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EXHIBIT 10.3
DEALER MANAGER AGREEMENT
August 22, 1997
BT SECURITIES CORPORATION
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
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
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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.
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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
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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
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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.
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(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-
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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
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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, Xxxx, Scholer, Fierman, Xxxx & 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)
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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
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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
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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-
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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
13
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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
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx
14
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with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
(b) if to Purchaser or any Guarantors:
SC International Services, Inc.
000 X. Xxxxx Xxxx.
Xxxxxxxxx, Xxxxx
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
with a copy to:
Xxxx, Scholer, Fierman, Xxxx & Handler, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx, 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
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
16
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prior approval, which approval shall not be unreasonably withheld or delayed.
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/ Xxxxxx X. Xxx
------------------------------
Name: Xxxxxx X. Xxx
Title: Authorized Signatory
SKY CHEFS, INC.
By: /s/ Xxxxxx X. Xxx
------------------------------
Name: Xxxxxx X. Xxx
Title: Authorized Signatory
CATERAIR INTERNATIONAL, INC. (II)
By: /s/ Xxxxxx X. Xxx
------------------------------
Name: Xxxxxx X. Xxx
Title: Authorized Signatory
CATERAIR INTERNATIONAL CORPORATION
By: /s/ Xxxxxx X. Xxx
------------------------------
Name: Xxxxxx X. Xxx
Title: Authorized Signatory
18
-2-
Accepted as of the date first above written:
BT SECURITIES CORPORATION
By: /s/ Xxxx Xxxxxxxx
------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
19
Exhibit A
[Offer to Purchase]
A-1
20
Exhibit B
[Letter of Transmittal]
B-1
21
Exhibit C
[Executed Opinion of Counsel to Purchaser and Guarantors]
[XXXX, SCHOLER, FIERMAN, XXXX & HANDLER, LLP LETTERHEAD]
August 25, 1997
BT Securities Corporation
One Bankers Trust Plaza
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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
22
[XXXX, SCHOLER, FIERMAN, XXXX & 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,
23
[XXXX, SCHOLER, FIERMAN, XXXX & 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
24
[XXXX, SCHOLER, FIERMAN, XXXX & 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.
25
[XXXX, SCHOLER, FIERMAN, XXXX & 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/ XXXX, SCHOLER, FIERMAN, XXXX & HANDLER LLP
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 Xxxxxxx X. Xxx and
Sky Chefs
Employment Agreement, dated as of January 1, 1997, between Xxxxxxx X. Xxxxxxx
and Sky Chefs
Employment Agreement, dated as of January 1, 1997, between Xxxxxxx X. Xxxx 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, Xxxxxx Guaranty Trust Company of New York
and Xxxxxxx, Xxxxx & Co., as documentation agent, Bankers Trust Company of New
York, as syndication agent, and Xxxxxx 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.
X-0
00
XXXXX X
Xxxx
X-0
