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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
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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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If to SCIS, to:
000 Xxxx Xxxxx
Xxxxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Executive Vice President and
Chief Financial and Administrative Officer
Telecopier: (000) 000-0000
with a copy to:
Xxxx, Scholer, Fierman, Xxxx & Handler
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Telecopier: (000) 000-0000
If to OMI, to:
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attention: Xxxxx Xxxxxxxx
Chief Financial Officer
Telecopier: (000) 000-0000
with a copy to:
Xxxx, Scholer, Fierman, Xxxx & Handler
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Telecopier: (000) 000-0000
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
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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/ Xxxxx X. Xxxxxxxx
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Name:
Title:
SC INTERNATIONAL SERVICES, INC.
By: /s/ Xxxxxx X. Xxx
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Name:
Title:
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