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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 X.X. Xxxxxx Securities Inc., as co-arrangers,
Bankers Trust Company, as syndication agent, the Bank of New York, as
co-agent, and Xxxxxx Guaranty Trust Company of New York, as administrative
agent, as such Amended and Restated Credit Agreement may
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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:
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"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;
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(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 Xxxxx'x 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;
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(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
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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"):
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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
X.X. Xxxxxx Securities Inc., as co-arrangers, Bankers Trust Company, as
syndication agent, the Bank of New York, as co-agent, and Xxxxxx 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.
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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.
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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/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
Vice President
TRINET ESSENTIAL FACILITIES VIII R, INC.
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
President and Chief Executive Officer
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Annex A
Section 9.O9
(Leverage Covenant)
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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
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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-
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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:
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Name:
Title:
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