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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.
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"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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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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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
▇▇▇▇▇'▇ 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
▇▇▇▇▇'▇ 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
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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
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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
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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, ▇▇▇▇▇▇
Guaranty Trust Company of New York and ▇▇▇▇▇▇▇,
Sachs & Co., as Co-Arrangers, ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co., as Documentation Agent, Bankers Trust
Company, as Syndication Agent, and ▇▇▇▇▇▇ 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
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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
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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."
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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 ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
With a copy to:
Day, ▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
To Tenant:
Caterair International Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Law Department
With copies to:
Onex Food Services, Inc.
do Sky Chefs, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
and
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▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ & Handler
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
To Agent:
▇▇▇▇▇▇ Guaranty Trust Company of New York
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
With a copy to:
White & Case
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇, 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;
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(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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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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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
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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 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇'▇ 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.
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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.
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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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
CATERAIR INTERNATIONAL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
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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.
