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EXHIBIT 10.40.1
ACQUISITION AGREEMENT,
DATED AS OF AUGUST 29, 1997,
BETWEEN
CATERAIR INTERNATIONAL, INC. (II)
AND
SKY CHEFS, INC.
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ACQUISITION AGREEMENT
ACQUISITION AGREEMENT (this "AGREEMENT"), dated as of August 29, 1997, by
and between CATERAIR INTERNATIONAL, INC. (II), a Delaware corporation ("CII"),
and SKY CHEFS, INC., a Delaware corporation ("SKY CHEFS"). Each of CII and Sky
Chefs may be referred to herein as a "PARTY" and both may be referred to herein
as the "PARTIES".
WHEREAS, CII operates flight kitchen catering facilities (each a "KITCHEN"
and, collectively, the "KITCHENS") at Baltimore/Washington International Airport
in Baltimore, Maryland, Oakland International Airport in Oakland, California and
Salt Lake City International Airport in Salt Lake City, Utah (each an "AIRPORT"
and, collectively, the "AIRPORTS") from which CII provides airline catering and
other services to airlines and other customers; and
WHEREAS, CII desires to sell all of its business and the related assets at
the Kitchens to Sky Chefs and Sky Chefs desires to acquire all of CII's business
and assets at the Kitchens, all upon the terms and subject to the conditions set
forth herein;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS AND OTHER MATTERS
1.1 CERTAIN DEFINITIONS.
"ACCOUNTANTS" shall have the meaning ascribed to such term in Section
2.3(b) of this Agreement.
"ACQUIRED AGREEMENTS" shall mean all customer contracts, contracts with
suppliers, other contracts, leases, licenses, permits, commitments or any other
agreements (written or oral) related to, necessary for, or entered into in
connection with, the operation of any of the Kitchens, in which CII has any
rights, under which CII is subject to any obligation or liability, or by which
any of the assets owned or used by CII in connection with the operation of any
of the Kitchens are bound, including, without limitation, the Acquired Kitchens
CIC License Agreement Rights, the CIC Sublease Agreements, the Customer
Agreements and the other agreements listed on Schedule 1 hereto, but excluding
the Excluded Assets.
"ACQUIRED ASSETS" shall mean all privileges, rights, interests and claims,
real and personal, tangible, and intangible, of every type and description that
are owned, leased, used or held for use by CII in connection with the operation
of any of the Kitchens, in which CII has any right, title or interest,
including, without limitation, (i) the Acquired Agreements, (ii) accounts
receivable arising
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on or prior to the Closing Date associated with any of the Kitchens and the
business and operations conducted thereat, (iii) that portion of the net working
capital of CII that is allocable to the Kitchens and the business and operations
conducted thereat, (iv) that portion of the goodwill of CII that is attributable
to the Kitchens and the business and operations conducted thereat and (v) those
items listed on Schedule 1 hereto, but excluding the Excluded Assets.
"ACQUIRED KITCHENS CIC LICENSE AGREEMENT RIGHTS" shall mean any and all of
the rights licensed by CII from Caterair pursuant to the CIC License Agreement
in any of the "CUSTOMER CONTRACTS" (as such term is defined in the CIC License
Agreement) pursuant to which CII has provided, is providing or has the right to
provide goods, products or services to any airline or other customer at or from
any of the Airports or otherwise utilizing any of the Kitchens.
"AGREEMENT" shall have the meaning ascribed to such term in the
introductory paragraph of this Agreement.
"ASSIGNMENT AGREEMENT" shall mean an Assignment Agreement, dated the
Closing Date, executed by each of Sky Chefs and CII, in substantially the form
attached as Exhibit D hereto.
"ASSUMED LIABILITIES" shall have the meaning ascribed to such term in
Section 2.2 of this Agreement.
"ASSUMPTION AGREEMENT" shall mean an Assumption Agreement, dated the
Closing Date, executed by each of Sky Chefs and CII, in substantially the form
attached as Exhibit E hereto.
"▇▇▇▇ OF SALE" shall mean a ▇▇▇▇ of Sale, dated the Closing Date, executed
by each of Sky Chefs and CII, in substantially the form attached as Exhibit C
hereto.
"KITCHENS NET WORKING CAPITAL" shall have the meaning ascribed to such
term in Section 2.3(a) of this Agreement.
"CATERAIR" shall mean Caterair International Corporation, a Delaware
corporation.
"CIC LICENSE AGREEMENT" shall mean that certain License Agreement, dated
as of September 29, 1995, between CII and Caterair.
"CIC SUBLEASE AGREEMENTS" shall mean those three certain Sublease
Agreements, each dated as of September 29, 1995, between CII and Caterair
pursuant to which CII subleases from Caterair certain real and personal property
associated with the Kitchens.
"CII" shall have the meaning ascribed to such term in the introductory
paragraph of this Agreement.
"CLOSING" shall have the meaning ascribed to such term in Section 3.1 of
this Agreement.
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"CLOSING DATE" shall have the meaning ascribed to such term in Section 3.1
of this Agreement.
"CLOSING DATE KITCHENS NET WORKING CAPITAL STATEMENT" shall have the
meaning ascribed to such term in Section 2.3(b) of this Agreement.
"CUSTOMER AGREEMENTS" shall mean all contracts, agreements, commitments or
other arrangements (whether written or oral) between CII, on the one hand, and
any airline or other customer of CII, on the other hand, pursuant to which CII
provides to such airline or other customer goods, products or services at or
from any of the Airports or otherwise utilizing any of the Kitchens, together
with all customer lists, financial and accounting records (including, without
limitation, sales records and sales histories) related thereto.
"DAMAGES" shall have the meaning ascribed to such term in Section 8.2 of
this Agreement.
"EXCLUDED ASSETS" shall mean (i) any and all collective bargaining
agreements or other arrangements, commitments or understandings arising under
any collective bargaining agreements or otherwise related to any collective
bargaining agreements or any other commitments, plans, arrangements or
understandings regarding terms and conditions of employment for any individuals
employed by CII at any of the Airports or at any of the Kitchens in effect at
any time (collectively, the "CBAS"), (ii) all assets of CII other than the
Acquired Assets (i.e., those assets of CII (or portion thereof) not owned,
leased, used or held for use by CII in connection with the operation of any of
the Kitchens) and (iii) if applicable, that part, portion, or other subdivision
of any Acquired Asset that does not (and only to the extent that such part,
portion, or other subdivision does not) relate to any of the Kitchens, any of
the Airports and the business and operations conducted thereat or therefrom,
which Excluded Assets of CII are expressly not being transferred by CII to Sky
Chefs in connection with the transactions being effected hereby, and will be
retained by CII.
"EXCLUDED LIABILITIES" shall mean (i) any contingent liabilities of CII
(whether or not related to or arising in connection with the Acquired Assets)
that arise, or relate to events which occurred, prior to the Closing Date
(excluding trade payables and accounts payable arising in the ordinary course of
business consistent with past practice), (ii) any liabilities of CII arising at
any time in connection with any Excluded Asset, (iii) any liabilities or
obligations in any way related to, or arising in connection with any CBAs or
under any Federal, state or local law or regulation governing the status of CII
as an employer at any of the Kitchens, (iv) any liability or obligation of CII
to any union representative of any employees at any of the Kitchens, and (v) any
employment-related liabilities, obligations or commitments of CII arising in
connection with, or which in any manner related to, the conduct or operations of
any of the Kitchens prior to the Closing Date related to (A) any claims,
grievances, charges, arbitrations, litigations or other claims or actions,
including, without limitation, those against CII, that in any manner relate to
terms and conditions of employment at any of the Kitchens or individuals
employed at any of the Kitchens and (B) compensation and other benefits due
individuals employed at any of the Kitchens.
"KITCHENS" shall have the meaning ascribed to such term in the first
WHEREAS clause of this Agreement.
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"KITCHENS NET WORKING CAPITAL" shall have the meaning ascribed to such
term in Section 2.3(a) of this Agreement.
"NET WORKING CAPITAL" shall have the meaning ascribed to such term in
Section 2.3(a) of this Agreement.
"PARTY" shall have the meaning ascribed to such term in the introductory
paragraph of the Agreement.
"PURCHASE PRICE" shall have the meaning ascribed to such term in Section
2.1 of this Agreement.
"RECEIPT" shall mean a Receipt, dated the Closing Date, executed by each
of Sky Chefs and CII, in substantially the form attached as Exhibit B hereto.
"RELATED AGREEMENTS" shall mean the Assumption Agreement, the Assignment
Agreement, the Sublease Assignments, the ▇▇▇▇ of Sale and the Receipt, and any
other agreements, instruments or certificates delivered hereunder or in
connection with the transactions contemplated by a Party.
"REQUIRED CONSENTS" shall mean the consents of any airline or other
customers of CII or other third parties that are required in connection with the
transactions contemplated hereby and in order for the Acquired Assets to be
properly transferred to Sky Chefs, including, without limitation, the consents
listed on Schedule 2 hereto.
"REQUIRED NOTICES" shall mean any notices required to be given to any
airline or other customers of CII or other third parties in connection with the
transactions contemplated hereby and in order for the Acquired Assets to be
properly transferred to Sky Chefs, including, without limitation, the notices
listed on Schedule 2 hereto.
"REVISED PURCHASE PRICE" shall have the meaning ascribed to such term in
Section 2.3(b) of this Agreement.
"REVISED PURCHASE PRICE STATEMENT" shall have the meaning ascribed to such
term in Section 2.3(b) of this Agreement.
"SKY CHEFS" shall have the meaning ascribed to such term in the
introductory paragraph of this Agreement.
"SUBLEASE ASSIGNMENTS" shall mean three Assignment Agreements, each in
substantially the form of Exhibit A hereto, dated the Closing Date, assigning
the CIC Sublease Agreements from CII to Sky Chefs.
1.2 PROVISO RELATING TO SYSTEM-WIDE OR MULTI-LOCATION CONTRACTS.
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Notwithstanding anything to the contrary contained in any definition or
other provision of this Agreement, if pursuant to any Acquired Agreement CII has
provided, does provide or enjoys the right to provide goods, products or
services to any airline or other customer or enjoys any other benefit at other
locations in addition to one of the Airports or otherwise utilizing any of the
Kitchens, then the rights enjoyed by CII with respect to such Acquired Agreement
shall be deemed to be an Acquired Agreement only to the extent that such rights
or benefits relate to the provision of goods, products or services to an airline
or other customer or other benefit enjoyed by CII at or from the Kitchens or at
or from the relevant Airport or otherwise utilizing the Kitchens (and not at the
other locations), and it is only such rights and benefits that are being
transferred by CII to Sky Chefs in connection with the transactions contemplated
hereby.
ARTICLE II
ACQUISITION OF ASSETS; ASSUMPTION OF LIABILITIES
2.1 PURCHASE AND SALE OF ASSETS
Upon the terms and subject to the conditions set forth herein, on the
Closing Date, in consideration of (i) $3,337,883 (the "PURCHASE PRICE") to be
paid by Sky Chefs to CII on the Closing Date by wire transfer of immediately
available funds to an account designated by CII or by such other method as may
be designated by CII and (ii) the assumption by Sky Chefs of the liabilities
described in Section 2.2 hereof, CII shall grant, sell, convey, assign, transfer
and deliver to Sky Chefs, and Sky Chefs shall purchase and accept from CII, all
right, title and interest of CII in the Acquired Assets.
2.2 ASSUMPTION OF LIABILITIES.
Upon the terms and subject to the conditions set forth herein, on the
Closing Date, Sky Chefs shall assume all liabilities and obligations associated
with the business and operations conducted at the Kitchens and with the Acquired
Assets, whether arising on, prior to or after the Closing Date, other than the
Excluded Liabilities (the "ASSUMED LIABILITIES").
2.3 ADJUSTMENT.
(a) Each of Sky Chefs and CII hereby acknowledge and agree that the
aggregate Net Working Capital associated with the business and operations at the
Kitchens (the "KITCHENS NET WORKING CAPITAL") as of July 31, 1997 hereof was
$3,103,354. For the purposes of this Agreement, "NET WORKING CAPITAL" is defined
as the difference between current assets and current liabilities each as would
be set forth on a balance sheet prepared in accordance with GAAP.
(b) CII shall prepare in good faith, and deliver to Sky Chefs, on or
before the date that is sixty (60) days following the Closing Date, a statement
setting forth the Kitchens Net Working Capital as of the Closing Date (which
statement shall set forth in reasonable detail the computation of such amount
including a listing of the assets and liabilities included in the Kitchens Net
Working
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Capital as of the Closing Date) (the "CLOSING DATE KITCHENS NET WORKING CAPITAL
STATEMENT"). If within thirty (30) days following delivery of the Closing Date
Kitchens Net Working Capital Statement, Sky Chefs does not give notice to CII of
its objection to the computation of the Kitchens Net Working Capital as of the
Closing Date (which notice must contain a statement of the basis of any
objection), then the calculation of the Kitchens Net Working Capital as of the
Closing Date set forth in the Closing Date Kitchens Net Working Capital
Statement shall be final and binding on all Parties. If a notice of objection is
given, then the Parties will attempt to settle the issues in dispute within
fifteen (15) days thereafter. If they are unable to resolve such issues, any
open items will be submitted to a nationally recognized accounting firm selected
by Sky Chefs and reasonably acceptable to CII (the "ACCOUNTANTS") for
resolution. If issues in dispute are submitted to the Accountants for
resolution, (i) each Party will furnish to the Accountants such work papers and
other documents and information relating to the disputed issues as the
Accountants may request and are available to that Party, and will be afforded
the opportunity to present to the Accountants any material relating to the
determination and to discuss the determination with the Accountants; (ii) the
determination by the Accountants, as set forth in a notice delivered to each of
CII and Sky Chefs, will be binding and conclusive on the Parties; and (iii) Sky
Chefs, on the one hand, and CII, on the other hand, will each bear 50% of the
fees of the Accountants for such determination.
(c) On or before the third business day following the final determination
of the Kitchens Net Working Capital as of the Closing Date, (i) in the event
that the Kitchens Net Working Capital as of the Closing Date is greater than the
Kitchens Net Working Capital as of July 31, 1997, Sky Chefs shall pay to CII the
amount of such excess, by wire transfer of immediately available funds, to an
account designated by CII and (ii) in the event that the Kitchens Net Working
Capital as of the Closing Date is less than the Kitchens Net Working Capital as
of July 31, 1997, CII shall pay to Sky Chefs the amount of such deficiency, by
wire transfer of immediately available funds, to an account designated by Sky
Chefs.
ARTICLE III
CLOSING
3.1 CLOSING.
Subject to the satisfaction (or waiver) of the conditions set forth in
Article V of this Agreement, the closing of the transactions contemplated hereby
(the "CLOSING") shall take place at the offices of ▇▇▇▇, Scholer, Fierman, ▇▇▇▇
& Handler, LLP, on or about October __, 1997 (the "CLOSING DATE"), or at such
other place and on such other date as the Parties shall agree.
3.2 DELIVERY OBLIGATIONS OF CII.
At the Closing, CII shall deliver to Sky Chefs:
(a) the Sublease Assignments, executed by a duly authorized officer on
behalf of CII, transferring to Sky Chefs all of CII's right, title and interest
in and under the CIC Subleases;
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(b) the ▇▇▇▇ of Sale, executed by a duly authorized officer on behalf of
CII;
(c) the Receipt, executed by a duly authorized officer on behalf of CII;
(d) the Assignment Agreement, executed by a duly authorized officer on
behalf of CII;
(e) the Assumption Agreement, executed by a duly authorized officer on
behalf of CII; and
(f) to the extent that Required Consents and Required Notices are required
to be given and/or received, documents reasonably satisfactory to Sky Chefs
evidencing the receipt of such Required Consents and the giving of such Required
Notices.
3.3 DELIVERY OBLIGATIONS OF SKY CHEFS.
At the Closing, Sky Chefs shall deliver to CII:
(a) the Purchase Price, as provided in Section 2.1 of this Agreement;
(b) the Sublease Assignments, executed by a duly authorized officer on
behalf of Sky Chefs;
(c) the Receipt, executed by a duly authorized officer on behalf of Sky
Chefs;
(d) the ▇▇▇▇ of Sale, executed by a duly authorized officer on behalf of
Sky Chefs;
(e) the Assignment Agreement, executed by a duly authorized officer on
behalf of Sky Chefs; and
(f) the Assumption Agreement, executed by a duly authorized officer on
behalf of Sky Chefs.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
4.1 REPRESENTATIONS AND WARRANTIES OF CII.
CII represents, warrants and covenants to Sky Chefs, with respect to the
transactions contemplated herein that:
(a) Organization and Authority of CII. CII is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the corporate power
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and authority to enter into and perform this Agreement and the Related
Agreements to which it is a party and the transactions herein and therein
contemplated.
(b) Authorization of Agreement. The execution, delivery and performance by
CII of this Agreement and the Related Agreements to which it is a party have
been duly authorized by all requisite corporate action. This Agreement and the
Related Agreements to which it is a party have been duly executed and delivered
by CII and constitute and will constitute a legal, valid and binding obligation
of CII enforceable against CII in accordance with their terms, except as may be
limited by bankruptcy or similar laws affecting creditors' rights generally and
general principles of equity.
(c) No Conflicts. The execution, delivery and performance of this
Agreement and the Related Agreements to which it is a party by CII do not
violate or conflict with (i) the certificate of incorporation or bylaws of CII
or (ii) any judicial, administrative or regulatory order, judgment or decree or
arbitration award to which CII is a party or by which it or its properties or
any of the Acquired Assets is bound.
(d) Acquired Assets. The Acquired Assets to be sold, transferred, or
assigned to Sky Chefs hereunder include all of the assets of CII used at, in
connection with, or in the operation of, the Kitchens and the business of CII
conducted thereat or therefrom and at the Airports.
(e) No Restrictions. Upon the consummation of the transactions
contemplated by this Agreement and the Related Agreements and the payment of the
Purchase Price by Sky Chefs to CII, Sky Chefs shall acquire good and valid title
to all of the Acquired Assets, free and clear of all restrictions on transfer.
(f) Severance. Except as set forth on Schedule 4.1(f) hereto, CII is not
liable for any severance payments or other payments on account of the
termination of any officer employee or shall be liable for any such payments as
a result of this Agreement.
(g) Collective Bargaining Agreements. Except as set forth on Schedule
4.1(g) hereto, CII is not a party to any CBAs in connection with the business
and operations conducted at any of the Kitchens.
(h) Labor Disputes. Except as set forth on Schedule 4.1(h) hereto, there
are no strikes, material work stoppages or material disputes pending or, to the
best knowledge of the management of CII, threatened between CII and any groups
of its employees employed in connection with the business and operations
conducted at any of the Kitchens.
(i) Unions. Except as set forth on Schedule 4.1(i) hereto, no labor union
or other collective bargaining unit represents any of the employees of CII
employed in connection with the business and operations conducted at any of the
Kitchens.
(j) Organizational Efforts. Except as set forth on Schedule 4.1(j) hereto,
to the best knowledge of the management of CII, no organizational effort by any
labor union or other collective
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bargaining unit currently is under way or threatened with respect to any
employees of CII employed in connection with the business and operations
conducted at any of the Kitchens.
(k) Certain Proceedings. Except as set forth on Schedule 4.1(k) hereto
with respect to the business and operations conducted by CII at any of the
Kitchens, there are no (i) material grievances or arbitration proceedings
arising out of or under any CBA, (ii) representation proceedings by any group of
CII's employees employed in connection with the business and operations
conducted at any of the Kitchens, (iii) unfair labor practice charges or
complaints pending before the National Labor Relations Board or any similar
foreign, state or local agency or (iv) charges, claims or litigations pending
before any local, state or Federal agency regarding any employment matter in
connection with the operation of any of the Kitchens or any wages or
compensation payable to any employee or third party in connection with the
operation of any of the Kitchens.
(l) No Brokers. CII has not incurred any obligation or liability,
contingent or otherwise, for brokers' or finders' fees or commissions in
connection with the transactions contemplated by this Agreement.
4.2 REPRESENTATIONS AND WARRANTIES OF SKY CHEFS.
Sky Chefs represents, warrants and covenants to CII, with respect to the
transactions contemplated herein that:
(a) Organization and Authority of Sky Chefs. Sky Chefs is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the corporate power and authority to enter into and
perform this Agreement and the Related Agreements to which it is a party and the
transactions herein and therein contemplated.
(b) Authorization of Agreement. The execution, delivery and performance by
Sky Chefs of this Agreement and the Related Agreements to which it is a party
have been duly authorized by all requisite corporate action. This Agreement and
the Related Agreements to which it is a party have been duly executed and
delivered by Sky Chefs and constitute and will constitute a legal, valid and
binding obligation of Sky Chefs enforceable against Sky Chefs in accordance with
their terms, except as may be limited by bankruptcy or similar laws affecting
creditors' rights generally and general principles of equity.
(c) No Conflicts. The execution, delivery and performance of this
Agreement and the Related Agreements to which it is a party by Sky Chefs do not
violate or conflict with (i) the certificate of incorporation or bylaws of Sky
Chefs or (ii) any judicial, administrative or regulatory order, judgment or
decree or arbitration aware to which Sky Chefs is a party or by which it or its
properties is bound.
(d) Condition of Acquired Assets. Sky Chefs hereby acknowledges that all
the Acquired Assets are being conveyed on an "as is - where is" basis, and CII
makes no representation or warranty as to the condition of the Acquired Assets.
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(e) No Brokers. Sky Chefs has not incurred any obligation or liability,
contingent or otherwise, for brokers' or finders' fees or commissions in
connection with the transactions contemplated by this Agreement.
(f) Transfer Taxes. Sky Chefs shall pay any Federal, state or local sales,
transfer, stamp or like taxes payable in connection with the transfer of the
Acquired Assets and the other transactions contemplated hereby.
ARTICLE V
CONDITIONS
5.1 CONDITIONS TO OBLIGATIONS OF SKY CHEFS AND CII.
Sky Chefs and CII's respective obligations to consummate the
transactions contemplated hereby are subject to the satisfaction on or prior to
the Closing Date of each of the following conditions (unless expressly waived by
Sky Chefs and CII at the Closing):
(a) all Required Consents be obtained and all Required Notices be
given, and that Sky Chefs shall have received written evidence thereof
reasonably satisfactory to Sky Chefs. If the Closing shall have occurred and any
Required Consent shall not have been obtained and/or any Required Notice shall
not have been given, the transfer effected hereby shall not be effective with
respect to the Acquired Asset the transfer of which required such Required
Notice to be given and/or Required Consent to be obtained; provided, however,
that the Parties shall use their respective reasonable efforts to obtain such
Required Consent or cause such Required Notice to be given as soon as is
reasonably practicable following the Closing Date and the related Acquired Asset
to be effectively transferred to Sky Chefs promptly thereafter. With respect to
any such Acquired Asset that cannot be assigned to Sky Chefs as of the date
hereof because of the failure or inability to obtain any Required Consent or to
give any Required Notice or for any other reason, CII hereby agrees, from and
after the date hereof and prior to the date of the proper and effective
assignment of such Acquired Asset to Sky Chefs in accordance with the
immediately preceding sentence, to cooperate with Sky Chefs in any reasonable
arrangement designed to provide to Sky Chefs the benefits and obligations
associated with such Acquired Asset (notwithstanding its non-assignment in
accordance with the second sentence of this subparagraph). Sky Chefs agrees
that, so long as Sky Chefs is receiving the benefits of any such Acquired Asset,
Sky Chefs will perform CII's obligations in connection therewith;
(b) there shall not be in effect any injunction or order of any
court prohibiting the consummation of the transactions contemplated hereby;
(c) the other Party shall have performed in all material respects
all of its obligations under this Agreement to be performed prior to or at the
Closing; and
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(d) there shall not be in effect any work stoppage, boycott, strike,
disruption or other interference, whether occasioned by any labor organization
or any employee or third party, directed at the operations and/or business of
any of the Kitchens or any other kitchen operated by Sky Chefs or CII, or the
operations and/or business of any customer of Sky Chefs or CII or any customer
of CII or Sky Chefs.
5.2 CONDITIONS TO OBLIGATIONS OF CII.
CII's obligations to consummate the transactions contemplated hereby
are subject to the satisfaction on or prior to the Closing Date of each of the
following conditions (unless expressly waived by CII at the Closing):
(a) Each of the representations and warranties of Sky Chefs in this
Agreement shall be true and correct in all material respects as of the date
hereof and as of the Closing with the same effect as though such representations
and warranties had been made at and as of such time, other than representations
and warranties that speak as of a specific date or time (which need only be true
and correct in all material respects as of such date or time).
(b) Sky Chefs shall have performed in all material respects all
obligations required to be performed or complied with by Sky Chefs under this
Agreement at or prior to Closing.
5.3 CONDITIONS TO OBLIGATIONS OF SKY CHEFS.
Sky Chefs' obligations to consummate the transactions contemplated
hereby are subject to the satisfaction on or prior to the Closing Date of the
following conditions (unless expressly waived by Sky Chefs on the Closing Date):
(a) Each of the representations and warranties of CII in this
Agreement shall be true and correct in all material respects as of the date
hereof and as of the Closing with the same effect as though such representations
and warranties had been made at and as of such time, other than representations
and warranties that speak as of a specific date or time (which need only be true
and correct in all material respects as of such date or time).
(b) CII shall have performed in all material respects all
obligations required to be performed or complied with by CII under this
Agreement at or prior to Closing.
(c) there shall be no material adverse change in the business,
operations, prospects and operations of any of the Kitchens or CII (including,
without limitation, any material change in the terms and conditions of employees
at any of the Kitchens).
ARTICLE VI
EMPLOYEE MATTERS
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6.1 EMPLOYEE MATTERS.
(a) Prior to the Closing, CII shall notify all employees at the Kitchens,
and with respect to any employees represented by any labor organization, the
appropriate representative of such organization, that CII will discontinue
operations at the Kitchens effective as of the Closing Date and that the
employment of any individuals employed by CII shall cease effective as of the
Closing Date.
(b) With respect to its operation of the Kitchens, after the Closing, Sky
Chefs shall be (i) entitled to set such terms and conditions of employment with
respect to the post-Closing operations of the Kitchens as Sky Chefs, in its sole
discretion, deems appropriate and (ii) undertake such recruiting and hiring
measures as it, in its sole discretion, deems appropriate.
6.2 COOPERATION IN LABOR MATTERS.
Prior to the Closing Date, CII shall permit, to the extent requested by
Sky Chefs, reasonable access to the Kitchens and its employees by
representatives of Sky Chefs for purposes of recruitment and/or hiring, and CII
and Sky Chefs shall provide each other with such information regarding labor and
employment matters as each may reasonably request in order to consummate the
transactions contemplated hereby.
ARTICLE VII
CONTINUITY OF CUSTOMER SERVICE
Sky Chefs shall use its reasonable best efforts to ensure that the
airlines and other CII customers being serviced from the Kitchens receive
uninterrupted and high quality catering services on and following the Closing
Date. If necessary to provide such services, Sky Chefs shall provide such
services from another facility for such period of time as may be necessary to
ensure such uninterrupted and high quality services.
ARTICLE VIII
INDEMNIFICATION; SURVIVAL
8.1 SURVIVAL
The representations and warranties of the parties to this Acquisition
Agreement shall survive the closing for a period of one (1) year from the
Closing Date.
8.2 INDEMNIFICATION BY CII
CII shall indemnify and hold harmless Sky Chefs and Sky Chefs' affiliates
from, and shall reimburse Sky Chefs and Sky Chefs' affiliates for all losses,
liabilities, deficiencies, penalties,
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claims, damages or expenses (including, but not limited to, costs of
investigation and defense and reasonable attorneys' fees) (collectively
"DAMAGES") arising out of or in connection with:
(a) any material inaccuracy in any representation or warranty by CII set
forth in this Agreement;
(b) any material failure by CII to perform or comply with any agreement or
covenant contained in this Agreement; and
(c) the Excluded Liabilities.
Notwithstanding anything to the contrary set forth herein, CII shall not
indemnify Sky Chefs for Damages arising out of the gross negligence or willful
misconduct of Sky Chefs. Sky Chefs hereby waives and releases any claims against
CII for consequential or similar damages.
8.3 INDEMNIFICATION BY SKY CHEFS
Sky Chefs shall indemnify and hold harmless CII and CII's affiliates from,
and shall reimburse CII and CII's affiliates for all Damages arising out of or
in connection with:
(a) any material inaccuracy in any representation or warranty by Sky Chefs
set forth in this Agreement;
(b) any material failure by Sky Chefs to perform or comply with any
agreement or covenant contained in this Agreement; and
(c) any Assumed Liabilities and the post-closing operation by Sky Chefs of
the Acquired Assets
Notwithstanding anything to the contrary set forth herein, Sky Chefs shall not
indemnify CII in connection with any Damages arising as a result of the gross
negligence or willful misconduct of CII. CII hereby waives and releases any
claims against Sky Chefs for consequential or similar damages.
8.4 PROCEDURE FOR INDEMNIFICATION
In the event that any claim to be indemnified by the other hereunder is
made by CII or Sky Chefs, the Party seeking indemnification hereunder shall give
prompt written notice thereof to the indemnifying Party and the indemnifying
Party shall assume control of, and all expense with respect to, the defense,
settlement, adjustment or compromise of such claim; provided, that (i) the
indemnified Party may, if it so desires, employ counsel at its own expense to
assist in the handling of such claim and (ii) the indemnifying Party shall
obtain the prior written approval of the indemnified Party, which approval shall
not be unreasonably withheld, before entering into any settlement, adjustment or
compromise of such claim or ceasing to defend against such claim, if pursuant
thereto or as a result thereof there would be imposed injunctive or other relief
against the indemnified Party other than monetary damages fully indemnified by
the indemnifying Party. The
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rights and obligations under this Section will survive the termination or
expiration of this Agreement for any reason.
ARTICLE IX
MISCELLANEOUS
9.1 ENTIRE AGREEMENT; AMENDMENT.
This Agreement (together with the Exhibits and Schedules hereto)
constitutes the entire agreement between the Parties with respect to the subject
matter contained herein, supersedes all prior oral or written agreements,
commitments or understandings between the parties with respect thereto, and
cannot be amended, supplemented or otherwise modified except in a writing
executed by each of the Parties.
9.2 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to principles of conflicts
of laws.
9.3 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
9.4 SUCCESSORS AND ASSIGNS.
This Agreement is intended for the exclusive benefit of the parties hereto
and their respective successors and assigns. Nothing contained in this Agreement
shall be construed as granting any rights or benefits in or to any third party,
and no person shall assert any rights as third-party beneficiary hereunder.
9.5 CAPTIONS.
The captions in this Agreement are for convenience of reference only and
shall not be given any effect in the interpretation of this Agreement.
9.6 FURTHER ASSURANCES.
On or after the date hereof, CII and Sky Chefs hereby agree to promptly
execute, acknowledge and deliver any other assurances, instruments, agreements,
certificates or other documents and take any other action reasonably requested
by the other party hereto to effect the transactions contemplated hereby.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their officers or other duly authorized representatives as of the date first
above written.
SKY CHEFS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial and Administrative
Officer
CATERAIR INTERNATIONAL,
INC. (II)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
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Schedule 1
ACQUIRED ASSETS
[TO COME FROM SCIS]
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Schedule 2
REQUIRED CONSENTS & REQUIRED NOTICES
1. Consent of the Maryland Aviation Administration pursuant to that certain
Lease and Concession Agreement, dated as of February 26, 1987, between
Caterair International Corporation (as successor to Marriott Corporation)
and the State Aviation Administration, Maryland Department of
Transportation.
2. Consent of the City of Oakland pursuant to that certain Lease Agreement,
dated September 3, 1968, between Caterair International Corporation (as
successor to Marriott Corporation) and the City of Oakland.
3. Consent of the Salt Lake City Corporation pursuant to that certain Lease
Agreement, dated as of November 30, 1972, between Salt Lake City
Corporation and Caterair International Corporation (as successor to
Marriott Corporation).
4. Consent of Continental Airlines, pursuant to that certain Catering
Agreement, dated as of January 1, 1985, between Marriott Corporation and
Continental Airlines, Inc. with respect to BWI and Salt Lake City.
5. Prior written notice to Trans World Airlines in which Caterair agrees in
writing to remain liable for and guarantees the full, faithful and
complete performance of the matters to be performed under the Catering
Agreement, dated March 29, 1995, between Trans World Airlines and Caterair
International Corporation with respect to Salt Lake City and BWI.
6. Consent of IcelandAir pursuant to that certain Catering Agreement, dated
as of April 1, 1996, between IcelandAir and Caterair International, Inc.
with respect to BWI.
7. Consent of Alaska Airlines, Inc. pursuant to that certain Global Catering
Agreement, dated as of June 8, 1993, between Alaska Airlines, Inc. and
Caterair International Corporation with respect to Oakland.
8. Consent of United Airlines, Inc. pursuant to that certain Master Catering
Agreement, dated February 10, 1989, between Marriott Inflite Services and
United Airlines, Inc. with respect to Salt Lake City, Oakland and BWI.
9. Consent of USAir, Inc. pursuant to that certain Catering Agreement between
Caterair International, Inc. and USAir, Inc. with respect to BWI.
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Schedule 4.1(f)
SEVERANCE
1. Caterair International, Inc. (II) Severance Policy Applicable to
Management Employees.
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Schedule 4.1(g)
COLLECTIVE BARGAINING AGREEMENTS
1. Agreement between Caterair International, Inc. (Baltimore) and
International Brotherhood of Teamsters Local 355, in effect through June
23, 1999.
2. Agreement between Caterair International, Inc. (Oakland) and International
Brotherhood of Teamsters Local 655, in effect through December 31, 1998.
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Schedule 4.1(h)
LABOR DISPUTES
None.
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Schedule 4.1(i)
UNIONS
1. International Brotherhood of Teamsters Local 355 (Baltimore).
2. International Brotherhood of Teamsters Local 655 (Oakland).
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Schedule 4.1(j)
ORGANIZATIONAL EFFORTS
None.
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Schedule 4.1(k)
CERTAIN PROCEEDINGS
PENDING EEOC CHARGES
1. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ v. Caterair (Salt Lake city) -- claim of termination
based on national origin.
UNION GRIEVANCES
1. ▇▇▇▇ ▇▇▇▇▇▇ (Baltimore) (grieving discharge)
2. ▇▇▇▇▇▇ ▇▇▇▇▇ (Baltimore) (grieving discharge)
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EXHIBIT A
FORM OF
ASSIGNMENT OF SUBLEASES
(Attached hereto)
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[307 Salt Lake City]
[060 Baltimore]
[304 Oakland]
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (this "AGREEMENT"), dated as of October __,
1997, is between CATERAIR INTERNATIONAL, INC. (II) ("CII"), a Delaware
corporation, and SKY CHEFS, INC. ("SKY CHEFS"), a Delaware corporation.
WHEREAS, CII and Sky Chefs are a party to that certain Acquisition
Agreement (the "ACQUISITION AGREEMENT"), dated as of August 29, 1997, pursuant
to which CII has agreed to sell all of its business and the related assets at
CII's flight kitchen catering facilities (the "KITCHENS") at
Baltimore/Washington International Airport in Baltimore, Maryland, Oakland
International Airport in Oakland, California and Salt Lake City International
Airport in Salt Lake City, Utah to Sky Chefs, and Sky Chefs has agreed to
acquire all of CII's business and assets at the Kitchens;
WHEREAS, CII is a party to that certain Sublease Agreement (the "CATERAIR
SUBLEASE"), dated as of September 29, 1995, between CII and Caterair
International Corporation ("CATERAIR"), regarding the subleasing of certain
facilities located in ______________, which facilities are leased by Caterair
from _____________ pursuant to a ___________ dated _________ __, 199_;
WHEREAS, CII desires to assign all of its right, title and interest in the
Caterair Sublease to Sky Chefs;
WHEREAS, Sky Chefs will assume all of CII's obligations and liabilities
under the Caterair Sublease; and
WHEREAS, this is an "Assignment of Sublease" contemplated by Sections
3.2(a) and 3.3(a) of the Acquisition Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
As of the date hereof, CII hereby grants, conveys and assigns to Sky Chefs
all of CII's right, title and interest in and to the Caterair Sublease and Sky
Chefs hereby accepts such assignment and assumes all duties, obligations and
liabilities arising therefrom from the date hereof, as if Sky Chefs were an
original party thereto.
In the event of a conflict between the provisions of this Assignment
Agreement and the provisions of the Acquisition Agreement, the parties hereby
agree that the provisions of the Acquisition Agreement shall control and shall
be dispositive.
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This Assignment Agreement may be executed in one or more counterparts,
each of which shall be considered an original but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Assignment Agreement
effective as of October ___, 1997.
CATERAIR INTERNATIONAL, INC. (II)
By:_____________________________________
Name:
Title:
SKY CHEFS, INC.
By:_____________________________________
Name:
Title:
Accepted and agreed as of
this ___ day of October, 1997
CATERAIR INTERNATIONAL CORPORATION
By:______________________________
Name:
Title:
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EXHIBIT B
FORM OF RECEIPT
(Attached hereto)
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CROSS RECEIPT
Reference is hereby made to that certain Acquisition Agreement (the
"ACQUISITION AGREEMENT"), dated as of August 29, 1997, between Sky Chefs, Inc.
("SKY CHEFS") and Caterair International, Inc. (II) ("CII"). Capitalized terms
used but not defined herein shall have the respective meanings ascribed to them
in the Acquisition Agreement.
Sky Chefs hereby acknowledges receipt, on the date hereof, of the Acquired
Assets referenced in Section 2.1 of the Acquisition Agreement.
CII hereby acknowledges receipt, on the date hereof, of $____________, in
respect of the Purchase Price for Sky Chefs' acquisition of the Acquired Assets,
as referenced in Section 2.1 of the Acquisition Agreement.
Date: October __, 1997
SKY CHEFS, INC.
By:____________________________________
Name:
Title:
CATERAIR INTERNATIONAL, INC. (II)
By:_____________________________________
Name:
Title:
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EXHIBIT C
FORM OF
▇▇▇▇ OF SALE
(Attached hereto)
30
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▇▇▇▇ OF SALE
Reference is hereby made to that certain Acquisition Agreement (the
"ACQUISITION AGREEMENT"), dated as of August 29, 1997, between Sky Chefs, Inc.
("SKY CHEFS") and Caterair International, Inc. (II) ("CII"). Capitalized terms
used but not defined herein shall have the respective meanings ascribed to them
in the Acquisition Agreement.
CII, for and in consideration of the representations, warranties and
agreements set forth in the Acquisition Agreement, and the payment by Sky Chefs
of the Purchase Price, as referenced in Section 2.1 of the Acquisition
Agreement, and other good and valuable consideration paid to the CII, the
receipt and sufficiency of which are hereby acknowledged, has bargained and sold
and by these presents do grant and convey, pursuant to the Agreement, unto Sky
Chefs, all of CII's right, title and interest in and to all of the Acquired
Assets.
IN WITNESS WHEREOF, the undersigned have duly executed this ▇▇▇▇ of
Sale as of this __ day of October, 1997.
SKY CHEFS, INC.
By:____________________________________
Name:
Title:
CATERAIR INTERNATIONAL, INC. (II)
By:_____________________________________
Name:
Title:
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EXHIBIT D
FORM OF
ASSIGNMENT OF CONTRACTS
(Attached hereto)
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ASSIGNMENT AGREEMENT
Assignment Agreement, dated as of October __, 1997, between Caterair
International, Inc. (II), a Delaware corporation ("CII") and Sky Chefs, Inc., a
Delaware corporation.
Reference is hereby made to that certain Acquisition Agreement, dated as
of August 29, 1997 (as amended from time to time, the "ACQUISITION AGREEMENT"),
between Sky Chefs and CII. Capitalized terms used but not otherwise defined
herein shall have the respective meanings ascribed to such terms in the
Acquisition Agreement.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged and subject to the terms and conditions set forth in the
Acquisition Agreement, CII hereby transfers, assigns, grants, transfers and
otherwise conveys and delivers to Sky Chefs, and Sky Chefs hereby accepts all of
CII's right, title and interest in, to and under the Acquired Agreements.
IN WITNESS WHEREOF, the undersigned have duly executed this Assumption
Agreement as of the date first written above.
SKY CHEFS, INC.
By:______________________________
Name:
Title:
CATERAIR INTERNATIONAL, INC. (II)
By:______________________________
Name:
Title:
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EXHIBIT E
FORM OF
ASSUMPTION AGREEMENT
(Attached hereto)
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ASSUMPTION AGREEMENT
Assumption Agreement, dated as of October __, 1997, by Sky Chefs, Inc., a
Delaware corporation ("SKY CHEFS").
Reference is hereby made to that certain Acquisition Agreement, dated as
of September __, 1997 (as amended from time to time, the "ACQUISITION
AGREEMENT"), between Sky Chefs and Caterair International, Inc. (II).
Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Acquisition Agreement.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Sky Chefs hereby assumes and agrees to pay, perform and
discharge when due all of the Assumed Liabilities (but not any of the Excluded
Liabilities) subject to the terms and conditions set forth in the Acquisition
Agreement.
IN WITNESS WHEREOF, the undersigned has duly executed this Assumption
Agreement as of the date first written above.
SKY CHEFS, INC.
By:______________________________
Name:
Title:
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