<PAGE>
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED NOVEMBER 21, 1996)
[ARAMARK LOGO APPEARS HERE]
ARAMARK SERVICES, INC.
$125,000,000
7.10% Guaranteed Notes due December 1, 2006
Unconditionally Guaranteed as to Payment of Principal, Premium, if any, and
Interest by
ARAMARK CORPORATION
Interest payable June 1 and December 1
ISSUE PRICE: 99.849%
Interest on the 7.10% Notes due December 1, 2006 (the "Notes") is payable semi-
annually on June 1 and December 1 of each year, commencing on June 1, 1997. The
Notes issued by ARAMARK Services, Inc. ("Services" or the "Company") are
unconditionally guaranteed as to payment of principal, premium, if any, and
interest by ARAMARK Corporation ("ARAMARK" or the "Guarantor"). The Notes will
not be redeemable prior to maturity and will not be subject to any sinking
fund. See "Description of the Notes".
The Notes will be represented by one global certificate registered in the name
of the nominee of The Depository Trust Company ("DTC") and such nominee will be
the sole holder of the Notes. The Notes will not be issued in definitive
registered form except in limited circumstances. Settlement for the Notes will
be made in immediately available funds. The Notes will trade in DTC's Same-Day
Settlement System until maturity, and secondary market trading activity in the
Notes will therefore settle in immediately available funds. See "Description of
the Notes--Global Notes".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
================================================================================
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
- --------------------------------------------------------------------------------
Per Note 99.849% 0.650% 99.199%
- --------------------------------------------------------------------------------
Total $124,811,250 $812,500 $123,998,750
- --------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from November 26, 1996.
(2) The Company and the Guarantor have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities Act
of 1933.
(3) Before deducting estimated expenses of $150,000 payable by the Company.
The Notes offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that
delivery of the Notes will be made through the book-entry facilities of DTC on
or about November 26, 1996 against payment therefor in immediately available
funds.
J.P. MORGAN & CO. GOLDMAN, SACHS & CO.
November 21, 1996.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS IN THE NOTES WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
NOTES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN
THE SECURITIES TO WHICH THEY RELATE OR ANY OFFER TO SELL OR THE SOLICITATION OF
ANY OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
Recent Developments ........................................................ S-3
Use of Proceeds ............................................................ S-3
Capitalization ............................................................. S-4
Description of Notes ....................................................... S-5
Underwriting ............................................................... S-9
PROSPECTUS
Available Information ...................................................... 2
Incorporation of Certain Documents by Reference ............................ 2
ARAMARK Corporation ........................................................ 2
Use of Proceeds ............................................................ 3
The Credit Agreement ....................................................... 3
Description of Securities and Guarantee .................................... 3
Validity of Securities and Guarantee ....................................... 15
Experts .................................................................... 15
Plan of Distribution ....................................................... 16
S-2
<PAGE>
RECENT DEVELOPMENTS
The Company is currently negotiating to sell an approximate 80% interest in its
business which provides specialized services for hospital emergency rooms and
other specialities and medical services to correctional institutions. This
business has approximately $500 million in annual revenues.
USE OF PROCEEDS
The proceeds of the offering of the Notes will be used by Services to repay
borrowings under the Credit Agreement. At November 18, 1996, approximately $690
million was outstanding under the Credit Agreement bearing interest at a
weighted average rate of 6.0% per annum and maturing in June 2001. Services has
borrowed under the Credit Agreement for general corporate purposes. Services
expects that all of the net proceeds will be used to repay indebtedness owed to
the bank syndicate in which Morgan Guaranty Trust Company of New York
("Morgan") is one of several lenders and for which J.P. Morgan Securities Inc.
acted as one of the co-arrangers. Morgan is an affiliate of J.P. Morgan
Securities Inc. See "Underwriting" and "The Credit Agreement" in the
Prospectus.
S-3
<PAGE>
CAPITALIZATION
The following table shows the consolidated capitalization of ARAMARK
Corporation as of September 27, 1996 and as adjusted for the issuance of $125
million of the Notes, and the application of the net proceeds to repay
borrowings under the Credit Agreement. See "The Credit Agreement" in the
Prospectus.
<TABLE>
<CAPTION>
SEPTEMBER 27, 1996
AS
ACTUAL ADJUSTED
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Long-Term Borrowings (including current maturities):
Subsidiaries' Borrowings
Credit Agreement borrowings (variable rate) (1)(2).. 596,400 472,551
8.15% Notes due 2005................................ 150,000 150,000
6.79% Note, payable in installments through 2003.... 125,000 125,000
10.625% Senior Notes Due 2000....................... 100,000 100,000
8% Notes Due 2002................................... 100,000 100,000
Canadian Credit Facility (variable rate)............ 45,123 45,123
Other Senior Debt................................... 66,524 66,524
Capital Lease Obligations........................... 3,670 3,670
The Notes........................................... -- 125,000
ARAMARK's Borrowings
Subordinated Notes Due 2003 (8 1/2%)................ 100,000 100,000
Subordinated Debentures and Notes Due 2000 (10%).... 58,849 58,849
Subordinated Convertible Notes Due 2000 (12 1/2%)... 2,340 2,340
--------- ---------
Total Long-Term Borrowings........................ 1,347,906 1,349,057
--------- ---------
Common Stock Subject to Potential Repurchases (3)....... 18,614 18,614
--------- ---------
Shareholders' Equity:
Common Stock.......................................... 247 247
Other Shareholders' Equity............................ 314,568 314,568
Common Stock Subject to Potential Repurchase.......... (18,614) (18,614)
--------- ---------
Total Shareholders' Equity.......................... 296,201 296,201
--------- ---------
Total Capitalization.............................. 1,662,721 1,663,872
========= =========
</TABLE>
(1) At September 27, 1996 there were in effect various interest rate hedging
agreements which fix the rate on $250 million of variable rate debt at an
average effective rate of 6.2% for remaining periods ranging between
9 months and 34 months.
(2) After giving effect to the issuance of the Notes, approximately $435
million of unused borrowings will be available under the Credit Agreement.
See "The Credit Agreement" in the Prospectus.
(3) Under the Company's Shareholders' Agreement, in certain circumstances
individual shareholders may cause the Company to repurchase up to 30% of
their shares for cash, subject, under the Credit Agreement, to an aggregate
limit on repurchases of capital stock of $18.6 million at September 27,
1996 (See Note 7 to the Consolidated Financial Statements).
S-4
<PAGE>
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Notes offered hereby
(referred to in the accompanying Prospectus as the "Guaranteed Securities")
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the Guaranteed Securities set forth in
the Prospectus, to which description reference is hereby made.
The Notes are to be issued under an Indenture, dated as of July 15, 1991 (the
"Guaranteed Indenture"), among ARAMARK, as guarantor, Services, as issuer, and
The Bank of New York, as successor to The Bank of New York (Delaware), as
trustee (the "Guaranteed Trustee").
The Notes are subject to defeasance as described under "Description of
Securities and Guarantee--Defeasance" in the Prospectus. Any election by
Services for covenant defeasance as described in the Prospectus will release
Services and ARAMARK from the restrictions described below under the caption
"--Certain Covenants Applicable to the Notes."
The Notes when issued will rank on a parity with all other unsecured and
unsubordinated indebtedness of Services. ARAMARK will guarantee the punctual
payment of the principal of, premium, if any, and interest on the Notes, when
and as the same are due and payable. The Guarantee is absolute and
unconditional, irrespective of any circumstances that might otherwise
constitute a legal or equitable discharge of a surety or guarantor. The
Guarantee will rank on a parity with unsecured and unsubordinated indebtedness
of ARAMARK.
The Notes will be represented by one global certificate registered in the name
of the nominee of DTC and such nominee will be the sole holder of the Notes.
The Notes will not be issued in definitive registered form except in limited
circumstances. Settlement for the Notes will be made in immediately available
funds. The Notes will trade in DTC's Same-Day Settlement System until maturity,
and secondary market trading activity in the Notes will therefore settle in
immediately available funds. See "--Global Notes". The Notes initially will be
limited to $125,000,000 aggregate principal amount.
The Notes will mature on December 1, 2006. The Notes will bear interest at
7.10% per annum, payable semi-annually in arrears on each June 1 and December
1, commencing on June 1, 1997 and accruing from their date of issuance. The
Regular Record Date for such interest shall be the May 15 or November 15
(whether or not a Business Day) as the case may be next preceding such Interest
Payment Date.
The Notes will not be redeemable by ARAMARK or Services prior to their Stated
Maturity, and will not have the benefit of any sinking fund.
CERTAIN COVENANTS APPLICABLE TO THE NOTES
The covenants described in the Prospectus under the captions "Certain Covenants
Applicable to Subordinated Securities and Guaranteed Securities--Mergers,
Consolidations and Certain Sales and Purchases of Assets", "--Provision of
Financial Statements", "--Limitation on Restricted Payments", and "--Limitation
on Certain Security Interests" will not apply to the Notes and will be replaced
by the covenants described below. Capitalized terms used herein and not
otherwise defined shall have the meanings given to them in the Guaranteed
Indenture or the Board resolutions authorizing the Notes, as the case may be.
Limitations on Liens. ARAMARK covenants that it will not issue, incur, create,
assume, guarantee or suffer to exist, and will not permit any Restricted
Subsidiary to issue, incur, create, assume, guarantee or suffer to exist, any
debt for borrowed money secured by a mortgage, security interest, pledge, lien,
charge or other encumbrance ("mortgages") upon any Principal Property (as
defined below) of ARAMARK or any Restricted Subsidiary or upon any shares of
stock or indebtedness of any Restricted Subsidiary (whether such Principal
Property, shares or indebtedness are now existing or owned or hereafter created
or acquired) without in any such case effectively providing concurrently with
the
S-5
<PAGE>
issuance, incurrence, creation, assumption or guarantee of any such secured
debt, or the grant of a mortgage with respect to any such indebtedness, that
the Notes (together with, if ARAMARK shall so determine, any other indebtedness
of or guarantee by ARAMARK ranking equally with the Guarantee or any
indebtedness of or guaranteed by any Restricted Subsidiary, as the case may be)
shall be secured equally and ratably with (or, at the option of ARAMARK, prior
to) such secured debt. The foregoing restriction, however, will not apply to:
(a) mortgages on property existing at the time of acquisition thereof by
ARAMARK or any Subsidiary, provided that such mortgages were in existence prior
to, and not incurred in contemplation of, such acquisition; (b) mortgages on
property, shares of stock or indebtedness or other assets of any corporation
existing at the time such corporation becomes a Restricted Subsidiary, provided
that such mortgages are not incurred in anticipation of such corporation
becoming a Restricted Subsidiary; (c) mortgages on property, shares of stock or
indebtedness to secure the payment of all or any part of the purchase price
thereof, or mortgages on property, shares of stock or indebtedness to secure
any indebtedness for borrowed money incurred prior to, at the time of, or
within 270 days after, the latest of the acquisition thereof, or, in the case
of property, the completion of construction, the completion of improvements, or
the commencement of substantial commercial operation of such property, for the
purpose of financing all or any part of the purchase price thereof, such
construction, or the making of such improvements; (d) mortgages to secure
indebtedness owing to ARAMARK or to a Restricted Subsidiary; (e) mortgages
existing at the date of the issuance of the Notes; (f) mortgages on property of
a corporation existing at the time such corporation is merged into or
consolidated with ARAMARK or a Restricted Subsidiary or at the time of a sale,
lease or other disposition of the properties of a corporation as an entirety or
substantially as an entirety to ARAMARK or a Restricted Subsidiary, provided
that such mortgage was not incurred in anticipation of such merger or
consolidation or sale, lease or other disposition; (g) mortgages in favor of
the United States or any State, territory or possession thereof (or the
District of Columbia), or any department, agency, instrumentality or political
subdivision of the United States or any State, territory or possession thereof
(or the District of Columbia), to secure partial, progress, advance or other
payments pursuant to any contract or statute or to secure any indebtedness
incurred for the purpose of financing all or any part of the purchase price or
the cost of constructing or improving the property subject to such mortgages;
and (h) extensions, renewals, refinancings or replacements of any mortgage
referred to in the foregoing clauses (a), (b), (c), (e) and (f); provided,
however, that any mortgages permitted by any of the foregoing clauses (a), (b),
(c), (e) and (f) shall not extend to or cover any property of ARAMARK or such
Restricted Subsidiary, as the case may be, other than the property, if any,
specified in such clauses and improvements thereto.
Notwithstanding the restrictions outlined in the preceding paragraph, ARAMARK
or any Restricted Subsidiary will be permitted to issue, incur, create, assume,
guarantee or suffer to exist, debt secured by a mortgage which would otherwise
be subject to such restrictions, without equally and ratably securing the
Notes, provided that after giving effect thereto, the sum of (i) all debt so
secured by mortgages (not including mortgages permitted under clauses (a)
through (h) above) and (ii) all Attributable Debt (as defined below) with
respect to Sale and Lease-Back Transactions (as defined below) with respect to
any Principal Property, at the time of determination, does not exceed 10% of
the Consolidated Tangible Assets of ARAMARK.
Limitations on Sale and Lease-Back Transactions. ARAMARK covenants that it will
not, nor will it permit any Restricted Subsidiary to, enter into any Sale and
Lease-Back Transaction with respect to any Principal Property, other than any
such transaction involving a lease for a term of not more than three years or
any such transaction between ARAMARK and a Restricted Subsidiary or between
Restricted Subsidiaries, unless: (a) ARAMARK or such Restricted Subsidiary
would be entitled to incur indebtedness secured by a mortgage on the Principal
Property involved in such transaction at least equal in amount to the
Attributable Debt with respect to such Sale and Lease-Back Transaction, without
equally and ratably securing the Notes, pursuant to the limitation on liens in
the covenant described above; or (b) ARAMARK shall apply an amount equal to the
greater of the net proceeds of such sale or the Attributable Debt with respect
to such Sale and Lease-Back Transaction within 120 days of such
S-6
<PAGE>
sale to either (or a combination of) the retirement (other than any mandatory
retirement, mandatory prepayment or sinking fund payment or by payment at
maturity) of debt for borrowed money of ARAMARK or a Restricted Subsidiary that
matures more than twelve months after the creation of such indebtedness or the
purchase, construction or development of other comparable property.
Certain Definitions Applicable to Covenants. The term "Attributable Debt" when
used in connection with a Sale and Lease-Back Transaction involving a Principal
Property shall mean, at the time of determination, the lesser of: (a) the fair
value of such property (as determined in good faith by the Board of Directors
of ARAMARK); or (b) the present value of the total net amount of rent required
to be paid under such lease during the remaining term thereof (including any
renewal term or period for which such lease has been extended), discounted at
the rate of interest set forth or implicit in the terms of such lease or, if
not practicable to determine such rate, the interest rate per annum borne by
the Notes compounded semi-annually. For purposes of the foregoing definition,
rent shall not include amounts required to be paid by the lessee, whether or
not designated as rent or additional rent, on account of or contingent upon
maintenance and repairs, insurance, taxes, assessments, water rates and similar
charges. In the case of any lease which is terminable by the lessee upon the
payment of a penalty, such net amount shall be the lesser of the net amount
determined assuming termination upon the first date such lease may be
terminated (in which case the net amount shall also include the amount of the
penalty, but no rent shall be considered as required to be paid under such
lease subsequent to the first date upon which it may be so terminated) or the
net amount determined assuming no such termination.
The term "Principal Property" shall mean the land, land improvements, buildings
and fixtures (to the extent they constitute real property interests) (including
any leasehold interest therein) constituting the principal corporate office or
any distribution, operation or maintenance facility (whether now owned or
hereafter acquired) which: (a) is owned by ARAMARK or any Subsidiary; (b) has
not been determined in good faith by the Board of Directors of ARAMARK not to
be materially important to the total business conducted by ARAMARK and its
Subsidiaries taken as a whole; and (c) has a market value on the date as of
which the determination is being made in excess of 1.0% of Consolidated
Tangible Assets of ARAMARK as most recently determined on or prior to such
date.
The term "Restricted Subsidiary" shall mean any Subsidiary that owns any
Principal Property or any shares or debt of another Restricted Subsidiary.
The Term "Sale and Lease-Back Transaction" shall mean any arrangement with any
person providing for the leasing by ARAMARK or any Restricted Subsidiary of any
Principal Property, which property has been or is to be sold or transferred by
ARAMARK or such Restricted Subsidiary to such person.
Consolidation, Merger and Sale of Assets. ARAMARK covenants that (i) it will
not consolidate with or merge into any other person or convey, transfer or
lease its properties and assets substantially as an entirety to any person, and
ARAMARK shall not permit any person to consolidate with or merge into ARAMARK
and (ii) it will not permit Services to consolidate with or merge into any
other person or convey, transfer or lease its properties and assets
substantially as an entirety to any person, and shall not permit any person to
consolidate with or merge into Services, unless:
(1) in case ARAMARK or Services shall consolidate with or merge into
another person or convey, transfer or lease its properties and assets
substantially as an entirety to any person, the person formed by such
consolidation or into which ARAMARK or Services, as the case may be, is
merged or the person which acquires by conveyance or transfer, or which
leases, the properties and assets of ARAMARK or Services, as the case may
be, substantially as an entirety shall be a corporation, partnership or
trust, shall be organized and validly existing under the laws of the United
States, any State thereof or the District of Columbia and shall expressly
assume, by a supplemental Guaranteed Indenture executed and delivered to
the Trustee, in form satisfactory to the Trustee, (a) the due and punctual
performance of the Guarantee and the performance or observance of every
covenant
S-7
<PAGE>
of the Guaranteed Indenture on the part of ARAMARK, in the case of a trans-
action involving ARAMARK, or (b) the due and punctual payment of the prin-
cipal of and any premium and interest on the Notes and the performance or
observance of every covenant of the Guaranteed Indenture on the part of
Services, in the case of a transaction involving Services;
(2) immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of ARAMARK or any Subsidiary as a
result of such transaction as having been incurred by ARAMARK or such
Subsidiary at the time of such transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event
of Default, shall have happened and be continuing; and
(3) if, as a result of any such consolidation or merger or such conveyance,
transfer or lease, properties or assets of ARAMARK or any Restricted
Subsidiary would become subject to a mortgage, pledge, lien, security
interest or other encumbrance which would not be permitted by the
Guaranteed Indenture, ARAMARK or such successor person, as the case may be,
shall take such steps as shall be necessary effectively to secure the Notes
equally and ratably with (or prior to) all indebtedness secured thereby.
GLOBAL NOTES
The Notes will be issued in the form of one or more fully registered global
Notes which will be deposited with, or on behalf of, The Depository Trust
Company, as Depository (the "Depository"), located in the Borough of Manhattan,
The City of New York, and will be registered in the name of the Depository or a
nominee of the Depository.
Ownership of beneficial interests in a global Note will be limited to
participants in and to persons that may hold interests through institutions
that have accounts with the Depository ("participants"). Ownership of
beneficial interests by participants in a global Note will be shown on, and the
transfer of that ownership interest will be effected only through, records
maintained by the Depository for such global Note. Ownership of beneficial
interests in such global Note by persons that hold through participants will be
shown on, and the transfer of that ownership interest within each participant
will be effected only through, records maintained by such participants.
Payment of principal of and interest on the Notes represented by any such
global Note will be made to the Depository or its nominee, as the case may be,
as the sole registered owner and the sole Holder of the Notes represented
thereby for all purposes under the Guaranteed Indenture. None of the Company,
the Trustee or any agent of the Company or the Trustee will have any
responsibility or liability for any aspect of the Depository's records relating
to, or payments made on account of, beneficial ownership interests in a global
Note representing any Notes or any other aspect of the relationship between the
Depository and its participants or the relationship between such participants
and the owners of beneficial interests in a global Note owning through such
participants or for maintaining, supervising or reviewing any of the
Depository's records relating to such beneficial ownership interests.
The Company has been advised by the Depository that upon receipt of any payment
of principal of or interest on any such global Note, the Depository will
immediately credit, on its book-entry registration and transfer system, the
accounts of participants with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such global Note as
shown on the records of the Depository. The accounts to be credited shall be
designated by the Underwriters. Payments by participants to owners of
beneficial interests in a global Note held through such participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for customer accounts registered in "street name," and
will be the sole responsibility of such participants.
No global Note may be transferred except as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such nominee
to a successor of the Depository or a nominee of such successor.
S-8
<PAGE>
A global Note representing Notes is exchangeable for definitive Notes in
registered form, only if (x) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for such global Note or if at any
time the Depository ceases to be a clearing agency registered under the
Securities Exchange Act of 1934 (the "Exchange Act"), (y) the Company in its
sole discretion determines that such global Note shall be exchangeable for
definitive Notes in registered form and notifies the Trustee thereof or (z) an
Event of Default with respect to the Notes represented by such global Note has
occurred and is continuing. Any global Note that is exchangeable pursuant to
the preceding sentence shall be exchangeable for definitive Notes issuable in
authorized denominations in registered form, aggregating a like amount. Such
definitive Notes shall be registered in the names of the owners of the
beneficial interests in such global Note as the Depository shall direct.
Except as provided above, owners of beneficial interests in such a global Note
will not be entitled to receive physical delivery of Notes in definitive form
and will not be considered the Holders thereof for any purpose under the
Guaranteed Indenture, and no global Note representing Notes shall be
exchangeable. Accordingly, each person owning a beneficial interest in such a
global Note must rely on the procedures of the Depository and, if such person
is not a participant, on the procedures of the participant through which such
person owns its interest, to exercise any rights of a Holder under the
Indenture or such global Note. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a global Note.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
Services and ARAMARK have agreed to sell to each of the Underwriters named
below, and each of such Underwriters has severally agreed to purchase, the
principal amount of the Notes set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT OF NOTES
----------- ---------------
<S> <C>
J.P. Morgan Securities Inc. ................................ $ 62,500,000
Goldman, Sachs & Co. ....................................... $ 62,500,000
------------
Total..................................................... $125,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the Underwriters
are committed to take and pay for all of the Notes if any are taken.
The Underwriters propose to offer the Notes in part directly to retail
purchasers at the initial public offering price set forth on the cover page of
this Prospectus Supplement and in part to certain securities dealers at such
price less a concession of .400% of the principal amount of the Notes. The
Underwriters may allow, and such dealers may reallow, a concession not to
exceed .250% of the principal amount of the Notes to certain brokers and
dealers. After the Notes are released for sale to the public, the offering
price and other selling terms may from time to time be varied by the
Underwriters.
The Notes are a new issue of securities with no established trading market.
Services and ARAMARK have been advised by the Underwriters that they intend to
make a market in the Notes but are not obligated to do so and may discontinue
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Notes. There is no assurance that the
Notes will trade at their principal amount.
The Company expects to use all of the net proceeds from the sale of the Notes
to repay indebtedness owed to a bank syndicate in which Morgan, an affiliate of
J.P. Morgan Securities Inc., is a lender and
S-9
<PAGE>
for which J.P. Morgan Securities Inc. acted as one of the co-arrangers. Morgan
is expected to receive approximately 7.5% of such net proceeds. See "Use of
Proceeds". In the ordinary course of business, J.P. Morgan Securities Inc. and
its affiliates have engaged, and in the future may engage, in commercial and
investment banking transactions with the Company and its affiliates, including
participation as a manager in certain placements and offerings of securities of
the Company and its affiliates, and have received and may in the future receive
customary fees, commissions and expense reimbursements.
Goldman Sachs & Co. and their affiliates maintain ongoing business
relationships with ARAMARK and in connection therewith may provide investment
banking, commercial banking and advisory services for which they receive
customary fees.
Services and ARAMARK have agreed to jointly and severally indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933.
S-10
<PAGE>
Debt Securities of
ARAMARK CORPORATION
OR
ARAMARK SERVICES, INC.
ARAMARK Corporation ("ARAMARK") may offer from time to time subordinated debt
securities (the "Subordinated Securities") and ARAMARK Services, Inc. ("Serv-
ices") may offer from time to time its debt securities (the "Guaranteed Secu-
rities," and collectively with the Subordinated Securities, the "Securities")
with an aggregate principal amount or, if Securities are issued at original
issue discount, such higher principal amount as may be sold for an initial
public offering price of up to $400,000,000. The issuer, the specific title,
the aggregate principal amount, the purchase price, the maturity, the rate and
time of payment of any interest, any redemption provisions, any other specific
terms of the Securities, and the agents and dealers or underwriters in connec-
tion with the sale of the Securities in respect of which this Prospectus is
being delivered are set forth in the accompanying supplement to this Prospec-
tus (the "Prospectus Supplement").
The Guaranteed Securities when issued will rank on a parity with all other
unsecured and unsubordinated indebtedness of Services and will be entitled to
the Guarantee of ARAMARK, which Guarantee will rank on a parity with all
unsecured and unsubordinated indebtedness of ARAMARK. The Subordinated Securi-
ties are unsecured and subordinated to all present and future Senior Indebted-
ness of ARAMARK and will rank on a parity with ARAMARK's outstanding subordi-
nated indebtedness. See "Description of Securities and Guarantee."
ARAMARK or Services may sell the Securities to or through underwriters, and
also may sell the Securities directly to other purchasers or through agents.
The accompanying Prospectus Supplement sets forth the names of any underwrit-
ers or agents involved in the sale of the Securities in respect of which this
Prospectus is being delivered, the principal amounts, if any, to be purchased
by underwriters and the compensation, if any, of such underwriters or agents.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE AC-
CURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
J.P. MORGAN & CO. GOLDMAN, SACHS & CO.
The date of this Prospectus is November 21, 1996.
<PAGE>
AVAILABLE INFORMATION
ARAMARK is subject to the informational requirements of the Securities Ex-
change Act of 1934 (the "Exchange Act"), and in accordance therewith files re-
ports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other infor-
mation concerning ARAMARK can be inspected and copied at the Commission's of-
fice at 450 Fifth Street, N.W., Washington D.C., and the Commission's Regional
Offices in New York (7 World Trade Center, New York, New York) and Chicago
(Northwest Atrium Center, 500 W. Madison, Suite 1400, Chicago, Illinois), and
at the Commission's web site at (http://www.sec.gov). Copies of such material
also can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington D.C. 20549, at prescribed rates. This Pro-
spectus does not contain all of the information set forth in the Registration
Statement which ARAMARK and Services have filed with the Commission under the
Securities Act of 1933 and to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
ARAMARK and Services hereby incorporate by reference in this Prospectus
ARAMARK's Annual Report on Form 10-K for the year ended September 27, 1996,
filed pursuant to Section 13 of the Exchange Act.
All documents filed by ARAMARK or Services subsequent to the date of this Pro-
spectus and prior to the termination of the offering of the Securities pursu-
ant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act shall be deemed
to be incorporated by reference into this Prospectus and to be a part hereof
from the date of filing of such documents. Any statement contained in a docu-
ment incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the ex-
tent that a statement contained herein or in any other subsequently filed doc-
ument which also is or is deemed to be incorporated by reference herein or in
the accompanying Prospectus Supplement modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain without charge, upon
request, a copy of any of the documents incorporated by reference herein, ex-
cept for the exhibits to such documents. Written or telephone requests should
be directed to Donald S. Morton, ARAMARK, 1101 Market Street, Philadelphia,
Pennsylvania 19107 or (215) 238-3240 or to ARAMARK c/o Prospectus Library,
J.P. Morgan Securities Inc., 44th Floor, 60 Wall Street, New York, New York
10260 or (212) 648-8612.
ARAMARK CORPORATION
ARAMARK, through Services and its other subsidiaries, is engaged in providing
or managing services including food and support services, uniform services,
health and education services and distributive services. ARAMARK provides most
of its services in the United States. ARAMARK also conducts operations primar-
ily management of food services, in Belgium, Canada, the Czech Republic, Ger-
many, Hungary, Japan, Korea, Mexico, Spain and the United Kingdom.
Services provides the majority of the food and support services provided by
ARAMARK's operations to businesses, government, educational and health care
institutions. Through subsidiaries, Services also conducts the majority of
ARAMARK's operations outside the United States.
ARAMARK's management shareholders (approximately 1,150 individuals) and their
permitted transferees own approximately 52% of the outstanding common stock on
a Class B equivalent basis (representing approximately 92% of the voting pow-
er) and ARAMARK's employee benefit plans own an additional approximately 24%
of the outstanding common stock on a Class B equivalent basis.
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<PAGE>
ARAMARK and Services, each a Delaware corporation, have their principal execu-
tive offices at ARAMARK Tower, 1101 Market Street, Philadelphia, Pennsylvania
19107, and their telephone number is (215) 238-3000. Unless the context other-
wise requires, references to ARAMARK include ARAMARK and its subsidiaries and
references to Services include Services and its subsidiaries.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the pro-
ceeds of the offering of Securities will be used by ARAMARK or Services to re-
pay borrowings under the Credit Agreement. See "The Credit Agreement."
THE CREDIT AGREEMENT
ARAMARK, through its wholly-owned subsidiary Services, has a $1.0 billion re-
volving credit facility with a group of banks (the "Credit Agreement"). Inter-
est under the Credit Agreement is based on the Prime Rate ), London Inter-Bank
Offered Rate (LIBOR) plus a spread of .15% to .625% (as of November 15, 1996--
.33%) or the Certificate of Deposit Rate plus a spread of .25% to .725% (as of
November 15, 1996--.43%), at the option of Services. The spread is based on
certain financial ratios and borrowing levels as defined. Services also pays
an annual fee of .10% to .375% (as of November 15, 1996--.17%) on the entire
credit facility. Morgan Guaranty Trust Company of New York, an affiliate of
J.P. Morgan Securities, Inc., is a co-agent under the Credit Agreement.
Maturity. The outstanding commitments of $1.0 billion under the Credit Agree-
ment are not subject to scheduled amortization. The final maturity for the
Credit Agreement is June 2001. The incurrance of certain amounts of secured
debt would result in commitment reductions.
Covenants; Events of Default. The Credit Agreement contains restrictive cove-
nants which provide, among other things, limitations on (i) the creation of
mortgages or security interests, (ii) dispositions of material assets, (iii)
the redemption of certain classes of capital stock of ARAMARK, and (iv) cer-
tain significant changes of control of ARAMARK. Under the Credit Agreement,
ARAMARK is required to maintain certain specified minimum ratios of cash flow
to fixed charges and to total borrowings and certain minimum levels of net
worth.
The Credit Agreement contains various event of default provisions, including
default in payment of principal or interest, material misrepresentations in
the Credit Agreement, default in compliance with the other terms of the Credit
Agreement or the related Guarantees, bankruptcy, default on other indebted-
ness, failure to satisfy or stay certain judgments or orders entered against
ARAMARK or any of its subsidiaries, failure to pay when due certain amounts
with respect to certain employee benefit plans, and other events with respect
to such plans.
Guarantees. Borrowings under the Credit Agreement are Guaranteed by certain of
ARAMARK's and Services' wholly-owned domestic subsidiaries and by ARAMARK.
DESCRIPTION OF SECURITIES AND GUARANTEE
Subordinated Securities may be issued from time to time in one or more series
under an indenture (the "Subordinated Indenture") between ARAMARK and The Bank
of New York, as Trustee (the "Subordi-
3
<PAGE>
nated Trustee"). The Guaranteed Securities may be issued from time to time in
one or more series under an Indenture (the "Guaranteed Indenture") among
ARAMARK, Services and The Bank of New York, as Trustee (the "Guaranteed Trust-
ee"). The Subordinated Indenture and the Guaranteed Indenture are sometimes
referred to collectively as the "Indentures," and the Subordinated Trustee and
the Guaranteed Trustee are sometimes referred to collectively as the "Trust-
ee." The statements under this caption are brief summaries of certain provi-
sions contained in the Indentures, do not purport to be complete and are qual-
ified in their entirety by reference to the Indentures, including the defini-
tions therein of certain terms, copies of which are filed as exhibits to the
Registration Statement of which this Prospectus is a part.
GENERAL
Each Indenture provides for the issuance of debt securities in one or more se-
ries, and does not limit the principal amount of debt securities which may be
issued thereunder.
Reference is made to the Prospectus Supplement for the following terms of the
Securities being offered hereby: (1) the title of the Securities; (2) whether
the Securities are Subordinated Securities or Guaranteed Securities; (3) the
aggregate principal amount of the Securities; (4) the date on which the prin-
cipal of the Securities is payable; (5) the rate or rates or the method for
determining such rate or rates, if any, at which the Securities will bear in-
terest; (6) the times at which any such interest will be payable; (7) any pro-
visions relating to optional or mandatory redemption of the Securities; (8) if
other than denominations of $1,000 and any integral multiple thereof, the de-
nominations in which the Securities are authorized to be issued; (9) the place
or places at which ARAMARK or Services will make payments of principal (and
premium, if any) and interest, if any; (10) the person to whom any Security of
such series will be payable, if other than the Person in whose name that Secu-
rity (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest; (11) any additional
covenants (or modifications to covenants set forth herein); (12) if other than
the principal amount thereof, the portion of the principal amount of Securi-
ties of the series which shall be payable upon declaration of acceleration of
the Maturity; (13) the Offer to Purchase Price, the Applicable Average Life,
the Applicable Stated Maturity and the Acquisition Average Life applicable to
the Securities of any series; and (14) any other specific terms of the Securi-
ties, which terms shall not be inconsistent with such Indentures.
One or more series of the Securities may be issued as Original Issue Discount
Securities. An "Original Issue Discount Security" is a Security, including any
zero-coupon Security, which is issued at a price lower than the amount payable
at the Stated Maturity thereof or which provides that upon redemption or ac-
celeration of the Maturity thereof an amount less than the amount payable upon
the Stated Maturity thereof and determined in accordance with the terms
thereof shall become due and payable.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Securities may be presented for registration of transfer (with the form of
transfer endorsed thereon duly executed) at the office of the Security Regis-
trar or at the office of any transfer agent designated by ARAMARK or Services,
as the case may be, for such purpose with respect to any series of Securities
and referred to in an applicable Prospectus Supplement, without service charge
and upon payment of any taxes and other governmental charges as described in
the relevant Indenture. Such transfer or exchange will be effected upon the
Security Registrar or such transfer agent, as the case may be, being satisfied
with the documents of title and identity of the person making the request.
ARAMARK and Services have appointed the Trustee as Security Registrar with re-
spect to the Securities.
In the event of any redemption in part, ARAMARK or Services, as the case may
be, shall not be required to (i) issue, register the transfer of or exchange
any Security during a period beginning at the opening of business 15 days be-
fore the mailing of a notice of redemption of Securities of like tenor and
4
<PAGE>
of the series of which such Security is a part, and ending at the close of
business on the date of such mailing and (ii) register the transfer of or ex-
change any Security so selected for redemption, in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
PAYMENT AND PAYING AGENT
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of and premium (if any) on any Security will be made only against
surrender to the Paying Agent of such Security. Unless otherwise indicated in
an applicable Prospectus Supplement, principal of and premium, if any, and in-
terest on Securities will be payable, subject to any applicable laws and regu-
lations, at the office of such Paying Agent or Paying Agents as ARAMARK or
Services, as the case may be, may designate from time to time, except that at
the option of ARAMARK or Services, as the case may be, payment of any interest
may be made by check mailed to the address of the person entitled thereto as
such address shall appear in the Security Register with respect to such Secu-
rities. Unless otherwise indicated in an applicable Prospectus Supplement,
payment of interest on a Security on any Interest Payment Date will be made to
the person in whose name such Security (or a Predecessor Security) is regis-
tered at the close of business on the Regular Record Date for such interest.
Unless otherwise indicated in an applicable Prospectus Supplement, the corpo-
rate trust office of The Bank of New York in The City of New York will be des-
ignated ARAMARK's and Services' sole Paying Agent for payments with respect to
Securities of each series.
All moneys paid by ARAMARK or Services to a Paying Agent for the payment of
the principal of and premium, if any, or interest on any Security of any se-
ries which remain unclaimed at the end of two years after such principal, pre-
mium, if any, or interest shall have become due and payable will be repaid to
ARAMARK and Services, as the case may be, and the holder of such Security will
thereafter look only to ARAMARK or Services, as the case may be, for payment
thereof.
CERTAIN COVENANTS APPLICABLE TO SUBORDINATED SECURITIES AND GUARANTEED
SECURITIES
Unless otherwise indicated in the applicable Prospectus Supplement, the fol-
lowing covenants are applicable to Subordinated Securities and Guaranteed Se-
curities.
Mergers, Consolidations and Certain Sales and Purchases of Assets. ARAMARK (i)
shall not consolidate with or merge with or into any Person who is not a Sub-
sidiary or permit any Person who is not a Subsidiary to consolidate with or
merge with or into ARAMARK or any Subsidiary; (ii) shall not directly or indi-
rectly transfer, convey, sell, lease or otherwise dispose of all or substan-
tially all of its assets as an entirety; and (iii) shall not, and shall not
permit any Subsidiary to, acquire Capital Stock of any other Person who is not
a Subsidiary such that such Person becomes a Subsidiary or directly or indi-
rectly purchase, lease or otherwise acquire all or substantially all of the
assets of any Person as an entirety or any existing business (whether existing
as a separate entity, subsidiary, division, unit or otherwise) of any Person,
unless (with respect to this clause (iii)) either (X) the amount of considera-
tion (including any indebtedness assumed by or which becomes an obligation of
ARAMARK or such Subsidiary in connection therewith and the fair market value
of property other than cash, as determined in good faith by the Board of Di-
rectors) paid for such Capital Stock or assets of any Person is less than or
equal to 1% of Consolidated Tangible Assets as of the most recently available
quarterly or annual consolidated balance sheet of ARAMARK or (Y) the amount of
consideration (including any indebtedness assumed by or which becomes an obli-
gation of ARAMARK or such Subsidiary in connection therewith and the fair mar-
ket value of property other than cash, as determined in good faith by the
Board of Directors) paid for such Capital Stock or assets plus the aggregate
amount of consideration (including any indebtedness assumed by or which be-
comes an obligation of ARAMARK or such Subsidiary in connection therewith and
the fair market value of property other than cash, as determined in good faith
by the Board of Directors) paid by ARAMARK or its Subsidiaries for other such
acquisitions (excluding acquisitions referred to in clause (X) and excluding
acquisitions permitted below and excluding any acquisitions in respect of
which ARAMARK makes an Offer to Purchase in accordance with the provisions of
the follow-
5
<PAGE>
ing paragraph) consummated during the prior 12 months does not exceed 10% of
the Consolidated Tangible Assets of ARAMARK as of the most recently available
quarterly or annual consolidated balance sheet of ARAMARK. Notwithstanding the
above, any such transaction described above may occur if: (1) in the case
ARAMARK or Services shall consolidate with or merge with or into another Per-
son or shall directly or indirectly transfer, convey, sell, lease or otherwise
dispose of all or substantially all of its assets as an entirety, the succes-
sor company shall be a domestic corporation, partnership, or trust and shall
expressly assume the obligations of ARAMARK or Services, as the case may be,
under the Indenture; (2) immediately before and after giving effect to such
transaction and treating any Indebtedness which becomes an obligation of
ARAMARK or a Subsidiary as a result of such transaction as having been in-
curred by ARAMARK or such Subsidiary at the time of the transaction, no de-
fault shall have happened and be continuing; and (3) immediately after giving
effect to such transaction or, if applicable, the portion of such transaction
that exceeds the amount of consideration otherwise permitted under clause
(iii) above, the Consolidated Cash Flow Ratio of ARAMARK or, if applicable, a
successor company for the immediately preceding four full fiscal quarters, for
which quarterly or annual consolidated financial statements of ARAMARK are
available on a pro forma basis, as if such transaction had taken place at the
beginning of such four full fiscal quarters, is equal to or greater than 2.0
to 1 or such other ratios specified in the applicable Prospectus Supplement.
No default in the performance, or breach, of the Mergers, Consolidations and
Certain Sales and Purchases of Assets covenant shall be deemed to have oc-
curred so as to result in an Event of Default with respect to the Securities
of any series by reason of any merger, consolidation, divestiture, sale, dis-
position or acquisition described above, unless and until ARAMARK fails to
make an Offer to Purchase within five Business Days of any such merger, con-
solidation, divestiture, sale, disposition or acquisition at a price equal to
the Offer to Purchase Price. (Section 801 of the Subordinated Indenture and
Section 801 of the Guaranteed Indenture)
Provision of Financial Statements. For so long as ARAMARK is subject to the
Exchange Act, ARAMARK shall file with the Commission the annual reports, quar-
terly reports and other documents (the "Documents") on or prior to the respec-
tive dates (the "Required Filing Dates") such Documents are required to be so
filed under the Exchange Act. If ARAMARK is not required to file Documents un-
der the Exchange Act, ARAMARK shall prepare quarterly and annual financial
statements including any notes thereto in accordance with generally accepted
accounting principles (and with respect to any annual financial statement, ob-
tain an auditors' report by a firm of established national reputation), and a
quarterly and annual "Management's Discussion and Analysis of Financial Condi-
tion and Results of Operations," prepared substantially in accordance with the
requirements of the Exchange Act or any successor provision thereto (collec-
tively with the quarterly and annual financial statements, the "Alternative
Documents"). ARAMARK shall (X) within 30 days of each Required Filing Date (i)
transmit by mail to all Holders, as their names and addresses appear in the
Security Register, without cost to such Holders, and (ii) file with the
Trustee copies of the Documents or the Alternative Documents and (Y) if filing
such Documents by ARAMARK with the Commission is not required under the Ex-
change Act, promptly upon written request supply copies of Alternative Docu-
ments to any legitimate prospective Holder. (Section 1008 of the Subordinated
Indenture and Section 1009 of the Guaranteed Indenture)
Limitation on Restricted Payments. As long as the Securities of any series are
outstanding ARAMARK (i) shall not, directly or indirectly, declare or pay any
dividend or make any distribution in cash or property, in respect of any class
of its Capital Stock, or to the holders of any class of its Capital Stock (in-
cluding pursuant to a merger or consolidation of ARAMARK, but excluding any
dividends or distributions payable solely in shares of its Capital Stock or in
options, warrants or other rights to acquire its Capital Stock), (ii) shall
not, and shall not permit any Subsidiary to, directly or indirectly, purchase,
redeem or otherwise acquire or retire for value (a) any Capital Stock of
ARAMARK or (b) any options, warrants or right to purchase or acquire shares of
Capital Stock of ARAMARK, (iii) shall not after the date of the Indentures
make, or permit any Subsidiary to make, any loan, advance, capital contribu-
tion
6
<PAGE>
to or investment in, or payment on a Guarantee of any obligation of, any Affil-
iate, other than ARAMARK, a Subsidiary or an Affiliate that becomes a Subsidi-
ary by reason of any such payment and (iv) shall not, and shall not permit any
Subsidiary to, directly or indirectly, declare or pay any dividend or make any
distribution in cash or property, in respect of any Minority Interest hereinaf-
ter created (excluding any dividends or distributions payable solely in shares
of Capital Stock of such Subsidiary or in options, warrants or other right to
acquire such Capital Stock) (except as further excluded below, the transactions
described in clauses (i) through (iv), only to the extent they exceed in the
aggregate in any fiscal year 3% of Consolidated Tangible Assets as of the most
recently available annual consolidated balance sheet of ARAMARK, are referred
to herein as "Restricted Payments"), if at the time thereof: (1) an Event of
Default, or an event that with the lapse of time or the giving of notice, or
both, would constitute an Event of Default, shall have occurred and is continu-
ing, or (2) such transaction constitutes a Restricted Payment and upon giving
effect to such Restricted Payment, the aggregate of all Restricted Payments
from May 15, 1989 exceeds the sum of: (a) 50% of cumulative Consolidated Net
Income (or, in the case cumulative Consolidated Net Income shall be negative,
minus 100% of such deficit) for the period from September 30, 1988 to the end
of the most recently available quarterly or annual consolidated income state-
ments of ARAMARK; provided, however, that the net income (loss) of any Person
acquired by ARAMARK in a pooling-of-interests transaction for any period prior
to the date of such transaction shall not be included in the calculation of cu-
mulative Consolidated Net Income; and (b) 100% of the aggregate net proceeds,
including the fair value of property other than cash, from the issuance of Cap-
ital Stock of ARAMARK (and, in the event ARAMARK merges or consolidates with
another Person in a transaction in which the outstanding common stock of
ARAMARK prior to the transaction is canceled, the Consolidated Net Worth of
such other Person but not less than zero) and warrants, rights or options on
Capital Stock and the principal amount of indebtedness of ARAMARK that has been
converted into Capital Stock of ARAMARK after the date of the original issuance
of securities of such series.
Restricted Payments shall not include the following: (i) the payment of any
dividend within 60 days after declaration thereof if at the declaration date
such payment would have complied with the foregoing provisions; (ii) any pur-
chase, repurchase, redemption, defeasance or other acquisition or retirement of
ARAMARK's Series Preferred Stock and dividends paid in respect thereof; or
(iii) payments in redemption of Capital Stock or options to purchase Capital
Stock but only to the extent that the cash payments (for either direct cash
payments or for cash principal payments on notes issued in connection with any
such redemption of Capital Stock or options) in respect of such Capital Stock
shall not exceed in any fiscal year 1% of Consolidated Tangible Assets as of
the most recently available quarterly or annual consolidated balance sheet of
ARAMARK.
No default in the performance, or breach, of this covenant shall be deemed to
have occurred so as to result in an Event of Default with respect to the Secu-
rities of such series by reason of any Restricted Payment, (A) if the Consoli-
dated Cash Flow Ratio for the immediately preceding four full fiscal quarters
for which quarterly or annual consolidated financial statements of ARAMARK are
available, on a pro forma basis, as if such Restricted Payment (or portion
thereof) made after the end of such four full fiscal quarters had been made at
the beginning of such four full fiscal quarters is equal to or greater than 2.0
to 1 or such other ratios specified in the applicable Prospectus Supplement; or
(B) unless and until ARAMARK fails to make an Offer to Purchase the Securities
within five Business Days of such Restricted Payment at a price equal to the
Offer to Purchase Price. (Section 1009 of the Subordinated Indenture and Sec-
tion 1010 of the Guaranteed Indenture)
Limitation on Certain Security Interests. The Indentures provide that ARAMARK
may not create, incur or permit to exist any security interest in shares of
Capital Stock of Services (except those security interests arising with respect
to Indebtedness of Services), without making effective provision whereby the
Securities will be secured equally and ratably with (or prior to) such security
interest; provided, however, that the foregoing shall not apply with respect to
a security interest arising with respect to indebtedness of any Subsidiary.
Compliance by ARAMARK with the foregoing may be waived by the holders of
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<PAGE>
not less than a majority of the principal amount of Securities of each series
at the time outstanding. The limitation on certain security interests would
automatically terminate in the event of a merger or consolidation of ARAMARK
and Services or the sale of substantially all of the assets of Services or
ARAMARK to the other. (Section 1006 of the Subordinated Indenture and Section
1007 of the Guaranteed Indenture)
REDEMPTION
If the Securities of a series provide for mandatory redemption by ARAMARK or
Services, as the case may be, or redemption at the election of ARAMARK or
Services, as the case may be, unless otherwise provided in the applicable Pro-
spectus Supplement, such redemption shall be on not less than 30 nor more than
60 days' notice and, in the event of redemption in part, the Securities to be
redeemed will be selected by the Trustee in such usual manner as it shall deem
fair and appropriate. Notice of such redemption will be mailed to holders of
Securities of such series to their last addresses as they appear on the regis-
ter of the Securities of such series.
DEFEASANCE
The Prospectus Supplement will state if any defeasance provision will apply to
the Securities of the Series offered thereby.
The Indentures provide, if such provision is made applicable to the Securities
of any series pursuant to Section 301 of the Indentures, that ARAMARK or Serv-
ices, as the case may be, may elect either (A) to defease and be discharged
from any and all obligations with respect to such Securities (except for the
obligations to register the transfer or exchange of such Securities, to re-
place temporary or mutilated, destroyed, lost or stolen Securities, to main-
tain an office or agency in respect of the Securities and to hold moneys for
payment in trust) ("defeasance") or (B) to be released from its obligations
with respect to such Securities under Section 501(6) and 1007 through 1010 of
the Guaranteed Indenture or Sections 1006 through 1010 of the Subordinated In-
denture (being the cross-default provision described in clause (vi) under
"Events of Default" and the restrictions described under "Certain Covenants
Applicable to Subordinated Securities and Guaranteed Securities" and, in the
case of Subordinated Securities, "Terms Applicable to the Subordinated Securi-
ties--Certain Additional Covenants Applicable to Subordinated Securities"
("covenant defeasance")), upon the deposit with the Trustee (or other qualify-
ing trustee), in trust for such purpose, of money and/or U.S. Government Obli-
gations which through the payment of principal and interest in accordance with
their terms will provide money in an amount sufficient to pay the principal of
(and premium, if any) and interest on such Securities, and any mandatory sink-
ing fund or analogous payments thereon, on the scheduled due dates therefor.
Such a trust may be established only if, among other things, ARAMARK or Serv-
ices, as the case may be, has delivered to the Trustee an opinion of counsel
(as specified in the Indentures) to the effect that the Holders of such Secu-
rities will not recognize income, gain or loss for Federal income tax purposes
as a result of such defeasance or covenant defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance or covenant defeasance
had not occurred. Such opinion, in the case of defeasance under clause (A)
above, must refer to and be based upon a ruling of the Internal Revenue Serv-
ice or a change in applicable Federal income tax law occurring after the date
of the Indentures. The Prospectus Supplement may further describe the provi-
sions, if any, permitting such defeasance or covenant defeasance with respect
to the Securities of a particular series. (Article Thirteen of the Guaranteed
Indenture and Article Fourteen of the Subordinated Indenture)
SOLELY CORPORATE OBLIGATIONS
No recourse for payment of principal of or interest on any Security or for any
claim based on any Security or the Indentures shall be had against the Trust-
ee, the Paying Agent, the Security Registrar or any director, officer or
stockholder of ARAMARK or Services.
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GOVERNING LAW
The Indentures and the Securities will be governed by, and construed in accor-
dance with, the laws of the State of New York.
TERMS APPLICABLE TO THE SUBORDINATED SECURITIES
MODIFICATION OF THE SUBORDINATED INDENTURE
The Subordinated Indenture contains provisions permitting ARAMARK and the
Trustee, with the consent of holders of not less than 66 2/3% in principal
amount of the debt securities which are affected by the modification, to mod-
ify the Subordinated Indenture or any supplemental indenture or the rights of
the holders of the debt securities issued under such Indenture; provided that
no such modification may, without the consent of the holder of each outstand-
ing debt security affected thereby, (a) change the Stated Maturity of the
principal of, or any installment of principal of or interest, if any, on, any
Security, (b) reduce the principal amount of, or premium or rate of interest,
if any, on, any Security, (c) reduce the amount of principal of an Original
Issue Discount Security payable upon acceleration of the maturity thereof, (d)
change the place or currency of payment of principal of, or premium or inter-
est, if any, on, any Security, (e) impair the right to institute suit for the
enforcement of any payment on or with respect to any Security, (f) reduce the
percentage in principal amount of Outstanding Securities of any series, the
consent of whose holders is required for modification or amendment of the Sub-
ordinated Indenture or for waiver of compliance with certain provisions of the
Subordinated Indenture or for waiver of certain defaults, or (g) modify any of
the provisions enumerated under "Terms Applicable to the Subordinated Securi-
ties-Modification of the Subordinated Indenture," except to increase any such
percentage or to provide that certain other provisions of the Subordinated In-
denture cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby. (Section 902 of the Subordinated Inden-
ture)
SUBORDINATION
The indebtedness evidenced by the Subordinated Securities (including principal
and interest) will be subordinated in right of payment to all present and fu-
ture Senior Indebtedness. (Section 1301 of the Subordinated Indenture) "Senior
Indebtedness" is defined in the Subordinated Indenture to mean "principal of,
premium, if any, and interest on: (1) all indebtedness incurred or Guaranteed
by ARAMARK, either before or after the date hereof, which is evidenced by an
instrument of indebtedness or reflected on the accounting records of ARAMARK
as a payable (excluding ARAMARK's 8 1/2% Subordinated Notes Due 2003, 10% Sub-
ordinated Notes Due 2000, 10% Subordinated Debentures Due 2000 and 12 1/2%
Subordinated Convertible Installment Notes due 2000, all of which shall rank
pari passu with the Subordinated Securities, and any other debt which by the
terms of the instrument creating or evidencing the same is not superior in
right of payment to the Subordinated Securities) including, without limita-
tion, as Senior Indebtedness (a) any amount payable with respect to any lease,
conditional sale or installment sale agreement or other financing instrument
or agreement which in accordance with generally accepted accounting principles
is, at the date hereof or at the time the lease, conditional sale or install-
ment sale agreement or other financing instrument or agreement is entered in-
to, or assumed or Guaranteed by, directly or indirectly, ARAMARK, required to
be reflected as a liability on the face of the balance sheet of ARAMARK and
(b) any amounts payable in respect to any interest rate exchange agreement,
currency exchange agreement or similar agreement and (c) any subordinated in-
debtedness of a corporation merged with or into or acquired by ARAMARK and (2)
any renewals or extensions or refunding of any such Senior Indebtedness or ev-
idences of indebtedness issued in exchange for such Senior Indebtedness."
(Section 101 of the Subordinated Indenture)
The Subordinated Indenture provides that, in the event of dissolution, winding
up, liquidation or reorganization of ARAMARK, all Senior Indebtedness must be
paid in full, or provision made for such payment, before any payment or dis-
tribution is made upon principal of or interest on Subordinated Securities.
(Section 1302 of the Subordinated Indenture) By reason of such subordination,
in the event of
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liquidation or insolvency, creditors of ARAMARK who are holders of Senior In-
debtedness, which, as indicated above, would include trade creditors and other
general creditors of ARAMARK, may recover more, ratably, than the holders of
the Subordinated Securities. In addition, such subordination will prevent
ARAMARK from making any payment with respect to the Subordinated Securities in
the event and during the continuation of any default with respect to Senior
Indebtedness that would permit or automatically effect acceleration of the ma-
turity thereof, or if a payment with respect to the Subordinated Securities
would result in any such event of default with respect to Senior Indebtedness,
or if any payment with respect to Senior Indebtedness is then due and payable.
(Section 1305 of the Subordinated Indenture) The Subordinated Indenture does
not limit the aggregate amount of Senior Indebtedness which may be issued. See
"Certain Additional Covenants Applicable to Subordinated Securities" for cer-
tain other restrictions.
EVENTS OF DEFAULT
An "Event of Default" with respect to Subordinated Securities of any series is
defined in the Subordinated Indenture to mean, among other things: (i) failure
to pay principal of (and premium, if any, on) any Subordinated Security of
such series when due, including by reason of an Offer to Purchase that has
been mailed; (ii) failure to pay interest on any Subordinated Security of such
series when due and continuance of such failure for 30 days; (iii) failure by
ARAMARK to comply with the provisions described under "Certain Covenants Ap-
plicable to Subordinated Securities and Guaranteed Securities--Mergers, Con-
solidations and Certain Sales and Purchases of Assets" and "--Limitation on
Restricted Payments;" (iv) failure to make any sinking fund payment, if any,
applicable to the Securities of such series; (v) failure by ARAMARK to perform
any other covenant in the Subordinated Indenture and continuance of such fail-
ure for 60 days after notice given to ARAMARK by the Trustee or to ARAMARK and
the Trustee by the Holders of a least 25% in principal amount of the Subordi-
nated Securities of such series at the time outstanding; (vi) a default under
any indebtedness for money borrowed by ARAMARK or any Subsidiary in excess of
$10,000,000, if such indebtedness is not discharged, or such acceleration is
not annulled, within 10 days after notice given to ARAMARK by the Trustee or
to ARAMARK and the Trustee by the Holders of at least 25% in principal amount
of the Subordinated Securities of such series; and (vii) certain events of
bankruptcy, insolvency or reorganization of ARAMARK or any Significant Subsid-
iary. (Section 501 of the Subordinated Indenture).
ARAMARK is required to furnish to the Trustee within 120 days after the end of
each fiscal year a statement of certain officers of ARAMARK as to whether such
officers have obtained knowledge of any default under the Subordinated Inden-
ture during such fiscal year. (Section 1004 of the Subordinated Indenture)
The Trustee or the Holders of 25% in principal amount of the outstanding Sub-
ordinated Securities of any series may declare to be due and payable immedi-
ately, by a notice in writing to ARAMARK (and to the Trustee if given by Hold-
ers of Subordinated Securities), upon the happening of any Event of Default
with respect to the Subordinated Securities of such series, all unpaid princi-
pal on the Subordinated Securities of such series outstanding at that time.
(Section 502 of the Subordinated Indenture) Upon any such declaration, all
such unpaid principal will become immediately due and payable on all outstand-
ing Subordinated Securities of such series. (Section 502 of the Subordinated
Indenture) The Holders of not less than a majority in principal amount of the
outstanding Subordinated Securities of any series are authorized to waive any
past default and its consequences, except a default in the payment of princi-
pal of (and premium, if any, on) or interest on any Subordinated Security, or
a default with respect to a covenant or provision which cannot be modified or
amended without the consent of the Holder of each outstanding Subordinated Se-
curity of any series affected. (Section 513 of the Subordinated Indenture)
Subject to the provisions of the Indenture relating to the duties of the
Trustee, the Trustee is under no obligation to exercise any of its rights or
powers under the Subordinated Indenture at the request or direction of any of
the Holders of Subordinated Securities of any series unless such Holders have
offered
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to the Trustee reasonable indemnity. (Section 603(e) of the Subordinated In-
denture) Subject to all provisions of the Subordinated Indenture and applica-
ble law, the Holders of a majority in principal amount of the Subordinated Se-
curities of any series outstanding at that time have the right to direct the
time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee.
(Section 512 of the Subordinated Indenture)
CERTAIN ADDITIONAL COVENANTS APPLICABLE TO SUBORDINATED SECURITIES
Unless otherwise indicated in the applicable Prospectus Supplement, the fol-
lowing covenant, in addition to the covenants set forth under "Certain Cove-
nants Applicable to Subordinated Securities and Guaranteed Securities," shall
be applicable to the Subordinated Securities of any series.
Limitation on Layered Indebtedness and Subsidiary Preferred Stock. ARAMARK
shall not (i) permit any Restricted Subsidiary to incur any Indebtedness that
would rank subordinate in right of payment to any other Indebtedness of such
Restricted Subsidiary or to issue any Preferred Stock or (ii) incur any In-
debtedness or, if ARAMARK and Services merge with or consolidate into each
other and such Successor Company becomes the primary obligor with respect to
any significant portion of the then existing consolidated indebtedness owing
to a bank or syndicate of banks, incur any indebtedness which is subordinate
in right of payment to any other indebtedness for borrowed money of such Suc-
cessor Company, unless, in either case, such indebtedness is Pari Passu Debt
or is subordinate in right of payment to the Subordinated Securities of any
series. The foregoing limitation shall not apply to (A) distinctions between
categories of Indebtedness which exist by reason of any liens arising or cre-
ated in respect of some but not all indebtedness or (B) any intercreditor
agreements (to which ARAMARK is not a party) among different classes of credi-
tors of ARAMARK.
Notwithstanding the foregoing, ARAMARK (i) may incur any subordinated Indebt-
edness in connection with the funding of a payment in redemption of Capital
Stock as is permitted under the provisions described under "Certain Covenants
Applicable to Subordinated Securities and Guaranteed Securities--Limitation on
Restricted Payments" above; (ii) may Guarantee any Indebtedness of any Subsid-
iary; (iii) may incur any Indebtedness owed by ARAMARK to any Subsidiary (pro-
vided that such Indebtedness is at all times held by the Subsidiary of
ARAMARK); provided, however, that for purposes of this covenant, upon either
(x) the transfer or other disposition by such Subsidiary of any Indebtedness
so permitted to a Person other than ARAMARK or another Subsidiary of ARAMARK
or (y) the issuance (other than directors' qualifying shares), sale, lease,
transfer or other disposition of shares of Capital Stock (including by consol-
idation or merger) of such Subsidiary to a Person other than ARAMARK or an-
other such wholly-owned Subsidiary such that the Subsidiary is no longer a
Subsidiary, the provisions of this clause (iii) shall no longer be applicable
to such indebtedness and such indebtedness shall be deemed to have been in-
curred at the time of such transfer or other disposition; (iv) may, and may
permit any Restricted Subsidiary to, incur any indebtedness of a Person
through the acquisition of such Person, subject to the Mergers, Consolidations
and Certain Sales and Purchases of Assets covenant, so long as such Indebted-
ness was incurred by such Person prior to the time (A) such Person became a
Subsidiary, (B) such Person merges with or consolidates with or into a Subsid-
iary or (C) another Subsidiary merges with or into such Person (in a transac-
tion in which such Person becomes a Subsidiary), and such indebtedness was not
incurred in anticipation of such acquisition and was outstanding prior to such
acquisition; (v) may, and may permit any Restricted Subsidiary to, incur sub-
ordinated indebtedness in principal amount and issue Preferred Stock having a
liquidation value which in aggregate does not exceed 2% of Consolidated Tangi-
ble Assets as of the most recently available quarterly or annual consolidated
balance sheet outstanding; and (vi) may incur any indebtedness in contempla-
tion of a refunding or refinancing of any existing Pari Passu Debt; provided,
however, that such new indebtedness (A) is Pari Passu Debt or is subordinate
in right of payment to the Subordinated Securities, and (B) does not exceed
the principal amount of indebtedness so refunded or refinanced. (Section 1010
of the Subordinated Indenture)
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TERMS APPLICABLE TO THE GUARANTEED SECURITIES
MODIFICATION OF THE GUARANTEED INDENTURE
The Guaranteed Indenture contains provisions permitting Services, ARAMARK and
the Guaranteed Trustee, with the consent of Holders of not less than 66 2/3%
in principal amount of the Guaranteed Securities which are affected by the
modification, to modify the Guaranteed Indenture or any supplemental indenture
or the rights of the holders of the debt securities issued under such Inden-
ture; provided that no such modification may, without the consent of the
holder of each outstanding debt security affected thereby, (a) change the
stated maturity date of the principal of, or any installment of principal of
or interest, if any, on, any Guaranteed Security, (b) reduce the principal
amount of, or premium or rate of interest, if any, on, any Security, (c) re-
duce the amount of principal of an original issue discount Guaranteed Security
payable upon acceleration of the maturity thereof, (d) change the place or
currency of payment of principal of, or premium or interest, if any, on, any
Guaranteed Security, (e) impair the right to institute suit for the enforce-
ment of any payment on or with respect to any Guaranteed Security, (f) reduce
the percentage in principal amount of Outstanding Guaranteed Securities of any
series the consent of whose holders is required for modification or amendment
of the Guaranteed Indenture or for waiver of compliance with certain provi-
sions of the Guaranteed Indenture or for waiver of certain defaults, or (g)
modify any of the provisions enumerated under "Terms Applicable to the Guaran-
teed Securities--Modification of the Guaranteed Indenture" except to increase
any such percentage or to provide that certain other provisions of the Guaran-
teed Indenture cannot be modified or waived without the consent of the Holder
of each Outstanding Security affected thereby. (Section 902 of the Guaranteed
Indenture)
EVENTS OF DEFAULT
An "Event of Default" with respect to any series of Guaranteed Securities is
defined in the Guaranteed Indenture to mean, among other things: (i) failure
to pay principal of (and premium, if any, on) any Guaranteed Security of such
series when due, including by reason of an Offer to Purchase that has been
mailed; (ii) failure to pay interest on any Guaranteed Security of such series
when due and continuance of such failure for 30 days; (iii) failure by ARAMARK
or Services to comply with the provisions described under "Certain Covenants
Applicable to Subordinated Securities and Guaranteed Securities--Mergers, Con-
solidations and Certain Sales and Purchases of Assets" and "Certain Covenants
Applicable to Subordinated Securities and Guaranteed Securities--Limitation on
Restricted Payments;" (iv) failure to make any sinking fund payment applicable
to the Guaranteed Securities of such series; (v) failure by ARAMARK or Serv-
ices to perform any other covenant in the Guaranteed Indenture and continuance
of such failure for 60 days after notice given to ARAMARK and Services by the
Trustee or to Services and the Trustee by the Holders of at least 25% in prin-
cipal amount of the Guaranteed Securities of such series at the time outstand-
ing; (vi) a default under any indebtedness for money borrowed by Services,
ARAMARK or any Subsidiary of ARAMARK in excess of $10,000,000, if such indebt-
edness is not discharged, or such acceleration is not annulled, within 10 days
after notice given to Services by the Trustee or to Services and the Trustee
by the Holders of at least 25% in principal amount of the Guaranteed Securi-
ties of such series; and (vii) certain events of bankruptcy, insolvency or re-
organization of ARAMARK, Services or any Significant Subsidiary. (Section 501
of the Guaranteed Indenture)
ARAMARK and Services are required to furnish to the Trustee within 120 days
after the end of each fiscal year a statement of certain officers of ARAMARK
and Services as to whether such officers have obtained knowledge of any de-
fault under the Indenture during such fiscal year. (Section 1004 and Section
1005 of the Guaranteed Indenture)
The Trustee or the Holders of 25% in principal amount of the outstanding Guar-
anteed Securities of each series may declare to be due and payable immediate-
ly, by a notice in writing to Services (and to the Guaranteed Trustee if given
by Holders), upon the happening of any Event of Default with respect
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<PAGE>
to the Guaranteed Securities of such series, all unpaid principal on the Guar-
anteed Securities of such series outstanding at that time. (Section 502 of the
Guaranteed Indenture) Upon any such declaration, all such unpaid principal will
become immediately due and payable on all outstanding Guaranteed Securities of
such series. (Section 502 of the Guaranteed Indenture) The Holders of not less
than a majority in principal amount of the outstanding Guaranteed Securities of
such series are authorized to waive any past default and its consequences, ex-
cept a default in the payment of principal of (and premium, if any, on) or in-
terest on any Guaranteed Security, or a default with respect to a covenant or
provision which cannot be modified or amended without the consent of the Holder
of each outstanding Guaranteed Security affected. (Section 513 of the Guaran-
teed Indenture) Subject to the provisions of the Guaranteed Indenture relating
to the duties of the Trustee, the Trustee is under no obligation to exercise
any of its rights or powers under the Guaranteed Indenture at the request or
direction of any of the Holders of the Guaranteed Securities of such series un-
less such Holders have offered to the Trustee reasonable indemnity. (Section
603 of the Guaranteed Indenture) Subject to all provisions of the Guaranteed
Indenture and applicable law, the Holders of a majority in principal amount of
the Guaranteed Securities of such series outstanding at that time have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee. (Section 512 of the Guaranteed Indenture)
GUARANTEE
ARAMARK will Guarantee the punctual payment of the principal of, premium, if
any, and interest on the Guaranteed Securities, when and as the same shall be
due and payable. The Guarantee is absolute and unconditional, irrespective of
any circumstances that might otherwise constitute a legal or equitable dis-
charge of a surety or guarantor. To evidence the Guarantee, a Guarantee exe-
cuted by ARAMARK will be endorsed on each Guaranteed Security.
CERTAIN DEFINITIONS
"Affiliate" of any Person means any other Person directly or indirectly con-
trolling or controlled by or under direct or indirect common control with such
Person. For the purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting securi-
ties, by contract or otherwise; and the terms "controlling" and "controlled"
have meanings correlative to the foregoing. Affiliate shall include, for pur-
poses of the provisions described under "Certain Covenants Applicable to Subor-
dinated Securities and Guaranteed Securities--Limitation on Restricted Pay-
ments," without limitation, any Person owning (a) 5% or more of ARAMARK's out-
standing Common Stock, or (b) 5% or more of ARAMARK's Voting Stock.
"Consolidated Cash Flow Available for Fixed Charges" means with respect to
ARAMARK and its Subsidiaries for any period Consolidated Net Income for such
period plus the aggregate amounts deducted in determining Consolidated Net In-
come for such period in respect of (i) income taxes, (ii) Consolidated Interest
Expense, (iii) depreciation, amortization and other similar non-cash charges
and (iv) minority interest as determined in accordance with generally accepted
accounting principles.
"Consolidated Cash Flow Ratio" means with respect to ARAMARK and its Subsidiar-
ies for any period the ratio of (i) Consolidated Cash Flow Available for Fixed
Charges for the period for which such calculation is made to (ii) Consolidated
Interest Expense for such period; provided, that in making such computation,
the Consolidated Interest Expense shall be reduced by the interest expense at-
tributable to any indebtedness not outstanding at the end of the period.
"Consolidated Interest Expense" means for any period the aggregate interest ex-
pense (net of interest income) of ARAMARK and its Subsidiaries for such period
including, without limitation (i) the portion of any obligation in respect of
any Capital Lease Obligation allocable to interest expense in accordance with
generally accepted accounting principles and (ii) the portion of any debt dis-
count that shall be amortized in such period.
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<PAGE>
"Consolidated Net Income" means for any period the consolidated net income (or
loss) of ARAMARK and its Subsidiaries determined in accordance with generally
accepted accounting principles, excluding any unusual items of gain or loss.
"Consolidated Net Worth" of a Person other than ARAMARK means the consolidated
shareholders' equity of such Person and its subsidiaries, as determined on a
consolidated basis in accordance with generally accepted accounting princi-
ples.
"Consolidated Tangible Assets" of ARAMARK and its Subsidiaries means total as-
sets of ARAMARK and its Subsidiaries less goodwill, all determined in accor-
dance with generally accepted accounting principles.
"Incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, assume, Guarantee, incur or otherwise become liable
in respect of such Indebtedness or other obligation or the recording, as re-
quired pursuant to generally accepted accounting principles, of any such In-
debtedness or other obligation on the consolidated balance sheet of any such
Person (and "Incurrence," "Incurred" and "Incurring" shall have meanings cor-
relative to the foregoing); provided, however, that a change in generally ac-
cepted accounting principles that results in an obligation of such Person that
exists at such time becoming Indebtedness shall not be deemed an Incurrence of
such Indebtedness.
"Indebtedness" shall mean (without duplication), with respect to any Person,
(i) every obligation of such Person for money borrowed, (ii) every obligation
of such Person evidenced by bonds, debentures, notes or other similar instru-
ments, including obligations incurred in connection with the acquisition of
property, assets or businesses, (iii) every obligation of such Person issued
or assumed as the deferred purchase price of property (but excluding trade ac-
counts payable or accrued liabilities arising in the ordinary course of busi-
ness which are not overdue by more than 90 days or which are being contested
in good faith), (iv) all Capital Lease Obligations of such Person and (v) ev-
ery obligation of the type referred to in clauses (i) through (iv) of another
Person and all dividends of another Person for the payment of which, in either
case, such Person has Guaranteed or is responsible or liable, directly or in-
directly, as obligor, guarantor or otherwise.
"Minority Interests" means Capital Stock of a Restricted Subsidiary not owned
by ARAMARK or another Subsidiary.
"Offer to Purchase" means with respect to any series of Securities, a written
notice (referred to as the "Notice") delivered to the Trustee and given by
ARAMARK or Services, as the case may be, via first-class mail, postage pre-
paid, to each Holder of Securities of such series at his address appearing in
the Security Register, stating that the Holder may elect to have his Securi-
ties purchased by ARAMARK or Services, as the case may be, either in whole or
in part in integral multiples of $1,000 of principal amount, at the applicable
purchase price. The Notice shall specify a purchase date not less than 30 days
nor more than 60 days after the date of such Notice (referred to as the "Pur-
chase Date"). The Notice shall contain all instructions and materials neces-
sary to enable such Holder to tender Securities of such series pursuant to an
Offer to Purchase. The Notice, which shall govern the terms of an Offer to
Purchase, shall state:
(1) the Section of the Indenture under which the Offer to Purchase is being
made;
(2) that the Offer to Purchase is for any and all Securities of such series,
the applicable purchase price and the Purchase Date;
(3) the name and address of the Paying Agent and that Securities of such se-
ries called for purchase must be surrendered to the Paying Agent to collect
the purchase price;
(4) that interest on any Security of such series not tendered or tendered but
not purchased by ARAMARK or Services, as the case may be, will continue to ac-
crue;
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<PAGE>
(5) that any Security of such series accepted for payment pursuant to an Offer
to Purchase shall cease to accrue interest after the Purchase Date;
(6) that each Holder of Securities of such series electing to have a Security
of such series purchased pursuant to an Offer to Purchase will be required to
surrender such Security to the Paying Agent at the address specified in the No-
tice prior to the close of business on the Purchase Date; and
(7) that Holders of Securities of such series will be entitled to withdraw
their election if the Paying Agent receives, not later than the close of busi-
ness on the Purchase Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Security of
such series the Holder delivered for purchase, the certificate number of the
Security the Holder delivered and a statement that such Holder is withdrawing
his election to have the Securities purchased.
"Offer to Purchase Price" with respect to the Securities of any series means
the price or prices specified in the applicable Prospectus Supplement as the
price or prices at which an Offer to Purchase will be made in accordance with
the covenants described under "Certain Covenants Applicable to Subordinated Se-
curities and Guaranteed Securities--Mergers, Consolidations and Certain Sales
and Purchases of Assets" and "--Limitation on Restricted Payments."
"Pari Passu Debt" means any indebtedness of ARAMARK for money borrowed whether
outstanding at the date hereof or incurred thereafter, that ranks pari passu
with the Subordinated Securities.
"Restricted Subsidiary" means any domestic corporation of which more than 80
percent of the outstanding Voting Stock shall, at the time as of which any de-
termination is being made, be owned by ARAMARK either directly or through sub-
sidiaries.
"Significant Subsidiary" means each and any Subsidiary which (i) accounted for
more than 5% of the consolidated revenues of ARAMARK and its Subsidiaries for
the fiscal year ended on the date of the most recently available audited con-
solidated balance sheet; (ii) accounted for more than 5% of the Consolidated
Net Income of ARAMARK and its Subsidiaries for the fiscal year ended on the
date of the most recently available audited consolidated balance sheet; or
(iii) was the owner of more than 5% of the consolidated assets of ARAMARK and
its Subsidiaries as of the date of the most recently available audited consoli-
dated balance sheet.
"Voting Stock" means, with respect to any Person, Capital Stock (however desig-
nated) having general voting power for the election of a majority of the mem-
bers of the board of directors, managers or trustees of such Person (irrespec-
tive of whether or not at the time Capital Stock of any other class or classes
shall have or might have voting power by reason of the happening of any contin-
gency). (Section 101 of the Subordinated Indenture and Section 101 of the Guar-
anteed Indenture)
VALIDITY OF SECURITIES AND GUARANTEE
The validity of the Securities and Guarantee will be passed upon for ARAMARK
and Services by Martin W. Spector, Executive Vice President, Secretary and Gen-
eral Counsel of ARAMARK and for the underwriters by Sullivan & Cromwell, New
York, New York. Mr. Spector owns 762,708 shares of Class B Common Stock of
ARAMARK.
EXPERTS
The consolidated financial statements and schedules of ARAMARK Corporation and
subsidiaries incorporated by reference in this Prospectus and elsewhere in the
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as set forth in their report also incorporated
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<PAGE>
herein by reference. In their report, that firm states that with respect to
amounts included for Versa Services Ltd. (ARAMARK's Canadian subsidiary), its
opinion, prior to fiscal 1995, is based on the report of other auditors, namely
Ernst & Young, Chartered Accountants, whose report is also incorporated herein
by reference. The financial statements and schedules referred to above have
been incorporated herein in reliance upon the authority of said firms as ex-
perts in giving said reports. Subsequent financial statements of ARAMARK and
the reports thereon of ARAMARK's independent public accountants, to the extent
incorporated herein by reference, also will be incorporated in reliance upon
the authority of those accountants as experts in giving those reports to the
extent such accountants have audited those financial statements and consented
to the use in this Prospectus of their reports thereon.
PLAN OF DISTRIBUTION
ARAMARK or Services may sell the Securities to or through underwriters, and
also may sell the Securities directly to other purchasers or through agents.
The distribution of the Securities may be effected from time to time in one or
more transactions at a fixed price or prices, which may be changed, or at mar-
ket prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
In connection with the sale of the Securities, underwriters may receive compen-
sation from ARAMARK or Services or from purchasers of the Securities for whom
they may act as agents in the form of discounts, concessions or commissions.
Underwriters may sell the Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions from the purchasers for whom they may
act as agents. Underwriters, dealers and agents that participate in the distri-
bution of the Securities may be deemed to be underwriters, and any discounts or
commissions received by them from ARAMARK or Services and any profit on the re-
sale of the Securities by them may be deemed to be underwriting discounts and
commissions under the Securities Act of 1933 (the "Act"). Any such underwriter
or agent will be identified, and any such compensation received from ARAMARK or
Services will be described, in the Prospectus Supplement.
Under agreements which may be entered into by ARAMARK or Services, underwriters
and agents who participate in the distribution of the Securities may be enti-
tled to indemnification by ARAMARK and Services against certain liabilities,
including liabilities under the Act.
If so indicated in the Prospectus Supplement, ARAMARK and Services will autho-
rize underwriters or other persons acting as ARAMARK's and Services' agents to
solicit offers by certain institutions to purchase the Securities from ARAMARK
or Services pursuant to contracts providing for payment and delivery on a fu-
ture date. Institutions with which such contracts may be made include commer-
cial and savings banks, insurance companies, pension funds, investment compa-
nies, educational and charitable institutions and others, but in all cases such
institutions must be approved by ARAMARK and Services. The obligations of any
purchaser under any such contract will be subject to the condition that the
purchase of the Securities shall not at the time of delivery be prohibited un-
der the laws of the jurisdiction to which such purchaser is subject. The under-
writers and such other agents will not have any responsibility in respect of
the validity or performance of such contracts.
16
