recovery or right to recovery
arising from any loss or damage to any assets referred to in
clause (a), (b) or (c) of this section.
(b) Sky Chefs hereby acknowledges that all the Assets are being
conveyed on an "as is - where is" basis and LSG makes no representation or
warranty as to the condition of the Assets.
2.2 CUSTOMER CONTRACTS
LSG shall transfer to Sky Chefs all of the Customer Contracts at the
Kitchens as set forth on Schedule 2.2 and such transfers shall take effect the
date of the Closing. Notwithstanding the preceding sentence, any Customer
Contracts which, by their terms, require the consent of the relevant customer in
order to be transferred to Sky Chefs, and for which such consent has not been
received as of the date of the Closing, shall be transferred to Sky Chefs as
soon as such consent can practically be obtained following the Closing.
Receivables due under Customer Contracts for services provided from the Kitchens
prior to the Closing shall remain the property of LSG.
2.3 PURCHASE PRICE
The purchase price being paid by Sky Chefs to LSG simultaneously with
the execution of this Agreement for all of LSG's business and Assets in the
Kitchens is U.S. $3,165,000.
2.4 ASSUMPTION OF LIABILITIES
(a) Except as provided in Article 2.4(b), Sky Chefs shall assume all
liabilities and obligations associated with the Kitchens and the Assets arising
after the date of the Closing. Sky Chefs shall not assume any liabilities or
obligations of LSG
- 3 -
<PAGE> 5
related to the operation of the Kitchens or the Assets arising on or prior to
the date of the Closing.
(b) LSG and Sky Chefs hereby acknowledge that any liability with
respect to the MIA Asbestos Liability shall not be assumed by Sky Chefs pursuant
to this Agreement.
ARTICLE 3
TERMINATION OF LEASES AND CONTRACTS
3.1 MANAGEMENT SERVICES AGREEMENT
At or prior to the Closing, the Management Services Agreement between
LSG and Sky Chefs, attached hereto as Schedule 3.1 (a), shall be terminated
pursuant to the termination letter attached hereto as Schedule 3.1 (b). LSG
represents and warrants that it has paid all amounts due and to Sky Chefs under
the Management Services Agreement through November 30, 1995. Notwithstanding the
foregoing, LSG hereby agrees to make the final payment of the service fee under
Section 4.1 of the Management Services Agreement in accordance with the terms
thereof.
3.2 TERMINATION OF LSG-CATERAIR AGREEMENTS
Prior to the Closing, Caterair and LSG shall have entered into a
Termination Agreement (the "Termination Agreement"), attached hereto as Schedule
3.2, terminating any and all agreements between LSG and Caterair relating to the
Kitchens (with such exceptions as provided herein or therein). Pursuant to the
Termination Agreement, the following agreements shall be terminated:
1. the Kitchen Lease Agreements; and
2. the Equipment Lease Agreement.
LSG (i) represents and warrants that it has paid all amounts due and
owing to Caterair under the Kitchen Lease Agreements and the Equipment Lease
Agreement through November 30, 1995, and (ii) hereby agrees to pay to Caterair
any amounts as contemplated by the second sentence of Section 2 of the
Termination Agreement.
3.3 TERMINATION OF PHH FLEET AMERICA LEASE AGREEMENT
At or prior to the Closing, the PHH Fleet America Lease Agreement
shall be terminated as between LSG and Caterair pursuant to the Agreement of
Termination, attached hereto as Schedule 3.3(a). As soon as is practicable
following the
- 4 -
<PAGE> 6
Closing, the PHH Fleet America Lease Agreement shall be assigned by LSG to
Caterair, pursuant to a Lease Assumption Agreement, in substantially the form
attached hereto as Schedule 3.3(b). LSG hereby represents and acknowledges that
it has paid to PHH all amounts due and owing to PHH under the PHH Fleet America
Lease Agreement through November 30, 1995.
ARTICLE 4
CLOSING
4.1 CLOSING
The Closing of the transactions contemplated herein shall take place at
Wilmer, Cutler & Pickering on November 30, 1995, or such other date as may be
mutually agreed upon in writing by LSG and Sky Chefs.
4.2 DELIVERY OBLIGATIONS OF LSG
At the Closing, LSG shall deliver:
(a) documents evidencing transfer to Sky Chefs of all Assets at
the Kitchens including, without limitation, all of the
supplies and inventories at the Kitchens and any recovery
right referred to in Section 2.1(a)(4);
(b) documents executed by it evidencing the termination of the
Management Services Agreement;
(c) documents executed by it evidencing the termination of the
Kitchen Lease Agreements;
(d) documents executed by it evidencing the termination of the
Equipment Lease Agreement;
(e) documents executed by it evidencing the termination of the PHH
Fleet America Lease Agreement as between LSG and Caterair;
(f) documents executed by it acknowledging receipt of the purchase
price; and
(g) to the extent required, documents evidencing consent of the
customers party to the contracts identified on Schedule 2.2.
- 5 -
<PAGE> 7
4.3 DELIVERY OBLIGATIONS OF SKY CHEFS
At the Closing, Sky Chefs shall deliver:
(a) the purchase price as set forth in Article 2.2 in immediately
available funds;
(b) documents executed by it evidencing the termination of the
Management Services Agreement; and
(c) documents executed by it acknowledging receipt by Sky Chefs of
all Assets and the transfer of certain Customer Contracts.
ARTICLE 5
REPRESENTATIONS, WARRANTIES, AND COVENANTS
5.1 REPRESENTATIONS, WARRANTIES, AND COVENANTS OF LSG. LSG represents,
warrants, and covenants to Sky Chefs, with respect to the transactions
contemplated herein, that:
(a) Organization and Authority of LSG. LSG is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Delaware and has the corporate power and
authority to enter into and perform this Agreement and the
transactions herein contemplated.
(b) Authorization of Agreement. The execution, delivery and
performance by LSG of this Agreement have been duly authorized
by all requisite corporate action. This Agreement has been
duly executed and delivered by LSG and constitutes and will
constitute a legal, valid and binding obligation of LSG
enforceable against LSG in accordance with its terms, except
as may be limited by bankruptcy or similar laws affecting
creditors rights generally.
(c) No Conflicts. The execution, delivery and performance of this
Agreement by LSG do not violate or conflict with (i) the
certificate of incorporation or by-laws of LSG or (ii) any
judicial, administrative or regulatory order, judgment or
decree or arbitration award to which LSG is a party or by
which it or its properties are bound.
- 6 -
<PAGE> 8
(d) Assets. The Assets to be sold, transferred, or assigned to Sky
Chefs include all of the assets of LSG used at, or in the
operation of, the Kitchens.
(e) No Liens. Upon consummation of the transactions contemplated
by this Agreement and payment of the purchase price by Sky
Chefs to LSG, Sky Chefs shall acquire good and valid title to
all of the Assets free and clear of all liens, encumbrances
and other restrictions on transfer (other than those caused or
incurred by Sky Chefs after January 12, 1995).
5.2 REPRESENTATIONS, WARRANTIES, AND COVENANTS OF SKY CHEFS. Sky Chefs
represents, warrants, and covenants to LSG, with respect to the transactions
contemplated herein, that:
(a) Organization and Authority. Sky Chefs is a corporation duly
organized and is validly existing and in good standing under
the laws of the State of Delaware and has the corporate power
and authority to enter into and perform this Agreement and the
transactions herein contemplated.
(b) Authorization of Agreement. The execution, delivery and
performance by Sky Chefs of this Agreement have been duly
authorized by all requisite corporate action. This Agreement
has been duly executed and delivered by Sky Chefs and
constitutes and will constitute the legal, valid and binding
obligation of Sky Chefs, enforceable against it in accordance
with its terms, except as may be limited by bankruptcy or
similar laws affecting creditors' rights generally.
(c) No Conflicts, The execution, delivery and performance of this
Agreement by Sky Chefs do not violate or conflict with (i) the
certificate of incorporation or by-laws of Sky Chefs or (ii)
any judicial, administrative or regulatory order, judgment or
decree or arbitration award to which Sky Chefs is a party or
by which it or its properties are bound.
- 7 -
<PAGE> 9
ARTICLE 6
EMPLOYEE MATTERS
6.1 EMPLOYMENT
(a) LSG hereby acknowledges and agrees that, after the date of the
Closing, Sky Chefs shall be entitled to employ any and all of the employees of
LSG who are currently employed by LSG at the Kitchens. Sky Chefs shall be
entitled to set such terms and conditions of employment with respect to
post-Closing operations at the Kitchens as Sky Chefs deems appropriate under the
circumstances (including any modifications, reductions or alterations of any
previous terms and conditions of employment).
(b) LSG, as employer, and Sky Chefs, as the manager of the Kitchens
pursuant to the Management Services Agreement, has notified or will notify all
LSG employees at the Kitchens that their employment with LSG will cease
effective the Closing. Sky Chefs has notified or will notify all employees at
the Kitchens that they will be hired as employees by Sky Chefs, subject to such
qualifications and terms and conditions of employment as Sky Chefs may adopt,
effective immediately after the Closing. LSG and Sky Chefs have taken any and
all steps necessary to ensure the parties' compliance with any laws involving
notification of employees regarding this transaction. For purposes of this
Article, "all LSG employees" shall include persons on approved leave or
disability who remain employees of LSG.
6.2 COOPERATION IN LABOR MATTERS
After the date of the Closing, LSG, at its cost, shall provide Sky
Chefs with such information as it may reasonably request regarding LSG employees
and the terms and conditions of employment of LSG employees.
6.3 CONTINUATION HEALTH COVERAGE
Sky Chefs will assume any obligations LSG may have to offer
continuation health coverage to current or former LSG employees and their
beneficiaries at the employees' own costs and as required by COBRA or applicable
laws.
6.4 WITHDRAWAL FROM SKY CHEFS' PLANS
Sky Chefs will prepare all necessary documents and take all necessary
steps, with LSG's cooperation, to remove LSG as a participating employer in Sky
Chefs's employee pension and welfare benefit plans ("HERE plans") maintained
pursuant to the contract with the Hotel Employees and Restaurant Employees
International Union, AFL-CIO ("HERE"). Sky Chefs will make all necessary filings
with the Federal government with regard to the
- 8 -
<PAGE> 10
creation, operation, and unwinding of the arrangements described in the
preceding sentence, including any Form 5500s. Sky Chefs will assume any and all
liabilities relating to or arising under the operation of the HERE plans, as
they now exist or may be amended in the future, except for contributions
attributable to LSG's employees' participation in such plans from April 1, 1995,
through November 30, 1995 and except as otherwise specified in this Article,
including, specifically, any obligations with respect to retiree medical and
retiree life insurance coverage.
6.5 PENSION PLAN
LSG agrees that it will pay the Retirement Benefit Plan of Sky Chefs,
Inc. for employees represented by HERE (the "Pension Plan") that sum determined
by Hewitt Associates, as actuary for the Pension Plan, as representing the
normal cost for employees of LSG at the SFO and MIA Kitchens participating in
the Pension Plan with respect to the period from April 1, 1995 to and including
November 30, 1995, under the Pension Plan's normal actuarial methods and
assumptions, using the valuation to be prepared as of January 1, 1996. LSG shall
have no obligation to make this payment unless the actuary certifies that the
payment is presently deductible.
6.6 LSG 401(k) PLANS
Sky Chefs agrees to assume sponsorship of the LSG Lufthansa Service USA
Corporation Money$mart 401(k) Savings and Retirement Plan and of the LSG
Lufthansa Service USA Corporation Retirement Savings & Investment Plan, each
effective as of December 1, 1995, and LSG shall withdraw from sponsorship as of
that same date subject to such changes that Sky Chefs may implement subsequent
to Closing. LSG will make all contributions to both plans for the period ending
November 30, 1995 on or before the due dates specified by the plans.
ARTICLE 7
INDEMNIFICATION
7.1 GENERAL INDEMNIFICATION BY LSG
LSG shall indemnify and hold harmless Sky Chefs, Sky Chefs' affiliates,
and each of their respective officers, directors, employees and agents, from,
and shall reimburse Sky Chefs, Sky Chefs' affiliates, and each of their
respective officers, directors, employees and agents, for all losses,
liabilities, deficiencies, penalties, claims, damages or expenses (including,
but not limited to, costs of investigation and defense and reasonable attorneys'
fees) (collectively, "Damages") arising out of or in connection with:
- 9 -
<PAGE> 11
(a) any material inaccuracy in any representation or warranty by
LSG set forth in this Agreement;
(b) any material failure by LSG to perform or comply with any
agreement contained in this Agreement;
(c) any claim by any person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or
understanding alleged to have been made by any such person
with LSG (or any person acting on its behalf) in connection
with any of the transactions contemplated hereby;
(d) (i) any action taken (or not taken) by LSG on or prior to
the date of the Closing relating to the Assets or the
Kitchens, including, without limitation, relating to
any claim by an employee regarding any compensation
or terms and conditions of employment (other than
claims involving LSG and arising on or after January
12, 1995 solely as a result of action taken (or not
taken) by Sky Chefs in connection with its services
under the Management Services Agreement ("Sky Chefs
Management Services Claims"));
(ii) any claim or liability relating to the Kitchens or
the Assets arising on or prior to the date of the
Closing (excluding Sky Chefs Management Services
Claims);
(e) the use and occupancy of the Kitchens and the Assets or the
conduct of the business on the premises of the Kitchens,
including, without limitation, any act or omission by LSG, its
agents, contractors, employees, servants, lessees,
concessionaires, invitees and customers arising on or prior to
the date of Closing (other than Sky Chefs Management Services
Claims).
The foregoing indemnification shall apply whether or not such
liabilities and costs are in any way or to any extent caused, in whole or in
part, by any act or omission of any kind by Sky Chefs, provided only that Sky
Chefs shall not be entitled under this Article to receive indemnification for
that portion, if any, of any liabilities and costs which is proximately caused
by its own individual gross negligence or willful misconduct, as determined in a
final judgment. If any person (including LSG or any of its affiliates) alleges
such gross negligence or willful misconduct by Sky Chefs, the indemnification
provided for herein shall nonetheless be paid upon demand, subject to later
adjustment or reimbursement, until such time as a court of
- 10 -
<PAGE> 12
competent jurisdiction enters a final judgment as to the extent and effect of
the gross negligence or willful misconduct.
The foregoing indemnities shall be perpetual. Any amount to be paid
hereunder by LSG to any person or for which LSG has indemnified any person shall
be a demand obligation owing by LSG to Sky Chefs.
7.2 GENERAL INDEMNIFICATION BY SKY CHEFS
Sky Chefs shall indemnify and hold harmless LSG, LSG's affiliates and
each of their respective officers, directors, employees and agents from, and
shall reimburse LSG, LSG's affiliates and each of their respective officers,
directors, employees and agents for any Damages arising from or in connection
with:
(a) any material inaccuracy in any representation or warranty by
Sky Chefs set forth in this Agreement;
(b) any material failure by Sky Chefs to perform or comply with
any agreement contained in this Agreement;
(c) any claim by any person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or
understanding alleged to have been made by such person with
Sky Chefs (or any person acting on its behalf) in connection
with any of the transactions contemplated hereby;
(d) any action taken (or not taken) by Sky Chefs after the date of
the Closing of this Agreement with respect to the Kitchens
including claims arising from the HERE collective bargaining
agreement;
(e) any claim brought against LSG by Caterair relating to the
Kitchens which claim arose due to any action taken (or not
taken) after January 12, 1995;
(f) Sky Chefs Management Services Claims; and
(g) any claim brought against LSG by HERE under its Master
National Agreement with Sky Chefs and arising solely as a
result of the execution of this Agreement and the performance
of the transactions contemplated herein, including, without
limitation, any claim by HERE regarding any bargaining
obligation addressing the effects of the transactions
contemplated herein.
- 11 -
<PAGE> 13
The foregoing indemnification shall apply whether or not such
liabilities and costs are in any way or to any extent caused, in whole or in
part, by any act or omission of any kind by LSG, provided only that LSG shall
not be entitled under this Article to receive indemnification for that portion,
if any, of any liabilities and costs which is proximately caused by its own
individual gross negligence or willful misconduct, as determined in a final
judgment. If any person (including Sky Chefs or any of its affiliates) alleges
such gross negligence or willful misconduct by LSG, the indemnification provided
for herein shall nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent jurisdiction enters a
final judgment as to the extent and effect of the gross negligence or willful
misconduct.
The foregoing indemnities shall be perpetual. Any amount to be paid
hereunder by Sky Chefs to any person or for which Sky Chefs has indemnified any
person shall be a demand obligation owing by Sky Chefs to LSG.
7.3 PROCEDURE FOR INDEMNIFICATION
The obligations and liabilities of each party hereunder with respect to
their respective indemnities resulting from any claim or other assertion of
liability by third parties (hereinafter a "Claim"), shall be subject to the
following terms and conditions:
(a) The party seeking indemnification (the "Indemnified Party")
must give the other party or parties, as the case may be (the
"Indemnifying Party"), notice of any such Claim promptly after
the Indemnified Party receives notice hereof.
(b) The Indemnifying Party shall have the right to undertake, by
counsel or other representatives of its own choosing, the
defense of such Claim and may settle such Claim at the sole
expense of the Indemnifying Party.
(c) In the event that the Indemnifying Party shall elect not to
undertake such defense, or within a reasonable time after
notice of any such Claim from the Indemnified Party shall fail
to defend, the Indemnified Party (upon further written notice
to the Indemnifying Party) shall have the right to undertake
the defense, compromise or settlement of such Claim, by
counsel of its own choosing, on behalf of and for the account
and risk of the Indemnifying Party (subject to the right of
the Indemnifying Party to assume defense of such Claim
- 12 -
<PAGE> 14
at any time prior to settlement, compromise or final
determination thereof).
7.4 EXCLUSIVITY
This Article 7 provides the exclusive means by which a Party may assert
claims for indemnification against another Party with respect to the
transactions contemplated by this Agreement.
ARTICLE 8
MISCELLANEOUS
8.1 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the Parties
with respect to the subjects covered herein, and supersedes all prior oral or
written agreements, commitments or understandings with respect to the matters
provided herein.
8.2 GUARANTEE
LSG Lufthansa Service GmbH hereby guarantees the full and timely
performance by LSG under this Agreement. This guarantee is an independent
obligation that may be enforced against LSG Lufthansa Service GmbH before,
after, or without enforcement of LSG's obligations under this Agreement and
shall be enforceable notwithstanding any amendment of, or forbearance under,
this Agreement or any other event (other than the full and timely performance by
LSG) that would discharge the obligations of a surety or guarantor.
8.3 ARBITRATION
Any dispute, controversy or claim arising out of or relating to this
Agreement or breach hereof, shall be conducted in accordance with UNCITRAL
Rules. The arbitration shall be conducted in London in the English language
before a sole arbitrator. The parties shall attempt, by agreement, to nominate
the sole arbitrator. If the parties fail so to nominate a sole arbitrator within
30 days from the date when the claimant's request for arbitration has been
communicated to the other party, the appointing authority shall be the London
Court of International Arbitration acting in accordance with its rules for this
purpose.
8.4 GOVERNING LAW
This Agreement is subject to, and shall be construed in accordance
with, the laws of the State of Delaware.
- 13 -
<PAGE> 15
8.5 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
8.6 EXCLUSIVE BENEFICIARIES
This Agreement is intended for the exclusive benefit of the parties
hereto and their respective successors and permitted assigns. Nothing contained
herein shall be construed as granting any rights or benefits in or to any third
party, including current and former employees of LSG.
8.7 FURTHER ASSURANCES
On or after the date of the Closing, LSG and Sky Chefs hereby agree to
promptly execute, acknowledge and deliver any other assurances or documents and
take any other action reasonably requested by the other party hereto to effect
the transactions contemplated hereby.
- 14 -
<PAGE> 16
IN WITNESS WHEREOF, the parties hereto have caused this
Acquisition Agreement to be executed by their officers or other representatives
duly authorized, as of the day first above written.
Sky Chefs, Inc.
By: /s/ Patrick W. Tolbert
------------------------------
Title:
---------------------------
LSG Lufthansa Service USA Corporation
By: /s/ Authorized Signatory
------------------------------
Title:
---------------------------
By: /s/ Rainer Bauer
------------------------------
Title: Treasurer
---------------------------
LSG Lufthansa Service GmbH (as to
Article 8.2 only)
By: /s/ Authorized Signatory
------------------------------
Title:
---------------------------
By: /s/ Rainer Bauer
------------------------------
Title: Vice President
----------------------------
<PAGE> 1
Exhibit 10.39
ACQUISITION AGREEMENT
BETWEEN
LSG LUFTHANSA SERVICE USA CORPORATION
AND
SKY CHEFS, INC.
August 14, 1995
<PAGE> 2
ACQUISITION AGREEMENT
This ACQUISITION AGREEMENT ("Agreement") is made and entered into this
14th day of August, 1995, by and between LSG LUFTHANSA SERVICE USA CORPORATION
("LSG"), a corporation organized under the laws of the State of Delaware, and
SKY CHEFS, INC. ("Sky Chefs"), a corporation organized under the laws of the
State of Delaware. Each of LSG and Sky Chefs may be referred to herein as a
"Party" and both may be referred to herein as "the Parties."
RECITALS
WHEREAS, LSG is the lessee of Lease No. AYC-526 of a flight kitchen
catering facility and LSG operates this facility at the John F. Kennedy
International Airport;
WHEREAS, LSG desires to assign all of its rights under Lease No.
AYC-526 and to sell or sublease certain assets in this facility to Sky Chefs,
and Sky Chefs desires to acquire all of LSG's rights and obligations under Lease
No. AYC-526 and to purchase or sublease certain LSG assets in the facility;
WHEREAS, the Port Authority of New York and New Jersey has agreed to
the assignment of all of LSG's rights and obligations under Lease No. AYC-526 to
Sky Chefs;
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, and agreements, and upon the terms and subject to the
conditions hereinafter set forth, the Parties do hereby agree as follows:
<PAGE> 3
ARTICLE 1
DEFINITIONS
ASSIGNMENT AGREEMENT means the agreement between LSG, Sky Chefs, and
the Port Authority of New York and New Jersey attached hereto as Schedule 1.
CLOSING shall have the meaning set forth in Article 3.1.
CLOSING DATE means the date and time of the Closing.
JFK AIRPORT means the John F. Kennedy International Airport, located in
New York, New York.
KITCHEN means the flight kitchen catering facility that LSG operates at
JFK Airport.
MASTER LEASE means Lease No. AYC-526 between LSG and the Port Authority
attached hereto as Schedule 2.
PORT AUTHORITY means The Port Authority of New York and New Jersey, a
corporate and political entity created by compact between the States of New York
and New Jersey, with the consent of the Congress of the United States.
PREMISES means the premises covered by this Agreement as identified at
Exhibit A of Lease No. AYC-526 attached hereto as Schedule 2. The premises
consist of that certain land at JFK Airport in the Borough of Queens, City and
State of New York, together with Building No. 143 and all other structures,
fixtures, improvements, facilities and other property of the Port Authority
located therein, thereon or thereunder.
SIGNING DATE means the date when the parties execute this Agreement.
ARTICLE 2
ACQUISITION OF LEASE AND ASSETS; ASSUMPTION OF LIABILITIES
2.1 ASSIGNMENT OF LEASE; PURCHASE OR SUBLEASE OF CERTAIN ASSETS
At the Closing:
(a) LSG shall transfer, convey, assign and deliver to Sky Chefs, and
Sky Chefs shall purchase and assume from LSG, all right, title and
interest of LSG in
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Lease No. AYC-526 attached hereto as Schedule 2 covering the
Premises and further reflected by the Assignment Agreement attached
hereto as Schedule 1, and certain assets of LSG identified in
Article 3.3.
(b) LSG shall sublease to Sky Chefs certain assets of LSG identified
in Article 3.3.
(c) LSG shall transfer all supplies and inventory at the Kitchen to
Sky Chefs.
(d) LSG shall assign to Sky Chefs any insurance recovery or right to
recovery arising from any loss or damage to any assets referred to
in clause (a), (b), or (c) of this section.
2.2 PURCHASE PRICE
The aggregate purchase price shall consist of a payment by Sky Chefs to
LSG of U.S. $1,556,219 (one million five hundred fifty six thousand two hundred
and nineteen dollars).
2.3 ACCOUNTS RECEIVABLE
The Parties hereby acknowledge that the accounts receivable with
respect to services provided from the Kitchen prior to the Closing remain with
LSG.
2.4 ASSUMPTION OF LIABILITIES
(a) Sky Chefs hereby assumes all liabilities and obligations
associated with the Master Lease, the Assignment Agreement, and
all other obligations associated with the assets related to the
JFK Kitchen from the Closing Date.
(b) Except for the matters subject to indemnification by Sky Chefs at
section 6.4, Sky Chefs shall not assume any liabilities or
obligations of LSG related to the operation of the JFK Kitchen
before the Closing Date.
(c) Sky Chefs shall not assume
i. notwithstanding any provision of this Agreement to the
contrary, any collective bargaining agreements or any other
arrangements, commitments or understandings arising under
any collective bargaining agreements or otherwise related to
any collective bargaining agreements, or
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ii. except as provided herein in sections 4.3, 4.4, and 6.4, any
other commitments, plans, arrangements or understandings
regarding terms and conditions of employment for any
individuals employed by LSG at the Kitchen before the
Closing Date.
ARTICLE 3
CLOSING
3.1 CLOSING
The Closing of the transaction contemplated herein shall take place at
the close of business on August 31, 1995 at the office of Wilmer, Cutler &
Pickering, 2445 M Street, N.W., Washington, D.C. 20037.
3.2 CONDITIONS
(a) The obligations of each Party to be performed at the Closing are
subject to the condition that
i. there shall not be in effect any injunction or order of any
court prohibiting the consummation of the transactions
contemplated herein,
ii. the Port Authority shall have consented, to the extent such
consent is required, to the consummation of the transactions
contemplated herein, and
iii. the other Party shall have performed in all material
respects all of its obligations under this Agreement to be
performed prior to or at the Closing.
(b) If the Closing does not occur by reason of the failure of the
condition specified in this section 3.2, this Agreement shall
terminate without any liability or obligation of either Party to
the other, but no such termination shall relieve a Party of
liability for any breach of this Agreement prior to the
termination.
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3.3 DELIVERY OBLIGATIONS OF LSG
At the Closing, LSG shall deliver:
(a) an Assignment Agreement executed by it pursuant to which LSG shall
assign all rights under the Master Lease to Sky Chefs;
(b) documents executed by it evidencing the sublease of the Equipment
Lease Agreement attached hereto as Schedule 3;
(c) documents executed by it evidencing the assignment of the PHH
Fleet America truck lease attached hereto as Schedule 4;
(d) documents evidencing transfer to Sky Chefs of all supplies and
inventories at the Kitchen and any recovery or right referred to
in section 2.1(d).
Sky Chefs hereby acknowledges that all assets are being conveyed on an
"as is - where is" basis and LSG makes no representation or warranty as to the
condition of the assets.
3.4 DELIVERY OBLIGATIONS OF SKY CHEFS
At the Closing, Sky Chefs shall deliver:
(a) a certified or bank check payable to LSG in the amount of the
purchase price as set forth in Article 2.2;
(b) an Assignment Agreement executed by it pursuant to which Sky Chefs
shall assume all rights and obligations under the Master Lease;
(c) documents executed by it evidencing the sublease of the Equipment
Lease Agreement attached hereto as Schedule 3;
(d) documents executed by it evidencing the assignment of the PHH
Fleet America truck lease attached hereto as Schedule 4;
(e) documents executed by it acknowledging receipt by Sky Chefs of all
supplies and inventories at the Kitchen.
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ARTICLE 4
COVENANTS
4.1 GENERAL COVENANT
LSG and Sky Chefs hereby agree to act in good faith and to use best
reasonable efforts between the Signing Date and Closing to insure:
(a) a smooth transition in, among other things, customer service and
labor matters; and
(b) that the business and operation of the Kitchen continues to
function as it has in the ordinary course prior to Closing.
4.2 CUSTOMER CONTRACTS
LSG shall endeavor to transfer to Sky Chefs all of LSG's customer
contracts at the JFK Kitchen attached hereto as Schedule 5 and such transfers
(if achieved) shall take effect as of the Closing.
4.3 EMPLOYEE MATTERS
(a) Prior to the Closing, LSG shall notify all employees at the
Kitchen that their employment with LSG will cease effective the
Closing, and Sky Chefs shall concurrently notify all employees at
the Kitchen that they will be hired as probationary employees by
Sky Chefs, subject to such qualifications and terms and conditions
of employment as Sky Chefs may adopt, effective immediately after
the Closing, subject to the following conditions:
i. all employees shall apply for employment with Sky Chefs and
shall fill out any necessary Sky Chefs employment
application forms, and
ii. all employees shall submit to, and pass, the mandatory Sky
Chefs drug testing program.
For purposes of this covenant, "all employees" shall include
persons on leave or disability to the extent they otherwise have
rights to be rehired.
(b) With respect to its operation of the Kitchen, after the Closing,
Sky Chefs shall be entitled to
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set such terms and conditions of employment with respect to
post-Closing operations at the Kitchen as Sky Chefs deems
appropriate under the circumstances (including any modifications,
reduction or alteration of any previous terms and conditions of
employment).
(c) If necessary, Sky Chefs shall reimburse LSG for its out of pocket
health maintenance organization premiums for the month of
September 1995 for individuals who were LSG employees at the
Kitchen prior to the Closing and who were hired by Sky Chefs after
the Closing.
(d) Sky Chefs shall provide continuation of health coverage under
section 4980B of the Internal Revenue Code for current and former
employees of the Kitchen.
4.4 COOPERATION IN LABOR MATTERS
After the Signing Date,
(a) LSG shall permit reasonable access to the Kitchen and its
employees by representatives of Sky Chefs for purposes of advising
employees about the terms and conditions of employment to be
implemented by Sky Chefs.
(b) LSG shall provide Sky Chefs with such information as it may
reasonably request regarding LSG employees and the terms and
conditions of employment of LSG employees.
(c) Sky Chefs shall provide LSG with such information as it may
reasonably request for use by LSG in providing appropriate
information to, and responding to any inquiries from, LSG
employees or employees' representatives regarding the terms and
conditions of employment to be implemented by Sky Chefs.
4.5 CONTINUITY OF CUSTOMER SERVICE
Sky Chefs shall use its best reasonable efforts to assist LSG in
ensuring that the LSG customers being serviced from the Kitchen receive
uninterrupted and high quality catering services between the Signing Date and
Closing. If requested by LSG, Sky Chefs shall provide to LSG such services from
another facility at JFK for such period of time between the Signing Date and
Closing as may be necessary to ensure such uninterrupted and high quality
services. Sky Chefs shall make available necessary
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personnel to provide such services for the LSG customers in the event of any
such problems between the Signing Date and Closing. LSG will reimburse Sky Chefs
for its reasonable costs (including compensation of its employees) of providing
such services and personnel.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES OF LSG. LSG represents and warrants to
Sky Chefs, with respect to the transactions contemplated herein, that:
(a) Organization and Authority of LSG. LSG is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Delaware and has the corporate power and authority to
enter into and perform this Agreement and the transactions herein
contemplated.
(b) Authorization of Agreement. The execution, delivery and
performance by LSG of this Agreement have been duly authorized by
all requisite corporate action. This Agreement has been duly
executed and delivered by LSG and constitutes and will constitute
legal, valid and binding obligations of LSG enforceable against
LSG in accordance with its terms, except as enforcement may be
limited by bankruptcy or similar laws affecting creditors' rights
generally.
(c) No Conflicts. The execution, delivery and performance of this
Agreement by LSG do not violate or conflict with (i) the
certificate of incorporation or by-laws of LSG or (ii) any
judicial, administrative or regulatory order, judgment or decree
or arbitration award to which LSG is a party or by which it or its
properties are bound.
(d) Assets. The assets to be transferred, assigned, or subleased to
Sky Chefs include all of the assets used by LSG at or in the
operation of the Kitchen.
5.2 REPRESENTATIONS AND WARRANTIES OF SKY CHEFS. Sky Chefs represents and
warrants to LSG, with respect to the transactions contemplated herein, that:
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(a) Organization and Authority. Sky Chefs has been duly organized and
is validly existing in good standing under the laws of the State
of Delaware and has the corporate power and authority to enter
into and perform this Agreement and the transactions herein
contemplated.
(b) Authorization of Agreement. The execution, delivery and
performance by Sky Chefs of this Agreement have been duly
authorized by all requisite corporate action. This Agreement has
been duly executed and delivered by Sky Chefs and constitutes and
will constitute the legal, valid and binding obligation of Sky
Chefs, enforceable against it in accordance with its terms, except
as enforcement may be limited by bankruptcy or similar laws
affecting creditors' rights generally.
(c) No Conflicts. The execution, delivery and performance of this
Agreement by Sky Chefs do not violate or conflict with (i) the
certificate of incorporation or by-laws of Sky Chefs or (ii) any
judicial, administrative or regulatory order, judgment or decree
or arbitration award to which Sky Chefs is a party or by which it
or its properties are bound.
ARTICLE 6
INDEMNIFICATION
6.1 INDEMNIFICATION FOR JFK LEASE LIABILITY
(a) Sky Chefs shall indemnify and hold LSG harmless with respect to,
and shall assume all loss, liability, deficiency, penalty, claim,
damage or expense (including, but not limited to, costs of
investigation and defense and reasonable attorneys' fees)
(collectively, "Damages") of LSG arising out of or in connection
with any failure by Sky Chefs to perform its obligations under
Lease No. AYC-526, the Assignment Agreement, or the negotiations,
transactions or events giving rise to Lease No. AYC-526 or the
Assignment Agreement taken at Sky Chefs' request or with Sky
Chefs' consent. LSG and Sky Chefs agree that Sky Chefs shall
assume all risks and liabilities arising out of or in connection
with Lease No. AYC-526 and the Assignment Agreement,
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notwithstanding anything to the contrary in Lease No. AYC-526 or
the Assignment Agreement.
(b) Sky Chefs shall indemnify, hold harmless, and reimburse LSG for
any failure of Sky Chefs or its successors or assigns to pay rent
or any other monetary liabilities pursuant to its assumption of
Lease No. AYC-526 or the Assignment Agreement, notwithstanding
anything to the contrary in sections 2, 3 and 4 of the Assignment
Agreement.
(c) LSG and Sky Chefs hereby acknowledge that any liability with
respect to the underground storage tank(s) at the Kitchen (the
"Caterair Environmental Liabilities") is the sole liability of
Caterair International Corporation and/or Marriott Corporation and
any such liability was not assumed by LSG pursuant to the Master
Lease, the Assignment Agreement, or this Agreement, and shall not
be assumed by Sky Chefs pursuant to this Agreement.
6.2 GENERAL INDEMNIFICATION BY LSG
LSG shall indemnify and hold harmless Sky Chefs, Sky Chefs' affiliates,
and each of their respective officers, directors, employees and agents, from,
and shall reimburse Sky Chefs, Sky Chefs' affiliates, and each of their
respective officers, directors, employees and agents, for any Damages arising at
any time from or in connection with:
(a) any material inaccuracy in any representation or warranty by LSG
set forth in this Agreement;
(b) any material failure by LSG to perform or comply with any
agreement contained in this Agreement;
(c) any claim by any person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or
understanding alleged to have been made by any such person with
LSG (or any person acting on its behalf) in connection with any of
the transactions contemplated hereby;
(d) any action taken (or not taken) by LSG before the Closing Date of
this Agreement with respect to the Kitchen, excluding any
liability referred to in section 6.3(g) and excluding any matters
subject to indemnification by Sky Chefs at section 6.4;
(e) the use and occupancy of the premises by LSG or the conduct or
management of the business
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conducted by LSG on the premises, including any act or omission by
LSG, its agents, contractors, employees, servants, lessees,
concessionaires, invitees, licensees, and customers before the
Closing Date, excluding any matters subject to indemnification by
Sky Chefs at section 6.4.
(f) any failure of LSG to follow applicable legal requirements with
regard to the effects upon employees with respect to the
transactions contemplated herein.
The foregoing indemnification shall apply whether or not such
liabilities and costs are in any way or to any extent caused, in whole or in
part, by any act or omission of any kind by Sky Chefs, provided only that Sky
Chefs shall not be entitled under this Article to receive indemnification for
that portion, if any, of any liabilities and costs which is proximately caused
by its own individual gross negligence or willful misconduct, as determined in a
final judgment. If any person (including LSG or any of its affiliates) alleges
such gross negligence or willful misconduct by Sky Chefs, the indemnification
provided for herein shall nonetheless be paid upon demand, subject to later
adjustment or reimbursement, until such time as a court of competent
jurisdiction enters a final judgment as to the extent and effect of the gross
negligence or willful misconduct.
The foregoing indemnities shall be perpetual. Any amount to be paid
hereunder by LSG to any person or for which LSG has indemnified any person shall
be a demand obligation owing by LSG to Sky Chefs.
6.3 GENERAL INDEMNIFICATION BY SKY CHEFS
Sky Chefs shall indemnify and hold harmless LSG, LSG's affiliates and
each of their respective officers, directors, employees and agents from, and
shall reimburse LSG, LSG's affiliates and each of their respective officers,
directors, employees and agents for any Damages arising from or in connection
with:
(a) any material inaccuracy in any representation or warranty by Sky
Chefs set forth in this Agreement;
(b) any material failure by Sky Chefs to perform or comply with any
agreement contained in this Agreement;
(c) any claim by any person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or
understanding alleged to have been made by such person with Sky
Chefs (or any
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person acting on its behalf) in connection with any of the
transactions contemplated hereby;
(d) any action taken (or not taken) by Sky Chefs after the Closing
Date of this Agreement with respect to the Kitchen, excluding any
matters subject to indemnification by Sky Chefs at section 6.4;
(e) the use and occupancy of the premises by Sky Chefs or the conduct
or management of the business conducted by Sky Chefs on the
premises, including any act or omission by Sky Chefs, its agents,
contractors, employees, servants, lessees, concessionaires,
invitees, licensees, and customers after the Closing Date,
excluding any matters subject to indemnification by Sky Chefs at
section 6.4;
(f) (i) the failure of Sky Chefs to perform any agreement, covenant or
obligation required to be performed by Sky Chefs pursuant to Lease
No. AYC-526 or the Assignment Agreement relating to environmental
laws or hazardous substances, (ii) any violation of or failure to
comply with any environmental law now existing or hereafter
occurring, resulting from or connected to the ownership,
construction, occupancy, operation, use, or maintenance of the
premises, (iii) the removal of hazardous substances from the
premises (or if removal is prohibited by law, the taking of
whatever action is required by law), (iv) any act, omission, event
or circumstance existing or occurring or resulting from or in
connection with the ownership, construction, occupancy, operation,
use or maintenance of the premises, regardless of whether the act,
omission, event or circumstance constituted a violation of or
failure to comply with any environmental law at the time of its
existence or occurrence, and (v) any and all claims or proceedings
(whether brought by private party or governmental agency) for
bodily injury, property damage, abatement or remediation,
environmental damage, or impairment or any other injury or damage
resulting from or relating to any hazardous substance located upon
or migrating into, on, from or through the premises (whether or
not any or all of the foregoing was caused by Sky Chefs, a prior
owner of the premises, a prior operator of the premises, their
respective tenants or subtenants, or any third party and whether
or not the alleged liability is attributable to the handling,
storage, use, treatment, processing,
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distribution, manufacture, generation, discharge, transportation
or disposal of such hazardous substance or the mere presence of
such hazardous substance on the premises), excluding the Caterair
Environmental Liabilities;
(g) claims of LSG employees' representatives arising solely as a
result of the transactions contemplated herein after the Closing
Date and resulting from any action taken by Sky Chefs with respect
to the terms and conditions of employment at the Kitchen on or
after the Closing Date; and
(h) any liabilities with respect to the trucks and other vehicles at
the Kitchen after the Closing Date.
The foregoing indemnification shall apply whether or not such
liabilities and costs are in any way or to any extent caused, in whole or in
part, by any act or omission of any kind by LSG, provided only that LSG shall
not be entitled under this Article to receive indemnification for that portion,
if any, of any liabilities and costs which is proximately caused by its own
individual gross negligence or willful misconduct, as determined in a final
judgment. If any person (including Sky Chefs or any of its affiliates) alleges
such gross negligence or willful misconduct by LSG, the indemnification provided
for herein shall nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent jurisdiction enters a
final judgment as to the extent and effect of the gross negligence or willful
misconduct.
The foregoing indemnities shall be perpetual. Any amount to be paid
hereunder by Sky Chefs to any person or for which Sky Chefs has indemnified any
person shall be a demand obligation owing by Sky Chefs to LSG.
The foregoing indemnities in this section 6.3 is in addition to, and
shall not limit in any way, the indemnities as set forth in section 6.4.
6.4 INDEMNIFICATION DURING PERIOD BETWEEN SIGNING DATE AND CLOSING
LSG and Sky Chefs hereby acknowledge that the Parties share a mutual
interest in a smooth transition of this transaction. LSG and Sky Chefs hereby
agree that Sky Chefs shall indemnify and hold harmless LSG, LSG's affiliates and
each of their respective officers, directors, employees and agents from, and
shall reimburse LSG, LSG's affiliates and each of their respective officers,
directors, employees and agents for any Damages arising from or in connection
with:
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(a) any claims of LSG employees or employees' representatives arising
during the period between the Signing Date and Closing solely as a
result of the transactions contemplated herein and not
attributable to the negligence or willful misconduct of LSG; and
(b) any claims of LSG customers for disruption of service between the
Signing Date and Closing arising solely as a result of the
transactions contemplated herein and not attributable to the
negligence or willful misconduct of LSG or the failure of LSG to
use its best reasonable efforts to minimize such disruption.
6.5 PROCEDURE FOR INDEMNIFICATION
The obligations and liabilities of each party hereunder with respect to
their respective indemnities resulting from any claim or other assertion of
liability by third parties (hereinafter a "Claim"), shall be subject to the
following terms and conditions:
(a) The party seeking indemnification (the "Indemnified Party") must
give the other party or parties, as the case may be (the
"Indemnifying Party"), notice of any such Claim promptly after the
Indemnified Party receives notice hereof.
(b) The Indemnifying Party shall have the right to undertake, by
counsel or other representatives of its own choosing, the defense
of such Claim and may settle such Claim at the sole expense of the
Indemnifying Party.
(c) In the event that the Indemnifying Party shall elect not to
undertake such defense, or within a reasonable time after notice
of any such Claim from the Indemnified Party shall fail to defend,
the Indemnified Party (upon further written notice to the
Indemnifying Party) shall have the right to undertake the defense,
compromise or settlement of such Claim, by counsel of its own
choosing, on behalf of and for the account and risk of the
Indemnifying Party (subject to the right of the Indemnifying Party
to assume defense of such Claim at any time prior to settlement,
compromise or final determination thereof).
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6.6 EXCLUSIVITY
This Article 6 provides the exclusive means by which a Party may assert
claims for indemnification against another Party with respect to the
transactions contemplated by this Agreement.
ARTICLE 7
MISCELLANEOUS
7.1 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the Parties
with respect to the subjects covered herein, and supersedes all prior oral or
written agreements, commitments or understandings with respect to the matters
provided herein.
7.2 GUARANTEE
LSG Lufthansa Service GmbH hereby guarantees the full and timely
performance by LSG Lufthansa Service USA Corporation under this Agreement. This
guarantee is an independent obligation that may be enforced against LSG
Lufthansa Service GmbH before, after, or without enforcement of LSG Lufthansa
Service USA Corporation's obligations under this Agreement and shall be
enforceable notwithstanding any amendment of, or forbearance under, this
Agreement or any other event (other than the full and timely performance by LSG
Lufthansa Service USA Corporation) that would discharge the obligations of a
surety.
7.3 ARBITRATION
Any dispute, controversy or claim arising out of or relating to this
Agreement or breach hereof, shall be conducted in accordance with UNCITRAL
Rules. The arbitration shall be conducted in London in the English language
before a sole arbitrator. The parties shall attempt, by agreement, to nominate
the sole arbitrator. If the parties fail so to nominate a sole arbitrator within
30 days from the date when the claimant's request for arbitration has been
communicated to the other party, the appointing authority shall be the London
Court of International Arbitration acting in accordance with its rules for this
purpose.
7.4 GOVERNING LAW
This Agreement is subject to, and shall be construed in accordance,
with, the laws of the State of Delaware.
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7.5 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
7.6 ASSIGNMENT
Sky Chefs may assign its rights under this Agreement to Onex Food
Services, Inc., or any subsidiary thereof, but no such assignment shall relieve
Sky Chefs of its obligations hereunder. Except as provided in the preceding
sentence, neither Party may assign any of its rights or obligations under this
Agreement.
7.7 EXCLUSIVE BENEFICIARIES
This Agreement is intended for the exclusive benefit of the Parties
hereto and their respective successors and permitted assigns. Nothing contained
in this Agreement shall be construed as granting any rights or benefits in or to
any third party, including current and former employees of LSG.
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IN WITNESS WHEREOF, the parties hereto have caused this Acquisition
Agreement to be executed by their officers or other representatives duly
authorized, as of the day first above written.
Sky Chefs, Inc.
By: /s/ Patrick W. Tolbert
--------------------------------------
Title: Executive Vice President
LSG Lufthansa Service USA Corporation
By: /s/ Illegible
--------------------------------------
Title: Assistant Secretary and Assistant
Treasurer
LSG Lufthansa Service GmbH (as to
Section 7.2 only)
By: /s/ Illegible
--------------------------------------
Title: Vice President Subsidiaries/
Audit/Corporate Affairs
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EXHIBIT 10.40
ACQUISITION AGREEMENT,
DATED AS OF JULY 18, 1997,
BETWEEN
CATERAIR INTERNATIONAL, INC. (II)
AND
SKY CHEFS, INC.
<PAGE> 2
ACQUISITION AGREEMENT
ACQUISITION AGREEMENT (this "Agreement"), dated as of July 18, 1997, by
and between CATERAIR INTERNATIONAL, INC. (II), a Delaware corporation ("CII"),
and SKY CHEFS, INC., a Delaware corporation ("Sky Chefs"). Each of CII and Sky
Chefs may be referred to herein as a "Party" and both may be referred to herein
as the "Parties".
WHEREAS, CII operates a flight kitchen catering facility (the "Kitchen")
at Logan International Airport in Boston, Massachusetts from which CII provides
airline catering and other services to airlines and other customers; and
WHEREAS, CII desires to sell all of its business and the related assets at
the Kitchen to Sky Chefs and Sky Chefs desires to acquire all of CII's business
and assets at the Kitchen, all upon the terms and subject to the conditions set
forth herein;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS AND OTHER MATTERS
1.1 Certain Definitions.
"Accountants" shall have the meaning ascribed to such term in Section
2.3(b) of this Agreement.
"Acquired Agreements" shall mean all customer contracts, contracts with
suppliers, other contracts, leases, licenses, permits, commitments or any other
agreements (written or oral) related to, necessary for, or entered into in
connection with, the operation of the Kitchen, in which CII has any rights,
under which CII is subject to any obligation or liability, or by which any of
the assets owned or used by CII in connection with the operation of the Kitchen
are bound, including, without limitation, the Boston Kitchen CIC License
Agreement Rights, the CIC Sublease Agreement, the Customer Agreements and the
other agreements listed on Schedule 1 hereto, but excluding the Excluded Assets.
"Acquired Assets" shall mean all privileges, rights, interests and claims,
real and personal, tangible, and intangible, of every type and description that
are owned, leased, used or held for use by CII in connection with the operation
of the Kitchen, in which CII has any right, title or interest, including,
without limitation, (i) the Acquired Agreements, (ii) accounts receivable
arising on or prior to the Closing Date associated with the Kitchen and the
business and operations conducted thereat, (ii) that portion of the net working
capital of CII that is allocable to the Kitchen and the business and operations
conducted thereat, (iv) that portion of the goodwill of CII that is attributable
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to the Kitchen and the business and operations conducted thereat and (v) those
items listed on Schedule 1 hereto, but excluding the Excluded Assets.
"Agreement" shall have the meaning ascribed to such term in the
introductory paragraph of this Agreement.
"Assignment Agreement" shall mean an Assignment Agreement, dated the
Closing Date, executed by each of Sky Chefs and CII, in substantially the form
attached as Exhibit D hereto.
"Assumed Liabilities" shall have the meaning ascribed to such term in
Section 2.2 of this Agreement.
"Assumption Agreement" shall mean an Assumption Agreement, dated the
Closing Date, executed by each of Sky Chefs and CII, in substantially the form
attached as Exhibit E hereto.
"Bill of Sale" shall mean a Bill of Sale, dated the Closing Date, executed
by each of Sky Chefs and CII, in substantially the form attached as Exhibit C
hereto.
"Boston Kitchen CIC License Agreement Rights" shall mean any and all of
the rights licensed by CII from Caterair pursuant to the CIC License Agreement
in any of the "Customer Contracts" (as such term is defined in the CIC License
Agreement) pursuant to which CII has provided, is providing or has the right to
provide goods, products or services to any airline or other customer at or from
Logan International Airport or otherwise utilizing the Kitchen.
"Boston Net Working Capital" shall have the meaning ascribed to such term
in Section 2.3(a) of this Agreement.
"Caterair" shall mean Caterair International Corporation, a Delaware
corporation.
"CIC License Agreement" shall mean that certain License Agreement, dated
as of September 29, 1995, between CII and Caterair, a copy of which is attached
hereto as Annex A.
"CIC Sublease Agreement" shall mean that certain Sublease Agreement, dated
as of September 29, 1995, between CII and Caterair, a copy of which is attached
hereto as Annex B.
"CII" shall have the meaning ascribed to such term in the introductory
paragraph of this Agreement.
"Closing" shall have the meaning ascribed to such term in Section 3.1 of
this Agreement.
"Closing Date" shall have the meaning ascribed to such term in Section 3.1
of this Agreement.
"Closing Date Boston Net Working Capital Statement" shall have the meaning
ascribed to such term in Section 2.3(b) of this Agreement.
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"Customer Agreements" shall mean all contracts, agreements, commitments or
other arrangements (whether written or oral) between CII, on the one hand, and
any airline or other customer of CII, on the other hand, pursuant to which CII
provides to such airline or other customer goods, products or services at or
from Logan International Airport or otherwise utilizing the Kitchen, together
with all customer lists, financial and accounting records (including, without
limitation, sales records and sales histories) related thereto.
"Damages" shall have the meaning ascribed to such term in Section 8.2 of
this Agreement.
"Excluded Assets" shall mean (i) any and all collective bargaining
agreements or other arrangements, commitments or understandings arising under
any collective bargaining agreements or otherwise related to any collective
bargaining agreements or any other commitments, plans, arrangements or
understandings regarding terms and conditions of employment for any individuals
employed by CII at Logan International Airport or at the Kitchen in effect at
any time (collectively, the "CBAs"), (ii) all assets of CII other than the
Acquired Assets (i.e., those assets of CII (or portion thereof) not owned,
leased, used or held for use by CII in connection with the operation of the
Kitchen) and (iii) if applicable, that part, portion, or other subdivision of
any Acquired Asset that does not (and only to the extent that such part,
portion, or other subdivision does not) relate to the Kitchen, Logan
International Airport and the business and operations conducted thereat or
therefrom, which Excluded Assets of CII are expressly not being transferred by
CII to Sky Chefs in connection with the transactions being effected hereby, and
will be retained by CII.
"Excluded Liabilities" shall mean (i) any contingent liabilities of CII
(whether or not related to or arising in connection with the Acquired Assets)
that arise, or relate to events which occurred, prior to the Closing Date
(excluding trade payables and accounts payable arising in the ordinary course of
business consistent with past practice), (ii) any liabilities of CII arising at
any time in connection with any Excluded Asset, (iii) any liabilities or
obligations in any way related to, or arising in connection with any CBA's or
under any Federal, state or local law or regulation governing the status of CII
as an employer at the Kitchen, (iv) any liability or obligation of CII to any
union representative of any employees at the Kitchen, and (v) any
employment-related liabilities, obligations or commitments of CII arising in
connection with, or which in any manner related to, the conduct or operations of
the Kitchen prior to the Closing Date related to (A) any claims, grievances,
charges, arbitrations, litigations or other claims or actions, including,
without limitation, those against CII, that in any manner relate to terms and
conditions of employment at the Kitchen or individuals employed at the Kitchen
and (B) compensation and other benefits due individuals employed at the Kitchen.
"Kitchen" shall have the meaning ascribed to such term in the first
WHEREAS clause of this Agreement.
"Net Working Capital" shall have the meaning ascribed to such term in
Section 2.3(a) of this Agreement.
"Purchase Price" shall have the meaning ascribed to such term in Section
2.1 of this Agreement.
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"Receipt" shall mean a Receipt, dated the Closing Date, executed by each
of Sky Chefs and CII, in substantially the form attached as Exhibit B hereto.
"Related Agreements" shall mean the Assumption Agreement, the Assignment
Agreement, the Sublease Assignment, the Bill of Sale and the Receipt, and any
other agreements, instruments or certificates delivered hereunder or in
connection with the transactions contemplated by a Party.
"Required Consents" shall mean the consents of any airline or other
customers of CII or other third parties that are required in connection with the
transactions contemplated hereby and in order for the Acquired Assets to be
properly transferred to Sky Chefs, including, without limitation, the consents
listed on Schedule 2 hereto.
"Required Notices" shall mean any notices required to be given to any
airline or other customers of CII or other third parties in connection with the
transactions contemplated hereby and in order for the Acquired Assets to be
properly transferred to Sky Chefs, including, without limitation, the notices
listed on Schedule 2 hereto.
"Revised Purchase Price" shall have the meaning ascribed to such term in
Section 2.3(b) of this Agreement.
"Revised Purchase Price Statement" shall have the meaning ascribed to such
term in Section 2.3(b) of this Agreement.
"Sky Chefs" shall have the meaning ascribed to such term in the
introductory paragraph of this Agreement.
"Sublease Agreement" shall have the meaning ascribed to such term in
Section 3.2(a) of this Agreement.
1.2 Proviso Relating To System-Wide or Multi-Location Contracts.
Notwithstanding anything to the contrary contained in any definition or
other provision of this Agreement, if pursuant to any Acquired Agreement CII has
provided, does provide or enjoys the right to provide goods, products or
services to any airline or other customer or enjoys any other benefit at other
locations in addition to Logan International Airport or otherwise utilizing the
Kitchen, then the rights enjoyed by CII with respect to such Acquired Agreement
shall be deemed to be an Acquired Agreement only to the extent that such rights
or benefits relate to the provision of goods, products or services to an airline
or other customer or other benefit enjoyed by CII at or from the Kitchen or at
or from Logan International Airport or otherwise utilizing the Kitchen (and not
at the other locations), and it is only such rights and benefits that are being
transferred by CII to Sky Chefs in connection with the transactions contemplated
hereby.
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ARTICLE II
ACQUISITION OF ASSETS; ASSUMPTION OF LIABILITIES
2.1 Purchase and Sale of Assets
Upon the terms and subject to the conditions set forth herein, on the
Closing Date, in consideration of (i) $1,000,000 (the "Purchase Price") to be
paid by Sky Chefs to CII on the Closing Date by wire transfer of immediately
available funds to an account designated by CII and (ii) the assumption by Sky
Chefs of the liabilities described in Section 2.2 hereof, CII shall grant, sell,
convey, assign, transfer and deliver to Sky Chefs, and Sky Chefs shall purchase
and accept from CII, all right, title and interest of CII in the Acquired
Assets.
2.2 Assumption of Liabilities.
Upon the terms and subject to the conditions set forth herein, on the
Closing Date, Sky Chefs shall assume all liabilities and obligations associated
with the business and operations conducted at the Kitchen and with the Acquired
Assets, whether arising on, prior to or after the Closing Date, other than the
Excluded Liabilities (the "Assumed Liabilities").
2.3 Adjustment.
(a) Each of Sky Chefs and CII hereby acknowledge and agree that the Net
Working Capital associated with the business and operations at the Kitchen (the
"Boston Net Working Capital") as of the date hereof is $1,000,000. For the
purposes of this Agreement, "Net Working Capital" is defined as the difference
between current assets and current liabilities each as would be set forth on a
balance sheet prepared in accordance with GAAP.
(b) CII shall prepare in good faith, and deliver to Sky Chefs, on or
before the date that is sixty (60) days following the Closing Date, a statement
setting forth the Boston Net Working Capital as of the Closing Date (which
statement shall set forth in reasonable detail the computation of such amount
including a listing of the assets and liabilities included in Boston Net Working
Capital as of the Closing Date) (the "Closing Date Boston Net Working Capital
Statement"). If within thirty (30) days following delivery of the Closing Date
Boston Net Working Capital Statement, Sky Chefs does not give notice to CII of
its objection to the computation of the Boston Net Working Capital as of the
Closing Date (which notice must contain a statement of the basis of any
objection), then the calculation of the Boston Net Working Capital as of the
Closing Date set forth in the Closing Date Boston Net Working Capital Statement
shall be final and binding on all Parties. If a notice of objection is given,
then the Parties will attempt to settle the issues in dispute within fifteen
(15) days thereafter. If they are unable to resolve such issues, any open items
will be submitted to a nationally recognized accounting firm selected by Sky
Chefs and reasonably acceptable to CII (the "Accountants") for resolution. If
issues in dispute are submitted to the Accountants for resolution, (i) each
Party will furnish to the Accountants such work papers and other documents and
information relating to the disputed issues as the Accountants may request and
are available to that Party, and will be
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afforded the opportunity to present to the Accountants any material relating to
the determination and to discuss the determination with the Accountants; (ii)
the determination by the Accountants, as set forth in a notice delivered to each
of CII and Sky Chefs, will be binding and conclusive on the Parties; and (iii)
Sky Chefs, on the one hand, and CII, on the other hand, will each bear 50% of
the fees of the Accountants for such determination.
(c) On or before the third business day following the final determination
of the Boston Net Working Capital as of the Closing Date, (i) in the event that
the Boston Net Working Capital as of the Closing Date is greater than the Boston
Net Working Capital as of the date hereof, Sky Chefs shall pay to CII the amount
of such excess, by wire transfer of immediately available funds, to an account
designated by CII and (ii) in the event that the Boston Net Working Capital as
of the Closing Date is less than the Boston Net Working Capital as of the date
hereof, CII shall pay to Sky Chefs the amount of such deficiency, by wire
transfer of immediately available funds, to an account designated by Sky Chefs.
ARTICLE III
CLOSING
3.1 Closing.
Subject to the satisfaction (or waiver) of the conditions set forth in
Article V of this Agreement, the closing of the transactions contemplated hereby
(the "Closing") shall take place at the offices of Kaye, Scholer, Fierman, Hays
& Handler, LLP, on or about July 18, 1997 (the "Closing Date"), or at such other
place and on such other date as the Parties shall agree.
3.2 Delivery Obligations of CII.
At the Closing, CII shall deliver to Sky Chefs:
(a) an Assignment of Sublease, in substantially the form attached as
Exhibit A hereto, dated as of the date hereof (the "Sublease Assignment"),
executed by a duly authorized officer on behalf of CII, transferring to Sky
Chefs all of CII's right, title and interest in and under the CIC Sublease;
(b) the Bill of Sale, executed by a duly authorized officer on behalf of
CII;
(c) the Receipt, executed by a duly authorized officer on behalf of CII;
(d) the Assignment Agreement, executed by a duly authorized officer on
behalf of CII;
(e) the Assumption Agreement, executed by a duly authorized officer on
behalf of CII; and
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(f) to the extent that Required Consents and Required Notices are required
to be given and/or received, documents reasonably satisfactory to Sky Chefs
evidencing the receipt of such Required Consents and the giving of such Required
Notices.
3.3 Delivery Obligations of Sky Chefs.
At the Closing, Sky Chefs shall deliver to CII:
(a) the Purchase Price, as provided in Section 2.1 of this Agreement;
(b) the Sublease Assignment, executed by a duly authorized officer on
behalf of Sky Chefs.
(c) the Receipt, executed by a duly authorized officer on behalf of Sky
Chefs; and
(d) the Bill of Sale, executed by a duly authorized officer on behalf of
Sky Chefs.
(e) the Assignment Agreement, executed by a duly authorized officer on
behalf of Sky Chefs; and
(f) the Assumption Agreement, executed by a duly authorized officer on
behalf of Sky Chefs.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
4.1 Representations and Warranties of CII.
CII represents, warrants and covenants to Sky Chefs, with respect to the
transactions contemplated herein that:
(a) Organization and Authority of CII. CII is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the corporate power and authority to enter into and perform
this Agreement and the Related Agreements to which it is a party and the
transactions herein and therein contemplated.
(b) Authorization of Agreement. The execution, delivery and performance by
CII of this Agreement and the Related Agreements to which it is a party have
been duly authorized by all requisite corporate action. This Agreement and the
Related Agreements to which it is a party have been duly executed and delivered
by CII and constitute and will constitute a legal, valid and binding obligation
of CII enforceable against CII in accordance with their terms, except as may be
limited by bankruptcy or similar laws affecting creditors' rights generally and
general principles of equity.
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(c) No Conflicts. The execution, delivery and performance of this
Agreement and the Related Agreements to which it is a party by CII do not
violate or conflict with (i) the certificate of incorporation or bylaws of CII
or (ii) any judicial, administrative or regulatory order, judgment or decree or
arbitration award to which CII is a party or by which it or its properties or
any of the Acquired Assets is bound.
(d) Acquired Assets. The Acquired Assets to be sold, transferred, or
assigned to Sky Chefs hereunder include all of the assets of CII used at, in
connection with, or in the operation of, the Kitchen and the business of CII
conducted thereat or therefrom and at Logan International Airport.
(e) No Liens. Upon the consummation of the transactions contemplated by
this Agreement and the Related Agreements and the payment of the Purchase Price
by Sky Chefs to CII, Sky Chefs shall acquire good and valid title to all of the
Acquired Assets, free and clear of all restrictions on transfer.
(f) Severance. Except as set forth on Schedule 4.1(f) hereto, CII is not
liable for any severance payments or other payments on account of the
termination of any officer employee or shall be liable for any such payments as
a result of this Agreement.
(g) Collective Bargaining Agreements. Except as set forth on Schedule
4.1(g) hereto, CII is not a party to any CBAs in connection with the business
and operations conducted at the Kitchen.
(h) Labor Disputes. Except as set forth on Schedule 4.1(h) hereto, there
are no strikes, material work stoppages or material disputes pending or, to the
best knowledge of the management of CII, threatened between CII and any groups
of its employees employed in connection with the business and operations
conducted at the Kitchen.
(i) Unions. Except as set forth on Schedule 4.1(i) hereto, no labor union
or other collective bargaining unit represents any of the employees of CII
employed in connection with the business and operations conducted at the
Kitchen.
(j) Organizational Efforts. Except as set forth on Schedule 4.1(j) hereto,
to the best knowledge of the management of CII, no organizational effort by any
labor union or other collective bargaining unit currently is under way or
threatened with respect to any employees of CII employed in connection with the
business and operations conducted at the Kitchen.
(k) Certain Proceedings. Except as set forth on Schedule 4.1(k) hereto
with respect to the business and operations conducted by CII at the Kitchen,
there are no (i) material grievances or arbitration proceedings arising out of
or under any CBA, (ii) representation proceedings by any group of CII's
employees employed in connection with the business and operations conducted at
the Kitchen, (iii) unfair labor practice charges or complaints pending before
the National Labor Relations Board or any similar foreign, state or local agency
or (iv) charges, claims or litigations pending before any local, state or
Federal agency regarding any employment matter in connection
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with the operation of the Kitchen or any wages or compensation payable to any
employee or third party in connection with the operation of the Kitchen.
(l) No Brokers. CII has not incurred any obligation or liability,
contingent or otherwise, for brokers' or finders' fees or commissions in
connection with the transactions contemplated by this Agreement.
4.2 Representations and Warranties of Sky Chefs.
Sky Chefs represents, warrants and covenants to CII, with respect to the
transactions contemplated herein that:
(a) Organization and Authority of Sky Chefs. Sky Chefs is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the corporate power and authority to enter into and
perform this Agreement and the Related Agreements to which it is a party and the
transactions herein and therein contemplated.
(b) Authorization of Agreement. The execution, delivery and performance by
Sky Chefs of this Agreement and the Related Agreements to which it is a party
have been duly authorized by all requisite corporate action. This Agreement and
the Related Agreements to which it is a party have been duly executed and
delivered by Sky Chefs and constitute and will constitute a legal, valid and
binding obligation of Sky Chefs enforceable against Sky Chefs in accordance with
their terms, except as may be limited by bankruptcy or similar laws affecting
creditors' rights generally and general principles of equity.
(c) No Conflicts. The execution, delivery and performance of this
Agreement and the Related Agreements to which it is a party by Sky Chefs do not
violate or conflict with (i) the certificate of incorporation or bylaws of Sky
Chefs or (ii) any judicial, administrative or regulatory order, judgment or
decree or arbitration aware to which Sky Chefs is a party or by which it or its
properties is bound.
(d) Condition of Acquired Assets. Sky Chefs hereby acknowledges that all
the Acquired Assets are being conveyed on an "as is - where is" basis, and CII
makes no representation or warranty as to the condition of the Acquired Assets.
(e) No Brokers. Sky Chefs has not incurred any obligation or liability,
contingent or otherwise, for brokers' or finders' fees or commissions in
connection with the transactions contemplated by this Agreement.
(f) Transfer Taxes. Sky Chefs shall pay any Federal, state or local sales,
transfer, stamp or like taxes payable in connection with the transfer of the
Acquired Assets and the other transactions contemplated hereby.
ARTICLE V
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CONDITIONS
5.1 Conditions to Obligations of Sky Chefs and CII.
Sky Chefs and CII's respective obligations to consummate the
transactions contemplated hereby are subject to the satisfaction on or prior to
the Closing Date of each of the following conditions (unless expressly waived by
Sky Chefs and CII at the Closing):
(a) all Required Consents be obtained and all Required Notices be
given, and that Sky Chefs shall have received written evidence thereof
reasonably satisfactory to Sky Chefs. If the Closing shall have occurred and any
Required Consent shall not have been obtained and/or any Required Notice shall
not have been given, the transfer effected hereby shall not be effective with
respect to the Acquired Asset the transfer of which required such Required
Notice to be given and/or Required Consent to be obtained; provided, however,
that the Parties shall use their respective reasonable efforts to obtain such
Required Consent or cause such Required Notice to be given as soon as is
reasonably practicable following the Closing Date and the related Acquired Asset
to be effectively transferred to Sky Chefs promptly thereafter. With respect to
any such Acquired Asset that cannot be assigned to Sky Chefs as of the date
hereof because of the failure or inability to obtain any Required Consent or to
give any Required Notice or for any other reason, CII hereby agrees, from and
after the date hereof and prior to the date of the proper and effective
assignment of such Acquired Asset to Sky Chefs in accordance with the
immediately preceding sentence, to cooperate with Sky Chefs in any reasonable
arrangement designed to provide to Sky Chefs the benefits and obligations
associated with such Acquired Asset (notwithstanding its non-assignment in
accordance with the second sentence of this subparagraph). Sky Chefs agrees
that, so long as Sky Chefs is receiving the benefits of any such Acquired Asset,
Sky Chefs will perform CII's obligations in connection therewith;
(b) there shall not be in effect any injunction or order of any
court prohibiting the consummation of the transactions contemplated hereby;
(c) the other Party shall have performed in all material respects
all of its obligations under this Agreement to be performed prior to or at the
Closing; and
(d) there shall not be in effect any work stoppage, boycott, strike,
disruption or other interference, whether occasioned by any labor organization
or any employee or third party, directed at the operations and/or business of
the Kitchen or any other kitchen operated by Sky Chefs or CII, or the operations
and/or business of any customer of Sky Chefs or CII or any customer of CII or
Sky Chefs.
5.2 Conditions to Obligations of CII.
CII's obligations to consummate the transactions contemplated hereby
are subject to the satisfaction on or prior to the Closing Date of each of the
following conditions (unless expressly waived by CII at the Closing):
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(a) Each of the representations and warranties of Sky Chefs in this
Agreement shall be true and correct in all material respects as of the date
hereof and as of the Closing with the same effect as though such representations
and warranties had been made at and as of such time, other than representations
and warranties that speak as of a specific date or time (which need only be true
and correct in all material respects as of such date or time).
(b) Sky Chefs shall have performed in all material respects all
obligations required to be performed or complied with by Sky Chefs under this
Agreement at or prior to Closing.
5.3 Conditions to Obligations of Sky Chefs.
Sky Chefs' obligations to consummate the transactions contemplated
hereby are subject to the satisfaction on or prior to the Closing Date of the
following conditions (unless expressly waived by Sky Chefs on the Closing Date):
(a) Each of the representations and warranties of CII in this
Agreement shall be true and correct in all material respects as of the date
hereof and as of the Closing with the same effect as though such representations
and warranties had been made at and as of such time, other than representations
and warranties that speak as of a specific date or time (which need only be true
and correct in all material respects as of such date or time).
(b) CII shall have performed in all material respects all
obligations required to be performed or complied with by CII under this
Agreement at or prior to Closing.
(c) there shall be no material adverse change in the business,
operations, prospects and operations of the Kitchen or CII (including, without
limitation, any material change in the terms and conditions of employees at the
Kitchen).
ARTICLE VI
EMPLOYEE MATTERS
6.1 Employee Matters.
(a) Prior to the Closing, CII shall notify all employees at the Kitchen,
and with respect to any employees represented by any labor organization, the
appropriate representative of such organization, that CII will discontinue
operations at the Kitchen effective as of the Closing Date and that the
employment of any individuals employed by CII shall cease effective as of the
Closing Date.
(b) With respect to its operation of the Kitchen, after the Closing, Sky
Chefs shall be (i) entitled to set such terms and conditions of employment with
respect to the post-Closing operations of the Kitchen as Sky Chefs, in its sole
discretion, deems appropriate and (ii) undertake such recruiting and hiring
measures as it, in its sole discretion, deems appropriate.
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6.2 Cooperation in Labor Matters.
Prior to the Closing Date, CII shall permit, to the extent requested by
Sky Chefs, reasonable access to the Kitchen and its employees by representatives
of Sky Chefs for purposes of recruitment and/or hiring, and CII and Sky Chefs
shall provide each other with such information regarding labor and employment
matters as each may reasonably request in order to consummate the transactions
contemplated hereby.
ARTICLE VII
CONTINUITY OF CUSTOMER SERVICE
Sky Chefs shall use its reasonable best efforts to ensure that the
airlines and other CII customers being serviced from the Kitchen receive
uninterrupted and high quality catering services on and following the Closing
Date. If necessary to provide such services, Sky Chefs shall provide such
services from another facility for such period of time as may be necessary to
ensure such uninterrupted and high quality services.
ARTICLE VIII
INDEMNIFICATION; SURVIVAL
8.1 Survival
The representations and warranties of the parties to this Acquisition
Agreement shall survive the closing for a period of one (1) year from the
Closing Date.
8.2 Indemnification by CII
CII shall indemnify and hold harmless Sky Chefs and Sky Chefs' affiliates
from, and shall reimburse Sky Chefs and Sky Chefs' affiliates for all losses,
liabilities, deficiencies, penalties, claims, damages or expenses (including,
but not limited to, costs of investigation and defense and reasonable attorneys'
fees) (collectively "Damages") arising out of or in connection with:
(a) any material inaccuracy in any representation or warranty by CII set
forth in this Agreement;
(b) any material failure by CII to perform or comply with any agreement or
covenant contained in this Agreement; and
(c) the Excluded Liabilities.
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Notwithstanding anything to the contrary set forth herein, CII shall not
indemnify Sky Chefs for Damages arising out of the gross negligence or willful
misconduct of Sky Chefs. Sky Chefs hereby waives and releases any claims against
CII for consequential or similar damages.
8.3 Indemnification by Sky Chefs
Sky Chefs shall indemnify and hold harmless CII and CII's affiliates from,
and shall reimburse CII and CII's affiliates for all Damages arising out of or
in connection with:
(a) any material inaccuracy in any representation or warranty by Sky Chefs
set forth in this Agreement;
(b) any material failure by Sky Chefs to perform or comply with any
agreement or covenant contained in this Agreement; and
(c) any Assumed Liabilities and the post-closing operation by Sky Chefs of
the Acquired Assets.
Notwithstanding anything to the contrary set forth herein, Sky Chefs shall not
indemnify CII in connection with any Damages arising as a result of the gross
negligence or willful misconduct of CII. CII hereby waives and releases any
claims against Sky Chefs for consequential or similar damages.
8.4 Procedure for Indemnification
In the event that any claim to be indemnified by the other hereunder is
made by CII or Sky Chefs, the Party seeking indemnification hereunder shall give
prompt written notice thereof to the indemnifying Party and the indemnifying
Party shall assume control of, and all expense with respect to, the defense,
settlement, adjustment or compromise of such claim; provided, that (i) the
indemnified Party may, if it so desires, employ counsel at its own expense to
assist in the handling of such claim and (ii) the indemnifying Party shall
obtain the prior written approval of the indemnified Party, which approval shall
not be unreasonably withheld, before entering into any settlement, adjustment or
compromise of such claim or ceasing to defend against such claim, if pursuant
thereto or as a result thereof there would be imposed injunctive or other relief
against the indemnified Party other than monetary damages fully indemnified by
the indemnifying Party. The rights and obligations under this Section will
survive the termination or expiration of this Agreement for any reason.
ARTICLE IX
MISCELLANEOUS
9.1 Entire Agreement; Amendment.
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This Agreement (together with the Exhibits and Schedules hereto)
constitutes the entire agreement between the Parties with respect to the subject
matter contained herein, supersedes all prior oral or written agreements,
commitments or understandings between the parties with respect thereto, and
cannot be amended, supplemented or otherwise modified except in a writing
executed by each of the Parties.
9.2 Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to principles of conflicts
of laws.
9.3 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
9.4 Successors and Assigns.
This Agreement is intended for the exclusive benefit of the parties hereto
and their respective successors and assigns. Nothing contained in this Agreement
shall be construed as granting any rights or benefits in or to any third party,
and no person shall assert any rights as third-party beneficiary hereunder.
9.5 Captions.
The captions in this Agreement are for convenience of reference only and
shall not be given any effect in the interpretation of this Agreement.
9.6 Further Assurances.
On or after the date hereof, CII and Sky Chefs hereby agree to promptly
execute, acknowledge and deliver any other assurances, instruments, agreements,
certificates or other documents and take any other action reasonably requested
by the other party hereto to effect the transactions contemplated hereby.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their officers or other duly authorized representatives as of the date first
above written.
SKY CHEFS, INC.
By: /s/ Hal Michel
-------------------------------
Name:
Title:
CATERAIR INTERNATIONAL,
INC. (II)
By: /s/ Thomas Statas
-------------------------------
Name: Thomas Statas
Title: Vice President
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Schedule 1
ACQUIRED ASSETS
[To come from SCIS]
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Schedule 2
REQUIRED CONSENTS & REQUIRED NOTICES
Required Consents
1. Consent of the Lenders under that certain Credit Agreement, dated as of
September 29, 1995, among Onex Food Services, Inc., SC International
Services, Inc., Caterair Holdings Corporation, Caterair International
Corporation, the Lenders named therein, Bankers Trust Company, Morgan
Guaranty Trust Company of New York and Goldman, Sachs & Co., as
Co-Arrangers, Goldman, Sachs & Co., as Documentation Agent, Bankers Trust
Company, as Syndication Agent, Morgan Guaranty Trust Company of New York,
as Administrative Agent and The Bank of New York, as Co-Agent.
2. Consent of the Massachusetts Port Authority pursuant to that certain
Lease, dated May 20, 1987, as amended (Authority Lease No. L-3672),
between Marriott Corporation and the Massachusetts Port Authority (as
subsequently assigned (i) by Marriott Corporation to Caterair Holdings
Corporation and (ii) by Caterair Holdings Corporation to Caterair
International Corporation and (iii) by Caterair International Corporation
to Caterair International, Inc. (II)).
3. Consent of Continental Airlines, pursuant to that certain Catering
Agreement, dated as of January 1, 1985, between Continental Airlines and
Marriott Corporation, as subsequently assigned to Caterair International
Corporation (as subsequently licensed by Caterair International
Corporation to Caterair International, Inc. (II), pursuant to a License
Agreement, dated as of September 29, 1995).
4. Consent of Iceland Air, pursuant to that certain Catering Agreement, dated
as of April 1, 1996, between Iceland Air and Caterair International, Inc.
(II).
5. Consent of Japan Airlines, pursuant to that certain Catering Agreement,
dated as of May 20, 1991, between Japan Airlines and Caterair
International Corporation (as subsequently licensed by Caterair
International Corporation to Caterair International, Inc. (II), pursuant
to a License Agreement, dated as of September 29, 1995).
Required Notices
1. Notice to Trans World Airways pursuant to that certain Catering Agreement,
dated as of March 29, 1995, between Trans World Airways and Caterair
International Corporation (as subsequently licensed by Caterair
International Corporation to Caterair International, Inc. (II), pursuant
to a License Agreement, dated as of September 29, 1995).
18
<PAGE> 19
Schedule 4.1(f)
Severance
1. Caterair International, Inc. (II) Severance Policy Applicable to
Management Employees.
2. Caterair International, Inc. (II) 1997 Boston Supervisors Severance Letter
regarding Special Enhanced Severance offered to Supervisors on June 13,
1997.
19
<PAGE> 20
Schedule 4.1(g)
Collective Bargaining Agreements
None
20
<PAGE> 21
Schedule 4.1(h)
Labor Disputes
None.
21
<PAGE> 22
Schedule 4.1(i)
Unions
1. International Association of Machinists (IAM), Lodge 2750.
22
<PAGE> 23
Schedule 4.1(j)
Organizational Efforts
None.
23
<PAGE> 24
Schedule 4.1(k)
Certain Proceedings
1. Mattson, Mary -- Age charge filed in connection with termination.
2. Mellone, Al -- Age and disability charge filed in connection with
termination.
24
<PAGE> 25
Exhibit A
FORM OF
ASSIGNMENT OF SUBLEASE
(Attached hereto)
25
<PAGE> 26
379 Boston
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (this "Agreement"), dated as of July __, 1997,
is between CATERAIR INTERNATIONAL, INC. (II) ("CII"), a Delaware corporation,
and SKY CHEFS, INC. ("Sky Chefs"), a Delaware corporation.
WHEREAS, CII and Sky Chefs are a party to that certain Acquisition
Agreement (the "Acquisition Agreement"), dated as of July __, 1997, pursuant to
which CII has agreed to sell all of its business and the related assets at CII's
flight kitchen catering facility (the "Kitchen") at the Logan International
Airport in Boston, Massachusetts to Sky Chefs, and Sky Chefs has agreed to
acquire all of CII's business and assets at the Kitchen;
WHEREAS, CII is a party to that certain Sublease Agreement (the "Caterair
Sublease"), dated as of September 29, 1995, between CII and Caterair
International Corporation ("Caterair"), regarding the subleasing of certain
facilities located in the City of Boston, Massachusetts, which facilities are
leased by Caterair (as the assignee of Marriott Corporation) from the
Massachusetts Port Authority pursuant to a Ground Lease dated May 20, 1987;
WHEREAS, CII desires to assign all of its right, title and interest in the
Caterair Sublease to Sky Chefs;
WHEREAS, Sky Chefs will assume all of CII's obligations and liabilities
under the Caterair Sublease; and
WHEREAS, this is the "Assignment of Sublease" contemplated by Section
3.2(a) of the Acquisition Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
As of the date hereof, CII hereby grants, conveys and assigns to Sky Chefs
all of CII's right, title and interest in and to the Caterair Sublease and Sky
Chefs hereby accepts such assignment and assumes all duties, obligations and
liabilities arising therefrom from the date hereof, as if Sky Chefs were an
original party thereto.
In the event of a conflict between the provisions of this Assignment
Agreement and the provisions of the Acquisition Agreement, the parties hereby
agree that the provisions of the Acquisition Agreement shall control and shall
be dispositive.
This Assignment Agreement may be executed in one or more counterparts,
each of which shall be considered an original but all of which together shall
constitute one and the same instrument.
26
<PAGE> 27
IN WITNESS WHEREOF, the parties have executed this Assignment Agreement
effective as of July ___, 1997.
CATERAIR INTERNATIONAL, INC. (II)
By:
-------------------------------------
Name:
Title:
SKY CHEFS, INC.
By:
-------------------------------------
Name:
Title:
Accepted and agreed as of
this ___ day of July, 1997
CATERAIR INTERNATIONAL CORPORATION
By:
---------------------------------
Name:
Title:
27
<PAGE> 28
Exhibit B
FORM OF RECEIPT
(Attached hereto)
28
<PAGE> 29
CROSS RECEIPT
Reference is hereby made to that certain Acquisition Agreement (the
"Acquisition Agreement"), dated as of July __, 1997, between Sky Chefs, Inc.
("Sky Chefs") and Caterair International, Inc. (II) ("CII"). Capitalized terms
used but not defined herein shall have the respective meanings ascribed to them
in the Acquisition Agreement.
Sky Chefs hereby acknowledges receipt, on the date hereof, of the Acquired
Assets referenced in Section 2.1 of the Acquisition Agreement.
CII hereby acknowledges receipt, on the date hereof, of $1,000,000, in
respect of the Purchase Price for Sky Chefs' acquisition of the Acquired Assets,
as referenced in Section 2.1 of the Acquisition Agreement.
Date: July __, 1997
SKY CHEFS, INC.
By:
-------------------------------------
Name:
Title:
CATERAIR INTERNATIONAL, INC. (II)
By:
-------------------------------------
Name:
Title:
29
<PAGE> 30
Exhibit C
FORM OF
BILL OF SALE
(Attached hereto)
30
<PAGE> 31
BILL OF SALE
Reference is hereby made to that certain Acquisition Agreement (the
"Acquisition Agreement"), dated as of July __, 1997, between Sky Chefs, Inc.
("Sky Chefs") and Caterair International, Inc. (II) ("CII"). Capitalized terms
used but not defined herein shall have the respective meanings ascribed to them
in the Acquisition Agreement.
CII, for and in consideration of the representations, warranties and
agreements set forth in the Acquisition Agreement, and the payment by Sky Chefs
of the Purchase Price, as referenced in Section 2.1 of the Acquisition
Agreement, and other good and valuable consideration paid to the CII, the
receipt and sufficiency of which are hereby acknowledged, has bargained and sold
and by these presents do grant and convey, pursuant to the Agreement, unto Sky
Chefs, all of CII's right, title and interest in and to all of the Acquired
Assets.
IN WITNESS WHEREOF, the undersigned have duly executed this Bill of
Sale as of this __ day of July, 1997.
SKY CHEFS, INC.
By:
-------------------------------------
Name:
Title:
CATERAIR INTERNATIONAL, INC. (II)
By:
-------------------------------------
Name:
Title:
31
<PAGE> 32
Exhibit D
FORM OF
ASSIGNMENT OF CONTRACTS
(Attached hereto)
32
<PAGE> 33
ASSIGNMENT AGREEMENT
Assignment Agreement, dated as of July __, 1997, between Caterair
International, Inc. (II), a Delaware corporation ("CII") and Sky Chefs, Inc., a
Delaware corporation.
Reference is hereby made to that certain Acquisition Agreement, dated as
of July __, 1997 (as amended from time to time, the "Acquisition Agreement"),
between Sky Chefs and CII. Capitalized terms used but not otherwise defined
herein shall have the respective meanings ascribed to such terms in the
Acquisition Agreement.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged and subject to the terms and conditions set forth in the
Acquisition Agreement, CII hereby transfers, assigns, grants, transfers and
otherwise conveys and delivers to Sky Chefs, and Sky Chefs hereby accepts all of
CII's right, title and interest in, to and under the Acquired Agreements.
IN WITNESS WHEREOF, the undersigned have duly executed this Assumption
Agreement as of the date first written above.
SKY CHEFS, INC.
By:
----------------------------------
Name:
Title:
CATERAIR INTERNATIONAL, INC. (II)
By:
----------------------------------
Name:
Title:
33
<PAGE> 34
Exhibit E
FORM OF
ASSUMPTION AGREEMENT
(Attached hereto)
34
<PAGE> 35
ASSUMPTION AGREEMENT
Assumption Agreement, dated as of July __, 1997, by Sky Chefs, Inc., a
Delaware corporation ("Sky Chefs").
Reference is hereby made to that certain Acquisition Agreement, dated as
of July __, 1997 (as amended from time to time, the "Acquisition Agreement"),
between Sky Chefs and Caterair International, Inc. (II). Capitalized terms used
but not otherwise defined herein shall have the respective meanings ascribed to
such terms in the Acquisition Agreement.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Sky Chefs hereby assumes and agrees to pay, perform and
discharge when due all of the Assumed Liabilities (but not any of the Excluded
Liabilities) subject to the terms and conditions set forth in the Acquisition
Agreement.
IN WITNESS WHEREOF, the undersigned has duly executed this Assumption
Agreement as of the date first written above.
SKY CHEFS, INC.
By:
-------------------------------
Name:
Title:
35
<PAGE> 36
Annex A
CIC LICENSE AGREEMENT
(Attached hereto)
36
<PAGE> 37
Annex B
CIC SUBLEASE AGREEMENT
(Attached hereto)
37
<PAGE> 1
EXHIBIT 12.1
SC International Services, Inc and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(Unaudited with respect to the six months ended June 30, 1996 and 1997)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Year Ended December 31, Six Months Ended June 30,
---------------------------------------------------------- ----------------------
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed charges:
Interest expense 8,223 6,703 5,748 N/A N/A N/A N/A
Implicit interest in rent 11,344 10,629 11,000 N/A N/A N/A N/A
--------- --------- --------- --------- --------- --------- ---------
Total fixed charges 19,567 17,332 18,748 N/A N/A N/A N/A
========= ========= ========= ========= ========= ========= =========
Earnings:
Earnings before provision for
income taxes 5,657 20,608 36,590 (22,569) (10,621) (26,277) (1,189)
Fixed charges 19,567 17,332 16,748 N/A N/A N/A N/A
--------- --------- --------- --------- --------- --------- ---------
Earnings, as defined 25,224 37,940 53,338 N/A N/A N/A N/A
========= ========= ========= ========= ========= ========= =========
Ratio of earnings to fixed charges 1.3 2.2 3.2 N/A N/A N/A N/A
========= ========= ========= ========= ========= ========= =========
Deficiency of earnings N/A N/A N/A (22,569) (10,621) (26,277) (1,189)
========= ========= ========= ========= ========= ========= =========
</TABLE>
<PAGE> 1
EXHIBIT 12.2
Caterair International Corporation and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(Unaudited with respect to the six months ended June 30, 1996 and 1997)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Year Ended December 31, Six Months Ended June 30,
--------------------------------------------------------- ---------------------
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed charges:
Interest expense N/A N/A N/A 4,979 18,450 9,537 8,926
Implicit interest in rent N/A N/A N/A 2,239 8,900 4,570 4,306
--------- --------- --------- --------- --------- --------- ---------
Total fixed charges N/A N/A N/A 7,218 27,350 14,107 13,232
========= ========= ========= ========= ========= ========= =========
Earnings:
Earnings from continuing operations
before provision for income taxes -- -- -- 3,064 16,101 6,849 8,544
Fixed charges N/A N/A N/A 7,218 27,350 14,107 13,232
--------- --------- --------- --------- --------- --------- ---------
Earnings, as defined N/A N/A N/A 10,282 43,451 20,956 21,776
========= ========= ========= ========= ========= ========= =========
Ratio of earnings to fixed charges N/A N/A N/A 1.4 1.6 1.5 1.6
========= ========= ========= ========= ========= ========= =========
Deficiency of earnings -- -- -- N/A N/A N/A N/A
========= ========= ========= ========= ========= ========= =========
</TABLE>
<PAGE> 1
EXHIBIT 12.3
SC International Services, Inc and Subsidiaries and
Caterair International Corporation and Subsidiaries
Computation of Combined Pro Forma Ratio of Earnings to Fixed Charges
(Unaudited with respect to the six months ended June 30, 1996 and 1997)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Twelve
Months
Year Ended Ended
December 31, Six Months Ended June 30, June 30,
------------ -------------------------- -----------
1996 1996 1997 1997
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Fixed charges:
Interest expense 59,156 N/A 30,849 59,568
Implicit interest in rent 28,329 N/A 14,230 27,783
------------ ----------- ----------- -----------
Total fixed charges 87,485 N/A 45,079 87,351
============ =========== =========== ===========
Earnings:
Earnings before provision for
income taxes 13,470 (14,651) 9,191 37,312
Fixed charges 87,485 N/A 45,079 87,351
------------ ----------- ----------- -----------
Earnings, as defined 100,955 N/A 54,270 124,663
============ =========== =========== ===========
Ratio of earnings to fixed charges 1.2 N/A 1.2 1.4
============ =========== =========== ===========
Deficiency of earnings N/A (14,651) N/A N/A
============ =========== =========== ===========
</TABLE>
<PAGE> 1
SUBSIDIARIES OF THE REGISTRANTS
<TABLE>
<CAPTION>
JURISDICTION
SUBSIDIARY OWNERSHIP PERCENTAGE OF INCORPORATION
- ---------------------------------------------- -------------------------- ----------------
<S> <C> <C>
Sky Chefs, Inc.* ("SKY CHEFS") SC International Services, Delaware
Inc. ("SCIS")
(100%)
Caterair International, Inc. (II)*("CII") SCIS(100%) Delaware
Caterair International Transition Corporation* SCIS(100%) Delaware
Onex Ohio Acceptance Corporation* SCIS(100%) Delaware
Onex Ohio Finance Corp.* SCIS(100%) Delaware
Onex Ohio Finance Corp. II* SCIS(100%) Delaware
Onex Ohio Equity Corp.* SCIS(100%) Delaware
Onex Ohio Equity Corp. II* SCIS(100%) Delaware
Onex Ohio Credit Corp.* SCIS(100%) Delaware
Onex Ohio Credit Corp. II* SCIS(100%) Delaware
Onex Ohio Capital Corp.* SCIS(100%) Delaware
Onex Ohio Capital Corp. II* SCIS(100%) Delaware
Onex Ohio Fiscal Corp.* SCIS(100%) Delaware
Onex Ohio Fiscal Corp. II* SCIS(100%) Delaware
Onex Ohio Funds Corp.* SCIS(100%) Delaware
Onex Ohio Funds Corp. II* SCIS(100%) Delaware
Arlington Services, Inc.* ("ASI") Sky Chefs(100%) Delaware
Arlington Services Holding Corporation*
("ASHC") Sky Chefs(100%) Delaware
Sky Chefs International Corp.* ("SCIC") Sky Chefs(100%) Delaware
Bethesda Services, Inc.* ("BSI") CII(100%) Delaware
Caterair New Zealand Limited* (formerly
known as Bethesda Services Holding
Corporation)("CNZL") BSI(100%) Delaware
JFK Caterers, Inc.* ASHC(100%) Delaware
Caterair Consulting Services Corporation* ASHC(100%) Delaware
Western Aire Chef, Inc.* ("WAC") ASHC(100%) Delaware
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
Jurisdiction
Subsidiary Ownership Percentage of Incorporation
- ------------------------------------------ -------------------- ----------------
<S> <C> <C>
Caterair Airport Properties, Inc.* ("CAP") ASHC (100%) Delaware
Caterair St. Thomas Holding Corporation* ASHC (100%) Delaware
("CSTHC")
Sky Chefs Argentina, Inc.* ASHC (100%) Delaware
LSG Sky Chefs do Brazil Catering-Refeicoes
Ltda. ("LSG do Brazil") SCIC (100%) Brazil
ServCater International Ltda. LSG de Brazil (90%) Brazil
Arlington Services Mexico S.A. de C.V.
("ASM") ASHC (100%) Mexico
Caterair de Mexico S.A. de C.V. ASM (100%) Mexico
Comisariato Goure S.A. ASM (100%) Mexico
Inmobiliaria Maraca S.A. de C.V. ASM (100%) Mexico
Casa de Ponce de Leon, S.A. ASM (100%) Mexico
("CPL")
Cocina del Aire Provincia, CPL (100%) Mexico
S.A. de C.V.
Caterair Inflite Services de
Mexico S.A. de C.V. CPL (100%) Mexico
Cater Suprimento de Refeicoes, Ltd. ("CSRL") ASHC (100%) Brazil
Caterair Servicos de Bordo e
Hotelaria S.A. CSRL (100%) Brazil
Caterair Chateau Canada Limited ("CCCL") ASHC (100%) Canada
SC International Services Ireland CCCL (100%) Ireland
Sky Chefs U.K. Limited ("SCUKL") ASHC (100%) United Kingdom
LSG Lufthansa Service Sky
Chefs/GCC Limited SCURL (50%) United Kingdom
Arlington Services Panama S.A. de C.V.
("ASP") ASHC (100%) Panama
Inversiones Turisticas Aeropuerto
Panama S.A. ("ITAP") ASP (100%) Panama
Caterair International de
Panama S.A. ITAP (100%) Panama
Caterair Barcelona S.A. ASHC (80%) Spain
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Jurisdiction
Subsidiary Ownership Percentage of Incorporation
- --------------------------------------------- -------------------- ----------------
<S> <C> <C>
Caterair Madrid S.A. ("CM") ASHC (100%) Spain
Caterair Barcelona S.A. CM (20%) Spain
LSG Lufthansa Service Sky Chefs France S.A. ASHC (100%) France
Caterair International Venezuela C.A. ("CIV") ASHC (100%) Venezuela
Marriott Export Services, L.A. CIV (100%) Venezuela
Marriott International Trade Services C.A. CIV (100%) Venezuela
Caterair International Japan Ltd. ASHC (100%) Japan
Caterair In-Flite Services of V.I., Inc. ASHC (100%) Virgin Islands
Marriott In-Flite Services of Korea, Ltd.+ ASHC (100%) Korea
Caterair Australia Pty. Ltd. ("CAP Ltd.") CAP (100%) Australia
Caterair Airport Services Pty. Ltd. ("CASP") CAP Ltd. (51%) Australia
Caterair Airport Services (Sydney) Pty. Ltd. CASP (100%) Australia
Caterair Taiwan Inflight Services, Inc.+ CNZL (100%) Taiwan
Caterair Portugal Assistancia A Bordo Limitada CAP (26%) Portugal
WAC (99%)
Caterair Chile S.A. ("CC") CAP (1%) Chile
CC (97%)
Caterair Servicos Industriales Ltda Sergio Aldunate (3%) Chile
</TABLE>
- -------------------
* Guarantor of SCIS' 9 1/4% Senior Subordinated Notes due 2007.
+ Held pursuant to certain trust arrangements.
<PAGE> 1
Exhibit 23.1
[COOPERS & LYBRAND LETTERHEAD]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-4 of our
report dated February 28, 1997, on our audits of the consolidated financial
statements of SC International Services, Inc. and Subsidiaries. We also consent
to the references to our firm under the captions "Experts," "Summary Historical
Financial Data" and "Selected Historical Financial Data."
We consent to the inclusion in this registration statement on Form S-4 of our
report dated March 5, 1997, on our audits of the consolidated financial
statements of Caterair International Corporation and Subsidiaries. We also
consent to the references to our firm under the captions "Experts," "Summary
Historical Financial Data" and "Selected Historical Financial Data."
/s/ Coopers & Lybrand L.L.P.
----------------------------
Coopers & Lybrand L.L.P.
Dallas, Texas
October 6, 1997
<PAGE> 1
Exhibit 23.4
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the use of our report
(and to all references to our Firm) included in or made a part of this
registration statement.
/s/ ARTHUR ANDERSEN LLP
-----------------------
ARTHUR ANDERSEN LLP
Washington, D.C.
October 6, 1997
<PAGE> 1
EXHIBIT 25.1
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
SC INTERNATIONAL SERVICES, INC.
(Exact name of obligor as specified in its charter)
Delaware 75-2607219
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
524 E. Lamar Boulevard
Arlington, Texas 76011-3999
(Address of principal executive offices) (Zip code)
<PAGE> 2
(Table of Additonal Registrants)
Sky Chefs, Inc. Delaware 13-1318387
Caterair International, Delaware 75-2607218
Inc. (II)
Caterair International Delaware 52-1640561
Corporation
Arlington Services, Inc. Delaware 51-0344713
Arlington Services Holding Delaware 51-0368977
Corporation
JFK Caterers, Inc. Delaware 52-1312557
Caterair Consulting
Services Corporation Delaware 52-0936585
Western Aire Chef, Inc. Delaware 52-0974724
Bethesda Services, Inc. Delaware 51-0369138
Caterair New Zealand Limited Delaware 51-0369139
Onex Ohio Finance Corp. Delaware 75-2184952
Onex Ohio Finance Corp.
(II) Delaware 75-2228384
Onex Ohio Equity Corp. Delaware 75-2184952
Onex Ohio Equity Corp.
(II) Delaware 75-2641451
Onex Ohio Credit Corp. Delaware 75-2137074
Onex Ohio Credit Corp.
(II) Delaware 75-2641443
Onex Ohio Acceptance
Corporation Delaware 75-2137075
Onex Ohio Capital Corp. Delaware 75-2344670
Onex Ohio Capital Corp.
(II) Delaware 75-2641452
Onex Ohio Fiscal Corp. Delaware 75-2273325
Onex Ohio Fiscal Corp.
(II) Delaware 75-2641448
Onex Ohio Funds Corp. Delaware 75-2272625
Onex Ohio Funds Corp.
(II) Delaware 75-2641444
Caterair International
Transition Corporation Delaware 52-1947041
Sky Chefs International
Corp. Delaware 13-3800220
Caterair Airport
Properties, Inc. Delaware 52-1047952
Caterair St. Thomas
Holdings Corporation Delaware 52-1805211
Sky Chefs Argentine
Inc. Delaware 52-1689276
----------------------
9 1/4% Senior Subordinated Notes due 2007
(Title of the indenture securities)
================================================================================
-2-
<PAGE> 3
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit
1 to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
- 3 -
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 23rd day of September, 1997.
THE BANK OF NEW YORK
By: /s/ VIVIAN GEORGES
-------------------------------
Name: VIVIAN GEORGES
Title: Assistant Vice President
-4-
<PAGE> 5
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1997,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ................ $ 8,249,820
Interest-bearing balances .......... 1,031,026
Securities:
Held-to-maturity securities ........ 1,118,463
Available-for-sale securities ...... 3,005,838
Federal funds sold and Securities pur-
chased under agreements to resell.... 3,100,281
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................32,895,077
LESS: Allowance for loan and
lease losses ..............633,877
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 32,260,771
Assets held in trading accounts ...... 1,715,214
Premises and fixed assets (including
capitalized leases) ................ 684,704
Other real estate owned .............. 21,738
Investments in unconsolidated
subsidiaries and associated
companies .......................... 195,761
Customers' liability to this bank on
acceptances outstanding ............ 1,152,899
Intangible assets .................... 683,503
Other assets ......................... 1,526,113
-----------
Total assets ......................... $54,746,131
===========
LIABILITIES
Deposits:
In domestic offices ................ $25,614,961
Noninterest-bearing ......10,564,652
Interest-bearing .........15,050,309
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 15,103,615
Noninterest-bearing .........560,944
Interest-bearing .........14,542,671
Federal funds purchased and Securities
sold under agreements to repurchase. 2,093,286
Demand notes issued to the U.S.
Treasury ........................... 239,354
Trading liabilities .................. 1,399,064
Other borrowed money:
With remaining maturity of one year
or less .......................... 2,075,092
With remaining maturity of more than
one year ......................... 20,679
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,160,012
Subordinated notes and debentures .... 1,014,400
Other liabilities .................... 1,840,245
-----------
Total liabilities .................... 50,560,708
-----------
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,544,303
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ (19,449)
Cumulative foreign currency transla-
tion adjustments .................. (13,034)
-----------
Total equity capital ................ 4,185,423
-----------
Total liabilities and equity
capital ........................... $54,746,131
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
-
Alan R. Griffith |
J. Carter Bacot |
Thomas A. Renyi | Directors
-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF SC INTERNATIONAL SERVICES, INC. SET FORTH
IN THE REGISTRATION STATEMENT TO WHICH THIS SCHEDULE IS AN EXHIBIT AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. THE
CO-REGISTRANTS INCLUDE CATERAIR INTERNATIONAL, INC. (II), SKY CHEFS, INC.,
CATERAIR INTERNATIONAL CORPORATION AND EACH OF THE OTHER CO-REGISTRANTS NAMED
IN THE TABLE OF ADDITIONAL REGISTRANTS INCLUDED IN THE REGISTRATION STATEMENT.
THE CONSOLIDATED FINANCIAL STATEMENTS OF SC INTERNATIONAL SERVICES, INC.
INCLUDE THE ACCOUNTS OF SC INTERNATIONAL SERVICES, INC. AND ALL OF THE OTHER
CO-REGISTRANTS OTHER THAN CATERAIR INTERNATIONAL CORPORATION.
</LEGEND>
<CIK> 0000948064
<NAME> SC INTERNATIONAL SERVICES, INC.
<MULTIPLIER> 1,000
<S> <C> <C> <C>
<PERIOD-TYPE> YEAR 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1997 DEC-31-1996
<PERIOD-START> JAN-01-1996 JAN-01-1997 JAN-01-1996
<PERIOD-END> DEC-31-1996 JUN-30-1997 JUN-30-1996
<CASH> 55,658 31,772 0
<SECURITIES> 0 0 0
<RECEIVABLES> 162,723 174,402 0
<ALLOWANCES> 14,314 13,924 0
<INVENTORY> 18,150 18,325 0
<CURRENT-ASSETS> 248,319 238,254 0
<PP&E> 307,238 314,794 0
<DEPRECIATION> 116,632 125,753 0
<TOTAL-ASSETS> 853,456 841,832 0
<CURRENT-LIABILITIES> 276,797 285,080 0
<BONDS> 125,000 125,000 0
0 0 0
0 0 0
<COMMON> 59,579 59,579 0
<OTHER-SE> (12,848) (15,399) 0
<TOTAL-LIABILITY-AND-EQUITY> 853,456 841,832 0
<SALES> 1,529,816 774,244 720,675
<TOTAL-REVENUES> 1,529,816 774,244 720,675
<CGS> 1,352,359 684,605 649,781
<TOTAL-COSTS> 1,352,359 684,605 649,781
<OTHER-EXPENSES> 23,721 9,287 12,621
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 50,431 25,868 25,917
<INCOME-PRETAX> (10,621) (1,189) (26,277)
<INCOME-TAX> 420 (701) (8,740)
<INCOME-CONTINUING> (11,041) (488) (17,537)
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> (11,041) (488) (17,537)
<EPS-PRIMARY> 0 0 0
<EPS-DILUTED> 0 0 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF CATERAIR INTERNATIONAL CORPORATION SET
FORTH IN THE REGISTRATION STATEMENT TO WHICH THIS SCHEDULE IS AN EXHIBIT AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. THE C0-
REGISTRANTS INCLUDE SC INTERNATIONAL SERVICES, INC., SKY CHEFS, INC., CATERAIR
INTERNATIONAL, INC. (II) AND EACH OF THE ADDITIONAL CO-REGISTRANTS NAMED IN THE
TABLE OF ADDITIONAL REGISTRANTS INCLUDED IN THE REGISTRATION STATEMENT.
</LEGEND>
<CIK> 0000855019
<NAME> CATERAIR INTERNATIONAL CORPORATION
<MULTIPLIER> 1,000
<S> <C> <C> <C>
<PERIOD-TYPE> YEAR 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1997 DEC-31-1996
<PERIOD-START> JAN-01-1996 JAN-01-1997 JAN-01-1996
<PERIOD-END> DEC-31-1996 JUN-30-1997 JUN-30-1996
<CASH> 6,847 181 0
<SECURITIES> 0 0 0
<RECEIVABLES> 12,137 11,820 0
<ALLOWANCES> 994 999 0
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 27,857 25,282 0
<PP&E> 180,854 179,348 0
<DEPRECIATION> 101,459 105,685 0
<TOTAL-ASSETS> 173,948 161,518 0
<CURRENT-LIABILITIES> 45,282 38,375 0
<BONDS> 0 0 0
0 0 0
0 0 0
<COMMON> 173,596 173,596 0
<OTHER-SE> (275,586) (269,721) 0
<TOTAL-LIABILITY-AND-EQUITY> 173,948 161,518 0
<SALES> 0 0 0
<TOTAL-REVENUES> 77,958 37,725 38,206
<CGS> 30,416 14,822 15,659
<TOTAL-COSTS> 30,416 14,822 15,659
<OTHER-EXPENSES> 0 0 0
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 18,450 8,926 9,537
<INCOME-PRETAX> 16,101 8,544 6,849
<INCOME-TAX> 8,044 2,350 2,174
<INCOME-CONTINUING> 8,057 6,194 4,675
<DISCONTINUED> 1,682 (329) 1,393
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 9,739 5,865 6,068
<EPS-PRIMARY> 0 0 0
<EPS-DILUTED> 0 0 0
</TABLE>
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL FOR
9 1/4% SENIOR SUBORDINATED NOTES DUE 2007, SERIES A
OF SC INTERNATIONAL SERVICES, INC.
PURSUANT TO THE OFFER TO EXCHANGE
9 1/4% SENIOR SUBORDINATED NOTES DUE 2007, SERIES B
FOR ALL OUTSTANDING
9 1/4% SENIOR SUBORDINATED NOTES DUE 2007, SERIES A
----------
PURSUANT TO THE PROSPECTUS, DATED ________ __, 1997
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
_______________, 1997, UNLESS EXTENDED (THE "EXPIRATION DATE").
TENDERS OF PRIVATE NOTES (AS DEFINED HEREIN) MAY BE WITHDRAWN AT
ANY TIME PRIOR TO THE EXPIRATION DATE.
TO: THE BANK OF NEW YORK, EXCHANGE AGENT (THE "EXCHANGE AGENT")
<TABLE>
<S> <C> <C>
By Hand Or Overnight Delivery: Facsimile Transmissions: By Registered Or Certified Mail:
(Eligible Institutions Only)
The Bank of New York (212) 815-6339 The Bank of New York
101 Barclay Street 101 Barclay Street, 7E
Corporate Trust Services Window To Confirm by Telephone or New York, New York 10286
Ground Level for Information Call: Attention: Reorganization Section,
Attention: Reorganization Section, (212) 815-6337 Odell Romeo
Odell Romeo
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION VIA
FACSIMILE, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
HOLDERS (AS DEFINED HEREIN) WHO WISH TO BE ELIGIBLE TO RECEIVE EXCHANGE NOTES
(AS DEFINED HEREIN) FOR THEIR PRIVATE NOTES PURSUANT TO THE EXCHANGE OFFER (AS
DEFINED HEREIN) MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR PRIVATE NOTES TO
THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
<PAGE> 2
By execution hereof, the undersigned acknowledges receipt of the
Prospectus (the "Prospectus"), dated________ __, 1997, of SC International
Services, Inc., a Delaware corporation (the "Issuer"), which, together with this
Letter of Transmittal and the instructions hereto (the "Letter of Transmittal"),
constitute the Issuer's offer (the "Exchange Offer") to exchange $1,000
principal amount of its registered 9 1/4% Senior Subordinated Notes due 2007,
Series B (the "Exchange Notes"), for each $1,000 principal amount of its
outstanding unregistered 9 1/4% Senior Subordinated Notes due 2007, Series A
(the "Private Notes" and, together with the Exchange Notes, the "Notes"), of
which $300,000,000 aggregate principal amount was outstanding on the date of the
Prospectus. The Exchange Notes have been registered under the Securities Act of
1933, as amended.
The Issuer reserves the right, at any time or from time to time, to
extend the Exchange Offer at its sole discretion, in which event the term
"Expiration Date" shall mean the latest time and date to which the Exchange
Offer is extended. The Issuer shall notify the holders of the Private Notes of
any extension by means of a press release or other public announcement prior to
9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date.
This Letter of Transmittal is to be used by Holders of Private Notes
if: (i) a certificate representing Private Notes is to be physically delivered
to the Exchange Agent herewith by Holders; or (ii) tender of Private Notes is to
be made by book-entry transfer to the account maintained by the Exchange Agent
at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to
the procedures set forth in "The Exchange Offer --Book-Entry Transfer" section
of the Prospectus by any financial institution that is a participant in The
Depository Trust Company (the "Depositary") whose name appears on a security
position listing as the owner of the Private Notes; or (iii) tender of Private
Notes is to be made by the guaranteed delivery procedures set forth in "The
Exchange Offer -- Guaranteed Delivery Procedures" section of the Prospectus. See
Instruction 1. DELIVERY OF DOCUMENTATION TO THE BOOK-ENTRY TRANSFER FACILITY
DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The term "Holder" with respect to the Exchange Offer means any person:
(i) in whose name Private Notes are registered on the books of the Issuer or any
other person who has obtained a properly completed bond power, as applicable,
from the registered holder, or (ii) whose Private Notes are held of record by
the Depositary (or its nominee), whose name appears on a security position
listing as the owner of Private Notes (and is a participant in the Depositary)
and who desires to deliver such Private Notes by book-entry transfer at the
Depositary.
----------
The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer.
All capitalized terms used herein and not defined herein shall have the
meaning ascribed to them in the Prospectus.
HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER THEIR PRIVATE
NOTES MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY.
2
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby tenders to the Issuer the aggregate principal
amount of Private Notes indicated in this Letter of Transmittal, upon the terms
and subject to the conditions set forth in the Prospectus, dated _________ ___,
1997 (the "Prospectus"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal. All capitalized terms used herein and not defined herein
shall have the meanings ascribed to them in the Prospectus.
Subject to, and effective upon, the acceptance for exchange of the
Private Notes tendered hereby, the undersigned hereby sells, assigns and
transfers to, or upon the order of, the Issuer all right, title and interest in
and to such Private Notes as are being tendered hereby and hereby irrevocably
constitutes and appoints the Exchange Agent as its agent and attorney-in-fact
with respect to such Private Notes (with full knowledge that the Exchange Agent
acts as agent of the Issuer and as Trustee under the Indenture for the Private
Notes and the Exchange Notes), with full power of substitution (such power of
attorney being an irrevocable power coupled with an interest), to:
(a) deliver such Private Notes in registered certificated form, or
transfer ownership of such Private Notes through book-entry transfer at the
Book-Entry Transfer Facility, to or upon the order of the Issuer, upon receipt
by the Exchange Agent, as the undersigned's agent, of the same aggregate
principal amount of Exchange Notes; and
(b) present such Private Notes for transfer on the books of the Issuer
and receive, for the account of the Issuer, all benefits and otherwise exercise,
for the account of the Issuer, all rights of beneficial ownership of the Private
Notes tendered hereby in accordance with the terms of the Exchange Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Private Notes
tendered hereby and that the Issuer will acquire good, marketable and
unencumbered title thereto, free and clear of all security interests, liens,
restrictions, charges, encumbrances, conditional sale agreements or other
obligations relating to their sale or transfer, and not subject to any adverse
claim when the same are accepted by the Issuer.
The undersigned also acknowledges that this Exchange Offer is being
made in reliance on the Issuer's belief, based upon interpretations by the staff
of the Securities and Exchange Commission (the "Commission") set forth in
no-action letters issued to third parties unrelated to the Issuer, that the
Exchange Notes issued pursuant to the Exchange Offer in exchange for the Private
Notes may be offered for resale, resold and otherwise transferred by any holder
thereof (other than (i) any such holder that is an "affiliate" of the Issuer
within the meaning of Rule 405 under the Securities Act or (ii) any
broker-dealer that purchased Notes from the Issuer to resell pursuant to Rule
144A under the Securities Act or any other available exemption under the
Securities Act) without compliance with the registration and prospectus delivery
provisions of the Securities Act; provided that the holder acquires the Exchange
Notes in the ordinary course of its business and is not engaging, and has no
intention to engage, and has no arrangement or understanding with any person to
participate, in the distribution of the Exchange Notes.
The undersigned hereby further represents that (i) the Exchange Notes
acquired in exchange for Private Notes tendered hereby will have been acquired
in the ordinary course of business of the person receiving such Exchange Notes,
whether or not such person is the undersigned, (ii) neither the undersigned nor
any such other person has an arrangement or understanding with any person to
participate in the distribution of such Exchange Notes and neither the holder of
such Private Notes nor any such person is engaging in, or intends to engage in,
the distribution of such Exchange Notes, and (iii) except as indicated herein,
neither the undersigned nor any such other person is an "affiliate" of the
Issuer within the meaning of Rule 405 under the Securities Act or, if such
holder or any such other person is an affiliate of the Issuer, that such holder
or such other person will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable. The undersigned has
read and agrees to all of the terms of the Exchange Offer as described in the
Prospectus and herein. If the undersigned or any beneficial owner for whom the
undersigned is tendering Private Notes is a broker-dealer that will receive
Exchange Notes for its own account in exchange for Private Notes, where such
Private Notes were acquired by such broker-dealer as a result of market-making
or other trading activities (a "Participating Broker-Dealer"), it acknowledges
that it will deliver a prospectus in connection with any resale of such Exchange
Notes; however, by so acknowledging and by delivering a prospectus, the
undersigned or such beneficial owner will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
3
<PAGE> 4
The Issuer has agreed that, subject to the provisions of the
Registration Rights Agreement, the Prospectus, as it may be amended or
supplemented from time to time, may be used by a Participating Broker-Dealer in
connection with resales of Exchange Notes received in exchange for Private Notes
acquired by such Participating Broker-Dealer for its own account as a result of
market-making or other trading activities, for a period ending 90 days after the
Expiration Date or, if earlier, when all such Exchange Notes have been disposed
of by such Participating Broker-Dealer. In that regard, each Participating
Broker-Dealer by tendering such Private Notes and executing this Letter of
Transmittal, agrees that, upon receipt of notice from the Issuer of the
occurrence of any event or the discovery of any fact which makes any statement
contained or incorporated by reference in the Prospectus untrue in any material
respect or which causes the Prospectus to omit to state a material fact
necessary in order to make the statements contained or incorporated by reference
therein, in light of the circumstances under which they were made, not
misleading, such Participating Broker-Dealer will suspend the sale of Exchange
Notes pursuant to the Prospectus until the Issuer has amended or supplemented
the Prospectus to correct such misstatement or omission and has furnished copies
of the amended or supplemented Prospectus to the Participating Broker-Dealer or
the Issuer has given notice that the sale of the Exchange Notes may be resumed,
as the case may be. If the Issuer gives such notice to suspend the sale of the
Exchange Notes, it shall extend the 90-day period referred to above during which
Participating Broker-Dealers are entitled to use the Prospectus in connection
with the resale of Exchange Notes by the number of days during the period from
and including the date of the giving of such notice to and including the date
when Participating Broker-Dealers shall have received copies of the supplemented
or amended Prospectus necessary to permit resales of the Exchange Notes or to
and including the date on which the Issuer has given notice that the sale of
Exchange Notes may be resumed, as the case may be.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Issuer or the Exchange Agent to be necessary or
desirable to complete the sale, assignment and transfer of the Private Notes
tendered hereby. All authority conferred or agreed to be conferred in this
Letter of Transmittal and every obligation of the undersigned hereunder shall be
binding upon the successors, assigns, heirs, executors, administrators, trustees
in bankruptcy and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned. This
tender may be withdrawn only in accordance with the procedures set forth in "The
Exchange Offer -- Withdrawal of Tenders" section of the Prospectus.
For purposes of the Exchange Offer, the Issuer shall be deemed to have
accepted validly tendered Private Notes when the Issuer has given oral or
written notice thereof to the Exchange Agent. If any tendered Private Notes are
not accepted for exchange pursuant to the Exchange Offer for any reason,
certificates for any such unaccepted Private Notes will be returned (except as
noted herein with respect to tenders through the Book-Entry Transfer Facility),
without expense, to the undersigned at the address shown below or at a different
address as may be indicated under "Special Issuance Instructions" as promptly as
practicable after the Expiration Date.
The undersigned understands that tenders of the Private Notes pursuant
to any one of the procedures described under "The Exchange Offer -- Procedures
for Tendering" in the Prospectus and in the instructions hereto will constitute
a binding agreement between the undersigned and the Issuer in accordance with
the terms and subject to the conditions of the Exchange Offer.
The undersigned recognizes that, under certain circumstances set forth
in the Prospectus under "The Exchange Offer -- Certain Conditions to the
Exchange Offer," the Issuer may not be required to accept for exchange any of
the Private Notes tendered. Private Notes not accepted for exchange or withdrawn
will be returned to the undersigned at the address set forth below unless
otherwise indicated under "Special Delivery Instructions" herein.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions", please deliver the Exchange Notes (and, if applicable, substitute
certificates representing Private Notes for any Private Notes not exchanged) in
the name of the undersigned or, in the case of a book-entry delivery of Private
Notes, please credit the account indicated above maintained at the Book-Entry
Transfer Facility. Similarly, unless otherwise indicated under the box entitled
"Special Delivery Instructions" below, please send the Exchange Notes (and, if
applicable, substitute certificates representing Private Notes for any Private
Notes not exchanged) to the undersigned at the address shown above in the box
entitled "Description of Private Notes." The undersigned recognizes that the
Issuer has no obligation pursuant to the "Special Issuance Instructions" and
"Special Delivery Instructions" to transfer any Private Notes from
4
<PAGE> 5
the name of the registered holder(s) thereof if the Issuer does not accept for
exchange any of the Private Notes so tendered.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF PRIVATE
NOTES" AND SIGNING THIS LETTER OF TRANSMITTAL AND DELIVERING SUCH PRIVATE NOTES
AND THIS LETTER OF TRANSMITTAL TO THE EXCHANGE AGENT, WILL BE DEEMED TO HAVE
TENDERED THE PRIVATE NOTES AS SET FORTH IN SUCH BOX.
List below the Private Notes to which this Letter of Transmittal
relates. If the space provided below is inadequate, list the certificate numbers
and principal amounts on a separately executed schedule and affix the schedule
to this Letter of Transmittal. Tenders of Private Notes will be accepted only in
principal amounts equal to $1,000 or integral multiples thereof.
DESCRIPTION OF PRIVATE NOTES TENDERED
<TABLE>
<CAPTION>
Certificate Number(s)* Aggregate Principal
Name(s) and Address(es) of Holder(s) (Attach signed list if Amount Tendered
(Please fill in if blank) necessary) (if less than all)**
<S> <C> <C>
</TABLE>
TOTAL PRINCIPAL AMOUNT OF PRIVATE NOTES TENDERED
* Need not be completed by Holders tendering by book-entry transfer.
** Need not be completed by Holders who wish to tender with respect to all
Private Notes listed. See Instruction 2.
USE OF BOOK ENTRY TRANSFER
/ / CHECK HERE IF TENDERED PRIVATE NOTES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT AT
THE DEPOSITORY TRUST COMPANY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:_________________________________________________
DTC Book-Entry Account No.:____________________________________________________
Transaction Code No.:__________________________________________________________
USE OF GUARANTEED DELIVERY
If Holders desire to tender Private Notes pursuant to the Exchange
Offer and (i) certificates representing such Private Notes are not lost
but are not immediately available, (ii) time will not permit this
Letter of Transmittal, certificates representing such Private Notes or
other required documents to reach the Exchange Agent prior to the
Expiration Date or (iii) the procedures for book-entry transfer cannot
be completed prior to the Expiration Date, such Holders may effect a
tender of such Private Notes in accordance with the guaranteed delivery
procedures set forth in the Prospectus under "The Exchange Offer --
Guaranteed Delivery Procedures."
5
<PAGE> 6
/ / CHECK HERE IF TENDERED PRIVATE NOTES ARE BEING DELIVERED PURSUANT TO
THE NOTICE OF GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE
AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Holder(s) of Private Notes:
Window Ticket No. (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Eligible Institution that Guaranteed Delivery:
If Delivered by Book-Entry Transfer, Name of Tendering Institution:
DTC Book-Entry Account No.:
Transaction Code No.:
BROKER-DEALER COPIES OF PROSPECTUS
/ / CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO
Name:
Address:
Aggregate Principal Amount of Private Notes so held:
FOR USE BY AFFILIATES
/ / CHECK HERE IF YOU OR ANY BENEFICIAL OWNER FOR WHOM YOU ARE TENDERING
PRIVATE NOTES IS AN AFFILIATE OF THE ISSUER
Name:
Address:
Aggregate Principal Amount of Private Notes so held: $
6
<PAGE> 7
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS OF PRIVATE NOTES REGARDLESS
OF WHETHER PRIVATE NOTES ARE BEING PHYSICALLY DELIVERED HEREWITH)
If a Holder is tendering any Private Notes, this Letter of Transmittal must be
signed by the Holder(s) of the Private Notes exactly as the name(s) appear(s) on
the certificate(s) for the Private Notes or, if tendered by a participant in The
Depository Trust Company, exactly as such participant's name appears on a
security position listing as the owner of the Private Notes, or by any person(s)
authorized to become Holder(s) by endorsements and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, please set forth full title and submit evidence
satisfactory to the Issuer of each such person's authority to so act. See
Instruction 3.
If the signature appearing below is not of a registered Holder of the Private
Notes, then the registered Holder must sign a valid proxy.
<TABLE>
<S> <C>
X________________________________________________ Date:____________________________________
X________________________________________________ Date:____________________________________
Signature(s) of Holder(s) or Authorized Signatory
Name(s):_____________________________________ Address:_________________________________
_____________________________________ _________________________________
(Please Print) (Including Zip Code)
Capacity:____________________________________ Area Code and Telephone No.:_____________
Social Security No.:_________________________
</TABLE>
PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN
SIGNATURE GUARANTEE (SEE INSTRUCTION 3 HEREIN)
CERTAIN SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION
________________________________________________________________________________
(Name of Eligible Institution Guaranteeing Signatures)
________________________________________________________________________________
(Address (including Zip Code)and Telephone Number (including Area Code) of Firm)
________________________________________________________________________________
(Authorized Signature)
________________________________________________________________________________
(Printed Name)
________________________________________________________________________________
(Title)
Date:_________________________
7
<PAGE> 8
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4 HEREIN)
To be completed ONLY if certificates for Private Notes not exchanged and/or
Exchange Notes are to be issued in the name of and sent to someone other than
the person or persons whose signature(s) appear(s) on this Letter of
Transmittal, or if Private Notes delivered by book-entry transfer which are not
accepted for exchange are to be returned by credit to an account maintained at
the Book-Entry Transfer Facility other than the account indicated above.
Name:______________________________________________
(Please Print)
Address:___________________________________________
(Please Print)
___________________________________________________
Zip Code
___________________________________________________
Taxpayer Identification or Social Security Number
(See Substitute Form W-9 herein)
Credit unexchanged Private Notes delivered by book-entry transfer to the
Book-Entry Transfer Facility account set forth below.
___________________________________________________________
(Book Entry Transfer Facility Account Number, if applicable)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4 HEREIN)
To be completed ONLY if certificates for Private Notes not exchanged and/or
Exchange Notes are to be sent to someone other than the person or persons whose
signature(s) appear(s) above on this Letter of Transmittal or to such person or
persons at an address other than shown above in the box entitled "Description of
Private Notes" on this Letter of Transmittal.
Mail Exchange Notes and/or Private Notes to:
Name:______________________________________________
(Please Print)
Address:___________________________________________
(Please Print)
___________________________________________________
Zip Code
___________________________________________________
Taxpayer Identification or Social Security Number
(See Substitute Form W-9 herein)
8
<PAGE> 9
TO BE COMPLETED BY ALL TENDERING HOLDERS
PAYER'S NAME: THE BANK OF NEW YORK, AS EXCHANGE AGENT
<TABLE>
<CAPTION>
<S> <C> <C>
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE
FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING
DEPARTMENT OF THE TREASURY AND DATING BELOW Social Security Number
INTERNAL REVENUE SERVICE
OR
PAYER'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER (TIN)
Employer Identification Number
PART 2--Certification--Under Penalties of Perjury, I PART 3-
certify that: Awaiting TIN [ ]
(1) The number shown on this form is my
correct Taxpayer Identification Number (or I
am waiting for a number to be issued to me)
and
(2) I am not subject to backup withholding
because: (a) I am exempt from backup
withholding, (b) I have not been notified by
the Internal Revenue Services ("IRS") that I
am subject to backup withholding as a result
of failure to report all interest or
dividends, or (c) the IRS has notified me
that I am no longer subject to backup
withholding.
Certificate instructions-- You must cross
out item (2) in Part 2 above if you have
been notified by the IRS that you are
subject to backup withholding because of
under reporting interest or dividends on
your tax return. However, if after being
notified by the IRS that you were subject to
backup withholding you received another
notification from the IRS stating that you
are no longer subject to backup withholding,
do not cross out item (2).
SIGNATURE_________________________ DATE___________________
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO HOLDERS OF EXCHANGE NOTES
PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES
FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM
W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification
Number has not been issued to me, and either (a) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a Taxpayer Identification Number within 60 days, 31 percent
of all reportable payments made to me thereafter will be withheld until I
provide a number.
________________________________ _________________________
Signature Date
9
<PAGE> 10
INSTRUCTIONS
FORMING PART OF THE TERMS AND
CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND PRIVATE NOTES; GUARANTEED
DELIVERY PROCEDURES. This Letter of Transmittal is to be completed by Holders of
Private Notes either if certificates are to be forwarded herewith or if tenders
are to be made pursuant to the procedures for delivery by book-entry transfer
set forth in "The Exchange Offer -- Book-Entry Transfer" section of the
Prospectus. Certificates for all physically tendered Private Notes, or a timely
confirmation of the book-entry transfer of Private Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility (a "Book-Entry
Confirmation"), as the case may be, as well as a properly completed and duly
executed Letter of Transmittal (or manually signed facsimile hereof) and any
other documentation required by this Letter of Transmittal, must be received by
the Exchange Agent at the address set forth herein on or prior to the Expiration
Date, or the tendering holder must comply with the guaranteed delivery
procedures set forth below and in the "The Exchange Offer -- Guaranteed Delivery
Procedures" section of the Prospectus. Private Notes may only be tendered in a
principal amount of $1,000 and any integral multiple thereof.
Holders of Private Notes whose certificates for Private Notes are not
immediately available or who cannot deliver their certificates and all other
required documentation to the Exchange Agent on or prior to the Expiration Date,
or who cannot complete the procedure for book-entry transfer on a timely basis,
may tender their Private Notes pursuant to the guaranteed delivery procedures
set forth in "The Exchange Offer -- Guaranteed Delivery Procedures" section of
the Prospectus. Pursuant to such procedures, (i) such tender must be made
through an Eligible Institution (as defined below), (ii) prior to the Expiration
Date, the Exchange Agent must receive from such Eligible Institution a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in the
form provided by the Issuer (by facsimile transmission (receipt confirmed by
telephone and an original delivered by guaranteed overnight courier), mail or
hand delivery), setting forth the name and address of the holder of Private
Notes, the certificate number(s) of such Private Notes (if applicable) and the
principal amount of Private Notes tendered, stating that the tender is being
made thereby and guaranteeing that, within five New York Stock Exchange ("NYSE")
trading days after the Expiration Date, this Letter of Transmittal (or a
facsimile thereof), together with the certificates for all physically tendered
Private Notes in proper form for transfer, or a Book-Entry Confirmation of such
Private Notes, and any other documentation required by this Letter of
Transmittal will be deposited by the Eligible Institution with the Exchange
Agent, and (iii) a properly executed Letter of Transmittal (or a facsimile
thereof), as well as the certificates for all physically tendered Private Notes
in proper form for transfer or a Book-Entry Confirmation of such Private Notes,
as the case may be, and all other documentation required by this Letter of
Transmittal, must be received by the Exchange Agent within five NYSE trading
days after the Expiration Date.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE PRIVATE NOTES
AND ALL OTHER REQUIRED DOCUMENTATION IS AT THE ELECTION AND RISK OF THE
TENDERING HOLDERS, BUT THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY
RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. INSTEAD OF DELIVERY BY MAIL, IT IS
RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE, PROPERLY
INSURED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO
THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION
DATE. DO NOT SEND THIS LETTER OF TRANSMITTAL OR ANY PRIVATE NOTES TO THE ISSUER.
See "The Exchange Offer" section of the Prospectus.
2. PARTIAL TENDERS (NOT APPLICABLE TO HOLDERS OF PRIVATE NOTES WHO TENDER
BY BOOK-ENTRY TRANSFER); WITHDRAWAL RIGHTS. Tenders of Private Notes will be
accepted only in the principal amount of $1,000 and integral multiples thereof.
If less than all of the Private Notes evidenced by a submitted certificate are
to be tendered, the tendering Holder(s) should fill in the aggregate principal
amount of Private Notes to be tendered in the box above entitled "Description of
Private Notes -- Aggregate Principal Amount Tendered." A reissued certificate
representing
10
<PAGE> 11
the balance of nontendered Private Notes will be sent to such tendering Holder,
unless otherwise provided in the appropriate box on this Letter of Transmittal,
promptly after the Expiration Date. ALL OF THE PRIVATE NOTES DELIVERED TO THE
EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.
Any Holder who has tendered Private Notes may withdraw the tender by
delivering written notice of withdrawal (which may be sent by facsimile
transmission (receipt confirmed by telephone and an original delivered by
guaranteed overnight courier), mail or hand delivery) to the Exchange Agent
prior to the Expiration Date. For a withdrawal to be effective, a written notice
of withdrawal must be received by the Exchange Agent at its address set forth
herein prior to the Expiration Date. Any such notice of withdrawal must (i)
specify the name of the person having tendered the Private Notes to be withdrawn
(the "Depositor"), (ii) identify the Private Notes to be withdrawn (including
the certificate number or numbers and principal amount of such Private Notes),
(iii) be timely received and signed by the Holder in the same manner as the
original signature on the Letter of Transmittal by which such Private Notes were
tendered or as otherwise set forth in Instruction 3 below (including any
required signature guarantees), or be accompanied by documents of transfer
sufficient to have the Trustee (as defined in the Prospectus) register the
transfer of such Private Notes pursuant to the terms of the Indenture into the
name of the person withdrawing the tender and (iv) specify the name in which any
such Private Notes are to be registered, if different from that of the
Depositor. If Private Notes have been tendered pursuant to the procedure for
book-entry transfer, any notice of withdrawal must specify the name and number
of the account at the book-entry transfer facility to be credited with the
withdrawn Private Notes or otherwise comply with the Book-Entry Transfer
Facility's procedures. See "The Exchange Offer -- Withdrawal of Tenders" section
of the Prospectus. Withdrawals of tenders of Private Notes may not be rescinded.
Private Notes properly withdrawn will not be deemed to have been validly
tendered for purposes of the Exchange Offer, and no Exchange Notes will be
issued with respect thereto unless the Private Notes so withdrawn are validly
retendered. Properly withdrawn Private Notes may be retendered at any subsequent
time on or prior to the Expiration Date by following the procedures described in
"The Exchange Offer -- Procedures for Tendering" section of the Prospectus.
All questions as to the validity, form and eligibility (including time
of receipt) of such withdrawal notices will be determined by the Issuer, in its
sole discretion, whose determination shall be final and binding on all parties.
None of the Issuer, any Guarantor, any employees, agents, affiliates or assigns
of the Issuer, the Exchange Agent or any other person shall be under any duty to
give any notification of any irregularities in any notice of withdrawal or incur
any liability for failure to give such notification. Any Private Notes which
have been tendered but which are withdrawn will be returned to the holder
thereof without cost to such holder as promptly as practicable after withdrawal.
3. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the Holder
of the Private Notes tendered hereby, the signature must correspond exactly with
the name as written on the face of the certificates or on a securities position
listing without any change whatsoever.
If any tendered Private Notes are owned of record by two or more joint
owners, all of such owners must sign this Letter of Transmittal.
If any tendered Private Notes are registered in different names on
several certificates or securities positions listings, it will be necessary to
complete, sign and submit as many separate copies of this Letter of Transmittal
as there are different registrations.
The signatures on this Letter of Transmittal or a notice of withdrawal,
as the case may be, must be guaranteed by an Eligible Institution unless the
Private Notes tendered pursuant hereto are tendered (i) by a registered Holder
of the Private Notes (including any participant in The Depository Trust Company
whose name appears on a security position listing as the owner of Private Notes)
who has not completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" in this Letter of Transmittal or (ii) for the
account of an Eligible Institution. In the event that the signatures in this
Letter of Transmittal or a notice of withdrawal, as the case may be, are
required to be guaranteed, such guarantees must be by a firm which is a member
of a registered national securities
11
<PAGE> 12
exchange or a member of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States, or another "eligible guarantor institution" within the meaning of Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended (collectively,
"Eligible Institutions").
If this Letter of Transmittal is signed by a person other than the
Holder of any Private Notes listed therein, such Private Notes must be endorsed
or accompanied by a properly completed bond power signed by such Holder exactly
as the name or names of such Holder or Holders appear(s) on such Private Notes
with the signatures on the Private Notes or the bond power guaranteed by an
Eligible Institution.
If this Letter of Transmittal or any Private Notes or assignments or
bond powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and,
unless waived by the Issuer, evidence satisfactory to the Issuer of their
authority to so act must be submitted with this Letter of Transmittal.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering Holders of
Private Notes should indicate in the applicable box the name and address to
which Exchange Notes issued pursuant to the Exchange Offer and/or substitute
certificates evidencing Private Notes not exchanged are to be issued or sent, if
different from the name or address of the person signing this Letter of
Transmittal. In the case of issuance in a different name, the Employer
Identification or Social Security Number of the person named must also be
indicated. A Holder of Private Notes tendering Private Notes by book-entry
transfer may request that Private Notes not exchanged be credited to such
account maintained at the Book-Entry Transfer Facility as such Holder may
designate hereon. If no such instructions are given, such Private Notes not
exchanged will be returned to the name or address of the person signing this
Letter of Transmittal or credited to the account listed beneath the box entitled
"Description of Private Notes," as the case may be.
5. TAX IDENTIFICATION NUMBER. Federal income tax law generally requires
that a tendering Holder whose Private Notes are accepted for exchange must
provide the Issuer (as payor) with such Holder's correct Taxpayer Identification
Number ("TIN") on Substitute Form W-9 below, which, in the case of a tendering
Holder who is an individual, is his or her Social Security Number. If the Issuer
is not provided with the current TIN or an adequate basis for an exemption, such
tendering Holder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, delivery to such tendering Holder of Exchange Notes may be
subject to backup withholding in an amount equal to 31% of all reportable
payments made after the exchange. If withholding results in an overpayment of
taxes, a refund may be obtained.
Exempt Holders of Private Notes (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. See the enclosed Guidelines of
Certification of Taxpayer Identification Number on Substitute Form W-9 (the "W-9
Guidelines") for additional instructions.
To prevent backup withholding, each tendering Holder of Private Notes
must provide its correct TIN by completing the Substitute Form W-9 set forth
below, certifying that the TIN provided is correct (or that such Holder is
awaiting a TIN) and that (i) the Holder is exempt from backup withholding, (ii)
the Holder has not been notified by the Internal Revenue Service that such
Holder is subject to backup withholding as a result of a failure to report all
interest or dividends or (iii) the Internal Revenue Service has notified the
Holder that such Holder is no longer subject to backup withholding. If the
tendering Holder of Private Notes is a nonresident alien or foreign entity not
subject to backup withholding, such Holder must give the Issuer a completed Form
W-8, Certificate of Foreign Status. These forms may be obtained from the
Exchange Agent. If the Private Notes are in more than one name or are not in the
name of the actual owner, such Holder should consult the W-9 Guidelines for
information on which TIN to report. If such Holder does not have a TIN, such
Holder should consult the W-9 Guidelines for instructions on applying for a TIN,
check the box in Part 3 of the Substitute Form W-9 and write "applied for" in
lieu of its TIN. Note: Checking such box and writing "applied for" on the form
means that such Holder has already applied for a TIN or that such Holder intends
to apply for one in the near future. If such Holder does not provide its TIN to
the Issuer within 60 days, backup withholding will begin and continue until such
Holder furnishes its TIN to the Issuer.
12
<PAGE> 13
6. TRANSFER TAXES. The Issuer will pay all transfer taxes, if any,
applicable to the transfer of Private Notes to it or its order pursuant to the
Exchange Offer. If, however, Exchange Notes and/or substitute Private Notes not
exchanged are to be delivered to, or are to be registered or issued in the name
of, any person other than the Holder of the Private Notes tendered hereby, or if
tendered Private Notes are registered in the name of any person other than the
person signing this Letter of Transmittal, or if a transfer tax is imposed for
any reason other than the transfer of Private Notes to the Issuer or its order
pursuant to the Exchange Offer, the amount of any such transfer taxes (whether
imposed on the Holder or any other persons) will be payable by the tendering
Holder. If satisfactory evidence of payment of such taxes or exemption therefrom
is not submitted herewith, the amount of such transfer taxes will be billed
directly to such tendering Holder.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR TRANSFER
TAX STAMPS TO BE AFFIXED TO THE PRIVATE NOTES SPECIFIED IN THIS LETTER OF
TRANSMITTAL.
7. WAIVER OF CONDITIONS. The Issuer reserves the absolute right to waive
satisfaction of any or all conditions enumerated in the Prospectus.
8. DETERMINATION OF VALIDITY. The Issuer will determine, in its sole
discretion, all questions as to the form of documents, validity, eligibility
(including time of receipt) and acceptance for exchange of any tender of Private
Notes, which determination shall be final and binding on all parties. The Issuer
reserves the absolute right to reject any and all tenders determined by it not
to be in proper form or the acceptance of which, or exchange for which, may be
unlawful. The Issuer also reserves the absolute right, subject to applicable
law, to waive any of the conditions of the Exchange Offer set forth in the
Prospectus under the caption "The Exchange Offer - Certain Conditions to the
Exchange Offer" or any conditions or irregularity in any tender of Private Notes
of any particular Holder whether or not similar conditions or irregularities are
waived in the case of other Holders.
The Issuer's interpretation of the terms and conditions of the Exchange
Offer (including this Letter of Transmittal and the instructions hereto) will be
final and binding. No tender of Private Notes will be deemed to have been
validly made until all irregularities with respect to such tender have been
cured or waived. Although the Issuer intends to notify holders of defects or
irregularities with respect to tenders of Private Notes, none of the Issuer, the
Guarantors, any employees, agents, affiliates or assigns of the Issuer, the
Exchange Agent, or any other person shall be under any duty to give notification
of any irregularities in tenders or incur any liability for failure to give such
notification.
9. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or
contingent tenders will be accepted. All tendering Holders of Private Notes, by
execution of this Letter of Transmittal, shall waive any right to receive notice
of the acceptance of their Private Notes for exchange.
10. MUTILATED, LOST, STOLEN OR DESTROYED PRIVATE NOTES. Any Holder whose
Private Notes have been mutilated, lost, stolen or destroyed should contact the
Exchange Agent at the address indicated above for further instructions. The
Holder will then be instructed as to the steps that must be taken to replace the
certificate(s). This Letter of Transmittal and related documents cannot be
processed until the Private Notes have been replaced.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the
procedure for tendering, as well as requests for additional copies of the
Prospectus and this Letter of Transmittal, may be directed to the Exchange
Agent, at the address and telephone number indicated above.
12. INADEQUATE SPACE. If the space provided herein is inadequate, the
aggregate principal amount of Private Notes being tendered and the certificate
number or numbers (if available) should be listed on a separate schedule
attached hereto and separately signed by all parties required to sign this
Letter of Transmittal.
13
<PAGE> 14
The Exchange Agent for the Exchange Offer is:
THE BANK OF NEW YORK
<TABLE>
<CAPTION>
<S> <C> <C>
By Hand Or Overnight Delivery: Facsimile Transmissions: By Registered Or Certified Mail:
(Eligible Institutions Only)
The Bank of New York The Bank of New York
101 Barclay Street 101 Barclay Street, 7E
Corporate Trust Services Window (212) 815-6339 New York, New York 10286
Ground Level Attention: Reorganization Section,
Attention: Reorganization Section, To Confirm by Telephone or Marcia Brown
Odell Romeo for Information Call:
(212) 815-6337
</TABLE>
14
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR 9 1/4% SENIOR SUBORDINATED NOTES DUE 2007, SERIES A
OF SC INTERNATIONAL SERVICES, INC.
As set forth in the Prospectus, dated __________ __, 1997 (the
"Prospectus"), of SC International Services, Inc. (the "Issuer"), and in the
accompanying Letter of Transmittal and instructions thereto (the "Letter of
Transmittal"), holders who wish to tender their 9 1/4% Senior Subordinated Notes
due 2007, Series A, of the Issuer (the "Private Notes"), and (i) whose Private
Notes are not immediately available, or (ii) who cannot deliver their Private
Notes, the Letter of Transmittal or any other required documentation to the
Exchange Agent prior to the Expiration Date (as hereinafter defined), may effect
a tender if: (a) tender is made through an Eligible Institution; (b) prior to
the Expiration Date, the Exchange Agent receives from such Eligible Institution
this properly completed and duly executed Notice of Guaranteed Delivery (by
facsimile transmission (receipt confirmed by telephone and an original delivered
by guaranteed overnight courier), mail or hand delivery) setting forth the name
and address of the holder, the certificate number(s) of such Private Notes and
the principal amount of the Private Notes being tendered, stating that the
tender is being made hereby and guaranteeing that, within five New York Stock
Exchange trading days after the Expiration Date, the Letter of Transmittal (or a
facsimile thereof) together with the certificate(s) representing the Private
Notes (or a Book-Entry Confirmation), as the case may be, and any other
documentation required by the Letter of Transmittal will be deposited by the
Eligible Institution with the Exchange Agent; and (c) such properly completed
and executed Letter of Transmittal (or a facsimile thereof), as well as the
certificate(s) representing all tendered Private Notes in proper form for
transfer or a Book-Entry Confirmation, as the case may be, and all other
documentation required by the Letter of Transmittal, are received by the
Exchange Agent within five New York Stock Exchange trading days after the
Expiration Date. This Notice of Guaranteed Delivery may be delivered or
transmitted by facsimile transmission (receipt confirmed by telephone and an
original delivered by guaranteed overnight courier), mail or hand delivery to
the Exchange Agent as set forth below. See "The Exchange Offer -- Procedures for
Tendering" section of the Prospectus. Capitalized terms used herein but not
defined herein have the respective meanings given to them in the Prospectus.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
__________________, 1997, UNLESS EXTENDED (THE "EXPIRATION DATE").
TENDERS OF PRIVATE NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE
EXPIRATION DATE.
THE EXCHANGE AGENT: THE BANK OF NEW YORK
<TABLE>
<CAPTION>
<S> <C> <C>
By Hand Or Overnight Delivery: Facsimile Transmissions: By Registered Or Certified Mail:
(Eligible Institutions Only)
The Bank of New York The Bank of New York
101 Barclay Street 101 Barclay Street, 7E
Corporate Trust Services Window (212) 815-6339 New York, New York 10286
Ground Level Attention: Reorganization Section,
Attention: Reorganization Section, To Confirm by Telephone or Odell Romeo
Odell Romeo for Information Call:
(212) 815-6337
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION VIA
FACSIMILE TRANSMISSION, MAIL OR HAND DELIVERY, OTHER THAN AS SET FORTH ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on
the Letter of Transmittal is required to be guaranteed by an "Eligible
Institution" under the instructions thereto, such signature guarantee must
appear in the applicable space provided in the signature box on the Letter of
Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tender(s) to the Issuer, upon the terms and
subject to the conditions set forth in the Prospectus and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the aggregate principal
amount of Private Notes set forth below pursuant to the guaranteed delivery
procedures set forth in the Prospectus.
The undersigned understands that tenders of Private Notes pursuant to
the Exchange Offer may not be withdrawn after 5:00 p.m., New York City time, on
the Expiration Date. Tenders of Private Notes may also be withdrawn if the
Exchange Offer is terminated without any such Private Notes being exchanged
thereunder or as otherwise provided in the Prospectus.
All authority herein conferred or agreed to be conferred by this Notice
of Guaranteed Delivery shall survive the death or incapacity of the undersigned
and every obligation of the undersigned under this Notice of Guaranteed Delivery
shall be binding upon the heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives of the undersigned.
PLEASE COMPLETE AND SIGN
<TABLE>
<CAPTION>
<S> <C>
Signature(s) of Registered Owner(s) or Authorized Name(s) of Registered Holder(s):__________________
Signatory:_______________________________________ __________________________________________________
_________________________________________________ __________________________________________________
_________________________________________________
Principal Amount of Private Notes tendered: Address:__________________________________________
__________________________________________________ __________________________________________________
Certificate No(s). of Private Notes (if available): Area Code and Telephone No.:______________________
__________________________________________________
__________________________________________________
If Private Notes will be delivered by book-entry
transfer at The Depository Trust Company, insert
Depository Account No.:
Date:_____________________________________________ _________________________________________________
</TABLE>
2
<PAGE> 3
This Notice of Guaranteed Delivery must be signed by the holder(s) of Private
Notes exactly as its (their) name(s) appear on certificates for Private Notes or
on a security position listing as the owner of Private Notes, or by person(s)
authorized to become holder(s) by endorsements and documents transmitted with
this Notice of Guaranteed Delivery. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer or other person acting in a
fiduciary or representative capacity, such person must provide the following
information.
Please print name(s) and address(es)
Name(s): ______________________________________
Capacity: ______________________________________
Address(es):______________________________________
______________________________________
______________________________________
Do not sent Private Notes with this form. Private Notes should be sent to the
Exchange Agent together with a properly completed and duly executed Letter of
Transmittal.
3
<PAGE> 4
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or a correspondent in the
United States, hereby (a) represents that each holder of Private Notes on whose
behalf this tender is being made "own(s)" the Private Notes covered hereby
within the meaning of Rule 14e-4 under the Securities Exchange Act of 1934, as
amended, (b) represents that such tender of Private Notes complies with such
Rule 14e-4, and (c) guarantees that, within five New York Stock Exchange trading
days after the Expiration Date, a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof), together with certificates representing
the Private Notes covered hereby in proper form for transfer (or confirmation of
the book-entry transfer of such Private Notes into the Exchange Agent's account
at The Depository Trust Company, pursuant to the procedure for book-entry
transfer set forth in the Prospectus) and required documents will be deposited
by the undersigned with the Exchange Agent.
The undersigned acknowledges that it must deliver the Letter of
Transmittal and Private Notes tendered hereby to the Exchange Agent within the
time period set forth above and that failure to do so could result in financial
loss to the undersigned.
Name of Firm:___________________________________________________________________
Authorized Signature
Address: _________________________________ Name: ___________________________
Title:___________________________
__________________________________________
Area Code and Telephone No.:______________ Date: ___________________________
* Must be in denominations of principal amount of $1,000 and any integral
multiple thereof.
4
