<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 15, 1998
FILE NO. 1-8827
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934)
----------------
ARAMARK CORPORATION
(NAME OF ISSUER AND PERSON FILING STATEMENT)
COMMON STOCK, CLASS A, PAR VALUE
$0.01 PER SHARE (TITLE OF CLASS OF SECURITIES)
----------------
MARTIN W. SPECTOR
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
ARAMARK CORPORATION
ARAMARK TOWER
1101 MARKET STREET
PHILADELPHIA, PENNSYLVANIA 19107
(215) 238-3000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF THE PERSON FILING STATEMENT)
----------------
COPY TO:
CHARLES I. COGUT, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017-3954
(212) 455-2000
----------------
MAY 15, 1998
(DATE TENDER OFFER FIRST PUBLISHED, SENT OR GIVEN TO SECURITY HOLDERS)
----------------
CALCULATION OF FILING FEE
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<TABLE>
<S> <C>
Transaction Valuation*........................................... $949,443,500*
Amount of Filing Fee............................................. $189,889
</TABLE>
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* Based upon purchase of 1,898,887 shares at $500.00 per share
[_]Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount Previously Paid: N/A Filing Party: N/A
Form Or Registration No.: N/A Date Filed: N/A
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<PAGE>
ITEM 1. SECURITY AND ISSUER.
(a) The name of the Issuer is ARAMARK Corporation, a Delaware corporation
(the "Company"), which has its principal executive offices at the ARAMARK
Tower, 1101 Market Street, Philadelphia, Pennsylvania 19107.
(b) This Schedule 13E-4 relates to the offer by the Company to purchase all
outstanding shares of Common Stock, Class A, par value $0.01 per share, of the
Company (the "Shares") at a price of $500.00 per Share, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated May 15,
1998 (the "Offer to Purchase"), and in the related Letter of Transmittal
(which together constitute the "Offer"), copies of which are attached hereto
as Exhibits (a)(1) and (a)(2), respectively. The Offer is being made to all
holders of Shares. The information set forth in "Introduction," "Section 11.
Certain Effects of the Offer" and "Section 12. Transactions and Arrangements
Concerning the Shares" of the Offer to Purchase is incorporated herein by
reference.
(c) The Shares are not listed on any exchange nor is there any established
trading market for the Shares. The information set forth in the "Introduction"
and "Section 7. Appraisal Price of Shares; Dividends" of the Offer to Purchase
is incorporated herein by reference.
(d) This statement is being filed by the Issuer.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in "Section 9. Source and Amount of Funds"
of the Offer to Purchase is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(j) The information set forth in the "Introduction," "Background and
Purpose of the Offer," "Section 10. Certain Information About the Company,"
"Section 11. Certain Effects of the Offer" and "Section 12. Transactions and
Arrangements Concerning the Shares" of the Offer to Purchase is incorporated
herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in "Section 12. Transactions and Arrangements
Concerning the Shares" of the Offer to Purchase is incorporated herein by
reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
The information set forth in the "Introduction," "Background and Purpose of
the Offer," "Section 11. Certain Effects of the Offer" and "Section 12.
Transactions and Arrangements Concerning the Shares" of the Offer to Purchase
is incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "Section 13. Fees and Expenses" of the Offer to
Purchase is incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) The financial information set forth in "Section 10. Certain
Information About the Company" of the Offer to Purchase is incorporated herein
by reference.
2
<PAGE>
ITEM 8. ADDITIONAL INFORMATION.
(a) The information set forth in "Section 12. Transactions and Arrangements
Concerning the Shares" of the Offer to Purchase is incorporated herein by
reference.
(b) The information set forth in "Section 8. Certain Legal Matters;
Regulatory Approvals" of the Offer to Purchase is incorporated herein by
reference.
(c) Not applicable.
(d) The information set forth in "Section 8. Certain Legal Matters;
Regulatory Approvals" of the Offer to Purchase is incorporated herein by
reference.
(e) Reference is hereby made to the Offer to Purchase and the related Letter
of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and
(a)(2), respectively, and incorporated in their entirety herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
(a)(1) Form of Offer to Purchase dated May 15, 1998.
(a)(2) Form of Letter of Transmittal.
(a)(3) Annual Report on Form 10-K of the Company for the fiscal year ended
October 3, 1997 (the "Form 10-K") (incorporated by reference to the
Form 10-K filed with the Securities and Exchange Commission (the
"SEC") on November 26, 1997).
(a)(4) Quarterly Report on Form 10-Q of the Company for the quarterly period
ended April 3, 1998 (the "Form 10-Q") (incorporated by reference to
the Form 10-Q filed with the SEC on May 15, 1998).
(b)(1) Credit and Guaranty Agreement dated as of January 7, 1998 (the "Credit
Agreement") among ARAMARK Services, Inc., ARAMARK Uniform Services
Group, Inc., the Company, as Parent Guarantor, the banks party thereto
and The Chase Manhattan Bank and Morgan Guaranty Trust Company of New
York, as agents.
(b)(2) Amendment No. 1 dated as of May 7, 1998 to the Credit Agreement.
(c)(1) Amended and Restated Stockholders' Agreement dated as of December 14,
1994 among the Company and the parties identified on the books of the
Company as "Management Investor" or their "Permitted Transferees" or
as "Individual Investors" or "Institutional Investors" (incorporated
by reference to the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1994).
(c)(2) Amended and Restated Registration Rights Agreement among the Company
and the parties thereto (incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended April 1,
1988).
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>
3
<PAGE>
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Aramark Corporation
May 15, 1998
/s/ Martin W. Spector
By:
-----------------------------------
MARTIN W. SPECTOR
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
4
<PAGE>
EXHIBIT 99.(A)(1)
OFFER TO PURCHASE FOR CASH
BY
ARAMARK CORPORATION
ALL OUTSTANDING SHARES OF ITS CLASS A COMMON STOCK
AT
$500.00 PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
PHILADELPHIA TIME, ON JUNE 15, 1998, UNLESS THE OFFER IS EXTENDED.
ARAMARK Corporation, a Delaware corporation (the "Company"), invites its
stockholders to tender all outstanding shares of its Common Stock, Class A,
par value $0.01 per share (the "Shares"), to the Company at a price of $500.00
per Share, upon the terms and subject to the conditions set forth in this
Offer to Purchase and the related Letter of Transmittal (which together
constitute the "Offer").
On May 12, 1998, the Board of Directors of the Company approved the Offer as
a means of increasing the employee ownership of the Company. The Offer is
expected to have such an effect because almost all of the outstanding Shares
(other than Shares owned by the Company's benefit plans) are owned by holders
other than directors and employees of the Company and all of the outstanding
shares of Common Stock, Class B, par value $0.01 per share, of the Company
(the "Class B Common Stock" and, collectively with the Shares, the "Common
Stock") are owned by such directors, employees and their permitted
transferees. In connection with the Offer, the three largest institutional
holders, Goldman, Sachs & Co., Chase Capital Partners and Metropolitan Life
Insurance Company, have advised the Company that they intend (but have not
committed) to tender not less than 163,440 (100% of its holdings), 73,520
(100% of its holdings) and 40,000 (25% of its holdings) Shares, respectively,
in the Offer. Based upon preliminary indications from the trustees of the
Company's benefit plans (which hold approximately 923,204 Shares or 49% of the
outstanding Shares), the Company also anticipates that such benefit plans will
tender approximately 400,000 Shares in the Offer. The Offer is also being made
in connection with the settlement of certain litigation initiated by certain
holders of the Shares. See "Background and Purpose of the Offer" and Section
8.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) AT LEAST 900,000
SHARES OF CLASS A COMMON STOCK BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR
TO THE EXPIRATION OF THE OFFER (THE "MINIMUM CONDITION"), AND (2) THE APPROVAL
BY THE COURT (AS DEFINED HEREIN) OF THE TERMS OF THE STIPULATION (AS DEFINED
HEREIN) (THE "SETTLEMENT CONDITION"). SEE SECTIONS 6 AND 8.
On May 1, 1998, there were 1,898,887 Shares outstanding. The Shares are not
listed on any exchange nor is there any established trading market for the
Shares. The Company as a matter of course obtains an appraisal of the fair
market value of the Shares as of December 1, March 1, June 1 and September 1
of each year. The most recent appraisal of the fair market value per Share was
$352.50, according to an appraisal completed by Houlihan, Lokey, Howard &
Zukin Financial Advisors Inc. ("HLHZ") as of March 1, 1998. The results of the
June 1, 1998 appraisal of the Shares will be provided in a supplement to this
Offer to Purchase to the holders of record of the Shares prior to the
Expiration Date. See Sections 6 and 7.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF
SO, HOW MANY SHARES TO TENDER. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS
MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN
FROM TENDERING SHARES.
May 15, 1998
<PAGE>
IMPORTANT
Any stockholders desiring to tender all or any portion of their Shares
should complete and sign the Letter of Transmittal or a facsimile thereof in
accordance with the instructions in the Letter of Transmittal and mail or
deliver it with any other required documents and the stock certificates for
such Shares to the Special Depositary Group, consisting of three members of
management of the Company and formed for the specific purpose of acting, and
authorized by the Board of Directors to act, as the Depositary with respect to
the Offer (the "Depositary").
TO EFFECT A VALID TENDER OF SHARES, STOCKHOLDERS MUST VALIDLY COMPLETE THE
LETTER OF TRANSMITTAL.
Questions and requests for assistance or for additional copies of this Offer
to Purchase or the Letter of Transmittal may be directed to the Depositary at
the address and telephone number set forth on the back cover of this Offer to
Purchase.
THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON
BEHALF OF THE COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER OR REFRAIN FROM
TENDERING SHARES PURSUANT TO THE OFFER. THE COMPANY HAS NOT AUTHORIZED ANY
PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION
WITH THE OFFER ON BEHALF OF THE COMPANY OTHER THAN THOSE CONTAINED IN THIS
OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL. DO NOT RELY ON ANY SUCH
RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATIONS, IF GIVEN OR MADE,
AS HAVING BEEN AUTHORIZED BY THE COMPANY.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
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<S> <C>
SUMMARY.................................................................... 4
INTRODUCTION............................................................... 5
BACKGROUND AND PURPOSE OF THE OFFER........................................ 6
THE OFFER.................................................................. 10
1. TERMS OF THE OFFER................................................... 10
2. PROCEDURE FOR TENDERING SHARES....................................... 11
3. WITHDRAWAL RIGHTS.................................................... 12
4. ACCEPTANCE FOR PAYMENT AND PAYMENT................................... 12
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.............................. 13
6. CERTAIN CONDITIONS OF THE OFFER...................................... 15
7. APPRAISAL PRICE OF SHARES; DIVIDENDS................................. 16
8. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.......................... 17
9. SOURCE AND AMOUNT OF FUNDS........................................... 18
10. CERTAIN INFORMATION ABOUT THE COMPANY................................ 19
11. CERTAIN EFFECTS OF THE OFFER......................................... 24
12. TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES.................. 24
13. FEES AND EXPENSES.................................................... 25
14. MISCELLANEOUS........................................................ 25
</TABLE>
3
<PAGE>
SUMMARY
This general summary is provided for the convenience of the holders of Shares
and is qualified in its entirety by reference to the full text and more
specific details of this Offer to Purchase.
The Company................. ARAMARK Corporation, a Delaware corporation.
The Shares.................. Common Stock, Class A, par value $0.01 per share,
of the Company.
Number of shares to be All outstanding Shares as are validly tendered.
Purchased...................
Purchase Price.............. $500.00 per Share, without interest thereon.
How to Tender Shares........ See Section 2. Call the Depositary for assistance
at (215) 238-3246.
Brokerage Commissions....... None.
Stock Transfer Tax.......... None.
Expiration Date............. June 15, 1998, at 5:00 P.M. Philadelphia time,
unless extended by the Company.
Payment Date................ As soon as practicable after the Expiration Date.
Position of the Company and
its Directors..............
Neither the Company nor its Board of Directors
makes any recommendation to any stockholder as to
whether to tender or refrain from tendering
Shares.
Withdrawal Rights........... Tendered Shares may be withdrawn at any time
until 5:00 P.M., Philadelphia time, on June 15,
1998, unless the Offer is extended by the Company
and, unless previously purchased, after July 14,
1998. See Section 3.
Purpose of Offer............ The Offer is intended to increase employee
ownership of the Company since almost all Shares
(other than Shares owned by the Company's benefit
plans) are owned by holders other than directors
and employees of the Company.
Appraisal Price of Shares... The most recent appraisal of the fair market
value per Share was $352.50, according to an
appraisal completed by HLHZ as of March 1, 1998.
The results of the June 1, 1998 appraisal of the
Shares will be provided in a supplement to this
Offer to Purchase to the holders of record of the
Shares prior to the Expiration Date. See Sections
6 and 7.
4
<PAGE>
TO THE HOLDERS OF SHARES OF CLASS A
COMMON STOCK OF ARAMARK CORPORATION:
INTRODUCTION
ARAMARK Corporation, a Delaware corporation (the "Company"), invites its
stockholders to tender all outstanding shares of its Common Stock, Class A,
par value $0.01 per share (the "Shares"), to the Company at a price of $500.00
per Share, (the "Purchase Price"), upon the terms and subject to the
conditions set forth in this Offer to Purchase and the related Letter of
Transmittal (which together constitute the "Offer").
The Company will pay the Purchase Price for all outstanding Shares validly
tendered prior to the Expiration Date (as defined in Section 1) and not
withdrawn, upon the terms and subject to the conditions of the Offer.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) AT LEAST 900,000
SHARES OF CLASS A COMMON STOCK BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR
TO THE EXPIRATION OF THE OFFER (THE "MINIMUM CONDITION"), AND (2) THE APPROVAL
BY THE COURT (AS DEFINED HEREIN) OF THE TERMS OF THE STIPULATION (AS DEFINED
HEREIN) (THE "SETTLEMENT CONDITION"). SEE SECTIONS 6 AND 8.
The Purchase Price will be paid to the tendering stockholder in cash for all
Shares purchased. Tendering stockholders will not be obligated to pay
brokerage commissions, solicitation fees or stock transfer taxes on the
Company's purchase of Shares pursuant to the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF
SO, HOW MANY SHARES TO TENDER. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS
MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN
FROM TENDERING SHARES.
The Offer provides stockholders who are considering a sale of all or a
portion of their Shares with the opportunity to do so at a premium to the most
recent appraisal price of the Shares and without transaction costs. The Offer
also allows stockholders to sell a portion of their Shares while retaining a
continuing equity interest in the Company. The Purchase Price is not intended
to represent a stockholder's proportionate interest in the enterprise value of
the Company. Class A stockholders who do not tender any of their Shares in the
Offer will, and Class A stockholders who tender less than all of their Shares
in the Offer may, experience an increase in their percentage Share ownership
interests as a result of the consummation of the Offer and thus an increase in
their proportionate interest in the Company's assets and equity, and therefore
in the Company's future earnings and assets, subject to future corporate
action, including the issuance of additional securities. As a result,
stockholders who do not tender in the Offer may benefit, along with other
Class A stockholders who do not tender in the Offer and the holders of the
shares of Class B Common Stock, from any future growth in the Company's
business and equity value.
In connection with the Offer, the three largest institutional holders,
Goldman, Sachs & Co. ("Goldman Sachs"), Chase Capital Partners and
Metropolitan Life Insurance Company ("MetLife") have advised the Company that
they intend (but have not committed) to tender not less than 163,440 (100% of
its holdings), 73,520 (100% of its holdings) and 40,000 (25% of its holdings)
Shares, respectively, in the Offer. Based upon preliminary indications from
the trustees of the Company's benefit plans (which hold approximately 923,204
Shares or 49% of the outstanding Shares), the Company also anticipates that
such benefit plans will tender approximately 400,000 Shares in the Offer. Any
of such Shares which are tendered by such stockholders may be withdrawn
pursuant to the procedures set forth in Section 3 hereof at any time prior to
the Expiration Date and, unless theretofore accepted for payment and paid for
by the Company pursuant to the Offer, may also be withdrawn at any time after
July 14, 1998.
On May 1, 1998, there were 1,898,887 Shares outstanding, held by
approximately 200 holders of record. The Shares are not listed on any exchange
nor is there any established trading market for the Shares. The
5
<PAGE>
Company as a matter of course obtains an appraisal of the fair market value of
the Shares as of December 1, March 1, June 1 and September 1 of each year. The
most recent appraisal of the fair market value per Share was $352.50,
according to an appraisal completed by Houlihan, Lokey, Howard & Zukin
Financial Advisors Inc. ("HLHZ") as of March 1, 1998. The results of the June
1, 1998 appraisal of the Shares will be provided in a supplement to this Offer
to Purchase to the holders of record of the Shares prior to the Expiration
Date. See Sections 6 and 7.
BACKGROUND AND PURPOSE OF THE OFFER
During 1997, the Company's management began to review various alternatives
for increasing management ownership in the Company, aligning more closely the
investment interests of management owners with the performance of the business
groups for which they work and enhancing stockholder value. During the 1997
fiscal year, senior members of the Company's management began preliminary
discussions with J.P. Morgan Securities Inc. ("J.P. Morgan") and with Goldman
Sachs and other Outside Stockholders ("Outside Stockholders" are holders of
Shares other than benefit plans and certain former managers of the Company)
regarding the possible means of achieving the foregoing objectives. Goldman
Sachs and J.P. Morgan historically have been financial advisors to the
Company.
The Company's senior management considered several alternatives for
achieving its objectives, including continuing current operations without
change; the spin-off of one or more of the subsidiaries comprising each of the
Company's business groups; the merger or sale of the Company or of one or more
of the subsidiaries comprising each of the business groups; the initial public
offering of the Company or any business group; or acquiring other businesses.
As a result of studying these alternatives, and discussing them with the
Company's advisors and certain Outside Stockholders, the Company's senior
management concluded a recapitalization of the Company that included as an
element the alignment of employees' investment interests would most nearly
achieve all of its objectives.
Accordingly, in July and August 1997, after consultations with its financial
and legal advisors and after additional discussions with certain Outside
Stockholders, the Company's senior management developed a plan of
recapitalization (the "Recapitalization Plan") pursuant to which, among other
things:
. the Company would redeem from the Outside Stockholders all of their
Shares for $347.50 per Share in cash (or, at the election of certain
eligible stockholders, such amount in installment notes);
. the other holders of Shares would receive $347.50 per Share (in the case
of the Company's benefit plans) or $295.50 per Share (in the case of the
Company's former managers) in cash or, at their election, shares of a
newly created class of "composite stock" reflecting an interest in all of
the "Business Groups" of the Company (consisting of the ARAMARK education
group, the ARAMARK food and support group and the ARAMARK uniform group)
and all other businesses and investments of the Company; and
. the holders of the Class B Common Stock would receive $29.55 per share in
cash or, at their election, shares of one of three newly created classes
of stock (each a "Business Group Stock") designed to track the performance
of the particular "Business Group" for which such holder worked and shares
of an additional newly created class of "composite stock" (except that
holders who did not work for any particular Business Group, including
executive officers and corporate staff of the Company, would receive only
"composite stock" upon such election).
At a meeting held on August 12, 1997, the Board of Directors received a
preliminary report from management concerning the Recapitalization Plan and
the other alternatives for achieving its objectives that management had
studied. The presentation indicated that the Recapitalization Plan was the
alternative which was considered the most likely to further the objective of
aligning management owners' investment interests with the performance of the
respective Business Groups for which they work, while preserving the
financial, strategic and operational benefits of remaining a single
corporation. Following the presentation, the Board of Directors directed
management to continue its review of the Recapitalization Plan with the
assistance of its outside legal counsel and financial advisors.
6
<PAGE>
Meetings of the Board of Directors were held on September 22, October 20,
and November 11, 1997 at which the Company's management made presentations
regarding the Recapitalization Plan. Presentations were also made by the
Company's financial advisors on October 20, 1997 and by the Company's legal
advisors on September 22 and October 20, 1997. On January 6, 1998 after having
received and considered more detailed and updated presentations, including a
fairness opinion from J.P. Morgan, the Board of Directors unanimously approved
the Recapitalization Plan.
Thereafter, in its proxy statement dated January 8, 1998, the Company
submitted to the stockholders of the Company the Recapitalization Plan for
their approval at the 1998 annual meeting of stockholders to be held on
February 10, 1998.
On January 14 and February 2, 1998, MetLife and several other Outside
Stockholders (collectively, the "Plaintiffs") commenced proceedings by filing
various complaints with respect to the Recapitalization Plan against the
Company and each of its directors in the Court of Chancery of the State of
Delaware in and for New Castle County (the "Court"). See Section 8. The
Plaintiffs claimed that, among other things, the consideration to be received
by the Outside Stockholders in the Recapitalization Plan was inconsistent with
the Delaware law concept that stockholders are entitled to the "fair value" of
their shares in an involuntary transaction. The Plaintiffs alleged that a
private company discount was inappropriately applied in establishing the per
share price at which the Shares were to be redeemed in the Recapitalization
and that such discount was not consistent with the Delaware law concept of
"fair value." One of the Plaintiffs contended that its financial expert,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, had applied five valuation
methods to estimate the true value of the Shares in an involuntary transaction
context and that such valuation methods yielded a per Share range of between
$460 to $870, which did not include the application of any private company
discount. This range was contrasted with the $323.10 to $403.80 per Share
range, after applying a private company discount, that resulted from J.P.
Morgan's analysis of the value of the Shares at January 6, 1998 in connection
with the Recapitalization Plan. Prior to applying that discount, J.P. Morgan's
valuation methods, which included a comparable companies analysis and a
discounted cash flow analysis of the Business Groups of the Company, yielded a
per Share range of between $478.60 and $598.20 at January 6, 1998.
For each comparable company, J.P. Morgan reviewed the following multiples
using the most recent publicly available information: firm value (which
includes the market value of equity and preferred stock plus debt net of cash
and marketable securities) to latest twelve months ("LTM") earnings before
interest and taxes ("EBIT") and to projected 1998 and 1999 EBIT; firm value to
LTM EBIT plus depreciation and amortization ("EBITDA") and to projected 1998
and 1999 EBITDA; and equity value (which includes the market value of equity
and preferred stock) to LTM earnings and to projected 1998 and 1999 earnings.
The financial data and ratios that J.P. Morgan used in its comparable
companies analysis were based on information publicly available at the time
that the analysis was performed, in late December 1997. That information may
or may not be valid at the time that this Offer is made.
J.P. Morgan conducted a discounted cash flow analysis for the purpose of
determining a range of firm values for each of the Business Groups. J.P.
Morgan calculated the unlevered free cash flows that each of the three
Business Groups was expected to generate during fiscal years 1998 through 2003
based upon financial projections prepared by the management of the Company. In
addition, J.P. Morgan performed sensitivity analyses to understand the effect
on firm values of adjustments to management projections, including adjustments
to reflect lower sales growth, lower operating margins, and higher capital
expenditures during the period. J.P. Morgan calculated a range of terminal
asset values of the three Business Groups at the end of fiscal year 2003 by
applying a perpetuity growth rate ranging from 2.5% to 4.0% of the unlevered
free cash flow of the relevant Business Group during the final year of the 6-
year period. The unlevered free cash flows and the range of terminal asset
values were then discounted to present values using a range of discount rates
from 9.0% to 10.0%, which were chosen by J.P. Morgan based upon an analysis of
the weighted average cost of capital of the three Business Groups. The present
value of the unlevered free cash flows and the range of terminal asset values
were then added to arrive at a range of firm values for each of the three
Business Groups. The financial data that J.P. Morgan used in its discounted
cash flow analysis may or may not be valid at the time that this Offer is
made.
7
<PAGE>
On February 5, 1998, the Court issued an oral ruling granting Plaintiffs'
motions for a preliminary injunction prohibiting the Company and the Board of
Directors from proceeding with the Recapitalization Plan (the "Ruling") and
entered an order on February 10, 1998 preliminarily enjoining the Company and
the Board of Directors from voting on, implementing or consummating the
Recapitalization Plan except for making supplemental disclosures. On the same
day, the Company and its directors sought an interlocutory appeal of the
Ruling to the Delaware Supreme Court. Due to the Ruling, the annual meeting of
stockholders was adjourned, and the stockholder proceedings with respect to
the Recapitalization Plan were thereby postponed, pending the outcome of such
appeal.
Following the Ruling, the Company's senior management explored various
modifications and alternatives to the Recapitalization Plan which would permit
the Company to achieve its goals in a manner consistent with the Ruling and
some or all of the concerns raised by the Plaintiffs. In connection therewith,
the Company retained an additional outside legal advisor in February 1998. The
Company's senior management also held several additional discussions with
certain Outside Stockholders, including Goldman Sachs and MetLife, relating to
structuring a transaction which would be acceptable to such Outside
Stockholders.
On March 1, 1998, HLHZ rendered its quarterly appraisal of the fair market
value of the Shares and the shares of Class B Common Stock as of such date.
Such appraisal indicated that the fair market value of the Shares and the
shares of Class B Common Stock was $352.50 and $29.95, respectively.
After a great deal of consideration, the Company's management, after
consultation with directors, decided that the Company would not go forward
with the Recapitalization Plan. Consequently, on March 26, 1998, the Company
moved to dismiss the interlocutory appeal to the Delaware Supreme Court. The
Delaware Supreme Court dismissed the appeal on March 31, 1998. On April 10,
1998, the annual meeting of stockholders was reconvened and concluded without
consideration of the Recapitalization Plan.
On April 10, a telephonic meeting of the Board of Directors was convened.
The Company's management reported to the Board of Directors management's view
that it was not desirable to attempt to accomplish through a single
transaction the goals of increasing employee ownership of the Company and of
aligning more closely the investment interests of the employee stockholders
with the performance of their Business Groups. Management's presentation
indicated that the separation of the objective of further aligning employee
ownership interests from the objective of increasing employee ownership also
provided more time to study the Business Group Stock structure and other
alternatives for achieving the alignment objective. Moreover, the Company's
management also suggested that there was a significant opportunity to settle
the litigation and further the Company's goal of increasing employee ownership
if the Company was prepared to purchase on a more expedited basis from the
Plaintiffs and other stockholders their Shares at a price acceptable to the
Company and such stockholders. Based on a review by the Company's advisors,
management reported to the Board of Directors that it had determined that a
tender offer could be the most efficient and least complex procedure for
increasing employee ownership of the Company at this time. Following
management's presentation, the Board of Directors authorized management to
continue to pursue, in consultation with the Company's legal advisors, the
possibility of a tender offer by the Company as a means to further the
Company's objective of increasing employee ownership. The Board of Directors
also authorized the engagement of Morgan Stanley & Co. Incorporated ("Morgan
Stanley") to assist management in its review of the financial impact on the
Company of a potential tender offer and to potentially render a fairness
opinion to the Company in connection with any such tender offer.
During April and early May 1998, prior to the announcement of the tender
offer, the Company's management held discussions with certain Outside
Stockholders, including the Plaintiffs, relating to the purchase of such
holders' Shares in a potential tender offer. The Company and its advisors also
negotiated with the Plaintiffs the terms of a settlement agreement relating to
the Ruling which would be entered into in connection with the tender offer.
At a meeting held on May 12, 1998, the Board of Directors unanimously
approved the Offer. In connection therewith, Morgan Stanley delivered to the
Board of Directors its opinion that the consideration to be paid by
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the Company to the holders of the Shares in the Offer is fair from a financial
point of view to the Company. The Board of Directors also received from HLHZ
an opinion relating to the solvency of the Company giving effect to the Offer.
In its presentation to the Board of Directors concerning the fairness of the
Offer to the Company, Morgan Stanley delivered its oral opinion, which was
confirmed in a written opinion dated May 12, 1998, that on the date thereof
and subject to the assumptions made, matters considered and limitations on the
review undertaken, the consideration to be paid pursuant to the Offer was fair
from a financial point of view to the Company. Morgan Stanley indicated that
in connection with its fairness opinion it had applied two valuation methods
(a discounted cash flow analysis and a comparable companies analysis) and such
valuation analyses yielded per Share ranges of between $690.80 and $949.00 and
$637.20 and $814.90, respectively. Morgan Stanley did not apply any private
company discounts in connection with such valuation analyses. THE OPINION
DELIVERED BY MORGAN STANLEY WAS NOT AN OPINION AS TO THE VALUE OF THE SHARES,
NOR WAS IT AN OPINION RESPECTING THE FAIRNESS, FROM A FINANCIAL POINT OF VIEW
OR OTHERWISE, TO THE HOLDERS OF THE SHARES TO WHOM THE OFFER IS BEING
EXTENDED.
On May 15, 1998, the Company and the Plaintiffs in the Class Action (as
defined in Section 8) filed with the Court a stipulation of settlement. See
Section 8.
The Company is making the Offer because the Board of Directors believes
that, given the Company's financial condition and outlook, the purchase of
Shares at this time is a prudent use of its financial resources, taking into
account the increased interest expense associated with the borrowing required
in connection with the Offer. In the view of the Board of Directors, the Offer
will further the Company's goal of increasing employee ownership and will
enhance stockholder value in the long term while providing an opportunity for
Outside Stockholders to sell their Shares at a premium over their original
investment in the Company. In addition, the Offer will provide a basis for
resolving the outstanding litigation that was commenced in connection with the
Recapitalization Plan. The Offer also preserves the Company's flexibility to
engage in future strategic transactions, if appropriate. The Purchase Price is
not intended to represent a stockholder's proportionate interest in the
enterprise value of the Company. Class A stockholders who do not tender any of
their Shares in the Offer will, and Class A stockholders who tender less than
all of their Shares in the Offer may, experience an increase in their
percentage Share ownership interests as a result of the consummation of the
Offer and thus an increase in their proportionate interest in the Company's
assets and equity, and therefore in the Company's future earnings and assets,
subject to future corporate action, including the issuance of additional
securities. As a result, stockholders who do not tender in the Offer may
benefit, along with other Class A stockholders who do not tender in the Offer
and the holders of the shares of Class B Common Stock, from any future growth
in the Company's business and equity value.
The Company remains committed to the goal of more closely aligning
employees' investment interests with the business group for which they work.
Management is working with the Company's new legal advisors, as well as the
Company's human resources consultant, to study the optimum methodology for
achieving this goal. Management expects to present the results of this study
and any related proposal, which management expects will take several months to
complete, to the Company's Board of Directors.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES.
STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF
SO, HOW MANY SHARES TO TENDER.
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THE OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer, the Company will
accept for payment and pay for all outstanding Shares as are validly tendered
prior to the Expiration Date and not theretofore withdrawn in accordance with
Section 3. The term "Expiration Date" means 5:00 P.M., Philadelphia time, on
Monday, June 15, 1998, unless and until the Company, in its sole discretion,
shall have extended the period of time during which the Offer is open, in
which event the term "Expiration Date" shall mean the latest time and date at
which the Offer, as so extended by the Company, will expire.
The Offer is conditioned upon the satisfaction of certain conditions set
forth in Section 6.
Subject to the applicable rules and regulations of the Securities and
Exchange Commission (the "Commission"), the Company expressly reserves the
right, in its sole discretion, at any time and from time to time, and
regardless of whether or not any of the events or facts set forth in Section 6
hereof shall have occurred, to extend the period of time during which the
Offer is open, and thereby delay acceptance for payment of and the payment for
any Shares, by giving oral or written notice of such extension to the
Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE
FOR TENDERED SHARES, WHETHER OR NOT THE COMPANY EXERCISES ITS RIGHT TO EXTEND
THE OFFER.
Subject to the applicable regulations of the Commission, the Company also
expressly reserves the right, in its sole discretion, at any time and from
time to time, to (i) delay acceptance for payment of, or, regardless of
whether such Shares were theretofore accepted for payment, payment for, any
Shares pending receipt of the court approval specified in Section 8 or in
order to comply in whole or in part with any applicable law, (ii) terminate
the Offer and not accept for payment any Shares if any of the conditions
referred to in Section 6 have not been satisfied and (iii) waive any condition
or otherwise amend the Offer in any respect, in each case, by giving oral or
written notice of such delay, termination, waiver or amendment to the
Depositary.
There can be no assurance that the Company will exercise its right to extend
the Offer. Any extension, amendment or termination will be followed as
promptly as practicable by public announcement or other means of
dissemination. In the case of an extension, Rule 14e-1(d) under the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), requires that the
announcement be issued no later than 9:00 a.m., Philadelphia time, on the next
business day after the previously scheduled Expiration Date in accordance with
the public announcement requirements of Rule 14d-4(c) under the Exchange Act.
Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the
Exchange Act, which requires that any material change in the information
published, sent or given to stockholders in connection with the Offer be
promptly disseminated to stockholders in a manner reasonably designed to
inform stockholders of such change), and without limiting the manner in which
the Company may choose to make any public announcement or other dissemination,
the Company will not have any obligation to publish, advertise or otherwise
communicate any such public announcement or other dissemination other than by
either making a release to the Dow Jones News Service or mailing a supplement
to this Offer to Purchase to the holders of record of the Shares. As used in
this Offer to Purchase, "business day" has the meaning set forth in Rule 14d-1
under the Exchange Act.
If the Company extends the Offer or if the Company is delayed in its
acceptance for payment of or payment (whether before or after its acceptance
for payment of Shares) for Shares or it is unable to pay for Shares pursuant
to the Offer for any reason, then, without prejudice to the Company's rights
under the Offer, the Depositary may retain tendered Shares on behalf of the
Company, and such Shares may not be withdrawn except to the extent tendering
stockholders are entitled to withdrawal rights as described in Section 3.
However, the ability of the Company to delay the payment for Shares that the
Company has accepted for payment is limited by Rule 14e-l(c) under the
Exchange Act, which requires that a bidder pay the consideration offered or
return the securities deposited by or on behalf of holders of securities
promptly after the termination or withdrawal of such bidder's offer.
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If the Company makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Company will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the
Exchange Act. The minimum period during which an offer must remain open
following material changes in the terms of the offer or information concerning
the offer, other than a change in price or a change in the percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms or information. With
respect to a change in price or a change in the percentage of securities
sought, a minimum period of ten business days is generally required to allow
for adequate dissemination to stockholders and investor response.
All Shares purchased pursuant to the Offer will be purchased at the Purchase
Price. All Shares not purchased pursuant to the Offer, including Shares
tendered and withdrawn, will be returned to the tendering stockholders at the
Company's expense as promptly as practicable following the Expiration Date or
as promptly as practicable following withdrawal, as the case may be. The
Company, upon the terms and subject to the conditions of the Offer, will
purchase at the Purchase Price all Shares properly tendered and not withdrawn.
2. PROCEDURE FOR TENDERING SHARES
VALID TENDER. For a stockholder validly to tender Shares pursuant to the
Offer, a Letter of Transmittal (or facsimile thereof), properly completed and
duly executed, together with the stock certificates for the tendered Shares
(except in the case of uncertificated Shares), and any other required
documents, must be received by the Depositary at the address set forth on the
back cover of this Offer to Purchase prior to the Expiration Date.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER.
SHARES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY.
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ENSURE TIMELY DELIVERY.
For a tender of Shares to be valid, such Shares must be free and clear of
all liens, restrictions, charges and encumbrances and not subject to any
adverse claim. By tendering Shares and signing the Letter of Transmittal, the
stockholder will be making a representation and warranty to the Company to
such effect.
The valid tender of Shares pursuant to the procedures described above will
constitute a binding agreement between the tendering stockholder and the
Company upon the terms and subject to the conditions of the Offer.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Company in its sole discretion, which determination
will be final and binding. The Company reserves the absolute right to reject
any or all tenders determined by it not to be in proper form or the acceptance
for payment of or payment for which may, in the opinion of the Company's
counsel, be unlawful. The Company also reserves the absolute right to waive
any defect or irregularity in the tender of any Shares of any particular
stockholder whether or not similar defects or irregularities are waived in the
case of other stockholders. No tender of Shares will be deemed to have been
validly made until all defects or irregularities relating thereto have been
cured or waived. None of the Company, the Depositary or any other person will
be under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification. The
Company's interpretation of the terms and conditions of the Offer (including
the Letter of Transmittal and the instructions thereto) will be final and
binding.
LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificates for the Shares
have been lost, destroyed or stolen, stockholders should contact the
Depositary immediately at the address and telephone number set forth on the
back cover of this Offer to Purchase. In such event, the Depositary will
forward additional documentation
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necessary to be completed in order to surrender effectively such lost,
destroyed or stolen certificates. The Purchase Price with respect to the
relevant Shares will not be paid until the procedures for replacing lost,
destroyed or stolen certificates have been followed.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE
SHARES TO BE PAID BY THE COMPANY, REGARDLESS OF ANY EXTENSION OF THE OFFER OR
ANY DELAY IN MAKING SUCH PAYMENT.
3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, a tender of Shares is
irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant
to the procedures set forth below at any time prior to the Expiration Date
and, unless theretofore accepted for payment and paid for by the Company
pursuant to the Offer, may also be withdrawn at any time after July 14, 1998.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
the address set forth on the back cover of this Offer to Purchase and must
specify the name of the person having tendered the Shares to be withdrawn, the
number of Shares to be withdrawn and the name of the registered holder of the
Shares to be withdrawn, if different from the name of the person who tendered
the Shares. Withdrawals of tenders of Shares may not be rescinded, and any
Shares properly withdrawn will thereafter be deemed not validly tendered for
purposes of the Offer. However, withdrawn Shares may be retendered again
following the procedures described in Section 2 at any time prior to the
Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Company in its sole
discretion, which determination will be final and binding. None of the
Company, the Depositary or any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Company will accept for payment and will pay for all
outstanding Shares as are validly tendered prior to the Expiration Date and
not properly withdrawn in accordance with Section 3 promptly after the
Expiration Date. All questions as to the satisfaction of such terms and
conditions will be determined by the Company in its sole discretion, which
determination will be final and binding. See Sections 1 and 6. The Company
expressly reserves the right, in its sole discretion, to delay acceptance for
payment of or payment for Shares pending receipt of the court approval
specified in Section 8 or in order to comply in whole or in part with any
applicable law. Any such delays will be effected in compliance with Rule 14e-
1(c) under the Exchange Act (relating to a bidder's obligation to pay for or
return tendered securities promptly after the termination or withdrawal of
such bidder's offer). For purposes of the Offer, the Company will be deemed to
have accepted for payment (and thereby purchased) Shares which are tendered
and not withdrawn when, as and if it gives oral or written notice to the
Depositary of its acceptance of such Shares for payment pursuant to the Offer.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (a) certificates
or receipt numbers for such Shares, (b) a Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, and (c) any other documents
required by the Letter of Transmittal. The per Share consideration paid to any
stockholder pursuant to the Offer will be the highest per Share consideration
paid to any other stockholder pursuant to the Offer.
Payment for Shares accepted for payment pursuant to the Offer will be made
by deposit of the Purchase Price therefor with the Company's transfer agent
for the Shares, which will act as agent for tendering stockholders for the
purpose of receiving payment from the Company and transmitting payment to
tendering stockholders. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE OF THE SHARES TO BE PAID BY THE COMPANY, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
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If the Company is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Company's rights under
the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange
Act), the Depositary may, nevertheless, on behalf of the Company, retain
tendered Shares, and such Shares may not be withdrawn except to the extent
tendering stockholders are entitled to exercise, and duly exercise, withdrawal
rights as described in Section 3.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, certificates for any such Shares will be returned, without expense to
the tendering stockholder, as promptly as practicable after the expiration or
termination of the Offer.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Sales of Shares by stockholders pursuant to the Offer will be taxable
transactions for federal income tax purposes and may also be taxable
transactions under applicable state, local, foreign and other tax laws. The
federal income tax consequences to a stockholder may vary depending upon the
stockholder's particular facts and circumstances.
Under section 302 of the Internal Revenue Code of 1986, as amended (the
"Code"), a sale of Shares pursuant to the Offer will, as a general rule, be
treated as a sale or exchange if the receipt of cash upon such sale (a) is
"substantially disproportionate" with respect to the stockholder, (b) results
in a "complete redemption" of the stockholder's interest in the Company or (c)
is "not essentially equivalent to a dividend" with respect to the stockholder.
If any of those three tests is satisfied, a tendering stockholder will
recognize gain or loss equal to the difference between the amount of cash
received by the stockholder pursuant to the Offer and the stockholder's tax
basis in the Shares sold pursuant to the Offer. Recognized gain or loss will
be capital gain or loss, assuming the Shares are held as capital assets, which
will be long-term capital gain or loss if the Shares are held for more than
one year.
Net capital gain recognized by an individual upon the sale of, or otherwise
attributable to, a capital asset that has been held for more than 18 months
will generally be subject to tax at a rate not to exceed 20%. Net capital gain
recognized by an individual from the sale of, or otherwise attributable to, a
capital asset that has been held for more than 12 months but not more than 18
months will continue to be subject to tax at a rate not to exceed 28%, and
capital gain recognized from the sale of, or otherwise attributable to, a
capital asset held for 12 months or less will continue to be subject to tax at
the ordinary income tax rates. In addition, capital gain recognized by a
corporate taxpayer will continue to be subject to tax at the ordinary income
tax rates applicable to corporations. The deductibility of capital losses is
subject to certain limitations.
In determining whether any of the tests under section 302 of the Code is
satisfied, stockholders must take into account not only the shares of Common
Stock they actually own, but also any shares of Common Stock they are deemed
to own pursuant to the constructive ownership rules of section 318 of the
Code. Pursuant to those constructive ownership rules, a stockholder is deemed
to own Common Stock actually owned, and in some cases constructively owned, by
certain related individuals or entities, and any Common Stock that the
stockholder has the right to acquire by exercise of an option or by conversion
or exchange of a security.
The receipt of cash will be "substantially disproportionate" with respect to
a stockholder if, among other things, the percentage of the outstanding Common
Stock actually and constructively owned by the stockholder immediately
following the sale of Shares pursuant to the Offer (treating as no longer
outstanding all Shares purchased pursuant to the Offer) is less than 80% of
the percentage of the outstanding Common Stock actually and constructively
owned by such stockholder immediately before the sale of Shares pursuant to
the Offer (treating as outstanding all Shares purchased pursuant to the
Offer). Stockholders should consult their tax advisors with respect to the
application of the "substantially disproportionate" test to their particular
facts and circumstances.
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The receipt of cash by a stockholder will result in a "complete redemption"
of the stockholder's interest in the Company if either (a) all the Common
Stock actually and constructively owned by the stockholder is sold pursuant to
the Offer or otherwise or (b) all the Common Stock actually owned by the
stockholder is sold pursuant to the Offer or otherwise and the stockholder is
eligible to waive and does effectively waive attribution of all Common Stock
constructively owned by the stockholder in accordance with section 302(c) of
the Code.
Even if the receipt of cash by a stockholder fails to satisfy the
"substantially disproportionate" test or the "complete redemption" test, such
stockholder may nevertheless satisfy the "not essentially equivalent to a
dividend" test, if the stockholder's sale of Shares pursuant to the Offer
results in a "meaningful reduction" in the stockholder's proportionate
interest in the Company. Whether the receipt of cash by a stockholder will be
"not essentially equivalent to a dividend" will depend upon the individual
stockholder's facts and circumstances. In certain circumstances, even a small
reduction in a stockholder's proportionate interest may satisfy this test. For
example, the IRS has indicated in a published ruling that a 3.3% reduction in
the proportionate interest of a small minority (substantially less than 1%)
stockholder in a publicly held corporation who exercises no control over
corporate affairs constitutes such a "meaningful reduction." Stockholders
expecting to rely upon the "not essentially equivalent to a dividend" test
should, therefore, consult their tax advisors as to its application in their
particular situations.
If none of the three tests under section 302 is satisfied then, to the
extent the Company has sufficient earnings and profits, the tendering
stockholder will be treated as having received a dividend includible in gross
income (and treated as ordinary income) in an amount equal to the entire
amount of cash received by the stockholder pursuant to the Offer (without
regard to gain or loss, if any).
In the case of a corporate stockholder, if the cash paid is treated as a
dividend, the dividend income may be eligible for the 70% dividends-received
deduction. The dividends-received deduction is subject to certain limitations,
and may not be available if the corporate stockholder does not satisfy certain
holding period requirements with respect to the Shares or if the Shares are
treated as "debt financed portfolio stock" within the meaning of section
246A(c) of the Code. Generally, if a dividends-received deduction is
available, it is expected that the dividend will be treated as an
"extraordinary dividend" under section 1059(a) of the Code, in which case such
corporate stockholder's tax basis in Shares retained by such stockholder would
be reduced, but not below zero, by the amount of the nontaxed portion of the
dividend. Any amount of the nontaxed portion of the dividend in excess of the
stockholder's basis will generally be treated as capital gain and will be
recognized in the taxable year in which the extraordinary dividend is
received. If a redemption of Shares from a corporate stockholder pursuant to
the Offer is treated as a dividend as a result of the stockholder's
constructive ownership of other Common Stock that it has an option or other
right to acquire, the portion of the extraordinary dividend not otherwise
taxed because of the dividends-received deduction would reduce the
stockholder's adjusted tax basis only in its Shares sold pursuant to the
Offer, and any excess of such non-taxed portion over such basis would be
currently taxable as gain on the sale of such Shares. Corporate stockholders
should consult their tax advisors as to the availability of the dividends-
received deduction and the application of section 1059 of the Code.
"Backup withholding" at a rate of 31% will apply to payments made to
stockholders pursuant to the Offer unless the stockholder has furnished its
taxpayer identification number in the manner prescribed in applicable Treasury
regulations, has certified that such number is correct, has certified as to no
loss of exemption from backup withholding and meets certain other conditions.
Any amounts withheld from a stockholder of Shares under the backup withholding
rules generally will be allowed as a refund or a credit against such
stockholder's United States federal income tax liability, provided the
required information is furnished to the Internal Revenue Service.
The foregoing discussion may not apply to Shares acquired pursuant to
certain compensation arrangements with the Company.
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THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY
AND IS BASED ON THE FEDERAL INCOME TAX LAW NOW IN EFFECT, WHICH IS SUBJECT TO
CHANGE, POSSIBLY RETROACTIVELY. THE TAX CONSEQUENCES OF A SALE PURSUANT TO THE
OFFER MAY VARY DEPENDING UPON, AMONG OTHER THINGS, THE PARTICULAR
CIRCUMSTANCES OF THE TENDERING STOCKHOLDER. NO INFORMATION IS PROVIDED HEREIN
AS TO THE STATE, LOCAL OR FOREIGN TAX CONSEQUENCES OF THE TRANSACTION
CONTEMPLATED BY THE OFFER. STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS TO DETERMINE THE PARTICULAR FEDERAL, STATE, LOCAL AND FOREIGN TAX
CONSEQUENCES OF SALES MADE BY THEM PURSUANT TO THE OFFER AND THE EFFECT OF THE
CONSTRUCTIVE STOCK OWNERSHIP RULES MENTIONED ABOVE.
6. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, the Company shall not be
required to accept for payment, purchase or pay for any Shares tendered, and
may terminate or amend the Offer or may postpone the acceptance for payment
of, or the purchase of and the payment for Shares tendered, subject to Rule
13e-4(f) promulgated under the Exchange Act, if, in the sole judgment of the
Company, the Minimum Condition and the Settlement Condition (See Section 8)
shall not have been satisfied or if at any time on or after May 15, 1998, and
prior to the time of payment for any such Shares (whether any Shares have
theretofore been accepted for payment, purchased or paid for pursuant to the
Offer), any of the following events shall have occurred (or shall have been
determined by the Company to have occurred) that, in the Company's sole
judgment in any such case and regardless of the circumstances giving rise
thereto (including any action or omission to act by the Company), makes it
inadvisable to proceed with the Offer or with such acceptance for payment or
payment:
(i) there shall have been threatened, instituted or pending before any
court, agency, authority or other tribunal any action, suit or proceeding
by any government or governmental, regulatory or administrative agency or
authority or by any other person, domestic or foreign, or any judgment,
order or injunction entered, enforced or deemed applicable by any such
court, authority, agency or tribunal, which (a) challenges or seeks to make
illegal, or to delay or otherwise directly or indirectly to restrain,
prohibit or otherwise affect the making of the Offer, the acquisition of
Shares pursuant to the Offer or is otherwise related in any manner to, or
otherwise affects, the Offer; or (b) could, in the sole judgment of the
Company, materially affect the business, condition (financial or other),
income, operations or prospects of the Company and its subsidiaries, taken
as a whole, or otherwise materially impair in any way the contemplated
future conduct of the business of the Company and its subsidiaries, taken
as a whole, or materially impair the Offer's contemplated benefits to the
Company; or
(ii) there shall have been any action threatened or taken, or any
approval withheld, or any statute, rule or regulation invoked, proposed,
sought, promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the Offer or the Company or any of its subsidiaries, by any
government or governmental, regulatory or administrative authority or
agency or tribunal, domestic or foreign, which, in the sole judgment of the
Company, would or might directly or indirectly result in any of the
consequences referred to in clause (a) or (b) of paragraph (i) above; or
(iii) there shall have occurred (a) the declaration of any banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory); (b) any general suspension of trading
in, or limitation on prices for, securities on any United States national
securities exchange or in the over-the-counter market; (c) the commencement
of a war, armed hostilities or any other national or international crisis
directly or indirectly involving the United States; (d) any limitation
(whether or not mandatory) by any governmental, regulatory or
administrative agency or authority on, or any event which, in the sole
judgment of the Company, might materially affect, the extension of credit
by banks or other lending institutions in the United States; (e) any
significant decrease in the market prices of equity securities generally in
the United States or any change in the general political, market, economic
or financial conditions or in the commercial paper markets in the United
States or abroad that could have in the sole judgment of the Company a
material adverse effect on the trading of such equity securities or on the
business, condition (financial or otherwise), income, operations or
prospects of the Company and its subsidiaries, taken as a whole; (f) in the
case of any of the foregoing existing at the time of the announcement of
the Offer, a material acceleration or worsening thereof; (g) any
significant decline in the
15
<PAGE>
appraisal price of the Shares as determined by HLHZ; or (h) any decline in
either the Dow Jones Industrial Average or the S&P 500 Composite Index by
an amount in excess of 10% measured from the close of business on May 14,
1998; or
(iv) any change shall occur or be threatened in the business, condition
(financial or other), income, operations or prospects of the Company and
its subsidiaries, taken as a whole, which in the sole judgment of the
Company is or may be material to the Company and its subsidiaries taken as
a whole; or
(v) if more than 1.4 million Shares are tendered in the Offer, the
Company shall not have received additional financing to purchase Shares in
excess of such 1.4 million Shares in the Offer on terms and conditions
satisfactory to the Company.
The foregoing conditions are for the Company's sole benefit and may be
asserted by the Company regardless of the circumstances giving rise to any
such condition (including any action or inaction by the Company) or may be
waived by the Company in whole or in part. The Company's failure at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any
such right, and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time. Any determination by the Company
concerning the events described above and any related judgment or decision by
the Company regarding the inadvisability of proceeding with the purchase of or
payment for any Shares tendered will be final and binding on all parties.
7. APPRAISAL PRICE OF SHARES; DIVIDENDS
The Shares are not listed on any exchange nor is there any established
trading market for the Shares.
The Company as a matter of course obtains from HLHZ, an investment banking
firm, an appraisal of the fair market value of its Common Stock as of December
1, March 1, June 1 and September 1 of each year. The appraisals are based on
market capitalization approaches and on income approaches, including
discounted cash flow analysis, to arrive at an aggregate equity value.
Consideration is also given to various qualitative factor considerations,
including limitations on the marketability of the Common Stock resulting in
part from the restrictions imposed by the Amended and Restated Stockholders'
Agreement, dated as of December 14, 1994 (the "Stockholders' Agreement") to
which certain of the holders of the Common Stock are parties. The most recent
appraisal, dated March 1, 1998, included an approximate 30% discount from
aggregate equity value with respect to qualitative factor considerations. The
Company has used HLHZ for its quarterly appraisals since 1994.
In rendering its appraisals, HLHZ: (i) generally holds interviews and
discussions with key senior corporate officers at the Company's corporate
headquarters in Philadelphia, Pennsylvania; (ii) reviews the history and
nature of the Company; (iii) reviews the financial data bearing upon recent
and prospective operations, including the Company's 10-K and 10-Q filings with
the Commission, other recent filings with the Commission, audited and interim
financial statements, and internal financial and operating segment data as
well as long-term financial forecasts of the Company; (iv) reviews and
analyzes the Company's operating segments and their prospects; (v) examines
industry and capital market information deemed relevant to the assessment of
investment risk and investment return attributes of the Class A Common Stock
and Class B Common Stock; and (vi) analyzes any other factors that it
considers necessary under the circumstances. The internal data and forecasts
reviewed by HLHZ include operating results, business plans and strategic plans
that are not made generally available to the stockholders of the Company.
Consistent with its objective of increasing employee ownership, the Company
has historically repurchased Shares in privately negotiated transactions at
the then prevailing appraisal price of the Shares from stockholders who have
expressed an interest in selling their Shares. While the Company expects to
continue its practice of repurchasing Shares in privately negotiated
transactions following the Offer, the ability of the Company to repurchase
Shares in such transactions is subject to the Company's continued operating
and financial performance and the requirements of applicable law.
16
<PAGE>
The appraisal prices for the Shares as of the following appraisal dates are
set forth below:
<TABLE>
<CAPTION>
APPRAISAL
PRICE
---------
<S> <C>
Fiscal Year 1996:
December 1, 1995............................................. $
166.00
March 1, 1996................................................ 173.00
June 1, 1996................................................. 179.00
September 1, 1996............................................ 182.00
Fiscal Year 1997:
December 1, 1996............................................. 186.00
March 1, 1997................................................ 193.00
June 1, 1997................................................. 201.00
September 1, 1997............................................ 215.00
Fiscal Year 1998:
December 1, 1997............................................. 264.00
March 1, 1998................................................ 352.50
</TABLE>
HLHZ has not conducted any appraisal of the Shares since March 1, 1998. The
results of the June 1, 1998 appraisal of the Shares will be provided in a
supplement to this Offer to Purchase to the holders of record of the Shares
prior to the Expiration Date.
The Company has not declared or paid any cash dividends on the Shares since
April of 1993 and presently has no plans to declare or pay cash dividends. As
of May 1, 1998, there were approximately 200 holders of record of the Shares.
8. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
On January 14, 1998, MetLife commenced a proceeding by filing a complaint
(the "MetLife Complaint") against the Company and each of its directors (the
"Directors") in the Court (Civil Action No. 16142-NC), seeking to enjoin the
consummation of the Recapitalization Plan (the "MetLife Action").
The MetLife Complaint alleged, among other things, that (i) the
Recapitalization Plan violated Delaware law because it impermissibly
discriminated among owners of Shares without any valid purpose; (ii) the
Directors had breached their fiduciary duty to act solely in the best interest
of the Company and its stockholders; and (iii) the Directors had breached
their fiduciary duty of candor to the stockholders of the Company.
The MetLife Complaint requested that the Court: (i) declare that the
Recapitalization Plan violated Delaware law; (ii) declare that the Directors
had breached their fiduciary obligations to the Company's stockholders by
approving the Recapitalization Plan; (iii) enjoin the consummation or closing
of the Recapitalization Plan; or (iv) in the event the Recapitalization Plan
was consummated, grant rescission or rescissory damages; (v) award the
plaintiff compensatory damages, together with prejudgment interest; (vi) award
the plaintiff its costs and expenses; and (vii) grant such other and further
relief as the Court deemed just and proper.
On January 30, 1998, MetLife filed an amended complaint (the "Amended
MetLife Complaint") against the Company and the Directors. The Amended MetLife
Complaint added one allegation to the Complaint as originally filed. The
Amended MetLife Complaint alleged that the Directors failed to disclose the
magnitude of the private company discount used to assess the fairness of the
$347.50 per share price of the Shares in the Recapitalization Plan. The
Amended MetLife Complaint alleged that the use of a private company discount
is not permitted in the context of a cash-out transaction such as the
Recapitalization Plan.
On February 2, 1998, Michael P. Recht (as trustee for The Michael P. Recht
Revocable Trust), Michael Paul Recht (as custodian for Brian Recht), Myra
Judd, Myra Judd (as custodian for Kevin Scott Judd), Myra
17
<PAGE>
Judd (as custodian for Robert L. Judd) and Joe Carol Recht (collectively, the
"Class Plaintiffs"), commenced a proceeding by filing a complaint in the Court
(Civil Action No. 16170) (the "Class Action Complaint") against the Company
and its Directors (the "Class Action"). The Class Plaintiffs brought their
action individually and as a purported class action on behalf of all similarly
situated stockholders (except the defendants and MetLife). Also on February 2,
1998, Clay M. Webb, III, Jeanette E. Webb, Helen R. Biegert, Ruth Helen Webb
Trust-30 and Virginia Irene Webb Trust-30 (collectively, the "Webb
Plaintiffs") filed a complaint with the Court (Civil Action No. 16171) against
the Company and the Directors (the "Webb Action").
After expedited discovery and argument, on February 5, 1998, Vice Chancellor
Bernard Balick ruled that a preliminary injunction should issue enjoining the
consummation of the Recapitalization Plan.
On February 10, 1998, the Court entered an order enjoining consummation of
the Recapitalization Plan (the "Preliminary Injunctions") and granted
certification of an interlocutory appeal by the Company and the Directors. The
Supreme Court accepted the interlocutory appeal on February 12, 1998 and
scheduled expedited proceedings on the appeal. Following briefing in the
Supreme Court, the Company determined that it would not proceed with the
Recapitalization Plan, and on March 31, 1998 the interlocutory appeal was
dismissed with the consent of the parties.
On May 15, 1998, the parties to the Class Action executed and filed with the
Court a Stipulation and Agreement of Compromise and Settlement (the
"Stipulation"), the terms of which are set forth in a Notice of Pendency of
Class Action, Class Action Determination, Proposed Settlement of Class Action,
Settlement Hearing and Right to Appear (the "Notice"). As set forth in the
Notice, the Court has scheduled a hearing to be held on June 15, 1998, to
determine whether the proposed settlement of the Class Action as described in
the Notice is fair, reasonable and adequate and should be approved by the
Court. The plaintiffs in each of the MetLife and the Webb Actions have agreed
to dismiss their respective actions, upon consummation of the Offer, and the
Company has agreed to pay their respective reasonable fees and expenses. If
the settlement of the Class Action is approved, the Preliminary Injunctions
will be vacated and each of the MetLife, Class and Webb Actions will be
dismissed. The Court's approval of the settlement in the Class Action on the
terms set forth in the Stipulation, including the vacating of the Preliminary
Injunctions, is a condition to the Company's obligation to accept for payment,
purchase or pay for any Shares tendered in the Offer (See Section 6).
The Company is not aware of any license or regulatory permit that appears to
be material to its business that might be adversely affected by its
acquisition of Shares as contemplated in the Offer or of any approval or other
action by any government or governmental, administrative or regulatory
authority or agency, domestic or foreign, that would be required for the
Company's acquisition or ownership of Shares as contemplated by the Offer.
Should any such approval or other action be required, the Company currently
contemplates that it will seek such approval or other action. The Company
cannot predict whether it may determine that it is required to delay the
acceptance for payment of, or payment for, Shares tendered pursuant to the
Offer pending the outcome of any such matter. There can be no assurance that
any such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that the failure to obtain any such
approval or other action might not result in adverse consequences to the
Company's business. The Company's obligations under the Offer to accept for
payment and pay for Shares are subject to certain conditions. See Introduction
and Section 6.
9. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Company to consummate the Offer is
estimated to be approximately $553 million (assuming that 1.1 million of the
Shares are validly tendered and not withdrawn). If all of the outstanding
Shares were validly tendered and not withdrawn, the total amount of funds that
would be
18
<PAGE>
required to consummate the Offer is estimated to be approximately $953
million. The Company plans to finance the Offer through a combination of
available cash and borrowings under its existing credit facility (the "Bank
Facility").
The Bank Facility is an unsecured revolving credit facility in the initial
amount of $1.4 billion provided by a group of lenders led by The Chase
Manhattan Bank and J.P. Morgan. The borrowers under the Bank Facility are
ARAMARK Services, Inc. and ARAMARK Uniform Services Group, Inc., and the
guarantors are the Company and certain wholly-owned domestic subsidiaries of
the Company and the two borrowers. The outstanding commitments under the Bank
Facility will reduce through scheduled amortizations to $1 billion at the end
of the fourth year (2002) and will continue at that level to a final maturity
at the end of the seventh year (2005). Interest under the Bank Facility is
based upon the London Interbank Offered Rate (LIBOR) plus a spread of .18% to
.70%, or the Certificate of Deposit Rate plus a spread of .28% to .80%, or the
Prime Rate at the option of the borrower. The spread is based on certain
financial ratios and credit ratings. The borrowers will also pay an annual fee
of .10% to .30% on the entire Bank Facility. The Bank Facility contains
restrictive covenants which provide, among other things, limitations on: (i)
the creation of mortgages and security interests; (ii) dispositions of
material assets; and (iii) certain significant changes of control of the
Company. Under the Bank Facility, the Company 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 Bank Facility contains various
event of default provisions, including default in payment of principal or
interest, material misrepresentation in the Bank Facility, default in
compliance with other terms of the Bank Facility or the related guarantees,
bankruptcy, default on other indebtedness, failure to satisfy or stay certain
judgments or orders entered against the Company 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.
After consummation of the Offer, the Company intends to explore various
possible plans for long-term debt financing that might be considered to
refinance part of the outstanding borrowings under the Bank Facility,
including the issuance of debt securities in the public or private markets,
depending upon market conditions.
If more than 1.4 million Shares are tendered in the Offer, the Company will
require additional financing. In such an event, the Offer will be subject to
the Company obtaining such additional financing. See Section 6. The Company
expects to obtain such additional financing, if necessary, through a
combination of increasing the availability under the Bank Facility and issuing
debt securities in the public or private markets. Based upon preliminary
indications from the trustees of the Company's benefit plans as to the number
of Shares that such benefit plans will tender in the Offer, the Company does
not currently expect that additional financing will be required.
10. CERTAIN INFORMATION ABOUT THE COMPANY
GENERAL. The Company is engaged in providing or managing services, including
food and support services, uniform and career apparel, educational resources
and magazine distribution. ARAMARK Services, Inc. was organized in 1959 in
Delaware. The Company was formed in September 1984 by the management of
ARAMARK Services, Inc. and acquired ARAMARK Services, Inc. in December 1984
through a merger. The Company provides most of its services in the United
States. The Company also conducts operations, primarily the management of food
services, in Belgium, Canada, the Czech Republic, Germany, Hungary, Japan,
Korea, Mexico, Spain and the United Kingdom. The Company employs approximately
150,000 persons, both full and part time, including approximately 40,000
employees outside the United States.
The Company provides food, refreshment, specialized dietary and support
services (including maintenance and housekeeping) to businesses, and to
educational, governmental and medical institutions. Food, lodging and
merchandise services are also provided at sports and entertainment facilities
such as convention centers, stadiums, parks, arenas, race tracks and other
recreational facilities.
19
<PAGE>
The Company rents, sells, cleans, maintains and delivers personalized work
apparel and other textile items for customers throughout the United States on
a contract basis. Also provided are walk-off mats, cleaning cloths, disposable
towels, and other environmental control items. The Company operates one of the
largest direct marketers of personalized work clothing, uniforms and related
accessories, primarily in the United States. The Company also operates one of
the largest direct marketers of public safety equipment and public employee
uniforms in the United States and is a leading provider of uniform apparel to
the hospitality and healthcare markets.
The Company provides infant, toddler, preschool and school-age learning
programs. The Company operates community-based child care centers, before and
after school programs on the premises of elementary schools, private
elementary schools and employer on-site child care centers.
The Company also provides wholesale distribution of magazines, books and
other printed matter. These materials are purchased from national distributors
and publishers and are delivered to retail locations patronized by the general
public.
PLANS OF THE COMPANY AFTER THE OFFER. Following the consummation of the
Offer, the business and operations of the Company will be continued
substantially as they are currently being conducted. Except as otherwise
described in this Offer to Purchase, the Company has no current plans or
proposals which relate to or would result in (a) the acquisition by any person
of additional securities of the Company or the disposition of securities of
the Company, other than in the ordinary course of business; (b) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation involving the Company; (c) a public offering of the capital stock
of the Company; (d) a sale or transfer of a material amount of assets of the
Company; (e) any change in the present Board of Directors or management of the
Company; (f) any material change in the present dividend rate or policy or
indebtedness or capitalization of the Company; (g) any other material change
in the Company's corporate structure or business; (h) a change in the
Company's Certificate of Incorporation or By-laws; (i) a class of equity
securities of the Company becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act; or (j) the suspension of the
Company's obligation to file reports pursuant to Section 15(d) of the Exchange
Act.
20
<PAGE>
SUMMARY CONSOLIDATED HISTORICAL FINANCIAL DATA. Set forth below is certain
summary historical consolidated financial data of the Company which has been
derived from the Company's audited consolidated financial statements as of
October 3, 1997 and September 27, 1996 and the fiscal years then ended, and
the Company's unaudited condensed consolidated financial statements as of
April 3, 1998 and March 28, 1997 and for the six month periods then ended. The
following financial data should be read in conjunction with, and is qualified
in its entirety by reference to, the Company's Consolidated Financial
Statements and notes thereto contained in the Company's Annual Report on Form
10-K for the fiscal year ended October 3, 1997 (the "Form 10-K") and the
Company's Quarterly Report on Form 10-Q for the period ended April 3, 1998
(the "Form 10-Q"), each of which is hereby incorporated herein by reference.
SUMMARY CONSOLIDATED HISTORICAL FINANCIAL DATA
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND RATIOS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEARS ENDED ON OR
ON OR NEAR APRIL NEAR SEPTEMBER
3, 30,
------------------ ------------------
1998 1997 1997(1) 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues............................... $3,182.9 $3,144.8 $6,310.4 $6,122.5
Earnings before depreciation and
amortization, interest, and
income taxes.......................... 236.3 300.6 523.6 478.0
Earnings before interest and income
taxes (2)............................. 139.3 204.8 331.9 295.2
Interest expense, net.................. 53.8 60.0 116.0 116.0
Income before extraordinary item....... 48.7 115.6 146.1 112.2
Net income............................. $ 47.2 $ 115.6 $ 146.1 $ 109.5
Earnings per share: (3)
Income before extraordinary item:
Basic................................ $ 1.18 $ 2.72 $ 3.49 $ 2.51
Diluted.............................. $ 1.11 $ 2.57 $ 3.31 $ 2.38
Net income per share:
Basic................................ $ 1.14 $ 2.72 $ 3.49 $ 2.45
Diluted.............................. $ 1.08 $ 2.57 $ 3.31 $ 2.32
Ratio of earnings to fixed charges (4). 2.1x 2.8x 2.3x 2.1x
BALANCE SHEET DATA (AT PERIOD END):
Total assets........................... $2,805.8 $2,816.0 $2,753.6 $2,844.8
Long-term borrowings(5)................ 1,210.8 1,319.6 1,213.9 1,322.0
Common stock subject to potential
repurchase(6)......................... 24.9 23.4 23.3 18.6
Shareholders' equity................... 396.1 375.3 370.0 296.2
Book value per share (7)............... $ 10.15 $ 9.44 $ 9.65 $ 7.28
</TABLE>
- --------
(1) Fiscal 1997 was a fifty-three week period.
(2) See note 2 to the consolidated financial statements for the fiscal year
ended October 3, 1997 contained in the Form 10-K and note 2 to the
condensed consolidated financial statements for the period ended April 3,
1998 contained in the Form 10-Q.
(3) Fiscal 1997 and 1996 earnings per share amounts have been restated to
reflect the adoption of Statement of Financial Standards No. 128,
"Earnings Per Share" which was effective beginning in fiscal 1998.
(4) For the purpose of determining the ratio of earnings to fixed charges,
earnings include pre-tax income plus fixed charges (excluding capitalized
interest). Fixed charges consist of interest on all indebtedness
(including capitalized interest) plus that portion of operating lease
rentals representative of the interest factor (deemed to be one-third of
operating lease rentals).
(5) See note 4 to the annual consolidated financial statements contained in
the Form 10-K and notes to the quarterly consolidated financial statements
contained in the Form 10-Q.
(6) See note 7 to the annual consolidated financial statements contained in
the Form 10-K.
(7) Book value per share is presented on a Class B equivalent basis (which
reflects Class A shares converted to a Class B basis, ten for one) and was
computed by dividing shareholders' equity plus common stock subject to
potential repurchase by the number of common shares outstanding at the end
of each period presented.
21
<PAGE>
SUMMARY CONSOLIDATED PRO FORMA FINANCIAL DATA. The following unaudited
summary consolidated pro forma financial data of the Company gives effect to
the purchase of the Shares pursuant to the Offer and related borrowings by the
Company, as if such transactions had occurred on April 3, 1998 and October 3,
1997 for Balance Sheet data and as of the beginning of the respective periods
presented for Income Statement data. The unaudited summary consolidated pro
forma data should be read in conjunction with the Company's Consolidated
Financial Statements and notes thereto contained in the Form 10-K and the Form
10-Q, each of which is hereby incorporated herein by reference. The pro forma
data does not purport to be indicative of the results that would actually have
been obtained, or that may be obtained in the future, had the purchase of the
Shares pursuant to the Offer been completed at the dates indicated.
UNAUDITED SUMMARY CONSOLIDATED
PRO FORMA FINANCIAL DATA
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND RATIOS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 3, 1998 OCTOBER 3, 1997
------------------------ ------------------------
HISTORICAL PRO FORMA (1) HISTORICAL PRO FORMA (1)
---------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues.................... $3,182.9 $3,182.9 $6,310.4 $6,310.4
Earnings before depreciation
and amortization, interest,
and income taxes .......... 236.3 236.3 523.6 523.6
Earnings before interest and
income taxes............... 139.3 139.3 331.9 331.9
Interest expense, net....... 53.8 72.6 116.0 152.7
Income before extraordinary
item....................... 48.7 37.4 146.1 124.1
Net income.................. $ 47.2 $ 35.9 $ 146.1 $ 124.1
Earnings per share:
Income before extraordinary
item:
Basic..................... $1.18 $1.24 $3.49 $4.02
Diluted................... $1.11 $1.14 $3.31 $3.74
Net income:
Basic..................... $1.14 $1.18 $3.49 $4.02
Diluted................... $1.08 $1.09 $3.31 $3.74
Ratio of earnings to fixed
charges(2)................. 2.1x 1.7x 2.3x 1.9x
<CAPTION>
AT APRIL 3, 1998 AT OCTOBER 3, 1997
------------------------ ------------------------
HISTORICAL PRO FORMA (1) HISTORICAL PRO FORMA (1)
---------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets................ $2,805.8 $2,805.8 $2,753.6 $2,753.6
Long-term borrowings........ 1,210.8 1,763.8 1,213.9 1,766.9
Common stock subject to
potential repurchase....... 24.9 20.0 23.3 20.0
Shareholders' equity
(deficit).................. 396.1 (152.0) 370.0 (179.7)
Book value per share(3)..... $ 10.15 $ (4.33) $ 9.65 $ (5.37)
</TABLE>
- --------
(1) The pro forma information assumes the purchase of 1.1 million Shares at
$500 per Share and $3 million of estimated transaction costs, financed
through additional borrowings under the Bank Facility.
(2) See note (4) to "--Summary Consolidated Historical Financial Data."
(3) See note (7) to "--Summary Consolidated Historical Financial Data."
CERTAIN PROJECTIONS. The following projections cover the fiscal years 1998
through 2000. The Company does not as a matter of course publish projections
as to future results of operations or financial condition. However, in
connection with developing the terms of the Recapitalization Plan, certain
similar projections of the
22
<PAGE>
Company's future operating performance were furnished to certain Outside
Stockholders and included in the Proxy Statement for the Recapitalization
Plan. In addition, in connection with seeking to obtain financing for the
Recapitalization Plan, substantially similar projections over the expected
term of the financing were furnished to certain current and prospective
lending institutions. In connection with the Offer, certain similar
projections of the Company's future operating performance were furnished to
the Company's financial advisor, Morgan Stanley.
THE PROJECTIONS, WHILE PRESENTED WITH NUMERICAL SPECIFICITY, ARE BASED ON A
VARIETY OF ESTIMATES AND ASSUMPTIONS WHICH, THOUGH CONSIDERED REASONABLE BY
THE COMPANY, MAY NOT BE REALIZED, AND ARE INHERENTLY SUBJECT TO SIGNIFICANT
BUSINESS, ECONOMIC AND COMPETITIVE UNCERTAINTIES, MANY OF WHICH ARE BEYOND THE
CONTROL OF THE COMPANY. THERE CAN BE NO ASSURANCE THAT THE PROJECTIONS WILL BE
REALIZED, AND ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE SHOWN. THE COMPANY
DOES NOT INTEND IN THE FUTURE TO RELEASE PUBLICLY, ON A PERIODIC BASIS OR
OTHERWISE, UPDATES TO THE PROJECTIONS SET FORTH HEREIN.
The projections assume that 1.1 million Shares (including 400,000 Shares
from the Company's benefit plans) are purchased by the Company pursuant to the
Offer at the beginning of fiscal 1998 for total consideration of $553 million,
including $3 million for expenses to be incurred in connection with the Offer.
The projections should be read in conjunction with the Company's
Consolidated Financial Statements and notes thereto contained in the Form 10-
K, which is hereby incorporated herein by reference.
PROJECTIONS
(IN MILLIONS)
<TABLE>
<CAPTION>
1998 1999 2000
------ ------ ------
<S> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues............................................... $6,583 $7,142 $7,829
Income before depreciation and amortization, interest
and income taxes...................................... 564 623 688
Operating income....................................... 365 409 455
Interest, net.......................................... 161 151 143
Net income............................................. $ 119 $ 150 $ 182
FUNDS FLOW DATA:
Net income............................................. $ 119 $ 150 $ 182
Depreciation and amortization.......................... 199 214 233
------ ------ ------
Total sources........................................ $ 318 $ 364 $ 415
------ ------ ------
Net capital additions.................................. 237 225 226
Change in working capital.............................. 15 5 6
Other use/(source)..................................... (15) 44 62
------ ------ ------
Total uses........................................... $ 237 $ 274 $ 294
------ ------ ------
Cash available to service debt and acquisitions........ $ 81 $ 90 $ 121
====== ====== ======
</TABLE>
ADDITIONAL INFORMATION. The Company is subject to the information filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports, proxy statements and other information with the Commission. Such
reports, proxy statements and other information can be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 2120, Washington, D.C. 20549, at its regional offices
located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511;
and 7 World Trade Center, New York, New York 10048. Copies of such material
may also be obtained by mail, upon payment of the Commission's customary
charges, from the Public Reference Section of the Commission at
23
<PAGE>
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission also maintains a Web site on the World Wide Web at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.
11. CERTAIN EFFECTS OF THE OFFER
Shares the Company acquires pursuant to the Offer will be retired by the
Company.
The Company may in the future purchase additional Shares in private
transactions, pursuant to the Stockholders' Agreement, through tender offers
or otherwise. Any such purchases may be on the same terms as, or on terms that
are more or less favorable to stockholders than, the terms of the Offer.
However, Rule 13e-4 promulgated under the Exchange Act generally prohibits the
Company and its affiliates from purchasing any Shares, other than pursuant to
the Offer, until at least ten business days after the expiration or
termination of the Offer. Any possible future purchases by the Company will
depend on many factors, including the appraised price of the Shares, the
results of the Offer, the Company's business and financial position and
general economic and market conditions.
The Company's purchase of Shares pursuant to the Offer is expected to
significantly reduce the number of outstanding Shares. As of May 1, 1998,
there were approximately 200 holders of record of the Shares. Although there
is no established trading market for the Shares, the consummation of the Offer
may further limit the liquidity of the Shares.
The Shares are not registered under the Exchange Act.
12. TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES
None of the officers, directors or affiliates of the Company beneficially
owns any Shares with the exception of one director, and such director has
advised the Company that he intends to tender a portion of his Shares.
Since March 1, 1998, the Company has repurchased the following Shares
pursuant to the Stockholders' Agreement based on the appraisal price of the
shares of Class B Common Stock: 10 Shares at $190.81 per Share from 1 former
employee, 70 Shares at $200.00 per Share from 1 former employee, 35,495 Shares
at $295.50 per Share from 43 former employees and from their permitted
transferees, and 57,466 Shares at $299.50 per Share from 33 former employees
and from their permitted transferees.
Based upon the Company's records and upon information provided to the
Company by its directors, executive officers, associates and subsidiaries,
neither the Company nor any of its associates or subsidiaries or persons
controlling the Company nor, to the best of the Company's knowledge, any of
the directors or executive officers of the Company or any of its subsidiaries,
nor any associates or subsidiaries of any of the foregoing, has effected any
transactions in the Shares during the 40 business days prior to the date
hereof.
The Stockholders' Agreement generally contains certain limitations on the
ability of the holders of the Shares to transfer the Shares to a third party
without providing the Company with the opportunity within a limited time
period to acquire such Shares at the price provided in the proposed third
party transaction. The Company and certain of the holders of the Shares are
parties to an Amended and Restated Registration Rights Agreement pursuant to
which, subject to the terms and conditions thereof, such holders have demand
registration rights with respect to their Shares.
Except as set forth in this Offer to Purchase, neither the Company or any
person controlling the Company nor, to the Company's knowledge, any of its
directors or executive officers, is a party to any contract, arrangement,
understanding or relationship with any other person relating, directly or
indirectly, to the Offer with respect to any securities of the Company
(including, but not limited to, any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any such securities,
joint ventures, loan or option arrangements, puts or calls, guarantees of
loans, guarantees against loss or the giving or withholding proxies, consents
or authorizations).
24
<PAGE>
13. FEES AND EXPENSES
The Company has paid fees of approximately $487,500 plus reimbursement of
certain expenses to HLHZ for appraisal services rendered to the Company during
the 12 months prior to the date of this Offer to Purchase and for solvency
opinions rendered to the Board of Directors in connection with the Offer and
the Recapitalization Plan. In addition, the Company has agreed to indemnify
HLHZ against certain liabilities which it might incur in connection with the
preparation of the opinion and the appraisals referred to above or otherwise
as a result of the services which it rendered.
The Company has retained Morgan Stanley to render a financial opinion letter
to the Board of Directors as to whether the consideration to be paid for the
Shares in the Offer is fair from a financial point of view to the Company.
Pursuant to an engagement letter with Morgan Stanley, the Company paid Morgan
Stanley an "opinion fee" of $1.5 million upon the delivery of such opinion
letter on May 12, 1998. The Company also has agreed to reimburse Morgan
Stanley for certain expenses incurred in connection with its engagement,
including out-of-pocket expenses and the reasonable fees and disbursements of
its counsel and to indemnify Morgan Stanley and certain related parties
against certain liabilities in connection with its engagement. Morgan Stanley
may render investment banking services to the Company in the future. Morgan
Stanley has not been retained to make solicitations or recommendations in
connection with the Offer.
The Company will not pay fees or commissions to any broker, dealer,
commercial bank, trust company or other person for soliciting any Shares
pursuant to the Offer. The Company will, however, on request, reimburse such
persons for customary handling and mailing expenses incurred in forwarding
materials in respect of the Offer to the beneficial owners for which they act
as nominees. No such broker, dealer, commercial bank or trust company has been
authorized to act as the Company's agent for purposes of the Offer. The
Company will pay (or cause to be paid) any stock transfer taxes on its
purchase of Shares.
14. MISCELLANEOUS
The Company is not aware of any jurisdiction where the making of the Offer
is not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer is not in compliance with any valid
applicable law, the Company will make a good faith effort to comply with such
law. If, after such good faith effort, the Company cannot comply with such
law, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Shares residing in such jurisdiction.
Pursuant to Rule 13e-4 promulgated under the Exchange Act, the Company has
filed with the Commission an Issuer Tender Offer Statement on Schedule 13E-4
(the "Schedule 13E-4") which contains additional information with respect to
the Offer. The Schedule 13E-4, including the exhibits and any amendments
thereto, may be examined, and copies may be obtained, at the same places and
in the same manner as is set forth in Section 10 with respect to information
concerning the Company.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF
TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
Aramark Corporation
May 15, 1998
25
<PAGE>
Any questions or requests for assistance may be directed to the Depositary
at the telephone number and address listed below. Requests for additional
copies of this Offer to Purchase, the Letter of Transmittal or other tender
offer materials may be directed to the Depositary, and such copies will be
furnished promptly at the Company's expense.
The Depositary for the Offer is:
THE SPECIAL DEPOSITARY GROUP
ARAMARK CORPORATION
ARAMARK TOWER
1101 MARKET STREET
PHILADELPHIA, PA 19107
ATTENTION: THE DEPOSITARY--29TH FLOOR
TELEPHONE: (215) 238-3246
<PAGE>
EXHIBIT 99.2(A)(2)
LETTER OF TRANSMITTAL
TO ACCOMPANY
SHARES OF CLASS A COMMON STOCK
OF
ARAMARK CORPORATION
TENDERED PURSUANT TO THE OFFER TO PURCHASE
DATED MAY 15, 1998
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
PHILADELPHIA TIME, ON JUNE 15, 1998, UNLESS THE OFFER IS EXTENDED.
TO: THE SPECIAL DEPOSITARY GROUP (THE "DEPOSITARY")
ARAMARK CORPORATION
ARAMARK TOWER
1101 MARKET STREET
PHILADELPHIA, PA 19107
ATTENTION: THE DEPOSITARY--29TH FLOOR
TELEPHONE: (215) 238-3246
DESCRIPTION OF SHARES OF CLASS A COMMON STOCK TENDERED
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED SHARES TENDERED
HOLDER(S) (IF BLANK, (ATTACH ADDITIONAL LIST IF
FILL IN EXACTLY AS NAME(S) APPEAR(S) ON NECESSARY)
CERTIFICATE(S)
- -------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES
CERTIFICATE/ REPRESENTED NUMBER OF
RECEIPT BY SHARES
NUMBER(S)* CERTIFICATE/RECEIPT TENDERED*
<S> <C> <C> <C>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL
- -------------------------------------------------------------------------------
</TABLE>
* Unless otherwise indicated, the holder will be deemed to have tendered
the full number of Shares represented by the tendered certificate(s).
See Instruction 3.
Delivery of this instrument to an address other than as set forth above
will not constitute a valid delivery.
Share certificates must accompany this Letter of Transmittal if shares are
represented by a certificate.
The instructions accompanying this Letter of Transmittal should be read
carefully before the Letter of Transmittal is completed. QUESTIONS AND
REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE OFFER TO PURCHASE,
THIS LETTER OF TRANSMITTAL OR OTHER TENDER OFFER MATERIALS MAY BE DIRECTED TO
THE DEPOSITARY.
ATTENTION: HAVE SHARE CERTIFICATES
BEEN LOST, DESTROYED OR STOLEN?
Please call the Depositary at (215) 238-3246 for assistance immediately.
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to ARAMARK Corporation, a Delaware
corporation (the "Company"), the above-described shares (the "Shares")
pursuant to the Company's offer to purchase any and all Shares of its Common
Stock, Class A, par value $0.01 per share (the "Class A Common Stock"), at a
purchase price of $500.00 per Share, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated May 15, 1998 (the "Offer
to Purchase"), receipt of which hereby is acknowledged, and in this Letter of
Transmittal (which together constitute the "Offer").
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Company all
right, title and interest in and to all the Shares that are being tendered
hereby and constitutes and appoints the Depositary the true and lawful agent
and attorney-in-fact of the undersigned with respect to such Shares, with full
power of substitution (such power of attorney, being deemed to be an
irrevocable power coupled with an interest), to (a) deliver certificates or
receipt numbers of such Shares and to accept such Shares together with all
accompanying evidences of transfer and authenticity, for deposit with the
Depositary, (b) present such Shares or receipt numbers for transfer on the
books of the Company, (c) instruct the Company's transfer agent for the Shares
to issue payment for such Shares/receipt numbers and/or certificates or
deliver unpurchased Shares or receipt numbers to the account of the
undersigned, and (d) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, all in accordance with the terms of the
Offer.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and that, when and to the extent the same are accepted for payment by
the Company, the Company will acquire good and unencumbered title thereto,
free and clear of all liens, charges, encumbrances, adverse claims and
restrictions.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and that, when and to the extent the same are accepted for payment by
the Company, the Company will acquire good and unencumbered title thereto,
free and clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claim. The undersigned will, upon request, execute and
deliver any additional documents deemed by the Company to be necessary or
desirable to complete the sale, assignment and transfer of the Shares tendered
hereby.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Depositary or the Company to be necessary or desirable
to complete the sale, assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall survive the
death, bankruptcy or incapacity of the undersigned, and every obligation of
the undersigned hereunder shall be binding upon the heirs, legal
representatives, successors, assigns, executors and administrators of the
undersigned. Except as stated in the Offer, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to the
procedures described under Section 2--"Procedure for Tendering Shares" in the
Offer to Purchase and in the instructions hereto will constitute the
undersigned's acceptance of the terms and conditions of the Offer.
The check for the purchase price of any Shares purchased, and/or the return
of any certificates for Shares not tendered or not purchased, will be issued
in the name(s) of the undersigned and mailed to the undersigned at the address
shown below the undersigned's signature(s).
2
<PAGE>
STOCKHOLDER(S) SIGN HERE
(Must be signed by the registered holder(s) exactly as name(s) appear(s)
on the stock certificate(s) or other evidence of stock holding. If
signature is by a trustee, executor, administrator, guardian, attorney-in-
fact, officer of a corporation or other person acting in a fiduciary or
representative capacity, please set forth full title and see Instruction
4.)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Signature(s) of Owner(s)
Dated _______________________________________________________________, 1998
Name(s)____________________________________________________________________
(Please Print)
---------------------------------------------------------------------------
Capacity (full title)______________________________________________________
Address____________________________________________________________________
---------------------------------------------------------------------------
(include Zip Code)
Area Code and Telephone No. _______________________________________________
Taxpayer Identification or Social Security No. ____________________________
3
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES. Certificates for all
tendered Shares (except in the case of uncertificated Shares, the receipt
numbers representing the Shares), as well as a properly completed and duly
executed Letter of Transmittal and any other documents required by this Letter
of Transmittal, must be received by the Depositary at the address set forth on
the front page of this Letter of Transmittal on or prior to the Expiration
Date (as defined in the Offer to Purchase). Stockholders who cannot deliver
their Shares and all other required documents to the Depositary on or prior to
the Expiration Date should contact the Depositary immediately for assistance.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF CERTIFICATES FOR SHARES ARE
SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED,
IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted. By
executing this Letter of Transmittal, the tendering stockholder waives any
right to receive any notice of the acceptance for payment of the Shares.
2. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
3. PARTIAL TENDERS. If fewer than all the Shares represented by any
certificate or receipt number delivered to the Depositary are to be tendered,
fill in the number of Shares that are to be tendered in the box entitled
"Number of Shares Tendered." In such case a confirmation receipt (in lieu of a
new certificate) for the remainder of the Shares represented by the old
certificate will be sent in the name of and to the person(s) signing this
Letter of Transmittal as promptly as practicable following the expiration or
termination of the Offer. All Shares represented by certificates or receipt
numbers delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
4. SIGNATURES ON LETTER OF TRANSMITTAL. This Letter of Transmittal must be
signed by each of the registered holder(s) of the Shares tendered hereby, and
the signature(s) must correspond with the name(s) as written on the face of
the certificates or the receipts without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates (or receipts).
No endorsements of certificates or separate stock powers are required.
If this Letter of Transmittal or any certificate or stock power is signed by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory
to the Company of the authority of such person so to act must be submitted.
5. STOCK TRANSFER TAXES. The Company will pay or cause to be paid any stock
transfer taxes with respect to the sale and transfer of any Shares to it or
its order pursuant to the Offer. IT WILL NOT BE NECESSARY TO AFFIX TRANSFER
TAX STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
6. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests
for assistance may be directed to the Depositary at the telephone number and
address set forth on the front page of this Letter of Transmittal. Requests
for additional copies of the Offer to Purchase, this Letter of Transmittal or
other tender offer materials may also be directed to the Depositary, and such
copies will be furnished promptly at the Company's expense.
4
<PAGE>
EXHIBIT 99.3(b)(1)
CONFORMED COPY
$1,400,000,000
CREDIT AND GUARANTY AGREEMENT
dated as of
January 7, 1998
among
ARAMARK SERVICES, INC.,
ARAMARK UNIFORM SERVICES GROUP, INC.,
ARAMARK CORPORATION,
as Parent Guarantor
THE BANKS LISTED HEREIN
and
THE CHASE MANHATTAN BANK
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Agents
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
ARTICLE 1
DEFINITIONS
<S> <C> <C>
SECTION 1.01. Definitions...................................................................................1
SECTION 1.02. Accounting Terms and Determinations..........................................................16
SECTION 1.03. Types of Borrowings..........................................................................16
ARTICLE 2
THE LOANS
SECTION 2.01. Commitments to Lend..........................................................................17
SECTION 2.02. Notice of Committed Borrowings...............................................................17
SECTION 2.03. Money Market Borrowings......................................................................18
SECTION 2.04. Swingline Advances...........................................................................21
SECTION 2.05. Notice to Banks; Funding of Loans............................................................21
SECTION 2.06. Maturity of Loans............................................................................22
SECTION 2.07. Notes........................................................................................22
SECTION 2.08. Interest.....................................................................................23
SECTION 2.09. Facility Fees................................................................................28
SECTION 2.10. Reduction of Commitments.....................................................................29
SECTION 2.11. Mandatory Termination of Commitments.........................................................31
SECTION 2.12. Optional Prepayments.........................................................................31
SECTION 2.13. Payments.....................................................................................31
SECTION 2.14. Funding Losses...............................................................................32
SECTION 2.15. Withholding Tax Exemption....................................................................32
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness................................................................................33
SECTION 3.02. Conditions to Borrowing......................................................................35
SECTION 3.03. Representation by Borrower...................................................................35
SECTION 3.04. Transitional Provisions......................................................................35
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power................................................................36
SECTION 4.02. Corporate and Governmental Authorization; No Contravention...................................36
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 4.03. Binding Effect...............................................................................37
SECTION 4.04. Financial Information........................................................................37
SECTION 4.05. Litigation...................................................................................37
SECTION 4.06. Compliance with ERISA........................................................................37
SECTION 4.07. Environmental Matters........................................................................38
SECTION 4.08. Taxes........................................................................................38
SECTION 4.09. Compliance with Laws.........................................................................38
SECTION 4.10. Not an Investment Company....................................................................39
SECTION 4.11. Full Disclosure..............................................................................39
ARTICLE 5
COVENANTS
SECTION 5.01. Information..................................................................................39
SECTION 5.02. Payment of Obligations.......................................................................42
SECTION 5.03. Maintenance of Property; Insurance...........................................................42
SECTION 5.04. Conduct of Business and Maintenance of Existence.............................................42
SECTION 5.05. Inspection of Property, Books and Records....................................................43
SECTION 5.06. Maintenance of Stock of Borrowers............................................................43
SECTION 5.07. Negative Pledge..............................................................................43
SECTION 5.08. Consolidations, Mergers and Sales of Assets..................................................44
SECTION 5.09. Fixed Charge Coverage........................................................................45
SECTION 5.10. Debt Coverage................................................................................45
SECTION 5.11. Minimum Consolidated Net Worth...............................................................45
SECTION 5.12. Transactions with Affiliates.................................................................45
SECTION 5.13. Use of Proceeds..............................................................................45
SECTION 5.14. Restricted Payments..........................................................................46
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default............................................................................46
SECTION 6.02. Notice of Default............................................................................49
ARTICLE 7
THE AGENTS
SECTION 7.01. Appointment and Authorization................................................................49
SECTION 7.02. Agents and Affiliates........................................................................49
SECTION 7.03. Action by Agents.............................................................................49
SECTION 7.04. Consultation with Experts....................................................................50
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 7.05. Liability of Agents..........................................................................50
SECTION 7.06. Indemnification..............................................................................50
SECTION 7.07. Credit Decision..............................................................................50
SECTION 7.08. Agency Fees..................................................................................51
SECTION 7.09. Successor Agents.............................................................................51
SECTION 7.10. Co-Agents....................................................................................51
ARTICLE 8
CHANGES IN CIRCUMSTANCES AFFECTING FIXED RATE LOANS
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair.....................................51
SECTION 8.02. Illegality...................................................................................52
SECTION 8.03. Increased Cost...............................................................................52
SECTION 8.04. Base Rate Loans Substituted for Affected Loans...............................................54
ARTICLE 9
GUARANTEE
SECTION 9.01. The Guarantee................................................................................55
SECTION 9.02. Guarantee Unconditional......................................................................55
SECTION 9.03. Discharge Only upon Payment in Full; Reinstatement in Certain
Circumstances.....................................................................................56
SECTION 9.04. Waiver.......................................................................................57
SECTION 9.05. Subrogation and Contribution.................................................................57
SECTION 9.06. Stay of Acceleration.........................................................................57
ARTICLE 10
JUDICIAL PROCEEDINGS
SECTION 10.01. Consent to Jurisdiction.....................................................................57
SECTION 10.02. Enforcement of Judgments....................................................................57
SECTION 10.03. Service of Process..........................................................................58
SECTION 10.04. No Limitation on Service or Suit............................................................58
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices.....................................................................................58
SECTION 11.02. No Waiver...................................................................................58
SECTION 11.03. Expenses; Documentary Taxes; Indemnification for Litigation.................................59
SECTION 11.04. Amendments and Waivers......................................................................59
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 11.05. Sharing of Set-offs.........................................................................60
SECTION 11.06. New York Law................................................................................60
SECTION 11.07. Successors and Assigns......................................................................60
SECTION 11.08. Collateral..................................................................................62
SECTION 11.09. Counterparts................................................................................62
SECTION 11.10. WAIVER OF JURY TRIAL........................................................................62
Exhibit A - Note
Exhibit B - Opinion of Counsel of the
Borrowers and the Parent Guarantor
Exhibit C - Opinion of Special Counsel for the Agents
Exhibit D - Subsidiary Guaranty Agreement
Exhibit E - Management Equity Note
Exhibit F - Invitation for Money Market Quotes
Exhibit G - Money Market Quote
</TABLE>
iv
<PAGE>
CREDIT AND GUARANTY AGREEMENT
AGREEMENT dated as of January 7, 1998 (the "Agreement") among ARAMARK
SERVICES, INC., ARAMARK UNIFORM SERVICES GROUP, INC., ARAMARK CORPORATION, as
the Parent Guarantor, the BANKS party hereto and THE CHASE MANHATTAN BANK and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agents.
ARTICLE
DEFINITIONS
SECTION 1.01 Definitions. The following terms, as used herein, have
the following meanings:
"Adjusted CD Rate" has the meaning set forth in Section 2.08(c).
"Administrative Agent" means The Chase Manhattan Bank, in its capacity
as administrative agent for the Banks hereunder, and its successors in such
capacity.
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form requested by the Administrative Agent
that is submitted to the Administrative Agent (with a copy to the other Agent
and the Borrowers) duly completed by such Bank.
"Affiliate" means any Person (other than the Parent Guarantor or a
Subsidiary) which controls, is controlled by or is under common control with the
Parent Guarantor. As used herein, the term "control" means possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agents" means The Chase Manhattan Bank and Morgan Guaranty Trust
Company of New York, in their respective capacities as agents for the Banks
hereunder, including, in the case of the Administrative Agent, its
administrative capacities hereunder.
"ARAMARK Services" means ARAMARK Services, Inc., a Delaware
corporation, and its successors.
<PAGE>
"ARAMARK UNIFORM" means ARAMARK Uniform Services Group, Inc., a Delaware
corporation, and its successors.
The "ARTICLE 8 SHARE" of any Borrower with respect to any amount payable
under Section 8.03 is the sum of (i) to the extent such amount is properly
allocable to Loans outstanding hereunder, the portion of such amount properly
allocable to the Loans outstanding to such Borrower and (ii) to the extent such
amount is not properly allocable to Loans outstanding hereunder, 50%.
"ASSESSMENT RATE" has the meaning set forth in Section 2.08(c).
"BANK" means each bank listed on the signature pages hereof as having a
Commitment, and (subject to Section 11.07) its successors and assigns, and
"BANKS" means all of the foregoing.
"BASE OVERDUE INTEREST RATE" has the meaning set forth in Section 2.08(b).
"BASE RATE" means, for any day, a rate per annum equal to the higher of (i)
the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal Funds
Rate for such day.
"BASE RATE LOAN" means a Committed Loan made or to be made by a Bank as a
Base Rate Loan in accordance with the applicable Notice of Committed Borrowing
or pursuant to Article VIII.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan within the
meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and
which is maintained or otherwise contributed to by any member of the ERISA
Group.
"BORROWER" means either ARAMARK Services or ARAMARK Uniform. References to
"the Borrower" in connection with any Loan or Borrowing are to the particular
Borrower to which such Loan is made or proposed to be made or by which such
Borrowing is made or proposed to be made. References to "BORROWERS" shall mean
both ARAMARK Services and ARAMARK Uniform.
"BORROWING" has the meaning set forth in Section 1.03.
"CAPITAL LEASE" means a lease that would be capitalized on a balance sheet
of the lessee prepared in accordance with generally accepted accounting
principles.
"CD BASE RATE" has the meaning set forth in Section 2.08(c).
2
<PAGE>
"CD LOAN" means a Committed Loan made or to be made by a Bank as a CD Loan
in accordance with the applicable Notice of Committed Borrowing.
"CD REFERENCE BANKS" means Morgan Guaranty Trust Company of New York, The
Chase Manhattan Bank and First Union National Bank.
"CO-AGENTS" means the Banks identified on the signature pages hereof as
such, in their capacity as Co-Agents in respect of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended, or any
successor statute.
"COMMITMENT" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof (or, in the case of
an Assignee, the portion of the transferor Bank's Commitment assigned to such
Assignee pursuant to Section 11.07), in each case, as such amount may be reduced
from time to time pursuant to Section 2.10 or changed as a result of an
assignment pursuant to Section 11.07.
"COMMITTED LOAN" means a loan made or to be made by a Bank pursuant to
Section 2.01.
"COMMON STOCK" means the Common Stock, par value $.01 per share, of the
Parent Guarantor.
"CONSOLIDATED CASH FLOW AVAILABLE FOR FIXED CHARGES" means for any period
EBITDA for such period, plus the excess (if any) of (x) the aggregate amounts
deducted in determining Consolidated Net Income for such period in respect of
rental expense over (y) the aggregate amounts included in determining such
Consolidated Net Income in respect of rental income (excluding any portion of
such rental expense or rental income in respect of leases having a term of one
year or less or in respect of Capital Leases).
"CONSOLIDATED FIXED CHARGES" means for any period (the "APPLICABLE PERIOD")
the sum of, without duplication, (i) the Consolidated Interest Charges accrued
in the Applicable Period, (ii) the excess (if any) of (x) the aggregate amounts
deducted in determining Consolidated Net Income for the Applicable Period in
respect of rental expense over (y) the aggregate amounts included in determining
such Consolidated Net Income in respect of rental income (excluding any portion
of such rental expense or rental income in respect of leases having a term of
one year or less or in respect of Capital Leases) and (iii) the aggregate amount
of dividends accrued in the Applicable Period in respect of Series Preferred
Stock.
"CONSOLIDATED INTEREST CHARGES" means for any period the aggregate interest
expense (net of interest income) of the Parent Guarantor and its Consolidated
Subsidiaries
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for such period including, without limitation, (i) the portion of any obligation
under Capital Leases allocable to interest expense in accordance with generally
accepted accounting principles, and (ii) the portion of any debt discount or
premium arising at issuance of such debt that shall be amortized in such period.
"CONSOLIDATED NET INCOME" means for any period the consolidated net income
of the Parent Guarantor and its Consolidated Subsidiaries for such period.
"CONSOLIDATED NET WORTH" means at any date (the "DATE OF DETERMINATION")
without duplication (i) the consolidated shareholders' equity (exclusive of the
cumulative foreign currency translation adjustment as determined in accordance
with generally accepted accounting principles) of the Parent Guarantor and its
Consolidated Subsidiaries as of the Date of Determination plus (ii) the
principal amount of all Management Equity Notes outstanding on the Date of
Determination. For purposes of this definition, consolidated shareholders'
equity includes Common Stock subject to potential repurchase pursuant to the
Stockholders' Agreement, as reflected in the consolidated financial statements
of the Parent Guarantor and its Consolidated Subsidiaries.
"CONSOLIDATED SUBSIDIARY" means, at any date with respect to any Person,
any Subsidiary or other entity the accounts of which would be consolidated with
those of such Person in the consolidated financial statements of such Person as
of such date.
"CONSOLIDATED TANGIBLE ASSETS" means at any date the consolidated assets of
the Parent Guarantor and its Consolidated Subsidiaries determined as of such
date less their consolidated goodwill, all determined as of such date.
"CONTINGENT LIABILITY" means any quantifiable obligation or liability which
is of a type required to be disclosed as a contingent liability in the
consolidated financial statements of the Parent Guarantor and its Consolidated
Subsidiaries in accordance with generally accepted accounting principles;
provided that Guarantees constitute Debt and not Contingent Liabilities.
"CREDIT" means any Loan or Swingline Advance.
"DEBT" of any Person means, without duplication, (i) all obligations of
such Person for borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person to pay the deferred purchase price of property or services, except
trade accounts payable arising in the ordinary course of business, (iv) all
obligations of such Person as lessee under Capital Leases, (v) all obligations
of such Person to purchase securities which arise out of or in connection with
the sale of the same or substantially similar securities, (vi) all noncontingent
obligations (and, for purposes of Section 5.07, all contingent obligations) of
such Person to reimburse any other Person for amounts which have been drawn
under
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a letter of credit or similar instrument, (vii) all Debt of others secured by a
Lien on any asset of such Person, whether or not such Debt is assumed by such
Person (such Debt to have a principal amount, for purposes of determinations
under this Agreement, not exceeding the net unencumbered carrying value of such
asset under generally accepted accounting principles), and (viii) all Debt of
others Guaranteed by such Person (such Debt to have a principal amount, for
purposes of determinations under this Agreement, not exceeding the portion of
such Debt Guaranteed by such Person).
"DEFAULT" means any condition or event that constitutes an Event of Default
or that with the giving of notice or lapse of time or both would, unless cured
or waived, become an Event of Default.
"DERIVATIVES OBLIGATIONS" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"DISPOSITION" means the sale, assignment, transfer or other disposition by
any Person of any asset or assets in a transaction or series of related
transactions.
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or other
day on which commercial banks in New York City (or, when used with reference to
any Swingline Advance, in the city in which the lending Bank is located) are
authorized or required by law to close.
"DOMESTIC LENDING OFFICE" means, as to each Bank, its office located at its
address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrowers and the Administrative Agent; provided that any Bank may
so designate separate Domestic Lending Offices for its Base Rate Loans, on the
one hand, and its CD Loans, on the other hand, in which case all references
herein to the Domestic Lending Office of such Bank shall be deemed to refer to
either or both of such offices, as the context may require.
"DOMESTIC LOAN" means a CD Loan or a Base Rate Loan.
"DOMESTIC RESERVE PERCENTAGE" has the meaning set forth in Section 2.08(c).
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"EBITDA" means for any period Consolidated Net Income for such period,
excluding therefrom any extraordinary items of gain or loss, plus the aggregate
amounts deducted in determining Consolidated Net Income for such period in
respect of (i) income taxes, (ii) Consolidated Interest Charges and (iii)
depreciation, amortization and other similar non-cash charges. If the period
for which EBITDA is calculated includes a date on which the Parent Guarantor or
any of its Consolidated Subsidiaries made a Major Asset Acquisition or Major
Asset Sale, then EBITDA for such period shall be calculated on a pro forma basis
as if such acquisition or sale had occurred on the first day thereof.
"EFFECTIVE DATE" means the date this Agreement becomes effective in
accordance with Section 3.01.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to the
environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA GROUP" means the Parent Guarantor, any Subsidiary and all members of
a controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Parent Guarantor or
any Subsidiary, are treated as a single employer under Section 414 of the
Internal Revenue Code.
"EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"EURO-DOLLAR LENDING OFFICE" means, as to each Bank, its office, branch or
affiliate located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Euro-Dollar Lending
Office) or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Euro-Dollar Lending Office by notice to the Borrowers
and the Administrative Agent.
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"EURO-DOLLAR LOAN" means a Committed Loan made or to be made as a Euro-
Dollar Loan pursuant to the applicable Notice of Committed Borrowing.
"EURO-DOLLAR OVERDUE INTEREST RATE" means a rate of interest determined
pursuant to Section 2.08(f).
"EURO-DOLLAR REFERENCE BANKS" means the principal London offices of Morgan
Guaranty Trust Company of New York, The Chase Manhattan Bank and First Union
National Bank.
"EURO-DOLLAR RESERVE PERCENTAGE" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor), for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "EUROCURRENCY LIABILITIES" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents).
"EVENTS OF DEFAULT" has the meaning set forth in Section 6.01.
"EXCESS CONTINGENT LIABILITIES" means at any time all Contingent
Liabilities of the Parent Guarantor and its Subsidiaries other than:
(a) surety or fidelity bonds or letters of credit issued on behalf of
the Parent Guarantor or any of its Subsidiaries issued in the normal course
of business of the Parent Guarantor or such Subsidiary, as the case may be;
and
(b) other Contingent Liabilities in an aggregate amount not exceeding
$100,000,000.
"EXCESS SECURED DEBT" means secured Debt other than Debt secured by Liens
permitted pursuant to clauses (a) through (g) of Section 5.07.
"EXISTING CREDIT AGREEMENT" means the Credit and Guaranty Agreement dated
as of May 29, 1996 among ARAMARK Services, the Parent Guarantor, the banks party
thereto and The Chase Manhattan Bank (formerly known as Chemical Bank) and
Morgan Guaranty Trust Company of New York, as agents, as in effect immediately
prior to the effectiveness of this Agreement.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on
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overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Domestic Business Day next succeeding such day,
provided that (i) if such day is not a Domestic Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Domestic Business Day as so published on the next succeeding Domestic Business
Day, and (ii) if no such rate is so published on such next succeeding Domestic
Business Day, the Federal Funds Rate for such day shall be the average rate
quoted to The Chase Manhattan Bank on such day on such transactions as
determined by the Administrative Agent.
"FINANCING DOCUMENTS" means this Agreement, the Notes and the Subsidiary
Guaranty Agreement.
"FISCAL YEAR" means a fiscal year of the Parent Guarantor.
"FIXED RATE LOANS" means CD Loans or Euro-Dollar Loans or Money Market
Loans or any combination of the foregoing.
"GUARANTEE" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt (whether
arising by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such Debt of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part), provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "GUARANTEE"
used as a verb has a corresponding meaning.
"HAZARDOUS SUBSTANCES" means any toxic, radioactive, caustic or otherwise
hazardous substance, including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent elements displaying any of
the foregoing characteristics.
"INTEREST PERIOD" means:
(1) with respect to each Euro-Dollar Borrowing, the period commencing on
the date of such Euro-Dollar Borrowing and ending one, two, three or six months
thereafter, or (subject to paragraph (e) of Section 2.08) 12 months thereafter,
as the Borrower may elect in the applicable Notice of Borrowing; provided that:
8
<PAGE>
(a) any Interest Period that would otherwise end on a day that is not a
Euro-Dollar Business Day shall be extended to the next succeeding Euro-
Dollar Business Day unless such day falls in another calendar month, in
which case such Interest Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period that begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (c) below, end on the last day of a calendar
month; and
(c) no Interest Period applicable to any Euro-Dollar Loan shall extend
beyond a date on which a payment of principal of the Loans is required (as
of the commencement of such Interest Period) to be made under Section
2.10(f) or Section 2.11, unless the aggregate principal amount of the Loans
represented by Base Rate Loans, or by Fixed Rate Loans having Interest
Periods that will expire on or before such date, equal or exceeds the
amount of such principal payment;
(2) with respect to each CD Borrowing, the period commencing on the date of
such Borrowing and ending 30, 60, 90 or 180 days thereafter, as the Borrower may
elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) no Interest Period applicable to any CD Loan shall extend beyond a
date on which a payment of principal of the Loans is required (as of the
commencement of such Interest Period) to be made under Section 2.10(f) or
Section 2.11, unless the aggregate principal amount of the Loans
represented by Base Rate Loans, or by Fixed Rate Loans having Interest
Periods that will expire on or before such date, equal or exceeds the
amount of such principal payment;
(3) with respect to each Base Rate Borrowing, the period commencing on the
date of such Borrowing and ending on the next succeeding Quarterly Date;
provided that:
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the Termination
Date shall end on the Termination Date;
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(4) with respect to each Money Market Borrowing, the period commencing on
the date of such Borrowing and ending such number of days thereafter (but not
less than 7 nor more than 270 days) as the Borrower may elect in accordance with
Section 2.03; provided that:
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) no Interest Period applicable to any Money Market Loan shall extend
beyond a date on which a payment of principal of the Loans is required (as
of the commencement of such Interest Period) to be made under Section
2.10(f) or Section 2.11, unless the aggregate principal amount of the Loans
represented by Base Rate Loans, or by Fixed Rate Loans having Interest
Periods that will expire on or before such date, equal or exceeds the
amount of such principal payment; and
(5) with respect to each Swingline Advance, the period commencing on the
date of such Swingline Advance and ending on the applicable Swingline Maturity
Date.
"INTEREST RATE AGREEMENT" means an agreement under the International Swap
and Derivatives Association, Inc. Master Agreement (or any predecessor or
successor agreement), or any other interest rate swap agreement or similar
agreement between a Borrower and one or more of the Banks or any affiliates of
the Banks.
"INTEREST RATE INDEBTEDNESS" means the obligations of a Borrower to the
Banks or any of them in respect of the Interest Rate Agreements.
"LENDING OFFICE" means, as to any Bank, its Domestic Lending Office, its
Euro-Dollar Lending Office or its Money Market Lending Office, as the context
may require.
"LEVERAGE RATIO" means on any date (the "DATE OF DETERMINATION") the ratio
of (A) EBITDA for the four most recent fiscal quarters of the Parent Guarantor
ended on or prior to the Date of Determination to (B) Total Borrowed Funds as of
the last day of the most recent fiscal quarter of the Parent Guarantor ended on
or prior to the Date of Determination.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purpose of this Agreement, the Parent Guarantor or any of its
Subsidiaries shall be deemed to own subject to a Lien any asset that it has
acquired or holds subject to the interest of a vendor
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or lessor under any conditional sale agreement or other title retention
agreement relating to such asset or any Capital Lease.
"LOAN" means a Domestic Loan or a Euro-Dollar or a Money Market Loan, and
"LOANS" means Domestic Loans or Euro-Dollar Loans or Money Market Loans or any
combination of the foregoing.
"LONDON INTERBANK OFFERED RATE" has the meaning set forth in Section
2.08(d).
"MAJOR ASSET ACQUISITION" means any acquisition for cash or other
consideration by the Parent Guarantor or any of its Subsidiaries, or any series
of such acquisitions of (a) any asset, (b) any group of related assets or (c)
any shares of capital stock or any other ownership interest in any Person;
provided that in the case of any such acquisition, or such series of
acquisitions, the aggregate of all consideration (including cash and the fair
market value (as certified by a Principal Officer of the Parent Guarantor) of
all other consideration paid by the Parent Guarantor or any of its Subsidiaries)
for or in respect of such acquisition, or such series of acquisitions, exceeds
$25,000,000; and provided further that no such acquisition or series of
acquisitions from the Parent Guarantor or any Subsidiary of the Parent Guarantor
shall constitute a Major Asset Acquisition.
"MAJOR ASSET SALE" means any Disposition by the Parent Guarantor or any of
its Subsidiaries of a Single Asset; provided that in the case of any such
Disposition the aggregate of all cash and the fair market value (as certified by
a Principal Officer of the Parent Guarantor) of all property received by the
Parent Guarantor or any of its Subsidiaries from or in respect of such
Disposition exceeds $25,000,000; and provided further that (i) no such
Disposition by any Wholly Owned Subsidiary of the Parent Guarantor to any other
Wholly Owned Subsidiary of the Parent Guarantor shall constitute a Major Asset
Sale and (ii) no Sale and Leaseback Transaction shall constitute a Major Asset
Sale.
"MANAGEMENT EQUITY NOTE" means a subordinated promissory note of the Parent
Guarantor carrying an interest rate no higher than the market interest rate
payable in respect of debt with comparable terms issued by comparable issuers,
substantially in the form of Exhibit E hereto, issued to management or former
management (including directors) of the Parent Guarantor in exchange for shares
of Common Stock pursuant to the Stockholders' Agreement or in exchange for
Series Preferred Stock.
"MARGIN STOCK" means "MARGIN STOCK" as such term is defined in Regulation U
of the Board of Governors of the Federal Reserve System, as the same may be
amended, supplemented or modified from time to time.
"MATERIAL FINANCIAL OBLIGATIONS" means a principal or face amount of Debt
and/or payment or collateralization obligations in respect of Derivatives
Obligations of
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the Parent Guarantor and/or one or more of its Subsidiaries, arising in one or
more related or unrelated transactions, exceeding in the aggregate $25,000,000.
"MONEY MARKET AUCTION" means a solicitation of Money Market Quotes setting
forth Money Market Rates pursuant to Section 2.03.
"MONEY MARKET LENDING OFFICE" means, as to each Bank, its Domestic Lending
Office or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Money Market Lending Office by notice to the
Borrowers and the Administrative Agent.
"MONEY MARKET LOAN" means a loan made or to be made by a Bank pursuant to a
Money Market Auction.
"MONEY MARKET QUOTE" means an offer by a Bank to make a Money Market Loan
in accordance with Section 2.03.
"MONEY MARKET RATE" has the meaning set forth in Section 2.03(c).
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five-year period.
"NOTES" means promissory notes of a Borrower, substantially in the form of
Exhibit A hereto, evidencing the obligation of such Borrower to repay the Loans
and the Swingline Advances, and "NOTE" means any one of such promissory notes
issued hereunder.
"NOTICE OF BORROWING" means a Notice of Committed Borrowing or a Notice of
Money Market Borrowing.
"NOTICE OF COMMITTED BORROWING" has the meaning set forth in Section
2.02(a).
"NOTICE OF MONEY MARKET BORROWING" has the meaning set forth in Section
2.03(d).
"OBLIGORS" means the Borrowers, the Parent Guarantor and each Subsidiary
from time to time party to the Subsidiary Guaranty Agreement.
"PARENT" means, with respect to any Bank, any Person controlling such Bank.
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"PARENT GUARANTOR" means ARAMARK Corporation, a Delaware corporation and
its successors.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERSON" means an individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"PLAN" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title I or IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees of
any member of the ERISA Group or (ii) has at any time within the preceding five
years been maintained, or contributed to, by any Person which was at such time a
member of the ERISA Group for employees of any Person which was at such time a
member of the ERISA Group.
"PRIME RATE" means the rate of interest publicly announced from time to
time by The Chase Manhattan Bank at its main offices in New York City as its
prime rate.
"PRINCIPAL OFFICER" means the chief executive officer, chief operating
officer, chief financial officer, chief accounting officer, any executive vice
president, treasurer or general counsel of the Parent Guarantor or a Borrower.
"QUALIFICATION" means, with respect to any report of independent public
accountants covering financial statements of a Person, (a) an explanatory
paragraph with respect to the continued existence of such Person, as
contemplated by Statement on Auditing Standards No. 59, or (b) a qualification
to such report (such as an "EXCEPT FOR" statement therein) (i) resulting from a
limitation on the scope of audit of such financial statements or the underlying
data, (ii) resulting from a change in accounting principles to which such
independent public accountants take exception or (iii) which could be eliminated
by changes in financial statements or notes thereto covered by such report (such
as, by the creation of or increase in a reserve or a decrease in the carrying
value of assets) and which if so eliminated by the making of any such change and
after giving effect thereto would occasion a Default, provided that neither of
the following shall constitute a Qualification: (x) an explanatory paragraph
relating to a change in accounting principles to which such independent public
accountants take no exception or (y) an explanatory paragraph relating to the
outcome or disposition of any uncertainty, including but not limited to
threatened litigation, pending litigation being contested in good faith, pending
or threatened claims or other contingencies, the impact of which litigation,
claims, contingencies or uncertainties cannot be determined with sufficient
certainty to permit quantification in such financial statements.
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"QUARTERLY DATE" means each March 31, June 30, September 30 and December
31.
"REFERENCE BANKS" means the CD Reference Banks or the Euro-Dollar Reference
Banks, as the context may require, and "REFERENCE BANK" means any one of such
Reference Banks.
"REFUNDING BORROWING" means a Borrowing which, after application of the
proceeds thereof, results in no net increase in the outstanding principal amount
of Committed Loans made by any Bank.
"REGULATION U" has the meaning set forth in Section 5.13.
"REQUIRED BANKS" means at any time Banks having at least 51% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 51% of the aggregate unpaid
principal amount of the Loans.
"REVOLVING CREDIT PERIOD" means the period from the Effective Date to but
not including the Termination Date.
"SALE AND LEASEBACK TRANSACTION" means any arrangement with any Person
providing for the leasing by the Parent Guarantor or any Subsidiary of any
property that, or of any property similar to and used for substantially the same
purposes as any other property that, has been or is to be sold, assigned,
transferred or otherwise disposed of by the Parent Guarantor or any of its
Subsidiaries to such Person with the intention of entering into such a lease.
"SERIES PREFERRED STOCK" means any series of Series Preferred Stock issued
by the Parent Guarantor from time to time.
"SINGLE ASSET" means, in the case of any Disposition by the Parent
Guarantor or any of its Subsidiaries, (a) any asset, (b) any group of assets
used in connection with the same line of business of the Parent Guarantor or
such Subsidiary prior to such sale, assignment, transfer or other disposition or
(c) any shares of capital stock or any other ownership interest in any Person.
"STOCKHOLDERS' AGREEMENT" means the Amended and Restated Stockholders'
Agreement dated as of December 14, 1994 among the Parent Guarantor and the
investors listed therein, as the same may be amended from time to time.
"SUBSIDIARY" means, with respect to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions are at the
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time directly or indirectly owned by such Person. As used herein, the term
"SUBSIDIARY" shall be deemed to refer to a Subsidiary of the Parent Guarantor
unless otherwise specified.
"SUBSIDIARY GUARANTY AGREEMENT" means the Subsidiary Guaranty Agreement
dated as of the date hereof among the Borrowers, the Parent Guarantor and
certain Subsidiaries, in the form of Exhibit D hereto.
"SWINGLINE ADVANCE" means an advance made by a Bank to a Borrower pursuant
to a solicitation of offers therefor in accordance with Section 2.04.
"SWINGLINE MATURITY DATE" has the meaning set forth in Section 2.06.
"TERMINATION DATE" means March 31, 2005, or if such date is not a Euro-
Dollar Business Day, the next succeeding Euro-Dollar Business Day unless such
succeeding Euro-Dollar Business Day falls in another calendar month, in which
case the Termination Date shall be the next preceding Euro-Dollar Business Day.
"THE CHASE MANHATTAN BANK" means The Chase Manhattan Bank and its
successors.
"TOTAL BORROWED FUNDS" means at any date the sum of (i) all Debt of the
Parent Guarantor and its Consolidated Subsidiaries that would be required to be
reflected on or referred to in a consolidated balance sheet of the Parent
Guarantor and its Consolidated Subsidiaries at such date (including without
limitation all Capital Leases of and, except as set forth below, all Debt
Guaranteed by the Parent Guarantor and its Consolidated Subsidiaries but
excluding (x) Debt Guaranteed by the Parent Guarantor and its Consolidated
Subsidiaries outstanding on January 7, 1998 in an aggregate principal amount not
exceeding $10,000,000 and (y) the Management Equity Notes) and (ii) Excess
Contingent Liabilities.
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"WHOLLY OWNED DOMESTIC MATERIAL SUBSIDIARY" means, with respect to any
Person, a Wholly Owned Subsidiary that (i) is organized under the laws of the
United States, any state thereof or any political subdivision thereof or therein
and (ii) whose total
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assets (or in the case of any Subsidiary which itself has
Subsidiaries, the consolidated total assets of such Subsidiary and its
Consolidated Subsidiaries) are at least 5% of the consolidated total assets of
the Parent Guarantor and its Consolidated Subsidiaries, as shown by the
financial statements then most recently delivered pursuant to Section 5.01
provided that if the Parent Guarantor determines in good faith that a Subsidiary
does not have consolidated assets of at least 5% of the consolidated total
assets of the Parent Guarantor and its Consolidated Subsidiaries as at any
fiscal year-end, such determination shall be conclusive for purposes of this
Agreement and the Subsidiary Guaranty Agreement for a period of 270 days
following such fiscal year-end.
"WHOLLY OWNED SUBSIDIARY" means, with respect to any Person, any Subsidiary
all of the shares of capital stock or other ownership interests of which (except
directors' qualifying shares) are at the time directly or indirectly owned by
such Person.
Section 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles applied on a basis consistent with the
audited consolidated financial statements of the Parent Guarantor and its
Consolidated Subsidiaries for the fiscal year ended October 3, 1997 referred to
in paragraph (a) of Section 4.04 (except for changes to which independent public
accountants for the Parent Guarantor take no exception) provided that, if the
Borrowers notify the Agents that the Borrowers wish to amend any covenant in
Article V to eliminate the effect of any change in generally accepted accounting
principles on the operation of such covenant (or if the Agents notify the
Borrowers that the Required Banks wish to amend Article V for such purpose),
then the Borrowers' compliance with such covenant shall be determined on the
basis of generally accepted accounting principles in effect immediately before
the relevant change in generally accepted accounting principles became
effective, until either such notice is withdrawn or such covenant is amended in
a manner satisfactory to the Parent Guarantor, the Borrowers and the Required
Banks.
Section 1.03. Types of Borrowings. The term "BORROWING" denotes the
aggregation of Loans of one or more Banks to be made to a single Borrower
pursuant to Article II on a single date and for a single Interest Period.
Borrowings are classified for purposes of this Agreement either by reference to
the pricing of Loans comprising such Borrowing (e.g., a "EURO-DOLLAR BORROWING"
is a Borrowing comprised of EuroDollar Loans) or by reference to the provisions
of Article II under which participation therein is determined (i.e., a
"COMMITTED BORROWING" is a Borrowing under Section 2.01 in which all Banks
participate in proportion to their Commitments, while a "MONEY MARKET BORROWING"
is a Borrowing under Section 2.03 in which the Bank participants are determined
on the basis of their bids in accordance therewith).
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ARTICLE 2
The Loans
Section 2.01. Commitments to Lend. During the Revolving Credit Period each
Bank severally agrees, on the terms and conditions set forth in this Agreement,
to make loans to either Borrower pursuant to this Section from time to time in
amounts such that the aggregate principal amount of Committed Loans by such Bank
at any one time outstanding to both Borrowers shall not exceed the amount of
such Bank's Commitment. Each Borrowing under this Section shall be in an
aggregate principal amount of $5,000,000 or any larger multiple of $5,000,000
(except that any such Borrowing may be in the aggregate amount available in
accordance with Section 3.02(b)) and shall be made from the several Banks
ratably in proportion to their respective Commitments. Within the foregoing
limits, the Borrowers may borrow under this Section, repay or, to the extent
permitted by Section 2.12, prepay Loans and reborrow at any time during the
Revolving Credit Period pursuant to this Section.
Section 2.02. Notice of Committed Borrowings. (a) A Borrower shall give
the Administrative Agent at least two Domestic Business Days' notice (or, in the
case of a Base Rate Borrowing on a date for which such Borrower has requested
quotes pursuant to a Money Market Auction but not accepted quotes in the full
amount for which requested, notice not later than 11:00 A.M. (New York City
time) on the date of such Borrowing) (a "NOTICE OF COMMITTED BORROWING") of its
intention to make a Domestic Borrowing and at least three Euro-Dollar Business
Days' notice (five Euro-Dollar Business Days' notice, in the case of a Euro-
Dollar Borrowing with respect to which a 12-month Interest Period is requested)
of its intention to make a Euro-Dollar Borrowing, in each case in writing (or by
telephone confirmed in writing not later than the close of business on the next
succeeding Domestic Business Day or Euro-Dollar Business Day, as applicable)
specifying:
(i) the proposed date of such Borrowing, which shall be a
Domestic Business Day in the case of a Domestic Borrowing or a Euro-
Dollar Business Day in the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to be CD
Loans, Base Rate Loans or Euro-Dollar Loans, and
(iv) in the case of a Fixed Rate Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
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(b) The provisions of subsection (a) above notwithstanding, if a Borrower
shall not have given a Notice of Committed Borrowing not later than two Domestic
Business Days prior to the last day of the Interest Period applicable to an
outstanding Committed Borrowing consisting of Base Rate Loans, then, unless such
Borrower shall have notified the Administrative Agent not later than two
Domestic Business Days prior to the last day of such Interest Period that it
elects not to borrow on such date, the Administrative Agent shall be deemed to
have received a Notice of Committed Borrowing specifying (i) that the date of
the proposed Borrowing shall be the last day of the Interest Period applicable
to such outstanding Borrowing, (ii that the aggregate amount of the proposed
Borrowing shall be the amount of such outstanding Borrowing (reduced to the
extent necessary to reflect any reduction of the Commitments on or prior to the
date of the proposed Borrowing), and (ii that the Loans comprising the proposed
Borrowing are to be Base Rate Loans.
(c) No more than eight Euro-Dollar Borrowings and eight CD Borrowings
shall be outstanding at any one time and no more than four Euro-Dollar
Borrowings or CD Borrowings at any one time outstanding shall have one-month or
30-day Interest Periods.
Section 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to Committed Borrowings pursuant
to Section 2.01, a Borrower may, as set forth in this Section, request the Banks
during the Revolving Credit Period to make offers to make Money Market Loans to
such Borrower. The Banks may, but shall have no obligation to, make such offers
and such Borrower may, but shall have no obligation to, accept any such offers
in the manner set forth in this Section 2.03.
(b) Money Market Quote Request. When a Borrower wishes to request offers
to make Money Market Loans under this Section 2.03, it shall transmit an
Invitation for Money Market Quotes substantially in the form of Exhibit F hereto
to each of the Banks by telex or facsimile transmission so as to be received no
later than 10:00 A.M. (New York City time) on the Domestic Business Day next
preceding the date of Borrowing proposed therein specifying:
(i) the proposed date of Borrowing, which shall be a Domestic
Business Day,
(ii) the aggregate amount of such Borrowing, which shall be
$5,000,000 or a larger multiple of $1,000,000, and
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period.
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A Borrower may request offers to make Money Market Loans for up to six
different Interest Periods in a single Invitation for Money Market Quotes. No
Invitation for Money Market Quotes shall be given within three Domestic Business
Days of any other Invitation for Money Market Quotes.
(c) Submission and Contents of Money Market Quotes. (i) Each Bank may
submit a Money Market Quote containing an offer or offers to make Money Market
Loans in response to any Invitation for Money Market Quotes. Each Money Market
Quote must comply with the requirements of this subsection (c) and must be
submitted to the Borrower by telex or facsimile transmission at its offices
specified in or pursuant to Section 11.01 not later than 10:00 A.M. (New York
City time) on the proposed date of Borrowing. Subject to Articles III and VI,
any Money Market Quote so made shall be irrevocable except with the written
consent of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form of Exhibit
G hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which
each such offer is being made, which principal amount (w) may be greater
than or less than the Commitment of the quoting Bank, (x) must be
$5,000,000 or a larger multiple of $1,000,000, (y) may not exceed the
principal amount of Money Market Loans for which offers were requested
and (z) may be subject to an aggregate limitation as to the principal
amount of Money Market Loans for which offers being made by such quoting
Bank may be accepted,
(C) the rate of interest per annum (specified to the nearest
1/10,000th of 1%) (the "MONEY MARKET RATE") offered for each such Money
Market Loan, and
(D) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit G hereto or
does not specify all of the information required by subsection (c)(ii);
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(B) except as provided in subsection (c)(ii)(B)(z), contains
qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set forth
in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (c)(i).
(d) Acceptance and Notice by Borrower. Not later than 11:00 A.M. (New
York City time) on the proposed date of Borrowing, the Borrower shall notify the
Administrative Agent of its acceptance or non-acceptance of the offers so
notified to it pursuant to subsection (c). In the case of acceptance, such
notice (a "NOTICE OF MONEY MARKET BORROWING") shall specify the aggregate
principal amount of offers for each Interest Period that are accepted. The
Borrower may accept any Money Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market Borrowing may
not exceed the applicable amount set forth in the related Invitation for
Money Market Quotes,
(ii) the principal amount of each Money Market Borrowing must be
$5,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of ascending
Money Market Rates and without regard to any Money Market Quote submitted by
a Bank that amends, modifies or is otherwise inconsistent with a previous
Money Market Quote submitted by such Bank in response to the same Invitation
for Money Market Quotes, unless such subsequent Money Market Quote is
submitted solely to correct a manifest error in such former Money Market
Quote,
(iv) the Borrower may not accept any offer that is described in
subsection (c)(iii) or that otherwise fails to comply with the requirements
of this Agreement, and
(v) the absence of timely acceptance by the Borrower in accordance
with this subsection (d) shall constitute rejection of all related Money
Market Quotes.
(e) Allocation Among Banks. If offers are made by two or more Banks with
the same Money Market Rates, for a greater aggregate principal amount than the
amount in respect of which such offers are accepted for the related Interest
Period, the principal amount of Money Market Loans in respect of which such
offers are accepted shall be allocated by the Borrower among such Banks as
nearly as possible (in multiples of $1,000,000) in proportion to the aggregate
principal amounts of such offers. Such
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determinations of the amounts of Money Market Loans shall be conclusive in the
absence of manifest error.
Section 2.04. Swingline Advances.
(a) A Borrower may at any time during the Revolving Credit Period request
any or all of the Banks to offer to make Swingline Advances under this Section.
No such Bank shall have any obligation to make such an offer, and such Borrower
shall have no obligation to request or accept any such offer.
(b) A Borrower may not request or accept any offer to make a Swingline
Advance:
(i) the final maturity date of which is more than 270 days
after the date of such Swingline Advance; or
(ii) the principal amount of which, when added to the aggregate
principal amount of all Credits then outstanding, exceeds the aggregate
Commitments at such time.
(c) A Borrower shall promptly notify the Administrative Agent, upon
receipt of a request therefor from the Administrative Agent during normal
business hours, of the aggregate principal amount of Swingline Advances then
outstanding to such Borrower.
Section 2.05. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Administrative Agent shall
promptly notify (by telex, cable, facsimile transmission, telephone or other
means of telecommunications) each Bank participating therein of the contents
thereof and of such Bank's share of such Borrowing, and such Notice of Borrowing
shall not thereafter be revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the date of each
Borrowing, each Bank participating therein shall, except as provided in
subsection (c) of this Section 2.05, make available its share of such Borrowing,
in Federal or other funds immediately available in New York City, to the
Administrative Agent at its address specified in or pursuant to Section 11.01.
Unless the Administrative Agent determines that any applicable condition
specified in Article III has not been satisfied, the Administrative Agent will
make the funds so received from the Banks available to the Borrower on such date
at the Administrative Agent's aforesaid address.
(c) If pursuant to any provision of this Agreement any Bank makes a new
Committed Loan hereunder to the Borrower on a day on which the Borrower is to
repay
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all or any part of an outstanding Committed Loan from such Bank, such Bank shall
apply the proceeds of such new Committed Loan to make such repayment and only an
amount equal to the difference (if any) between the amount being borrowed and
the amount being repaid shall be made available by such Bank to the
Administrative Agent, or remitted by the Borrower to the Administrative Agent,
as the case may be.
(d) Unless the Administrative Agent shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not make available to the
Administrative Agent such Bank's share of such Borrowing, the Administrative
Agent may assume that such Bank has made such share available to the
Administrative Agent on the date of such Borrowing in accordance with
subsections (b) and (c) of this Section 2.05 and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so
made such share available to the Administrative Agent, such Bank and the
Borrower severally agree to repay to the Administrative Agent forthwith on
demand (or within one Domestic Business Day, in the case of the Borrower) such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Borrower, a rate
per annum equal to the higher of the Federal Funds Rate and the interest rate
applicable thereto pursuant to Section 2.08 and (ii in the case of such Bank,
the Federal Funds Rate. If such Bank shall repay to the Administrative Agent
such corresponding amount, such amount so repaid shall constitute such Bank's
Loan included in such Borrowing for purposes of this Agreement.
Section 2.06. Maturity of Loans. Each Committed Loan and each Money
Market Loan shall mature, and the principal amount thereof shall be due and
payable, on the last day of the Interest Period applicable thereto. Each
Swingline Advance made by a Bank shall mature, and the principal amount thereof
shall be due and payable, on the maturity date specified in the applicable offer
made pursuant to Section 2.04 (the "SWINGLINE MATURITY DATE").
Section 2.07. Notes. (a) The Credits of each Bank to a Borrower shall be
evidenced by a single Note of such Borrower payable to the order of such Bank
for the account of its Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Credits to such Borrower.
(b) Each Bank may, by notice to a Borrower and the Administrative Agent,
request that its Credits of a particular type to such Borrower be evidenced by a
separate Note of such Borrower in an amount equal to the aggregate unpaid
principal amount of such Credits. Each such Note shall be in substantially the
form of Exhibit A hereto with appropriate modifications to reflect the fact that
it evidences solely Credits of the relevant
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type. Each reference in this Agreement to the "NOTE" of such Bank shall be
deemed to refer to and include any or all of such Notes, as the context may
require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01, the
Administrative Agent shall deliver, by hand or overnight courier, such Note to
such Bank. Each Bank shall record the date, amount, type and maturity of each
Credit to be evidenced by its Note and the date and amount of each payment of
principal made by the Borrower with respect thereto and may, if a Bank so elects
in connection with any transfer or enforcement of its Note, and is hereby
irrevocably authorized by each Borrower to, endorse on the schedules forming a
part thereof appropriate notations to evidence such information and attach to
and make a part of any Note a continuation of any such schedule as and when
required. Notwithstanding the foregoing provisions of this paragraph (c),
neither the obligations of the Borrowers and the Parent Guarantor hereunder nor
the rights of any Bank shall be affected by the failure of any Bank to
appropriately record such information on any Note.
Section 2.08. Interest. (a) Subject to paragraph (b) of this Section
2.08, each Base Rate Loan shall bear interest on the unpaid principal amount
thereof from time to time outstanding at a rate per annum equal to the Base
Rate. Such interest rate shall be adjusted automatically on and as of the
effective date of any change in the Base Rate. Such interest shall be payable
with respect to each Base Rate Loan on the last day of the related Interest
Period.
(b) Any overdue principal of or interest on any Base Rate Loan shall bear
interest, payable on demand, for each day from the date payment thereof was due
to but excluding the date of actual payment, at a rate per annum equal to the
sum of 1-1/2% plus the Base Rate for such day (the "BASE OVERDUE INTEREST
RATE").
(c) Each CD Loan shall bear interest on the outstanding principal amount
thereof, for each day during the Interest Period applicable thereto, at a rate
per annum equal to the sum of the CD Margin for such day plus the Adjusted CD
Rate applicable to such Interest Period; provided that (i) such interest rates
shall be adjusted automatically on and as of the effective date of any change in
the Domestic Reserve Percentage, the Assessment Rate or the CD Margin and (ii)
if any CD Loan shall, as a result of clause (2)(b) of the definition of Interest
Period, have an Interest Period of less than 30 days, such CD Loan shall bear
interest during such Interest Period at the rate applicable to Base Rate Loans
during such period. Such interest shall be payable for each Interest Period on
the last day thereof and, if such Interest Period is longer than 90 days, 90
days after the first day thereof. Any overdue principal of or interest on any
CD Loan shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the higher of (i) the sum of 1-1/2% plus the sum of the
Adjusted CD Rate applicable to the Interest Period for such Loan plus the CD
Margin for such day and (ii) the Base Overdue Interest Rate for such day.
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"CD MARGIN" means a rate per annum determined in accordance with the table
set forth below paragraph (g) of this Section 2.08.
The "ADJUSTED CD RATE" applicable to any Interest Period means a rate per
annum determined pursuant to the following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if necessary, to the next
higher 1/100 of 1%
The "CD BASE RATE" applicable to any Interest Period is the rate of
interest determined by the Administrative Agent to be the average (rounded
upward, if necessary, to the next higher 1/100 of 1%) of the prevailing rates
per annum bid at 10:00 A.M. (New York City time) (or as soon thereafter as
practicable) on the first day of such Interest Period by two or more New York
certificate of deposit dealers of recognized standing for the purchase at face
value from each CD Reference Bank of its certificates of deposit in an amount
comparable to the principal amount of the CD Loan of such CD Reference Bank to
which such Interest Period applies and having a maturity comparable to such
Interest Period.
"DOMESTIC RESERVE PERCENTAGE" means for any day that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including without limitation any basic,
supplemental or emergency reserves) for a member bank of the Federal Reserve
System in New York City with deposits exceeding five billion dollars in respect
of new non-personal time deposits in dollars in New York City having a maturity
comparable to the related Interest Period and in an amount of $100,000 or more.
"ASSESSMENT RATE" means for any day the annual assessment rate in effect on
such day which is payable by a member of the Bank Insurance Fund classified as
adequately capitalized and within supervisory subgroup "A" (or a comparable
successor assessment risk classification) within the meaning of 12 C.F.R. (S)
327.4(a) (or any
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successor provision) to the Federal Deposit Insurance Corporation (or any
successor) for such Corporation's (or such successor's) insuring time deposits
at offices of such institution in the United States.
(d) Subject to paragraph (f) of this Section 2.08, each Euro-Dollar Loan
shall bear interest on the unpaid principal amount thereof, for each day during
the Interest Period applicable thereto, at an interest rate per annum equal to
the sum of the Euro-Dollar Margin for such day plus the Adjusted Euro-Dollar
Rate applicable to such Interest Period. Such interest rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage or the Euro-Dollar Margin. Interest on each Euro-Dollar Loan
shall be payable on the last day of the related Interest Period and, if such
Interest Period is longer than three months, at intervals of three months after
the first day thereof.
"EURO-DOLLAR MARGIN" means a rate per annum determined in accordance with
the table set forth below paragraph (g) of this Section 2.08.
The "ADJUSTED EURO-DOLLAR RATE" applicable to any Interest Period means a
rate per annum equal to the quotient obtained (rounded upward, if necessary, to
the next higher 1/100 of 1%) by dividing (i) the applicable London Interbank
Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.
The "LONDON INTERBANK OFFERED RATE" applicable to any Interest Period means
the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the
respective rates per annum at which deposits in dollars are offered to each of
the Euro-Dollar Reference Banks in the London interbank market at approximately
11:00 A.M. (London time) two Euro-Dollar Business Days before the first day of
such Interest Period in an amount approximately equal to the principal amount of
the largest Euro-Dollar Loan to which such Interest Period is to apply and for a
period of time comparable to such Interest Period.
(e) If requested to do so by a Borrower through the Administrative Agent
at least five Euro-Dollar Business Days before the beginning of any Interest
Period applicable to a Euro-Dollar Borrowing, each Bank participating therein
will advise the Administrative Agent before noon (New York City time) on the
third Euro-Dollar Business Day preceding the beginning of such Interest Period
as to whether, if such Borrower selects a duration of 12 months for such
Interest Period, such Bank expects that deposits in dollars with a term
corresponding to such Interest Period will be available to it on the first day
of such Interest Period in the amount required to fund its Euro-Dollar Loan to
which such Interest Period would apply. Unless Banks having more than 34% of
the aggregate principal amount of the Commitments respond by such time to the
effect that they expect such deposits not to be available to them, such Borrower
shall be entitled to select a duration of 12 months for such Interest Period.
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(f) Any overdue principal of or interest on any Euro-Dollar Loan shall
bear interest, payable on demand, for each day from and including the date
payment thereof was due to but excluding the date of actual payment, at a rate
per annum equal to the sum of 1-1/2% plus the Euro-Dollar Margin for such day
plus the quotient obtained (rounded upward, if necessary to the next higher
1/100 of 1%) by dividing (i) the average (rounded upward, if necessary, to the
next higher 1/16 of 1%) of the respective rates per annum at which one-day (or,
if such amount due remains unpaid more than three Euro-Dollar Business Days,
then for such other period of time not longer than six months as the
Administrative Agent may elect) deposits in dollars in an amount approximately
equal to the largest such overdue payment due to any Bank are offered to each
Euro-Dollar Reference Bank in the London interbank market for the applicable
period determined as provided above by (ii 1.00 minus the Euro-Dollar Reserve
Percentage (or, if the circumstances described in clause (a) or (b) of Section
8.01 shall exist, at a rate per annum equal to the Base Overdue Interest Rate
for such day).
(g) The "EURO-DOLLAR MARGIN", "CD MARGIN" and "FACILITY FEE RATE" shall be
for any day the respective percentages indicated in the table set forth below in
the applicable row under the column corresponding to the Status that applies on
such day.
STATUS LEVEL LEVEL LEVEL LEVEL LEVEL LEVEL
I II III IV V VI
- -------------------------------------------------------------
Euro-Dollar 0.18% 0.22% 0.30% 0.40% 0.50% 0.70%
Margin
- -------------------------------------------------------------
CD Margin 0.28% 0.32% 0.40% 0.50% 0.60% 0.80%
- -------------------------------------------------------------
Facility Fee 0.10% 0.11% 0.15% 0.225% 0.25% 0.30%
Rate
- -------------------------------------------------------------
For purposes of this Section 2.08(g), the following terms have the
following meanings (in addition to terms defined in Section 1.01):
"LEVEL I STATUS" applies at any date if, at such date, either (x) ARAMARK
Service's long-term debt is rated BBB+ or higher by S&P or Baa1 or higher by
Moody's or (y) the Reference Ratio is equal to or greater than .50 to 1.0.
"LEVEL II STATUS" applies at any date if, at such date, (i) either (x)
ARAMARK Service's long-term debt is rated BBB or higher by S&P or Baa2 or higher
by Moody's or (y) the Reference Ratio is equal to or greater than .45 to 1.0 and
(ii) Level I Status does not apply.
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"LEVEL III STATUS" applies at any date if, at such date, (i) either (x)
ARAMARK Service's long-term debt is rated BBB- or higher by S&P or Baa3 or
higher by Moody's or (y) the Reference Ratio is equal to or greater than .40 to
1.0 and (ii) neither Level I Status nor Level II Status applies.
"LEVEL IV STATUS" applies at any date if, at such date, (i) either (x)
ARAMARK Service's long-term debt is rated BB+ or higher by S&P or Ba1 or higher
by Moody's or (y) the Reference Ratio is equal to or greater than .35 to 1.0 and
(ii) none of Level I Status, Level II Status and Level III Status applies.
"LEVEL V STATUS" applies at any date if, at such date, (i) either (x)
ARAMARK Service's long-term debt is rated BB or higher by S&P or Ba2 or higher
by Moody's or (y) the Reference Ratio is equal to or greater than .30 to 1.0 and
(ii) none of Level I Status, Level II Status, Level III Status and Level IV
Status applies.
"LEVEL VI STATUS" applies at any date if, at such date, no other Status
applies.
"MOODY'S" means Moody's Investors Service, Inc.
"REFERENCE RATIO" means for any day during any fiscal quarter of the Parent
Guarantor (the "CURRENT QUARTER"), the Leverage Ratio as of the last day of the
most recent fiscal quarter of the Parent Guarantor ended 80 days or more before
the first day of the Current Quarter; provided that from the Effective Date
until July 2, 1998, the Reference Ratio shall be deemed to be at a level
resulting in Level III Status. The Parent Guarantor shall, prior to the first
day of each fiscal quarter of the Parent Guarantor during which Status (if
determined solely on the basis of the Reference Ratio) would differ from the
Status (if so determined) during the next preceding fiscal quarter of the Parent
Guarantor, deliver to the Administrative Agent a certificate of the Parent
Guarantor signed by its chief financial officer, its Treasurer or its chief
accounting officer setting forth in reasonable detail the calculation of the
Reference Ratio.
"S&P" means Standard & Poor's Ratings Services.
"STATUS" refers to the determination of which of Level I Status through
Level VI Status applies at any date.
The credit ratings to be utilized for purposes of the above schedule are
those assigned to the senior unsecured long-term debt securities of ARAMARK
Services without third-party credit enhancement, and any rating assigned to any
other debt security of ARAMARK Services shall be disregarded. The rating in
effect at any date is that in effect at the close of business on such date.
ARAMARK Services shall promptly notify the Administrative Agent of any change in
the credit ratings assigned to its long-term debt.
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(h) Each Money Market Loan and each Swingline Advance made by a Bank shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the Money Market Rate
quoted by the Bank making such Loan in accordance with Section 2.03 or the fixed
interest rate quoted by the Bank making such Swingline Advance in accordance
with Section 2.04, as the case may be. Such interest shall be payable for each
Interest Period on the last day thereof. Any overdue principal of or interest
on any Money Market Loan or Swingline Advance shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the sum of 2% plus
the Prime Rate for such day.
(i) The Administrative Agent shall determine each rate of interest
applicable to the Loans. The Administrative Agent shall give prompt notice
thereof to the Borrower and the affected Banks by telephone, facsimile
transmission, telex or cable. The Administrative Agent's good faith
determination of each such rate of interest shall be conclusive in the absence
of manifest error.
(j) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Administrative Agent as contemplated hereby. If any Reference
Bank does not furnish a timely quotation, the Administrative Agent shall
determine the relevant interest rate on the basis of the quotation or quotations
furnished by the remaining Reference Bank or Banks or, if none of such
quotations is available on a timely basis, the provisions of Section 8.01 shall
apply.
(k) Interest based on the Prime Rate shall be computed on the basis of a
year of 365 days (or 366 days in a leap year) and paid for the actual number of
days elapsed (including the first day but excluding the last day). All other
interest shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed, calculated as to each Interest Period or period
fixed pursuant to paragraph (f) of this Section 2.08 from and including the
first day thereof to but excluding the last day thereof.
Section 2.09. Facility Fees. (a) The Borrowers shall be jointly and
severally obligated to pay to the Administrative Agent for the account of the
Banks a facility fee at the Facility Fee Rate (determined daily in accordance
with the schedule set forth below paragraph (g) of Section 2.08) accrued (i)
from and including the Effective Date to but excluding the Termination Date (or
earlier date of termination of the Commitments in their entirety) on the daily
average aggregate amount of the Commitments (whether used or unused) and (ii)
from and including the Termination Date or such earlier date of termination to
but excluding the date the Loans shall be repaid in their entirety, on the daily
aggregate outstanding principal amount of the Loans; provided that no such fee
shall accrue with respect to the portion, if any, of the aggregate Commitments
utilized in the form of Base Rate Loans during any fiscal quarter of the Parent
Guarantor if the Reference Ratio is more than 0.45 to 1 for such fiscal quarter.
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(b) Accrued facility fees under this Section shall be computed on the
basis of a year of 360 days and paid for the actual number of days elapsed.
Such facility fees shall be paid quarterly in arrears on each March 31, June 30,
September 30 and December 31 and on the Termination Date (and, if later, such
later date of repayment).
(c) Upon receipt of any amount representing fees paid pursuant to this
Section 2.09, the Administrative Agent shall pay such amount to the Banks in
proportion to their respective Commitments.
Section 2.10. Reduction of Commitments. (a) The Borrowers at their option
may at any time and from time to time upon at least three Domestic Business
Days' notice to the Administrative Agent terminate in their entirety or reduce,
in an aggregate amount of $10,000,000 or any larger multiple of $5,000,000, the
unused Commitments. For this purpose, the Commitments shall be deemed unused at
any time to the extent (and only to the extent) that a Borrower could at such
time borrow Committed Loans without causing the Credits to exceed the aggregate
Commitments at such time. Upon any termination or reduction of the Commitments
pursuant to this subsection (a) or subsection (b) below, the Administrative
Agent shall promptly notify each Bank of such termination or reduction.
(b) In addition, the Commitments shall be reduced:
(i) on each date set forth in the table below by an aggregate
amount equal to the amount set forth in the applicable row under the
column corresponding to such date
DATE AMOUNT OF REDUCTION
- -------------------------------------
March 31, 2000 $100,000,000
- -------------------------------------
March 31, 2001 $150,000,000
- -------------------------------------
March 31, 2002 $150,000,000
- -------------------------------------
(ii) upon the incurrence by the Parent Guarantor or any of its
Subsidiaries of Excess Secured Debt (other than Excess Secured Debt
arising out of the refinancing, extension, renewal or refunding of other
Excess Secured Debt, except to the extent, and only to the extent, that
the outstanding principal amount of such other Excess Secured Debt is
increased), in an amount equal to the cash proceeds of such Excess
Secured Debt, net of the reasonable expenses of the Parent Guarantor or
such Subsidiary in connection with such incurrence.
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(c) (i) Any reduction of the Commitments pursuant to subsection (a) of
this Section 2.10 shall be applied to reduce subsequent mandatory reductions of
the Commitments required by subsection (b)(i) in forward chronological order.
(ii) Any reduction of the Commitments pursuant to subsection (b) (ii) of
this Section 2.10 shall be applied to ratably reduce the amounts of subsequent
mandatory reductions required by subsection (b)(i).
(d) The reduction required by subsection (b)(ii) of this Section 2.10
shall be effective on the date of receipt by the Parent Guarantor or any of its
Subsidiaries of the amounts described therein; provided that, in the event such
amounts shall aggregate less than $10,000,000, such reduction shall be effective
forthwith upon receipt by the Parent Guarantor or any of its Subsidiaries of
proceeds which, together with all other amounts described in subsection (b)(ii)
above not previously applied pursuant to subsection (b)(ii) of this Section
2.10, aggregate $10,000,000 or more. The Borrowers shall give the
Administrative Agent at least four Euro-Dollar Business Days' notice of each
reduction in the Commitments pursuant to subsection (b)(ii) of this Section 2.10
and a certificate of a Principal Officer of the Parent Guarantor, setting forth
the information, in form and substance satisfactory to the Administrative Agent,
necessary to determine the amount of each such reduction.
(e) Each reduction of the Commitments pursuant to this Section 2.10 shall
be applied ratably to the respective Commitments of the Banks. In addition,
each reduction of the Commitments pursuant to this Section 2.10 shall be
permanent.
(f) On each date on which a reduction required by subsection (b) becomes
effective, each Borrower shall, in such proportion as the Borrowers have jointly
determined or in the absence of any such determination as shall be determined by
the Administrative Agent, repay or prepay such principal amount of the
outstanding Credits, if any, as may be necessary so that after such payment or
prepayment, (i) the unpaid principal amount of the Credits does not exceed the
aggregate Commitments after giving effect to such reduction of the Commitments
and (ii) the unpaid principal amount of the Committed Loans of each Bank does
not exceed the amount of the Commitment of such Bank as then reduced. The
particular Borrowings to be repaid shall be as designated by the Borrowers in
the related Notice or Notices of Borrowing; provided that if there shall have
been a mandatory reduction of the Commitments pursuant to subsection (b) of this
Section 2.10 at a time such that, and with the result that, this subsection (f)
would otherwise require payment of principal of Fixed Rate Loans or portions
thereof prior to the last day of the related Interest Period, such payment shall
be deferred to such last day unless the Required Banks otherwise elect by notice
to the Borrowers through the Administrative Agent (and the facility fee provided
for in Section 2.09(a) shall continue
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to accrue on the amount of such deferred payment until such payment is made).
Each repayment or prepayment pursuant to this subsection (e) shall be made
together with accrued interest to the date of payment or prepayment, and shall
be applied ratably to payment of the Credits of the several Banks in the related
Borrowing.
Section 2.11. Mandatory Termination of Commitments. The Commitments
shall terminate on the Termination Date, and any Loans then outstanding
(together with accrued interest thereon) shall be due and payable on such date.
Section 2.12. Optional Prepayments. (a) A Borrower may (i) upon at least
one Domestic Business Day's notice to the Administrative Agent, prepay any Base
Rate Borrowing without premium or penalty, (ii upon three Domestic Business
Days' notice to the Administrative Agent, subject to Section 2.14, prepay any CD
Borrowing and (ii upon at least three Euro-Dollar Business Days' notice to the
Administrative Agent subject to Section 2.14, prepay any Euro-Dollar Borrowing,
in each case in whole at any time or from time to time in part in an aggregate
amount equal to $5,000,000 or any larger multiple of $5,000,000, by paying the
principal amount being prepaid together with interest accrued thereon to the
date of prepayment. Each such prepayment shall be applied ratably to the Loans
of the Banks included in the applicable Borrowing.
(b) Subject to Section 2.14, Money Market Loans and Swingline Advances
shall be prepayable as may be mutually agreed by the Borrower and the Bank
making any such Money Market Loan or Swingline Advance.
(c) Upon receipt of a notice of prepayment pursuant to this Section, the
Administrative Agent shall promptly notify each affected Bank of the contents
thereof and of such Bank's ratable share of such prepayment and such notice
shall not thereafter be revocable by the Borrower.
Section 2.13. Payments. (a) All payments of principal of, and interest
on, the Loans and of fees and other amounts payable hereunder shall be made not
later than 12:00 Noon (New York City time) on the date when due, in Federal or
other funds immediately available in New York City, without set-off,
counterclaim or other deduction, to the Administrative Agent at its office at 52
Broadway, New York, New York. The Administrative Agent will promptly distribute
to each Bank in like funds its ratable share of each such payment received by
the Administrative Agent for the account of the Banks.
(b) Whenever any payment of principal of, or interest on, any Domestic
Loans or any Swingline Advances or of facility fees hereunder shall be due on a
day which is not a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, any Euro-Dollar Loans shall be due on a day which
is not a Euro-Dollar Business
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Day, the date for payment thereof shall be extended to the next succeeding Euro-
Dollar Business Day, unless such day falls in another calendar month, in which
case such payment shall be due on the next preceding Euro-Dollar Business Day.
Whenever any payment of principal of, or interest on, any Money Market Loans
shall be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar Business
Day. If the date for any payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such extended time.
(c) Unless the Administrative Agent shall have received notice from a
Borrower prior to the date on which any payment is due to the Banks hereunder
that such Borrower will not make such payment in full, the Administrative Agent
may assume that such Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in reliance
upon such assumption, cause to be distributed to each Bank on such due date an
amount equal to the amount then due such Bank. If and to the extent that such
Borrower shall not have so made such payment, each Bank shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
Section 2.14. Funding Losses. If a Borrower makes any payment of
principal with respect to any Fixed Rate Loan or Swingline Advance (pursuant to
Article II, VI, VIII or otherwise) on any day other than the last day of the
Interest Period applicable thereto, or the last day of an applicable period
fixed pursuant to Section 2.08(f), or if a Borrower fails to borrow or prepay
any Fixed Rate Loan after notice has been given to any Bank in accordance with
Section 2.05(a) or 2.12(c), such Borrower shall reimburse each Bank on demand
for any resulting loss or expense incurred by such Bank (or by any existing or
prospective participant in the related Credit), including (without limitation)
any loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after any such payment or
failure to borrow or prepay, provided that such Bank shall have delivered to
such Borrower a certificate as to the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error.
Section 2.15. Withholding Tax Exemption. At least five Domestic Business
Days prior to the first date on which interest or facility fees are payable
hereunder for the account of any Bank, each Bank that is not incorporated under
the laws of the United States of America or a state thereof agrees that it will
deliver to each Borrower and the Administrative Agent two duly completed copies
of United States Internal Revenue Service Form 1001 or 4224, certifying in
either case that such Bank is entitled to receive payments under the Financing
Documents without deduction or withholding of any United States federal income
taxes. Each Bank which so delivers a Form 1001 or 4224
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further undertakes to deliver to each Borrower and the Administrative Agent two
additional copies of such form (or a successor form) on or before the date that
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by a Borrower or the Administrative Agent, in each case certifying
that such Bank is entitled to receive payments under the Financing Documents
without deduction or withholding of any United States federal income taxes,
unless an event (including without limitation any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form with respect
to it and such Bank advises each Borrower and the Administrative Agent that it
is not capable of receiving payments without any deduction or withholding of
United States federal income tax.
ARTICLE 3
Conditions
Section 3.01. Effectiveness. This Agreement shall become effective on the
date that each of the following conditions shall have been satisfied (or waived
in accordance with Section 11.04):
(a) receipt by the Administrative Agent of counterparts hereof
signed by each of the parties hereto (or, in the case of any party as to
which an executed counterpart shall not have been received, receipt by
the Administrative Agent in form satisfactory to it of telegraphic,
telex or other written confirmation from such party of execution of a
counterpart hereof by such party);
(b) receipt by the Administrative Agent for the account of each
Bank of a duly executed Note of each Borrower dated on or before the
Effective Date complying with the provisions of Section 2.07;
(c) receipt by the Administrative Agent of counterparts of all
other Financing Documents signed by each of the parties thereto (or, in
the case of any party as to which an executed counterpart shall not have
been received, receipt by the Administrative Agent in form satisfactory
to it of telegraphic, telex or other written confirmation from such
party of execution of a counterpart thereof by such party);
(d) receipt by the Agents of evidence satisfactory to them of
the payment of all principal and interest on any "LOANS" (as therein
defined) outstanding
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under, and of all other amounts payable under, the Existing Credit
Agreement (excluding amounts payable with respect to the Money Market
Loans and Swingline Advances specified in Section 3.04(b));
(e) receipt by the Agents (i) for their own respective
accounts, of the fees set forth in Section 7.08 and (ii) for the account
of the Banks, of participation fees in the amounts heretofore mutually
agreed upon;
(f) receipt by the Agents of a certificate of a Principal
Officer of the Parent Guarantor and of each Borrower that, upon the
Effective Date, no Default shall have occurred and be continuing and
that each of the representations and warranties made by the Obligors in
or pursuant to the Financing Documents are true and correct in all
material respects;
(g) receipt by the Agents of an opinion of the General Counsel
or Associate General Counsel of each Borrower and the Parent Guarantor,
substantially in the form of Exhibit B hereto and covering such
additional matters relating to the transactions contemplated hereby as
the Required Banks may reasonably request;
(h) receipt by the Agents of an opinion of Davis Polk &
Wardwell, special counsel for the Agents, substantially in the form of
Exhibit C hereto and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may reasonably
request; and
(i) receipt by the Agents of all documents they may reasonably
request relating to the existence of each Borrower and the Parent
Guarantor, the corporate authority for and the validity and
enforceability of the Financing Documents, and any other matters
relevant hereto, all in form and substance satisfactory to the Agents;
provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later than
January 21, 1998. The Administrative Agent shall promptly notify the Borrowers
and the Banks of the Effective Date, and such notice shall be conclusive and
binding on all parties hereto. The Banks that are parties to the Existing
Credit Agreement, comprising the "REQUIRED BANKS" as defined therein, and
ARAMARK Services and the Parent Guarantor agree to eliminate the requirement
under Section 2.10(a) of the Existing Credit Agreement that notice of optional
termination of the commitments thereunder be given three Domestic Business Days
in advance, and further agree that the commitments under the Existing Credit
Agreement shall terminate in their entirety simultaneously with and subject to
the effectiveness of this Agreement and that ARAMARK Services shall be obligated
to pay the accrued facility fees thereunder to but excluding the date of such
effectiveness.
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Section 3.02. Conditions to Borrowing. The obligation of each Bank to
make a Loan on the occasion of each Borrowing is subject to the satisfaction of
such of the following conditions as shall not have been expressly waived in
writing by Banks having 51% or more in aggregate principal amount of the Loans
to be included in such Borrowing:
(a) receipt (or deemed receipt) by the Administrative Agent of
a Notice of Borrowing as required by Section 2.02 or 2.03, as the case
may be;
(b) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of Loans will not exceed an
amount equal to (A) the aggregate amount of the Commitments at such time
less (B) the aggregate outstanding principal amount of Swingline
Advances at such time;
(c) the fact that, immediately after such Borrowing: (i) in the
case of a Refunding Borrowing, no Event of Default and no Default under
Section 6.01(a) or (b) shall have occurred and be continuing and (ii) in
the case of any other Borrowing, no Default shall have occurred and be
continuing;
(d) the fact that each of the representations and warranties
made by the Obligors in or pursuant to the Financing Documents (other
than, in the case of a Refunding Borrowing, the representations and
warranties set forth in Sections 4.04(b), 4.05, 4.06, 4.07 and 4.08 of
this Agreement), shall be true and correct in all material respects on
and as of the date of such Borrowing; and
(e) the fact that such Borrowing will not violate any provision
of law or regulation applicable to any Bank (including, without limiting
the generality of the foregoing, Regulations U and X of the Board of
Governors of the Federal Reserve System) as then in effect.
Section 3.03. Representation by Borrower. Each Borrowing under this
Agreement shall be deemed to be a representation and warranty by the Borrower on
the date of such Borrowing as to the facts specified in subsections (b), (c) and
(d) of Section 3.02.
Section 3.04. Transitional Provisions. (a) Upon the Effective Date, any
outstanding Money Market Loans or Swingline Advances of any bank party to the
Existing Credit Agreement that is not a Bank hereunder (a "NON-CONTINUING BANK")
shall become due, and ARAMARK Services shall on the Effective Date repay any
such outstanding Money Market Loans or Swingline Advances made by such Non-
Continuing Banks. If any repayment of Money Market Loans or Swingline Advances
under the Existing Credit Agreement is made pursuant to this subsection (a),
ARAMARK Services
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agrees that it will reimburse each Non-Continuing Bank for any funding losses
incurred in connection therewith pursuant to Section 2.14 of the Existing Credit
Agreement.
(b) Each Money Market Loan or Swingline Advance outstanding under the
Existing Credit Agreement and made on or prior to the Effective Date by any bank
that is both a party to the Existing Credit Agreement and a Bank hereunder shall
(i) mature on the last day of the then current Interest Period applicable
thereto under the Existing Credit Agreement, (ii bear interest at the interest
rate applicable thereto under the Existing Credit Agreement, (ii be deemed made
pursuant to this Agreement and (iv be deemed no longer outstanding under the
Existing Credit Agreement.
ARTICLE 4
Representations and Warranties
The Parent Guarantor and each Borrower jointly and severally represent and
warrant to each Agent and each Bank that:
Section 4.01. Corporate Existence and Power. Each of the Parent Guarantor,
each Borrower and each of their respective Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted (except, in the case of such Subsidiaries, to
the extent that failure to comply with the foregoing statements could not, in
the aggregate, affect the business, financial position, results of operations or
prospects of the Parent Guarantor and its Consolidated Subsidiaries in a manner
material and adverse to the creditworthiness of the Borrowers and the other
Obligors, considered as a whole), and each of the Parent Guarantor, each
Borrower and each of their respective Subsidiaries is duly qualified as a
foreign corporation, licensed and in good standing in each jurisdiction where
qualification or licensing is required by the nature of its business or the
character and location of its property, business or customers and in which the
failure so to qualify or be licensed, as the case may be, in the aggregate,
could affect the business, financial position, results of operations or
prospects of the Parent Guarantor and its Consolidated Subsidiaries in a manner
material and adverse to the creditworthiness of the Borrowers and the other
Obligors, considered as a whole.
Section 4.02. Corporate and Governmental Authorization; No Contravention.
The execution and delivery by each Obligor of each of the Financing Documents to
which it is a party and the performance by such Obligor of its obligations
thereunder are within the corporate power of such Obligor, have been duly
authorized by all necessary
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corporate action, require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene, or constitute a
default under, any provi sion of applicable law or regulation or of the charter
or by-laws of such Obligor or of any agreement or instrument relating to Debt of
the Parent Guarantor or any Subsidiary or any other agreement, judgment,
injunction, order, decree or other instrument binding upon such Obligor material
to the business of the Parent Guarantor and its Consolidated Subsidiaries,
considered as a whole, or result in the creation or imposition of any Lien on
any asset of the Parent Guarantor or any Subsidiary.
Section 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of each of the Parent Guarantor and each Borrower and the
other Financing Documents, when executed and delivered in accordance with this
Agreement, will constitute valid and binding obligations of each Obligor that is
a party thereto, in each case enforceable in accordance with its terms.
Section 4.04. Financial Information. (a) The consolidated balance sheet
of the Parent Guarantor and its Consolidated Subsidiaries as of October 3, 1997
and the related consolidated statements of income and cash flows for the fiscal
year then ended, reported on by Arthur Andersen LLP, a copy of which has been
delivered to each of the Banks, fairly present, in conformity with generally
accepted accounting principles, the consolidated financial position of the
Parent Guarantor and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such fiscal year.
(b) Since October 3, 1997, there has been no change in the business,
financial position or results of operations of the Parent Guarantor and its
Consolidated Subsidiaries which materially and adversely affects the credit-
worthiness of the Borrowers and the other Obligors, considered as a whole.
Section 4.05. Litigation. There is no action, suit or proceeding
pending against, or to the knowledge of a Principal Officer threatened against,
the Parent Guarantor, either Borrower or any of their respective Subsidiaries
before any court or arbitrator or any governmental body, agency or official in
which there is a reasonable likelihood of an adverse decision which would affect
the business, financial position or results of operations of the Parent
Guarantor and its Consolidated Subsidiaries in a manner material and adverse to
the credit-worthiness of the Borrowers and the other Obligors, considered as a
whole, or which in any manner questions the validity or enforceability of any
Financing Document.
Section 4.06. Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Code with respect to each Plan and is in compliance in all material respects
with the presently applicable provisions of ERISA and the Code with respect to
each Plan. No member of
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the ERISA Group has (i) sought a waiver of the minimum funding standard under
Section 412 of the Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting of
a bond or other security under ERISA or the Code or (iii) incurred any liability
under Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA.
Section 4.07. Environmental Matters. The Parent Guarantor has reasonably
concluded that the liabilities and costs associated with the effect of
Environmental Laws on the business, operations and properties of the Parent
Guarantor and its Subsidiaries, including the costs of compliance with
Environmental Laws, are unlikely to affect the business, financial condition,
results of operations or prospects of the Parent Guarantor and its Consolidated
Subsidiaries in a manner material and adverse to the creditworthiness of the
Borrowers and the other Obligors, considered as a whole.
Section 4.08. Taxes. United States Federal income tax returns of ARAMARK
Services and its Subsidiaries have been examined and closed through the fiscal
year ended on October 2, 1992. The Parent Guarantor, each Borrower and each of
their respective Subsidiaries have filed all United States Federal income tax
returns and all other material tax returns that are required to be filed by them
and have paid all taxes due pursuant to such returns or pursuant to any
assessment received by any of them, except for any such taxes being diligently
contested in good faith and by appropriate proceedings. Adequate reserves have
been provided on the books of the Parent Guarantor and its Subsidiaries in
respect of all taxes or other governmental charges in accordance with generally
accepted accounting principles, and no tax liabilities in excess of the amount
so provided are, in the good faith determination of the Parent Guarantor,
anticipated that could affect the business, financial position, results of
operations or prospects of the Parent Guarantor and its Consolidated
Subsidiaries in a manner material and adverse to the creditworthiness of the
Borrowers and the other Obligors, considered as a whole.
Section 4.09. Compliance with Laws. The Parent Guarantor, each Borrower
and each of their respective Subsidiaries are, in the good faith determination
of the Parent Guarantor, in compliance with all applicable laws, rules and
regulations (including, without limitation, Environmental Laws and ERISA and the
rules and regulations thereunder), other than such laws, rules or regulations
(i) the validity or applicability of which the Parent Guarantor, a Borrower or
such Subsidiary is contesting in good faith or (ii) the failure to comply with
which cannot reasonably be expected to affect the business, financial position,
results of operations or prospects of the Parent Guarantor and its Consolidated
Subsidiaries in a manner material and adverse to the creditworthiness of the
Borrowers and the other Obligors, considered as a whole.
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Section 4.10. Not an Investment Company. None of the Obligors is an
"INVESTMENT COMPANY" within the meaning of the Investment Company Act of 1940,
as amended.
Section 4.11. Full Disclosure. All information heretofore furnished by
the Parent Guarantor or the Borrowers to the Agents or any Bank for purposes of
this Agreement or any transaction contemplated hereby was, in the good faith
opinion of the Parent Guarantor at the time such information was furnished, true
and accurate in all material respects on the date as of which such information
was furnished, and such information as may have been modified or superseded by
any subsequently furnished information is true and accurate in all material
respects.
ARTICLE 5
Covenants
The Parent Guarantor and each Borrower jointly and severally agree that, so
long as any Bank has any Commitment hereunder or any amount payable under any
Note remains unpaid:
Section 5.01. Information. The Parent Guarantor will deliver to each of
the Banks, with respect to information relating to the Parent Guarantor, from
the Effective Date and, with respect to information relating to a Borrower, from
the date such Borrower borrows any amount hereunder:
(a) within 90 days after the end of each fiscal year of the
Parent Guarantor, consolidated balance sheets of such Borrower and its
respective Consolidated Subsidiaries and of the Parent Guarantor and its
Consolidated Subsidiaries as of the end of such fiscal year, and the
related consolidated statements of income and cash flows for such fiscal
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and, in the case of such
balance sheet and related consolidated statements of income and cash
flows of the Parent Guarantor and its Consolidated Subsidiaries,
accompanied by an opinion thereon by Arthur Andersen LLP or other
independent public accountants of nationally recognized standing, which
opinion (x) shall state that such financial statements present fairly
the consolidated financial position of the companies being reported upon
as of the date of such financial statements and the consolidated results
of their operations and cash flows for the period covered by such
financial statements in conformity with generally accepted accounting
principles and that the audit of such accountants in
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connection with such financial statements has been conducted in
accordance with generally accepted auditing standards and (y) shall not
contain any Qualification;
(b) within 60 days, in the case of the Parent Guarantor, and 75
days, in the case of a Borrower, after the end of each of the first
three quarters of each fiscal year of the Parent Guarantor, consolidated
balance sheets of such Borrower and its respective Consolidated
Subsidiaries and of the Parent Guarantor and its Consolidated
Subsidiaries, and the related consolidated statements of income for such
quarter and for the portion of the fiscal year ended at the end of such
quarter and cash flows for the portion of the fiscal year ended at the
end of such quarter, setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding portion of
the previous fiscal year, if any, all prepared in accordance with Rule
10-01 of Regulation S-X of the General Rules and Regulations under the
Securities Act of 1933, or any successor rule that sets forth the manner
in which interim financial statements shall be prepared, and certified
(subject to normal year-end audit adjustments) as to fairness of
presentation and consistency by the chief financial officer or the chief
accounting officer of ARAMARK Services, ARAMARK Uniform or the Parent
Guarantor, as applicable;
(c) simultaneously with the delivery of each set of financial
statements referred to in paragraphs (a) and (b) of this Section 5.01, a
certificate of the chief financial officer, Treasurer or chief
accounting officer of the Parent Guarantor (i) setting forth in
reasonable detail such calculations as are required to establish whether
the Parent Guarantor was in compliance with the requirements of Sections
5.07 through 5.14, inclusive, on the date of such financial statements,
(ii stating whether there exists on the date of such certificate any
Default and, if any Default then exists, setting forth the details
thereof and the action that the Parent Guarantor is taking or proposes
to take with respect thereto and (ii stating whether, since the date of
the most recent financial statements previously delivered pursuant to
paragraph (a) or (b) of this Section 5.01, there has been a change in
the generally accepted accounting principles applied in preparing the
financial statements then being delivered from those applied in
preparing the most recent financial statements and, in the case of the
Parent Guarantor, audited financial statements so delivered which is
material to the financial statements then being delivered;
(d) within five days after any officer of the Parent Guarantor
obtains knowledge of any Default, if such Default is then continuing, a
certificate of the chief financial officer, Treasurer or chief
accounting officer of the Parent Guarantor setting forth the details
thereof and the action that the Parent Guarantor is taking or proposes
to take with respect thereto;
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(e) promptly upon the receipt of a request therefor from the
Administrative Agent at the request of any Bank, copies of all financial
statements, reports and proxy statements that the Parent Guarantor shall
have mailed to its shareholders;
(f) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and annual,
quarterly or monthly reports that the Parent Guarantor or any of its
Consolidated Subsidiaries shall have filed with the Securities and
Exchange Commission;
(g) excluding any event which has not resulted and will not
result in a potential liability of a member of the ERISA Group under
Title IV of ERISA in an amount in excess of $10,000,000, if and when any
member of the ERISA Group (i) gives or is required to give notice to the
PBGC of any "REPORTABLE EVENT" (as defined in Section 4043 of ERISA)
with respect to any Plan which could reasonably lead to a termination of
such Plan under Title IV of ERISA, or knows that the plan administrator
of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii receives notice of complete or
partial withdrawal liability under Title IV of ERISA in an amount
greater than $10,000,000 or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated, a copy of such
notice; (ii receives notice from the PBGC under Title IV of ERISA of an
intent to terminate, impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or appoint a trustee to
administer, any Plan, a copy of such notice; (iv applies for a waiver of
the minimum funding standard under Section 412 of the Code, a copy of
such application; (v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information
filed with the PBGC; (vi gives notice of withdrawal from any Plan
pursuant to Section 4063 of ERISA, a copy of such notice; or (vi fails
to make any required payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could
result in the imposition of a Lien or the posting of a bond or other
security, a certificate of the chief financial officer or the chief
accounting officer of the Parent Guarantor setting forth details as to
such occurrence and action, if any, which the applicable member of the
ERISA Group is required or proposes to take; and
(h) from time to time such additional information regarding the
financial position, results of operations, business or prospects of the
Parent Guarantor or any of its Subsidiaries as the Administrative Agent,
at the request of any Bank, may reasonably request.
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Section 5.02. Payment of Obligations. The Parent Guarantor will, and will
cause each of its Subsidiaries to, pay and discharge, as the same shall become
due and payable, (i) all material claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like Persons which, in any such
case, if unpaid, might by law give rise to a Lien upon any of its property or
assets, and (ii) all material taxes, assessments and governmental charges or
levies upon it or its property or assets, except where any of the items in
clause (i) or (ii) above may be contested in good faith by appropriate
proceedings, and the Parent Guarantor or such Subsidiary, as the case may be,
shall have set aside on its books, in accordance with generally accepted
accounting principles, appropriate reserves for the accrual of any such items.
Section 5.03. Maintenance of Property; Insurance. The Parent Guarantor
will keep, and will cause each of its Subsidiaries to keep, all material
property useful and necessary in its business in good working order and
condition in accordance with generally accepted industry standards applicable to
the line of business in which such property is used; will maintain and will
cause each of its Subsidiaries to maintain (either in the name of the Parent
Guarantor or in such Subsidiary's own name) with insurance companies which the
Parent Guarantor reasonably believes, at the time the relevant coverage is
placed or renewed, are financially sound and responsible, insurance on all their
respective properties in at least such amounts and against at least such risks
(and with such risk retentions) as are usually insured against in the same
general area by companies of established repute engaged in the same or a similar
business; and will furnish to the Banks, upon written request from the
Administrative Agent, information presented in reasonable detail as to the
insurance so carried. Notwithstanding the foregoing, the Parent Guarantor may,
in lieu of maintaining the insurance required by the preceding sentence, self-
insure, or cause any of its Subsidiaries to self-insure, with respect to the
properties and risks referred to in the preceding sentence to the extent that
such self-insurance is customary among companies of established repute engaged
in the line of business in which such properties are used or to which such risks
pertain.
Section 5.04. Conduct of Business and Maintenance of Existence. Subject to
Section 5.08, the Parent Guarantor will continue, and will cause each of its
Subsidiaries to continue, to engage in business of the same general type as now
conducted by the Parent Guarantor and its Subsidiaries, and will preserve, renew
and keep in full force and effect, and will cause each of its Subsidiaries to
preserve, renew and keep in full force and effect, their respective corporate
existences and their respective rights, privileges and franchises necessary or
desirable in the normal conduct of business; provided that, subject to Section
5.08, nothing in this Section 5.04 shall prohibit the termination of the
corporate existence of any Subsidiary (other than the Borrowers) if the Parent
Guarantor in good faith determines that such termination is in the best interest
of the Parent Guarantor and is not adverse to the interests of the Banks;
provided further that nothing in this Section 5.04 shall prohibit the
termination of the corporate existence of either
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Borrower or the Parent Guarantor, if such termination is the result of the
merger of such Borrower with the Parent Guarantor or of the merger of the
Borrowers with each other, in each case, pursuant to Section 5.08 hereof.
Section 5.05. Inspection of Property, Books and Records. The Parent
Guarantor will keep, and will cause each of its Subsidiaries to keep, proper
books of record and account in which full, true and correct entries in
conformity with generally accepted accounting principles shall be made of all
dealings and transactions in relation to its business and activities. The
Parent Guarantor, upon reasonable request by any Bank to the Treasurer of the
Parent Guarantor, will permit, and will cause each of its Subsidiaries to
permit, representatives of any Bank to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books and
records and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants, all at
such reasonable times and as often as may reasonably be desired.
Section 5.06. Maintenance of Stock of Borrowers. The Parent Guarantor
will at all times maintain ownership of 100% of the outstanding shares of each
class of capital stock of each Borrower, unless such Borrower and the Parent
Guarantor shall have merged or the Borrowers shall have merged with each other,
in each case, in accordance with Section 5.08.
Section 5.07. Negative Pledge. The Parent Guarantor will not, and will
not permit any of its Subsidiaries to, create, assume or suffer to exist any
Lien on any asset now owned or hereafter acquired by the Parent Guarantor or any
such Subsidiary, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal
amount not exceeding $10,000,000;
(b) any Lien existing on any asset prior to the acquisition
thereof by the Parent Guarantor or such Subsidiary and not created in
contemplation of such acquisition;
(c) any Lien existing on any asset of any Person at the time
such Person becomes a Subsidiary and not created in contemplation of
such event;
(d) any Lien arising out of the refinancing, extension, renewal
or refunding of any Debt secured by any Lien permitted by any of the
foregoing subsections of this Section 5.07, provided that the
outstanding principal amount of such Debt is not increased and is not
secured by any additional assets;
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(e) any Liens arising in the ordinary course of business of the
Parent Guarantor or any of its Subsidiaries which (i) do not secure Debt
or Derivatives Obligations and (ii do not in the aggregate materially
detract from the value of the assets of the Parent Guarantor and its
Consolidated Subsidiaries, considered as a whole, or impair the use
thereof in the operation of the business of the Parent Guarantor and its
Consolidated Subsidiaries, considered as a whole; provided that any Lien
on any asset of the Parent Guarantor or any of its Subsidiaries arising
in connection with a judgment in excess of $25,000,000 (reduced, for
purposes of this proviso, by any amount in respect thereof that is
acknowledged by a reputable insurer as being payable under any valid and
enforceable insurance policy issued by such insurer), whether or not
such judgment is being contested or execution thereof has been stayed,
shall be deemed not arising in the ordinary course of business of the
Parent Guarantor or such Subsidiary;
(f) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash
equivalents subject to such Liens may at no time exceed $25,000,000;
(g) any Lien not otherwise permitted by the foregoing
provisions of this Section 5.07 securing Debt (or Derivative
Obligations, as measured by the amount of the pledged collateral in
excess of that permitted under (f)) in an aggregate principal amount not
to exceed an amount equal to 10% of Consolidated Tangible Assets
(excluding any such Lien securing any individual obligation in an amount
not in excess of $5,000,000); and
(h) subject to Section 2.10(b), any Lien on any asset or assets
of the Parent Guarantor or any of its Subsidiaries securing Excess
Secured Debt.
Section 5.08. Consolidations, Mergers and Sales of Assets. (a) None of
the Parent Guarantor or either Borrower shall consolidate or merge with or into
any Person, except that (i) the Parent Guarantor and either Borrower may merge
with any Person (other than each other) if the Parent Guarantor or such Borrower
is the surviving corporation and if, immediately after such merger (and giving
effect thereto), no Default shall have occurred and be continuing, (ii the
Parent Guarantor and either Borrower may merge with each other and (iii) the
Borrowers may merge with each other, if (x) immediately after such merger (and
giving effect thereto), no Default shall have occurred and be continuing and (y)
the surviving corporation, whether it be the Parent Guarantor or a Borrower,
shall have signed an instrument of assumption in form and substance satisfactory
to the Required Banks immediately prior to such merger.
(b) The Parent Guarantor will not, and will not permit any of its
Subsidiaries to, sell, lease or otherwise transfer or dispose of to any Person
all or any substantial part of the assets of the Parent Guarantor and its
Subsidiaries, taken as a whole.
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Section 5.09. Fixed Charge Coverage. As of the last day of each fiscal
quarter of the Parent Guarantor, the ratio of Consolidated Cash Flow Available
for Fixed Charges to Consolidated Fixed Charges, in each case for the four
fiscal quarters ending on such day, shall not be less than 2.0 to 1.0.
Section 5.10. Debt Coverage. As of the last day of each fiscal quarter of
the Parent Guarantor ending during a period set forth in the table below, the
Leverage Ratio at such day shall not be less than the ratio set forth in the
table below corresponding to the applicable period.
PERIOD LEVERAGE RATIO
Prior to October 2, 1998 .250
On or after October 2, 1998 and prior to .275
October 1, 1999
On or after October 1, 1999 .300
Section 5.11. Minimum Consolidated Net Worth. Consolidated Net Worth
shall (i) at no date on or after October 3, 1997 be less than negative
$75,000,000, (ii at no date on or after October 2, 1998 be less than $0, (iii)
at no date on or after October 1, 1999 be less than $100,000,000 and (iv) at no
date on or after September 29, 2000 be less than $100,000,000 plus an amount
equal to 50% of Consolidated Net Income for each Fiscal Year ending on or after
September 29, 2000 but prior to the date of determination for which Consolidated
Net Income is positive (but with no deduction on account of negative
Consolidated Net Income for any fiscal year of the Parent Guarantor).
Section 5.12. Transactions with Affiliates. The Parent Guarantor will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
engage in any material transaction with an Affiliate unless the terms of such
transaction are determined on an arm's-length basis and are substantially as
favorable to the Parent Guarantor or such Subsidiary as the terms which could
have been obtained from a Person which was not an Affiliate.
Section 5.13. Use of Proceeds. The proceeds of Credits hereunder will be
used for general corporate purposes, including a repurchase and/or redemption by
the Parent Guarantor of its shares of common stock pursuant to a proposed plan
of recapitalization dated as of January 6, 1998. None of such proceeds will be
used in violation of any
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applicable law or regulation, including without limitation Regulation G, T, U or
X of the Board of Governors of the Federal Reserve System, as each is in effect
from time to time. After giving effect to the making of each Loan and
application of the proceeds thereof, Margin Stock that was Margin Stock at the
time it was acquired by the Parent Guarantor or any Subsidiary will not exceed
10% of the value of the total assets (as determined in good faith by the board
of directors of the Parent Guarantor) of the Parent Guarantor and its
Consolidated Subsidiaries, taken as a whole.
Section 5.14. Restricted Payments. The Parent Guarantor will not
repurchase shares of its capital stock pursuant to Section 5 of the
Stockholders' Agreement (Put of Shares upon Death, Complete Disability or Normal
Retirement) unless the aggregate cash amount paid with respect to such
repurchase of shares, together with the aggregate cash amount paid in respect of
all prior repurchases of shares pursuant to Section 5 of the Stockholders'
Agreement made after January 7, 1998, shall not exceed an amount equal to the
greater of (x) $20,000,000 and (y) 5% of Consolidated Net Worth, as reflected in
the most recent balance sheet of the Parent Guarantor and its Consolidated
Subsidiaries referred to in Section 4.04(a) or delivered prior to such
repurchase pursuant to Section 5.01.
ARTICLE 6
defaults
Section 6.01. Events of Default. If one or more of the following events
("EVENTS OF DEFAULT") shall have occurred and be continuing
(a) a Borrower shall fail to pay when due any principal of any Note; or
(b) a Borrower shall fail to pay any interest on any Note or any fees or
any other amount payable hereunder for a period of three Domestic Business Days
after the same shall become due; or
(c) any Obligor shall fail to observe or perform any covenant contained in
Sections 5.06 to 5.14, inclusive; or
(d) any Obligor shall fail to observe or perform any of its covenants or
agreements contained in the Financing Documents (other than those covered by
paragraph (a), (b) or (c) above) for 30 days after notice thereof has been given
to the Parent Guarantor by the Administrative Agent at the request of any Bank;
or
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(e) any representation, warranty, certification or statement made or
deemed made by any Obligor in any Financing Document or in any certificate,
financial statement or other document delivered pursuant thereto shall prove to
have been incorrect in any material respect when made or deemed made; or
(f) the Parent Guarantor or any of its Subsidiaries shall fail to make any
payment in respect of any Material Financial Obligations when due or within any
applicable grace period; or
(g) any event or condition shall occur that results in the acceleration of
the maturity of Debt of the Parent Guarantor or any of its Subsidiaries
aggregating in excess of $25,000,000, or enables (or, with the giving of notice
or lapse of time or both, would enable) the holder or holders of such Debt or
any Person acting on behalf of such holder or holders to accelerate the maturity
thereof (it being understood that the prepayment by ARAMARK Services of (x) its
Senior Note (the "SENIOR NOTE") payable to Metropolitan Life Insurance Company
(the "HOLDER") or (y) any successor note (a "SUCCESSOR NOTE") issued by ARAMARK
Services to the Holder in connection with the refinancing of the Debt evidenced
by the Senior Note (provided that the principal amount of any Successor Note is
not more than $150,000,000 and that such Successor Note is substantially in the
form of the Senior Note in all material respects other than principal amount,
amortization, maturity and interest rate), by reason of the refusal by the
Holder to consent to a proposed written waiver or amendment of this Agreement
insofar as the provisions hereof are incorporated by reference in the Senior
Note or the Successor Note, as the case may be, shall not constitute an event or
condition subject to this paragraph (g)); or
(h) the Parent Guarantor or any Subsidiary shall commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally or admit in writing its
inability to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing; or
(i) an involuntary case or other proceeding shall be commenced against the
Parent Guarantor or any Subsidiary seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period
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of 60 days; or an order for relief shall be entered against the Parent Guarantor
or any Subsidiary under the Federal bankruptcy laws as now or hereafter in
effect; or
(j) any member of the ERISA Group shall fail to pay when due an amount or
amounts aggregating in excess of $25,000,000 which it shall have become liable
to pay under Title IV of ERISA (other than any such liability which is being
contested in good faith by appropriate proceedings and is not secured by any
Lien); or notice of intent to terminate a Plan or Plans having aggregate
Unfunded Liabilities in excess of $25,000,000 (a "MATERIAL PLAN") shall be filed
under Title IV of ERISA by any member of the ERISA Group, any plan administrator
or any combination of the foregoing; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate, to impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer, any Material Plan; or a condition shall exist by reason
of which the PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans which could cause one or
more members of the ERISA Group to incur a current annual payment obligation in
excess of $25,000,000 or an aggregate payment obligation in excess of
$25,000,000; or
(k) a judgment or order for the payment of money in excess of $15,000,000
(reduced, for purposes of this paragraph (k), by any amount in respect thereof
that is acknowledged by a reputable insurer as being payable under any valid and
enforceable insurance policy issued by such insurer) shall be rendered against
the Parent Guarantor or any of its Subsidiaries and such judgment or order shall
continue unsatisfied and unstayed for a period of 30 days; or
(l) any Wholly Owned Domestic Material Subsidiary shall not have entered
into the Subsidiary Guaranty Agreement within 30 days after the later of the
date hereof or the date on which such Wholly Owned Domestic Material Subsidiary
shall have become a Wholly Owned Domestic Material Subsidiary; provided that the
foregoing provision of this paragraph (l) shall not apply to any Wholly Owned
Domestic Material Subsidiary if such Wholly Owned Domestic Material Subsidiary
is a Subsidiary of an Obligor (other than the Parent Guarantor or the
Borrowers); or
(m) more than 30 percent (40 percent, in the case of voting securities
held by a Plan) in voting power of the voting securities of the Parent Guarantor
shall be held (i) by any Person or (ii) by any two or more Persons (other than
parties to the Stockholders' Agreement) who "act as a partnership, limited
partnership, syndicate or other group for the purpose of acquiring, holding, or
disposing of securities" of the Parent Guarantor, as the case may be, within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934;
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then, and in every such event, the Administrative Agent shall (i) if requested
by Banks having more than 50 percent in aggregate amount of the Commitments, by
notice to each Borrower terminate the Commitments, and the Commitments shall
thereupon terminate, and (ii) if requested by the Banks holding Notes evidencing
more than 50 percent in aggregate principal amount of the Loans, by notice to
each Borrower declare the Notes (together with accrued interest thereon) and all
other amounts payable by the Borrowers hereunder to be, and such Notes (together
with accrued interest thereon) and amounts shall thereupon become, immediately
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by each Borrower, provided that in the case
of any of the Events of Default specified in paragraph (h) or (i) of this
Section 6.01 with respect to the Parent Guarantor or the Borrowers, without any
notice to any Obligor or any other act by any Agent or any Bank, the Commitments
shall thereupon terminate and the Notes (together with accrued interest thereon)
and all other amounts payable by the Borrowers hereunder shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by each Borrower.
Section 6.02. Notice of Default. The Administrative Agent shall give
notice to the Parent Guarantor and each Borrower under Section 6.01(d) promptly
upon being requested to do so by any Bank and shall thereupon notify all the
Banks thereof.
ARTICLE 7
The Agents
Section 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes each Agent to take such action as agent on such Bank's
behalf and to exercise such powers under the Financing Documents as are
delegated to such Agent by the terms thereof, together with all such powers as
are reasonably incidental thereto.
Section 7.02. Agents and Affiliates. Each of The Chase Manhattan Bank and
Morgan Guaranty Trust Company of New York shall have the same rights and powers
under this Agreement as any other Bank and may exercise or refrain from
exercising the same as though it were not an Agent, and each of The Chase
Manhattan Bank and Morgan Guaranty Trust Company of New York and its affiliates
may accept deposits from, lend money to, and generally engage in any kind of
business with the Parent Guarantor or any Subsidiary or Affiliate of the Parent
Guarantor as if it were not an Agent.
Section 7.03. Action by Agents. The obligations of each Agent under the
Financing Documents are only those expressly set forth therein with respect to
it.
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Without limiting the generality of the foregoing, neither Agent shall be
required to take any action with respect to any Default, except as expressly
provided in Article VI.
Section 7.04. Consultation with Experts. Either Agent may consult with
legal counsel (who may be counsel for the Parent Guarantor or a Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
Section 7.05. Liability of Agents. Neither any Agent nor any of its
affiliates nor any of their respective directors, officers, agents or employees
shall be liable for any action taken or not taken by such Agent or affiliate or
any such director, officer, agent or employee in connection herewith (i) with
the consent or at the request of the Required Banks or (ii) in the absence of
the gross negligence or willful misconduct of such Agent, affiliate, director,
officer, agent or employee. Neither any Agent nor any of its directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any statement, warranty or representation
made in connection with any Financing Document or any borrowing hereunder; (ii)
the performance or observance of any of the covenants or agreements of any
Obligor under any Financing Document; (iii) the satisfaction of any condition
specified in Article III except, in the case of the Administrative Agent,
receipt of items required to be delivered to the Administrative Agent; or (iv)
the validity, effectiveness or genuineness of any Financing Document or any
other instrument or writing furnished in connection therewith. Neither Agent
shall incur any liability by acting in reliance upon any notice, consent,
certificate, statement, or other writing (which may be a bank wire, telex,
facsimile or similar writing) believed by it to be genuine or to be signed by
the proper party or parties.
Section 7.06. Indemnification. The Banks shall, ratably in accordance with
their respective Commitments, indemnify each Agent (to the extent not reimbursed
by any Obligor) against any cost, expense (including counsel fees and
disbursements), claim, demand, action, loss or liability (except such as result
from such Agent's gross negligence or willful misconduct) that such Agent may
suffer or incur in connection with the Financing Documents or any action taken
or omitted by such Agent thereunder.
Section 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon either Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement and any other
Financing Document to which it is a party. Each Bank also acknowledges that it
will, independently and without reliance upon either Agent or any other Bank,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking any
action under the Financing Documents.
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Section 7.08. Agency Fees. The Borrowers shall be jointly and severally
obligated to pay fees to the Agents in the amounts and on the dates agreed to
prior to the date hereof by the Borrowers and the Agents.
Section 7.09. Successor Agents. Either Agent may resign at any time by
giving notice thereof to the Banks and the Obligors. Upon any such resignation,
the Required Banks shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required Banks, and shall
have accepted such appointment, within 30 days after the retiring Agent gives
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent.
Section 7.10. Co-Agents. Nothing contained in this Agreement shall be
construed to impose any obligation or duty whatsoever on any Co-Agent in its
capacity as such.
ARTICLE 8
Changes in Circumstances Affecting Fixed Rate Loans
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If
on or prior to the first day of any Interest Period for any Fixed Rate
Borrowing:
(a) the Administrative Agent is advised by the Reference Banks that
deposits in dollars (in the applicable amounts) are not being offered to the
Reference Banks in the relevant market for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks having at least a majority
of the aggregate amount of the related Commitments advise the Administrative
Agent that the Adjusted CD Rate or the Adjusted Euro-Dollar Rate, as the case
may be, as determined by the Administrative Agent will not adequately and fairly
reflect the cost to such Banks of maintaining or funding their respective CD
Loans or Euro-Dollar Loans, as the case may be, for such Interest Period,
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the Administrative Agent shall forthwith give notice thereof to the Borrower
(specifying in reasonable detail, in the case of an event referred to in clause
(b) above, the information relating thereto received by the Administrative Agent
from the Banks) and the Banks, whereupon until the Administrative Agent notifies
the Borrower that the circumstances giving rise to such suspension no longer
exist (which it shall promptly do when it determines that such circumstances
have ceased to exist or, in the case of clause (b) of this Section 8.01, when
the Administrative Agent is so notified by Banks having at least a majority of
the related Commitments, as specified above), the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be, shall be suspended.
Unless the Borrower notifies the Administrative Agent at least two Domestic
Business Days before the date of any Fixed Rate Borrowing for which a Notice of
Borrowing has previously been given that it elects not to borrow on such date,
if such Fixed Rate Borrowing is a Committed Borrowing, such Borrowing shall
instead be made as a Base Rate Borrowing.
Section 8.02. Illegality. If, on or after the date hereof, the adoption
of any applicable law, rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Bank (or
its Euro-Dollar Lending Office) with any request or directive (whether or not
having the force of law) of any such author ity, central bank or comparable
agency shall make it unlawful or impossible for any Bank (or its Euro-Dollar
Lending Office) to make, maintain or fund any of its Euro-Dollar Loans and such
Bank shall so notify the Administrative Agent, the Administrative Agent shall
forthwith give notice thereof to the other Banks and each Borrower, whereupon
until such Bank notifies each Borrower and the Administrative Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Bank to make Euro-Dollar Loans shall be suspended. Before giving any notice
to the Administrative Agent pursuant to this Section 8.02, such Bank shall
designate a different Euro-Dollar Lending Office if such designation will avoid
the need for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. If such Bank shall determine that it may
not lawfully continue to maintain and fund any of its outstanding Euro-Dollar
Loans to maturity and shall so specify in such notice, each Borrower shall
immediately prepay in full the then outstanding principal amount of each such
Euro-Dollar Loan to it, together with accrued interest thereon. Concurrently
with prepaying each such Euro-Dollar Loan, such Borrower shall borrow a Base
Rate Loan in equal principal amount from such Bank (on which interest and
principal shall be payable contemporaneously with the related Euro-Dollar Loans
of the other Banks), and such Bank shall make such a Base Rate Loan.
Section 8.03. Increased Cost. (a) If on or after (x) the date hereof, in
the case of any Committed Loan or any obligation to make Committed Loans, or (y)
the date of the related Money Market Quote, in the case of any Money Market
Loan, the adoption of
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any applicable law, rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Bank (or
its Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency:
(A) shall subject any Bank (or its Lending Office) to any tax,
duty or other charge with respect to its Fixed Rate Loans, its Notes or
its obligation to make Fixed Rate Loans, or shall change the basis of
taxation of payments to any Bank (or its Lending Office) of the
principal of or interest on its Fixed Rate Loans or any other amounts
due under this Agreement in respect of its Fixed Rate Loans or its
obligation to make Fixed Rate Loans (except for changes in the rate of
tax on the overall net income of such Bank or its Lending Office imposed
by the jurisdiction in which such Bank's principal executive office or
Lending Office is located); or
(B) shall impose, modify or deem applicable any reserve,
special deposit, insurance assessment or similar requirement (including,
without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System, but excluding (x) with respect
to any CD Loan any such requirement included in an applicable Domestic
Reserve Percentage or Assessment Rate and (y) with respect to any Euro-
Dollar Loan any such requirement included in an applicable Euro-Dollar
Reserve Percentage) against assets of, deposits with or for the account
of, or credit extended by, any Bank's Lending Office or shall impose on
any Bank (or its Lending Office) or on the United States market for
certificates of deposit or the London interbank market any other
condition affecting its Fixed Rate Loans, its Note or its obligation to
make Fixed Rate Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Fixed Rate Loan, or to reduce
the amount of any sum received or receivable by such Bank (or its Lending
Office) under this Agreement or under its Note with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Administrative Agent), the Borrowers shall pay to
or for the account of such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction with respect to its
Fixed Rate Loans. Each Borrower shall be severally liable for its Article 8
Share of such amount.
(b) If any Bank shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital adequacy of
general applicability,
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or any change in any such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Lending Office) with any request or
directive regarding capital adequacy of general applicability (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
capital of such Bank (or its Parent) as a consequence of an undrawn Commitment
hereunder to a level below that which such Bank (or its Parent) could have
achieved but for such adoption, change or compliance (taking into consideration
its policies with respect to capital adequacy) by an amount deemed by such Bank
to be material, then from time to time, within 15 days after demand by such Bank
(with a copy to the Administrative Agent), the Borrowers shall pay to such Bank
such additional amount or amounts as will compensate such Bank (or its Parent)
for such reduction. Each Borrower shall be severally liable for its Article 8
Share of such amount. The Borrowers shall not be obligated to compensate any
Bank pursuant to this subsection (b) for reduced return accruing prior to the
date which is 30 days before such Bank requests compensation; provided that if
any law, rule or regulation, or interpretation or administration thereof, or any
request or directive giving rise to reduced returns has retroactive effect, such
Bank shall be entitled to claim compensation hereunder for the period commencing
on such date of retroactive effect through the date of adoption or change or
promulgation thereof without regard to the foregoing limitation. If any Bank has
demanded compensation under this subsection (b), the Borrowers shall have the
right, with the assistance of the Administrative Agent, to seek a mutually
satisfactory substitute bank or banks (which may be one or more of the Banks) to
purchase the Note and assume the Commitment of such Bank; and
(c) Each Bank will promptly notify each Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
that will entitle such Bank to compensation pursuant to this Section 8.03 and
will designate a different Lending Office if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate
of any Bank claiming compensation under this Section 8.03 and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, such Bank may use
any reasonable averaging and attribution methods.
Section 8.04. Base Rate Loans Substituted for Affected Loans. If (i) the
obligation of any Bank to make Euro-Dollar Loans has been suspended pursuant to
Section 8.02 or (ii) any Bank has demanded compensation under Section 8.03(a)
and the Borrowers shall by at least five Euro-Dollar Business Days' prior notice
to such Bank through the Administrative Agent have elected that the provisions
of this Section shall apply to such Bank, then, unless and until such Bank
notifies the Borrowers that the
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<PAGE>
circumstances giving rise to such suspension or demand for compensation no
longer apply:
(a) all Loans which would otherwise be made by such Bank as CD
Loans or Euro-Dollar Loans, as the case may be, shall be made instead as
Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Fixed Rate Loans of the other Banks),
and
(b) after each of its CD Loans or Euro-Dollar Loans, as the
case may be, has been repaid, all payments of principal that would
otherwise be applied to repay such Fixed Rate Loans shall be applied to
repay its Base Rate Loans instead.
ARTICLE 9
Guarantee
Section 9.01. The Guarantee. The Parent Guarantor hereby unconditionally
and irrevocably guarantees to the Banks, and to each of them, the due and
punctual payment of all present and future indebtedness evidenced by or arising
out of this Agreement, the Notes and any Interest Rate Agreements, including,
but not limited to, the due and punctual payment of principal of and interest on
the Notes and the due and punctual payment of all other sums now or hereafter
owed by the Borrowers under this Agreement and the Notes as and when the same
shall become due and payable, whether at maturity, by declaration or otherwise,
according to the terms hereof and thereof and the due and punctual payment of
any Interest Rate Indebtedness. In case of failure by a Borrower punctually to
pay the indebtedness guaranteed hereby, the Parent Guarantor hereby
unconditionally agrees to cause such payment to be made punctually as and when
the same shall become due and payable, whether at maturity or by declaration or
otherwise, and as if such payment were made by such Borrower.
Section 9.02. Guarantee Unconditional. The obligations of the Parent
Guarantor under this Article IX shall be unconditional and absolute and, without
limiting the generality of the foregoing, shall not be released, discharged or
otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of any other Obligor under any
Financing Document or any Interest Rate Agreement by operation of law or
otherwise;
(b) any modification or amendment of or supplement to any
Financing Document or any Interest Rate Agreement;
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(c) any modification, amendment, waiver, release, non-
perfection or invalidity of any direct or indirect security, or of any
guarantee or other liability of any third party, for any obligation of
any other Obligor under any Financing Document or any Interest Rate
Agreement;
(d) any change in the corporate existence, structure or
ownership of any other Obligor, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any other Obligor
or its assets or any resulting release or discharge of any obligation of
any other Obligor contained in any Financing Document or any Interest
Rate Agreement;
(e) the existence of any claim, set-off or other rights which
the Parent Guarantor may have at any time against any other Obligor, any
Agent, any Bank or any other Person, whether or not arising in
connection with any Financing Document or any Interest Rate Agreement,
provided that nothing herein shall prevent the assertion of any such
claim by separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against
any other Obligor for any reason of any Financing Document or any
Interest Rate Agreement, or any provision of applicable law or
regulation purporting to prohibit the payment by any other Obligor of
the principal of or interest on any Note or any other amount payable by
it under any Financing Document or any Interest Rate Agreement; or
(g) any other act or omission to act or delay of any kind by
any other Obligor, any Agent, any Bank or any other Person or any other
circumstance whatsoever that might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the obligations
of the Parent Guarantor under this Article IX.
Section 9.03. Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances. The Parent Guarantor's obligations under this Article IX
shall remain in full force and effect until the Commitments are terminated and
the principal of and interest on the Notes and all other amounts payable by the
Borrowers under this Agreement shall have been paid in full. If at any time any
payment of the principal of or interest on any Note or any other amount payable
by a Borrower under this Agreement is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of such Borrower or
any Subsidiary Guarantor or otherwise, the Parent Guarantor's obligations under
this Article IX with respect to such payment shall be reinstated at such time as
though such payment had become due but had not been made at such time.
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Section 9.04. Waiver. The Parent Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not provided for herein, as
well as any requirement that at any time any action be taken by any Person
against any other Obligor or any other Person.
Section 9.05. Subrogation and Contribution. The Parent Guarantor
irrevocably waives any and all rights to which it may be entitled, by operation
of law or otherwise, upon making any payment hereunder (i) to be subrogated to
the rights of the payee against a Borrower with respect to such payment or
otherwise to be reimbursed, indemnified or exonerated by a Borrower in respect
thereof or (ii) to receive any payment, in the nature of contribution or for any
other reason, from any other Obligor with respect to such payment.
Section 9.06. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by a Borrower under this Agreement or the Notes is
stayed upon the insolvency, bankruptcy or reorganization of such Borrower, all
such amounts otherwise subject to acceleration under the terms of this Agreement
shall nonetheless be payable by the Parent Guarantor hereunder forthwith on
demand by the Administrative Agent made at the request of the requisite number
of Banks specified in Section 6.01.
ARTICLE 10
Judicial Proceedings
Section 10.01. Consent to Jurisdiction. Each Obligor hereby irrevocably
submits to the non-exclusive jurisdiction of the United States District Court
for the Southern District of New York and of any New York State court sitting in
the City of New York over any suit, action or proceeding arising out of or
relating to any Financing Document. To the fullest extent it may effectively do
so under applicable law, each Obligor irrevocably waives and agrees not to
assert, by way of motion, as a defense or otherwise, any claim that it is not
subject to the jurisdiction of any such court, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
Section 10.02. Enforcement of Judgments. Each Obligor agrees, to the
fullest extent it may effectively do so under applicable law, that a judgment in
any suit, action or proceeding of the nature referred to in Section 10.01
brought in any such court shall be conclusive and binding upon such Obligor and
may be enforced in the courts of the United States of America or the State of
New York (or any other courts to the jurisdiction of which such Obligor is or
may be subject) by a suit upon such judgment.
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Section 10.03. Service of Process. Each Obligor consents to process being
served in any suit, action or proceeding of the nature referred to in Section
10.01 by mailing a copy thereof by registered or certified air mail, postage
prepaid, return receipt requested, to the address of such Obligor specified in
or designated pursuant to Section 11.01. Each Obligor agrees that such service
(i) shall be deemed in every respect effective service of process upon such
Obligor in any such suit, action or proceeding and (ii) shall, to the fullest
extent permitted by law, be taken and held to be valid personal service upon and
personal delivery to such Obligor.
Section 10.04. No Limitation on Service or Suit. Nothing in this Article X
shall affect the right of the Administrative Agent or any Bank to serve process
in any manner permitted by law, or limit any right that the Administrative Agent
or any Bank may have to bring proceedings against any Obligor in the courts of
any jurisdiction or to enforce in any lawful manner a judgment obtained in one
jurisdiction in any other jurisdiction.
ARTICLE 11
Miscellaneous
Section 11.01. Notices. Unless otherwise specified herein, all notices,
requests and other communications to any party hereunder shall be in writing
(including bank wire, telex, facsimile transmission or similar writing) and
shall be given to such party (x) in the case of the Parent Guarantor, either
Borrower or either Agent, at its address or telex or facsimile number set forth
on the signature pages hereof, (y) in the case of any Bank, at its address or
telex or facsimile number set forth in its Administrative Questionnaire, or (z)
in the case of any party hereto, at such other address or telex or facsimile
number as such party may hereafter specify for the purpose by notice to the
Agents and the Parent Guarantor. Each such notice, request or other
communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section 11.01 and the
appropriate answerback is received, (ii) if given by facsimile transmission,
when transmitted to the facsimile number specified in this Section and
confirmation of receipt is received, (iii) if given by mail, five days after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (iv) if given by any other means, when delivered at
the address specified in this Section 11.01, provided that notices to the
Administrative Agent under Article II or VIII shall not be effective until
received.
Section 11.02. No Waiver. No failure or delay by any Agent or any Bank in
exercising any right, power or privilege under any Financing Document shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies provided in the Financing
Documents shall be cumulative and not exclusive of any rights or remedies
provided by law.
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Section 11.03. Expenses; Documentary Taxes; Indemnification for
Litigation. (a) The Borrowers shall be jointly and severally obligated to pay
(i) all out-of-pocket expenses of each Agent, including fees and disbursements
of the law firm acting as special counsel for the Banks and the Agents and such
local counsel as may be retained by the Administrative Agent on behalf of the
Banks and the Agents, in connection with the preparation and administration of
the Financing Documents, any waiver or amendment of any provision thereof, or
any Default or alleged Default hereunder, and (ii) if any Event of Default
occurs, all out-of-pocket expenses incurred by any Agent or any Bank, including
fees and disbursements of counsel, in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom. The Borrowers shall be jointly and severally obligated to indemnify
each Bank from and hold it harmless against any transfer taxes, documentary
taxes, or other similar assessments or charges made by any governmental
authority by reason of the execution and delivery of the Financing Documents.
(b) The Parent Guarantor and the Borrowers shall be jointly and severally
obligated to indemnify each Bank and hold each Bank harmless from and against
any and all liabilities, losses, damages, costs and expenses of any kind
(including, without limitation, the reasonable fees and disbursements of counsel
for any Bank in connection with any investigative, administrative or judicial
proceeding, whether or not such Bank shall be designated a party thereto) which
may be incurred by any Bank (or by any Agent in connection with its actions as
Agent hereunder), relating to or arising out of the Financing Documents or any
actual or proposed use of the proceeds of the Credits hereunder, provided that
no Bank shall have the right to be indemnified hereunder for its own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction.
Section 11.04. Amendments and Waivers. Any provision of this Agreement or
the Notes may be amended or waived if, and only if, such amendment or waiver is
in writing and is signed by the Parent Guarantor, each Borrower (or in the case
of the Notes, the relevant Borrower) and the Required Banks (and, if the rights
or duties of either Agent are affected thereby, by such Agent), provided that no
such amendment or waiver shall, unless signed by all the Banks, (i) increase or
decrease the amount of any Commitment (except for a ratable decrease in the
Commitments of all Banks) or subject any Bank to any additional obligation, (ii)
reduce the principal of or rate of interest on any Loan or any fees payable
hereunder, (iii) postpone the date fixed for any payment of principal of or
interest on any Loan or any fees payable hereunder, (iv) change the percentage
of the Commitments or of the aggregate unpaid principal amount of the Notes, or
the number of Banks, which shall be required for the Banks or any of them to
take any action under this Section 11.04 or any other provision of this
Agreement or any other Financing Document or (v) postpone the date fixed for
termination or reduction of the Commitments; and provided further that an
amendment or waiver of the payment
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obligations of a Borrower with respect to any Swingline Advance shall be
effective if, and only if, signed by such Borrower and the Bank making such
Swingline Advance.
In the event that (i) a Bank shall have granted a participation pursuant to
Section 11.07(b); (ii) by virtue of the participation arrangement, such Bank is
required to obtain the consent of its participant to a proposed amendment to
this Agreement or its Note; (iii) such participant's consent is not forthcoming;
(iv) such Bank and the other Banks are otherwise prepared to agree to such
proposed amendment; and (v) such Bank shall have so certified to the
Administrative Agent, then, in order to effect and in conjunction with such
amendment, the Borrowers may terminate the Commitment of such Bank and, on a
date otherwise permitted hereunder, prepay the outstanding Credits of such Bank
in their entirety, provided that the Borrowers shall have procured a substitute
Bank (which may be such Bank) contemporaneously to assume the Commitment of such
Bank and to fund, for the balance of the respective Interest Periods applicable
thereto, the Loans prepaid pursuant to this paragraph.
Section 11.05. Sharing of Set-offs. Each Bank agrees that if it shall, by
exercising any right of set-off or counterclaim or otherwise, receive payment of
a propor tion of the aggregate amount of principal and interest due with
respect to its Credits which is greater than the proportion received by any
other Bank in respect of the aggregate amount of principal and interest due with
respect to the Credits of such other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in the
Credits of the other Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest with respect to the
Credits of the Banks shall be shared by the Banks pro rata. Each Borrower and
the Parent Guarantor agree, to the fullest extent they may effectively do so
under applicable law, that any holder of a participation in a Note, whether or
not acquired pursuant to the foregoing arrangements, may exercise rights of set-
off or counterclaim and other rights with respect to such participation as fully
as if such holder of a participation were a direct creditor of such Borrower or
the Parent Guarantor, as the case may be, in the amount of such participation.
Each Bank further agrees that if it shall, by exercising any right of set-off or
counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of facility fees due with respect to its Commitments which is greater
than the proportion received by any other Bank in respect of the aggregate
amount of facility fees due with respect to the Commitments of such other Bank,
adjustments shall be made as may be required so that all such payments of
facility fees with respect to the Commitments of the Banks shall be shared by
the Banks pro rata.
Section 11.06. New York Law. This Agreement and each Note shall be
construed in accordance with and governed by the law of the State of New York.
Section 11.07. Successors and Assigns. (a) All of the provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their
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respective successors and assigns, except that neither the Parent Guarantor nor
the Borrowers may assign or transfer any of its rights or obligations under this
Agreement without the consent of all Banks.
(b) No Bank may assign (other than (x) to Persons affiliated with such
Bank or (y) by granting participations) such Bank's rights or obligations
hereunder without the consent of each Borrower, which shall not be unreasonably
withheld, and no Bank may grant participations (other than to Persons affiliated
with such Bank) with respect to amounts exceeding 80% of such Bank's Commitment;
provided that nothing herein shall be deemed to prohibit (i) the granting of
participations by any Bank in its rights with respect to any particular Credit
or Credits or (ii) the assignment or pledge by any Bank of its Notes and its
rights hereunder with respect thereto to any Federal Reserve Bank. Any
agreement pursuant to which any Bank may grant a participation shall provide
that such Bank shall retain the sole right and responsibility to enforce the
obligations of the Borrowers relating to any Credit or Credits including,
without limitation, the right to approve any amendment, modification or waiver
of any provision of this Agreement; provided that (i) any such participation
agreement with respect to any or all of a Bank's Credit or Credits may provide
that such Bank will not agree to any proposed modification, amendment or waiver
of this Agreement without the consent of the participant which would reduce the
principal of or rate of interest on such Credit or Credits or postpone the date
fixed for any payment of principal of or interest on such Credit or Credits and
(ii) any such participation agreement with respect to a portion of a Bank's
Commitment may provide that such Bank will not agree to any modification,
amendment or waiver described in clause (i), (ii) or (iii) of the first sentence
of Section 11.04 without the consent of the participant; provided further that
any such participation agreement described in the preceding clause (ii) shall
further provide that such Bank may agree to any proposed modification, amendment
or waiver referred to in such clause (ii) without the consent of such
participant if such participant fails to provide such Bank voting instructions
with respect to such proposal within 30 days after such participant's receipt of
such proposal and such Bank's request for such voting instructions. Any Bank
that has granted or grants a participation with respect to a portion of its
Commitment shall notify the Borrowers as to the amount of its Commitment subject
to such participation and the identity of the participant. Each of the Agents
and each Borrower may, for all purposes of this Agreement, treat any Bank as the
holder of any Note drawn to its order until written notice of an assignment in
accordance with this Section 11.07(b) is received by it.
(c) No assignee of any Bank's rights or obligations shall be entitled to
receive any greater payment under Section 8.03 than such Bank would have been
entitled to receive with respect to the rights assigned, unless such assignment
(or change in Lending Office) is made with the Borrowers' prior written consent
or by reason of the provisions of Section 8.02 or 8.03 requiring such Bank to
designate a different Lending Office under
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certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
Section 11.08. Collateral. Each Bank (the "REPRESENTING BANK") represents
to each Agent and each other Bank that the Representing Bank in good faith is
not relying upon any Margin Stock as collateral in the extension or maintenance
of the credit provided for in the Financing Documents.
Section 11.09. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, and all of which taken
together shall constitute a single agreement, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
Section 11.10. WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS, THE AGENTS AND
THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the date first above
written.
ARAMARK SERVICES, INC.
By /s/ B.A. Austell
------------------------------------------
Title: Treasurer
ARAMARK Tower
1101 Market Street
Philadelphia, Pennsylvania 19107
Facsimile number: (215) 238-3284
(215) 238-3282
ARAMARK UNIFORM SERVICES GROUP,
INC.
By /s/ B.A. Austell
------------------------------------------
Title: Treasurer
ARAMARK Tower
1101 Market Street
Philadelphia, Pennsylvania 19107
Facsimile number: (215) 238-3284
(215) 238-3282
ARAMARK CORPORATION
By /s/ B.A. Austell
------------------------------------------
Title: Senior Vice President, Finance
and Treasurer
ARAMARK Tower
1101 Market Street
Philadelphia, Pennsylvania 19107
Facsimile number: (215) 238-3284
(215) 238-3282
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Commitments
- -----------
Agents
------
$106,000,000 THE CHASE MANHATTAN BANK
By /s/ Karen M. Sharf
------------------------------------------
Title: Vice President
$106,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Diana H. Imhof
------------------------------------------
Title: Vice President
Co-Agents
---------
$81,000,000 BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By /s/ John Pocalyko
------------------------------------------
Title: Managing Director
$81,000,000 CORESTATES BANK, N.A.
By /s/ Kathleen E. Stucy
------------------------------------------
Title: Senior Vice President
<PAGE>
$81,000,000 CREDIT LYONNAIS
NEW YORK BRANCH
By /s/ Scott R. Chappelka
------------------------------------------
Title: Vice President
$81,000,000 FIRST UNION NATIONAL BANK
By /s/ Wynelle Farlow
------------------------------------------
Title: Vice President
$81,000,000 NATIONSBANK, N.A.
By /s/ Rajesh Sood
------------------------------------------
Title: Vice President
$81,000,000 PNC BANK NATIONAL ASSOCIATION
By /s/ Daniel K. Fitzpatrick
------------------------------------------
Title: Vice President & Senior Relationship
Manager
$81,000,000 THE BANK OF NEW YORK
By /s/ Peter H. Abdill
------------------------------------------
Title: Vice President
<PAGE>
$81,000,000 THE SUMITOMO BANK, LIMITED
NEW YORK BRANCH
By /s/ Kazuyoshi Ogawa
------------------------------------------
Title: Joint General Manager
$81,000,000 WACHOVIA BANK, N.A.
By /s/ Adam T. Ogburn
------------------------------------------
Title: Vice President
Participants
------------
$30,000,000 BANK OF HAWAII
By /s/ Joseph T. Donalson
------------------------------------------
Title: Vice President
$25,000,000 THE BANK OF NOVA SCOTIA
By /s/ J. Alan Edwards
------------------------------------------
Title: Authorized Signatory
$25,000,000 BANK ONE, N.A.
By /s/ David A. Hammond
------------------------------------------
Title: Vice President
<PAGE>
$30,000,000 BANKBOSTON, N.A.
By /s/ Maura Wadlinger
------------------------------------------
Title: Vice President
$25,000,000 BHF-BANK AKTIENGESELLSCHAFT
By /s/ Linda Pace
------------------------------------------
Title: Vice President
By /s/ Thomas Scifo
------------------------------------------
Title: Assistant Vice President
$40,000,000 CIBC INC.
By /s/ Christopher Kleczkowski
------------------------------------------
Title: Executive Director
CIBC Oppenheimer Corp., as Agent
$25,000,000 COMERICA BANK
By /s/ Dan M. Roman
------------------------------------------
Title: Vice President
$40,000,000 FLEET NATIONAL BANK
By /s/ Peter Dorfman
------------------------------------------
Title: Vice President
<PAGE>
$40,000,000 KREDIETBANK N.V.
By /s/ Robert Snauffer
------------------------------------------
Title: Vice President
By /s/ Tod R. Angus
------------------------------------------
Title: Vice President
$40,000,000 MELLON BANK, N.A.
By /s/ Laurie G. Dunn
------------------------------------------
Title: Vice President
$30,000,000 NATIONAL WESTMINSTER BANK PLC
By /s/ John G. Brett
------------------------------------------
Title: Corporate Manager
$25,000,000 COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH
By /s/ Angelo J. Balestrieri
------------------------------------------
Title: Vice President
By /s/ W. Pieter C. Kodde
------------------------------------------
Title: Vice President
$54,000,000 THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., NEW YORK BRANCH
By /s/ Hiroshi Kitada
------------------------------------------
Title: Deputy General Manager
<PAGE>
$30,000,000 U.S. BANK NATIONAL ASSOCIATION
By /s/ Mark R. Olmon
------------------------------------------
Title: Vice President
Total Commitments
$1,400,000,000
<PAGE>
THE CHASE MANHATTAN BANK, as Agent
By /s/ Karen M. Sharf
------------------------------------------
Title: Vice President
270 Park Avenue
New York, NY 10017
Telex: 129100
Facsimile: (212) 270-7138
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Diana H. Imhof
------------------------------------------
Title: Vice President
60 Wall Street
New York, New York 10260
Telex: 177615
Facsimile: (212) 648-5018
<PAGE>
EXHIBIT A
NOTE
New York, New York
____________, 19__
For value received, [ARAMARK Services, Inc./ARAMARK Uniform Services Group,
Inc.], a Delaware corporation (the "BORROWER"), promises to pay to the order of
(the "BANK"), for the account of its Applicable Lending Office, the unpaid
principal amount of each Credit provided by the Bank to the Borrower pursuant to
the Credit Agreement referred to below on the last day of the Interest Period
relating to such Credit. The Borrower promises to pay interest on the unpaid
principal amount of each such Credit on the dates and at the rate or rates
provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or other
immediately available funds at the office of The Chase Manhattan Bank, 52
Broadway, New York, New York.
All Credits provided by the Bank, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, if the Bank so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with respect
to each such Credit then outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; provided that the failure of the Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
<PAGE>
This note is one of the Notes referred to in the Credit and Guaranty
Agreement dated as of January 7, 1998 among the Borrower, [ARAMARK Uniform
Services Group, Inc./ARAMARK Services, Inc.], a Delaware corporation, ARAMARK
Corporation, a Delaware corporation, the banks party thereto and The Chase
Manhattan Bank and Morgan Guaranty Trust Company of New York, as Agents (as the
same may be amended from time to time, the "CREDIT AGREEMENT"). Terms defined
in the Credit Agreement are used herein with the same meanings. Reference is
made to the Credit Agreement for provisions for the prepayment hereof and the
acceleration of the maturity hereof.
[ARAMARK SERVICES, INC./
ARAMARK UNIFORM SERVICES
GROUP, INC.]
By __________________________
Name:
Title:
A-2
<PAGE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
AMOUNT TYPE AMOUNT OF
OF OF PRINCIPAL MATURITY NOTATION
DATE LOAN LOAN REPAID DATE MADE BY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-3
<PAGE>
EXHIBIT B
OPINION OF GENERAL COUNSEL OR ASSOCIATE GENERAL COUNSEL
OF ARAMARK SERVICES, ARAMARK UNIFORM
AND THE PARENT GUARANTOR
[Effective Date]
To the Banks and the Agents
c/o The Chase Manhattan Bank, as
Administrative Agent
277 Park Avenue
New York, New York 10172
Dear Sirs:
I am General Counsel of ARAMARK Services, Inc. ( "ARAMARK SERVICES"), of
ARAMARK Uniform Services Group, Inc. ("ARAMARK UNIFORM" and together with
ARAMARK Services, the "BORROWERS"), and of ARAMARK Corporation (the "PARENT
GUARANTOR") and am familiar with (i) the Credit and Guaranty Agreement (the
"CREDIT AGREEMENT") dated as of January 7, 1998 among the Borrowers, the Parent
Guarantor, the banks party thereto and The Chase Manhattan Bank and Morgan
Guaranty Trust Company of New York, as Agents, and (ii) the Subsidiary Guaranty
Agreement. Terms defined in the Credit Agreement and not otherwise defined
herein are used herein as therein defined.
I have examined originals or copies, certified or otherwise identified to
my satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for purposes of this
opinion. I have assumed, for purposes of this opinion, that the Banks and the
Agents have all requisite power and authority and have taken all necessary
corporate action to enter into the Credit Agreement and to effect any
transaction contemplated thereby. This opinion is limited to the federal laws
of the United States, the laws of the States of Pennsylvania and New York and
the corporation law of the State of Delaware. As to matters pertaining to the
laws of any other State, I do not purport to practice law therein or be an
expert on the laws thereof and have relied on my general familiarity and
experience with pertinent opinions in similar transactions and relevant statutes
and case law. As to the due incorporation and
<PAGE>
good standing of the Subsidiaries of the Parent Guarantor under the laws of any
State, I have relied on certificates of public officials of such State and have
no reason to believe that any such Subsidiary is not duly incorporated or in
good standing in such State. For purposes of this opinion, "MATERIAL DEBT" means
all Debt of the Parent Guarantor, the Borrowers or any of their respective
Subsidiaries, other than any such Debt having an outstanding principal amount of
$1,000,000 or less and aggregating, together with all other such Debt, not more
than $10,000,000 in outstanding principal amount.
Upon the basis of the foregoing, I am of the opinion that:
1. Each Borrower and the Parent Guarantor is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, and has all corporate powers required to carry on its business as
now conducted.
2. The execution, delivery and performance (a) of the Credit Agreement by
each Borrower and the Parent Guarantor, (b) of the Notes by the relevant
Borrower and (c) of the Subsidiary Guaranty Agreement by the Parent Guarantor,
each Borrower and each of the Subsidiaries of the Parent Guarantor listed on the
signature pages of the Subsidiary Guaranty Agreement (the "SUBSIDIARY
GUARANTORS" and with the Borrowers and the Parent Guarantor, collectively, the
"OBLIGORS") are within the respective corporate powers of the Obligors, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the charter or by-laws of any Obligor or of any agreement or
instrument relating to Material Debt or any other agreement, judgment,
injunction, order, decree or other instrument binding upon any Obligor material
to the business of the Parent Guarantor and its Subsidiaries, considered as a
whole, or result in the creation or imposition of any Lien on any asset of any
Obligor or any of their respective Subsidiaries.
3. The Credit Agreement constitutes a valid and binding agreement of each
Borrower and the Parent Guarantor, and the Notes constitute valid and binding
obligations of the relevant Borrower, in each case enforceable in accordance
with their respective terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability.
4. The Subsidiary Guaranty Agreement constitutes a valid and binding
agreement of each Borrower, the Parent Guarantor and each Subsidiary of the
B-2
<PAGE>
Parent Guarantor listed on the signature pages thereof, enforceable in
accordance with its terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability. I have
assumed for purposes of the foregoing opinion that, in light of the limitations
set forth in Section 2.03 of the Subsidiary Guaranty Agreement and other
relevant considerations, a court would conclude that a fraudulent conveyance has
not occurred.
5. To the best of my knowledge after due inquiry, there is no action,
suit or proceeding pending or threatened against the Parent Guarantor, either
Borrower or any of their respective Subsidiaries before any court or arbitrator
or any governmental body, agency or official in which there is a reasonable
likelihood of an adverse decision which would affect the business, financial
position or results of operations of the Parent Guarantor and its Subsidiaries,
considered as a whole, in a manner material and adverse to the creditworthiness
of the Obligors, considered as a whole, or which in any manner questions the
validity or enforceability of any Financing Document.
6. Each Obligor (other than the Parent Guarantor and the Borrowers) is a
corporation validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
7. None of the Obligors is an "INVESTMENT COMPANY" within the meaning of
the Investment Company Act of 1940, as amended.
In giving the foregoing opinion, I express no opinion as to the effect (if
any) of any law of any jurisdiction in which any Bank is located which limits
the rate of interest that such Bank may charge or collect.
Very truly yours,
B-3
<PAGE>
EXHIBIT C
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENTS
[Effective Date]
To the Banks and the Agents
c/o The Chase Manhattan Bank,
as Administrative Agent
277 Park Avenue
New York, New York 10172
Dear Sirs:
We have participated in the preparation of the Credit and Guaranty
Agreement (the "CREDIT AGREEMENT") dated as of January 7, 1998 among ARAMARK
Services Inc., a Delaware corporation ("ARAMARK SERVICES"), ARAMARK Uniform
Services Group, Inc., a Delaware corporation ("ARAMARK UNIFORM" and together
with ARAMARK Services, the "BORROWERS"), ARAMARK Corporation, a Delaware
corporation (the "PARENT GUARANTOR"), the banks party thereto (the "BANKS") and
The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, as
Agents (the "AGENTS"), and have acted as special counsel for the Agents for the
purpose of rendering this opinion pursuant to Section 3.01(g) of the Credit
Agreement. Terms defined in the Credit Agreement are used herein as therein
defined.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for purposes of this
opinion. In addition, in connection with certain questions of fact, we have
relied upon representations and certificates of officers of the Company.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by each Borrower and the Parent
Guarantor of the Credit Agreement and by the relevant Borrower of the
<PAGE>
Notes are within the respective corporate powers of the Parent Guarantor and
each Borrower and have been duly authorized by all necessary corporate action.
2. The Credit Agreement constitutes a valid and binding agreement of each
Borrower and the Parent Guarantor, and each Note constitutes a valid and binding
obligation of the relevant Borrower, in each case enforceable in accordance with
its terms, except as may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and by general principles of equity.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the federal laws of the
United States of America and the General Corporation Law of the State of
Delaware. In giving the foregoing opinion, we express no opinion as to the
effect (if any) of any law of any jurisdiction (except the State of New York) in
which any Bank is located which limits the rate of interest that such Bank may
charge or collect.
This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied upon
by any other person without our prior written consent.
Very truly yours,
C-2
<PAGE>
EXHIBIT D
SUBSIDIARY GUARANTY AGREEMENT
dated as of
January 7, 1998
among
ARAMARK SERVICES, INC.,
ARAMARK UNIFORM SERVICES GROUP, INC.,
ARAMARK CORPORATION
and
THE SUBSIDIARY GUARANTORS REFERRED TO HEREIN
<PAGE>
TABLE OF CONTENTS
-----------------------
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions...................................................................................1
SECTION 1.02. Accounting Terms and Determinations..........................................................16
SECTION 1.03. Types of Borrowings..........................................................................16
ARTICLE 2
THE LOANS
SECTION 2.01. Commitments to Lend..........................................................................17
SECTION 2.02. Notice of Committed Borrowings...............................................................17
SECTION 2.03. Money Market Borrowings......................................................................18
SECTION 2.04. Swingline Advances...........................................................................21
SECTION 2.05. Notice to Banks; Funding of Loans............................................................21
SECTION 2.06. Maturity of Loans............................................................................22
SECTION 2.07. Notes........................................................................................22
SECTION 2.08. Interest.....................................................................................23
SECTION 2.09. Facility Fees................................................................................28
SECTION 2.10. Reduction of Commitments.....................................................................29
SECTION 2.11. Mandatory Termination of Commitments.........................................................31
SECTION 2.12. Optional Prepayments.........................................................................31
SECTION 2.13. Payments.....................................................................................31
SECTION 2.14. Funding Losses...............................................................................32
SECTION 2.15. Withholding Tax Exemption....................................................................32
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness................................................................................33
SECTION 3.02. Conditions to Borrowing......................................................................35
SECTION 3.03. Representation by Borrower...................................................................35
SECTION 3.04. Transitional Provisions......................................................................35
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power................................................................36
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention.....................................................................................36
SECTION 4.03. Binding Effect...............................................................................37
SECTION 4.04. Financial Information........................................................................37
SECTION 4.05. Litigation...................................................................................37
SECTION 4.06. Compliance with ERISA........................................................................37
SECTION 4.07. Environmental Matters........................................................................38
SECTION 4.08. Taxes........................................................................................38
SECTION 4.09. Compliance with Laws.........................................................................38
SECTION 4.10. Not an Investment Company....................................................................39
SECTION 4.11. Full Disclosure..............................................................................39
ARTICLE 5
COVENANTS
SECTION 5.01. Information..................................................................................39
SECTION 5.02. Payment of Obligations.......................................................................42
SECTION 5.03. Maintenance of Property; Insurance...........................................................42
SECTION 5.04. Conduct of Business and Maintenance of Existence.............................................42
SECTION 5.05. Inspection of Property, Books and Records....................................................43
SECTION 5.06. Maintenance of Stock of Borrowers............................................................43
SECTION 5.07. Negative Pledge..............................................................................43
SECTION 5.08. Consolidations, Mergers and Sales of Assets..................................................44
SECTION 5.09. Fixed Charge Coverage........................................................................45
SECTION 5.10. Debt Coverage................................................................................45
SECTION 5.11. Minimum Consolidated Net Worth...............................................................45
SECTION 5.12. Transactions with Affiliates.................................................................45
SECTION 5.13. Use of Proceeds..............................................................................45
SECTION 5.14. Restricted Payments..........................................................................46
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default............................................................................46
SECTION 6.02. Notice of Default............................................................................49
ARTICLE 7
THE AGENTS
SECTION 7.01. Appointment and Authorization................................................................49
SECTION 7.02. Agents and Affiliates........................................................................49
</TABLE>
D-ii
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 7.03. Action by Agents.............................................................................49
SECTION 7.04. Consultation with Experts....................................................................50
SECTION 7.05. Liability of Agents..........................................................................50
SECTION 7.06. Indemnification..............................................................................50
SECTION 7.07. Credit Decision..............................................................................50
SECTION 7.08. Agency Fees..................................................................................51
SECTION 7.09. Successor Agents.............................................................................51
SECTION 7.10. Co-Agents....................................................................................51
ARTICLE 8
CHANGES IN CIRCUMSTANCES AFFECTING FIXED RATE LOANS
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair.....................................51
SECTION 8.02. Illegality...................................................................................52
SECTION 8.03. Increased Cost...............................................................................52
SECTION 8.04. Base Rate Loans Substituted for Affected Loans...............................................54
ARTICLE 9
GUARANTEE
SECTION 9.01. The Guarantee................................................................................55
SECTION 9.02. Guarantee Unconditional......................................................................55
SECTION 9.03. Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances.............................................................................56
SECTION 9.04. Waiver.......................................................................................57
SECTION 9.05. Subrogation and Contribution.................................................................57
SECTION 9.06. Stay of Acceleration.........................................................................57
ARTICLE 10
JUDICIAL PROCEEDINGS
SECTION 10.01. Consent to Jurisdiction.....................................................................57
SECTION 10.02. Enforcement of Judgments....................................................................57
SECTION 10.03. Service of Process..........................................................................58
SECTION 10.04. No Limitation on Service or Suit............................................................58
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices.....................................................................................58
SECTION 11.02. No Waiver...................................................................................58
</TABLE>
D-iii
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 11.03. Expenses; Documentary Taxes; Indemnification for
Litigation........................................................................................59
SECTION 11.04. Amendments and Waivers......................................................................59
SECTION 11.05. Sharing of Set-offs.........................................................................60
SECTION 11.06. New York Law................................................................................60
SECTION 11.07. Successors and Assigns......................................................................60
SECTION 11.08. Collateral..................................................................................62
SECTION 11.09. Counterparts................................................................................62
SECTION 11.10. WAIVER OF JURY TRIAL........................................................................62
</TABLE>
<PAGE>
SUBSIDIARY GUARANTY AGREEMENT
AGREEMENT dated as of January 7, 1998 among ARAMARK Services, Inc., a
Delaware corporation ("ARAMARK SERVICES"), ARAMARK Uniform Services Group, Inc.,
a Delaware corporation ("ARAMARK UNIFORM" and together with ARAMARK Services,
the "BORROWERS"), ARAMARK Corporation, a Delaware corporation (the "PARENT
GUARANTOR"), and each of the Subsidiary Guarantors listed on the signature pages
hereof under the caption "SUBSIDIARY GUARANTORS" and each Person that shall, at
any time after the date hereof, become an additional "SUBSIDIARY GUARANTOR"
pursuant to Section 3.01 hereof (collectively, the "SUBSIDIARY GUARANTORS").
WHEREAS, the Borrowers and the Parent Guarantor have entered into a Credit
and Guaranty Agreement (as the same may be amended from time to time, the
"CREDIT AGREEMENT") dated as of January 7, 1998 among the Borrowers, the Parent
Guarantor, the banks party thereto and The Chase Manhattan Bank and Morgan
Guaranty Trust Company of New York, as Agents, pursuant to which the Borrowers
are entitled, subject to certain conditions, to jointly borrow up to
$1,400,000,000 and pursuant to which the payment when due of all principal,
interest and other amounts thereunder is guaranteed by the Parent Guarantor;
WHEREAS, as a condition to the effectiveness of the Credit Agreement, each
of the entities listed on Schedule I hereto and each Wholly Owned Domestic
Material Subsidiary of the Parent Guarantor is required to execute and deliver
to the Administrative Agent, on behalf of the Banks, a Subsidiary Guaranty
Agreement whereby such entity or Wholly Owned Domestic Material Subsidiary shall
guarantee the payment when due of all principal, interest, and other amounts
that shall be at any time payable by a Borrower under the Credit Agreement; and
WHEREAS, ARAMARK Services has in the past and the Borrowers may in the
future become obligated to one or more of said banks under one or more Interest
Rate Agreements;
WHEREAS, in conjunction with the transactions contemplated by the Credit
Agreement and in consideration of the financial and other support that the
Borrowers have provided, and such financial and other support as the Borrowers
and the Parent Guarantor may in the future provide, to the Subsidiary
Guarantors, and in order to induce the Banks to enter into the Credit Agreement
and any Interest Rate Agreements, the Subsidiary Guarantors are willing to
guarantee the obligations of the Borrowers thereunder;
NOW, THEREFORE, the parties hereto agree as follows:
<PAGE>
ARTICLE 1
Definitions
Section 1.01. Definitions. Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as therein defined.
ARTICLE 2
Guarantees
Section 2.01. Guarantees. Subject to Section 2.03, the Subsidiary
Guarantors hereby jointly, severally, unconditionally and irrevocably guarantee
to the Banks, and to each of them, the due and punctual payment of all present
and future indebtedness of the Borrowers evidenced by or arising out of the
Financing Documents and any Interest Rate Agreements, including, but not limited
to, the due and punctual payment of principal of and interest on the Notes, the
due and punctual payment of all other sums now or hereafter owed by each
Borrower under any Financing Document as and when the same shall become due and
payable, whether at maturity, by declaration or otherwise, according to the
terms thereof and the due and punctual payment of any Interest Rate
Indebtedness. In case of failure by a Borrower punctually to pay the
indebtedness guaranteed hereby, the Subsidiary Guarantors, subject to Section
2.03, hereby jointly, severally and unconditionally agree to cause such payment
to be made punctually as and when the same shall become due and payable, whether
at maturity or by declaration or otherwise, and as if such payment were made by
such Borrower.
Section 2.02. Guarantees Unconditional. The obligations of each Subsidiary
Guarantor under this Article II shall be unconditional and absolute and, without
limiting the generality of the foregoing, shall not be released, discharged or
otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of any other Obligor under any
Financing Document or any Interest Rate Agreement, by operation of law
or otherwise;
(b) any modification or amendment of or supplement to any
Financing Document or any Interest Rate Agreement;
(c) any modification, amendment, waiver, release, non-perfection
or invalidity of any direct or indirect security, or of any
D-2
<PAGE>
guarantee or other liability of any third party, for any obligation of
any other Obligor under any Financing Document or any Interest Rate
Agreement;
(d) any change in the corporate existence, structure or ownership
of any other Obligor, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting any other Obligor or its assets or
any resulting release or discharge of any obligation of any other
Obligor contained in any Financing Document or any Interest Rate
Agreement;
(e) the existence of any claim, set-off or other rights which any
Subsidiary Guarantor may have at any time against any other Obligor, the
Administrative Agent, any Bank or any other Person, whether or not
arising in connection with the Financing Documents or any Interest Rate
Agreement, provided that nothing herein shall prevent the assertion of
any such claim by separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against any
other Obligor for any reason of any Financing Document or any Interest
Rate Agreement, or any provision of applicable law or regulation
purporting to prohibit the payment by any other Obligor of the principal
of or interest on any Note or any other amount payable by any other
Obligor under the Financing Documents or any Interest Rate Agreement; or
(g) any other act or omission to act or delay of any kind by any
other Obligor, the Administrative Agent, any Bank or any other Person or
any other circumstance whatsoever that might, but for the provisions of
this paragraph, constitute a legal or equitable discharge of the
obligations of any Subsidiary Guarantor under this Article II.
Section 2.03. Limit of Liability. Each Subsidiary Guarantor shall be
liable under this Agreement only for amounts aggregating up to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the United States Bankruptcy Code or any comparable
provisions of any applicable state law.
Section 2.04. Discharge; Reinstatement in Certain Circumstances. (a)
Subject to Section 2.03 and paragraph (b) of this Section 2.04, each Subsidiary
Guarantor's obligations under this Article II shall remain in full force and
effect, except as otherwise agreed with the consent of the Required Banks, until
the Commitments are terminated and the principal of and interest on the Notes
and all other amounts payable by the Borrowers under the Financing Documents
shall have been paid in full. If at any time any payment of the principal of or
interest
D-3
<PAGE>
on any Note or any other amount payable by a Borrower under any Financing
Document is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of any other Obligor or otherwise, each
Subsidiary Guarantor's obligations under this Article II with respect to such
payment shall be reinstated at such time as though such payment had become due
but had not been made at such time.
(b) In the event that any capital stock of any Subsidiary Guarantor
shall be disposed of with the effect that such Subsidiary Guarantor shall cease
to be a Subsidiary of the Parent Guarantor, such Subsidiary Guarantor shall be
released and discharged from any obligation under this Agreement; provided that
no such disposition shall be made unless, immediately after such disposition,
and giving effect thereto, no Event of Default shall have occurred and be
continuing; and provided further that such Subsidiary Guarantor's obligations
under this Agreement shall be immediately reinstated if at any time after such
disposition it becomes a Subsidiary of the Parent Guarantor. The obligations
hereunder of any Subsidiary Guarantor the capital stock of which has been so
disposed of shall be unenforceable for so long as it shall be released and
discharged of its obligations pursuant to this Section 2.04(b).
Section 2.05. Waiver. Each Subsidiary Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against any other Obligor or any other Person.
Section 2.06. Subrogation and Contribution. Each Subsidiary Guarantor
irrevocably waives, until such time as all amounts under the Financing Documents
and any Interest Rate Agreement have been indefeasibly paid in full, any and all
rights to which it may be entitled, by operation of law or otherwise, upon
making any payment hereunder (i) to be subrogated to the rights of the payee
against a Borrower with respect to such payment or otherwise to be reimbursed,
indemnified or exonerated by such Borrower in respect thereof or (ii) to receive
any payment, in the nature of contribution or for any other reason, from any
other Obligor with respect to such payment.
Section 2.07. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by a Borrower under the Financing Documents is
stayed upon the insolvency, bankruptcy or reorganization of such Borrower, all
such amounts otherwise subject to acceleration under the terms of the Financing
Documents shall nonetheless be payable by each Subsidiary Guarantor hereunder
forthwith on demand by the Administrative Agent made at the request of the
requisite number of Banks specified in the Financing Documents.
D-4
<PAGE>
ARTICLE 3
Covenant of the Company and the Parent Guarantor
Section 3.01. Additional Subsidiary Guarantors. The Parent Guarantor and
each Borrower jointly and severally agree to cause each Person that shall, at
any time after the date hereof, become a Wholly Owned Domestic Material
Subsidiary of the Parent Guarantor to enter into this Agreement not later than
30 days after the date on which such Person shall have become a Wholly Owned
Domestic Material Subsidiary.
ARTICLE 4
Miscellaneous
Section 4.01. Notices. Unless otherwise specified herein, all notices,
requests and other communications to any party hereunder shall be in writing
(including bank wire, telex, facsimile transmission or similar writing) and
shall be given to such party at its address or telex or facsimile number set
forth on the signature pages hereof (or, in the case of any Subsidiary Guarantor
as to which no such address or telex or facsimile number is so set forth, to it
at the address or telex or facsimile number of the Parent Guarantor set forth on
the signature pages hereof) or such other address or telex or facsimile number
as such party may hereafter specify for the purpose by notice to the
Administrative Agent. Each such notice, request or other communication shall be
effective (i) if given by telex, when such telex is transmitted to the
appropriate answerback is received, (ii) if given by mail, five days after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the address specified in this Section 4.01.
Section 4.02. No Waiver. No failure or delay by the Administrative Agent
or any Bank in exercising any right, power or privilege under this Agreement or
any other Financing Document shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein and therein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
Section 4.03. Amendments and Waivers. Any provision of this Agreement may
be amended or waived if, and only if, such amendment or waiver is in writing and
is signed by the Parent Guarantor, each Borrower, each
D-5
<PAGE>
Subsidiary Guarantor and the Administrative Agent with the prior written consent
of the Required Banks.
Section 4.04. New York Law. This Agreement shall be construed in
accordance with and governed by the law of the State of New York. Each of the
Subsidiary Guarantors hereby agrees to be bound by each of Article X and Section
11.10 of the Credit Agreement to the same extent as if it were a party thereto.
Section 4.05. Successors and Assigns. All the provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that no Subsidiary Guarantor may
assign or transfer any of its rights or obligations under this Agreement.
Section 4.06. Counterpars; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, and all of which
taken together shall constitute a single instrument, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when the Administrative Agent shall have received a
counterpart hereof signed by each Borrower, the Parent Guarantor and one or more
of the Subsidiary Guarantors. Thereafter, upon execution and delivery of this
Agreement on behalf of any other Subsidiary Guarantor, this Agreement shall
become effective with respect to such Subsidiary Guarantor as of the date of
such delivery.
D-6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the date first above
written.
ARAMARK SERVICES, INC.
By:
-------------------------------------
Title:
ARAMARK Tower
1101 Market Street
Philadelphia, Pennsylvania 19107
Facsimile number: (215) 238-3284
(215) 238-3282
ARAMARK UNIFORM SERVICES GROUP,
INC.
By:
-------------------------------------
Title:
ARAMARK Tower
1101 Market Street
Philadelphia, Pennsylvania 19107
Facsimile number: (215) 238-3284
(215) 238-3282
ARAMARK CORPORATION
By:
-------------------------------------
Title:
ARAMARK Tower
1101 Market Street
Philadelphia, Pennsylvania 19107
Facsimile number: (215) 238-3284
(215) 238-3282
D-7
<PAGE>
SUBSIDIARY GUARANTORS
---------------------
ARAMARK EDUCATIONAL GROUP, INC.
By:
-------------------------------------
Title:
ARAMARK HEALTH & EDUCATION
SERVICES, INC.
By:
-------------------------------------
Title:
ARAMARK HEALTHCARE SUPPORT
SERVICES, INC.
By: ____________________________________
Title:
ARAMARK SPORTS AND ENTERTAINMENT
GROUP, INC.
By: _____________________________________
Title:
ARAMARK MAGAZINE & BOOK
SERVICES, INC.
By _____________________________________
Title:
ARAMARK REFRESHMENT SERVICES, INC.
By: _____________________________________
Title:
D-8
<PAGE>
ARAMARK SENIOR NOTES COMPANY
By: _____________________________________
Title:
ARAMARK SERVICES, INC.
By: _____________________________________
Title:
ARAMARK UNIFORM SERVICES, INC.
By: _____________________________________
Title:
ARAMARK UNIFORM SERVICES
GROUP, INC.
By: _____________________________________
Title:
D-9
<PAGE>
Schedule
SUBSIDIARY GUARANTORS
ARAMARK EDUCATIONAL GROUP, INC.
ARAMARK HEALTH & EDUCATION SERVICES, INC.
ARAMARK HEALTHCARE SUPPORT SERVICES, INC.
ARAMARK SPORTS AND ENTERTAINMENT GROUP, INC.
ARAMARK MAGAZINE & BOOK SERVICES, INC.
ARAMARK REFRESHMENT SERVICES, INC.
ARAMARK SENIOR NOTES COMPANY
ARAMARK SERVICES, INC.
ARAMARK UNIFORM SERVICES, INC.
ARAMARK UNIFORM SERVICES GROUP, INC.
D-10
<PAGE>
EXHIBIT E
MANAGEMENT EQUITY NOTE
[To be provided by Borrower]
<PAGE>
EXHIBIT F
FORM OF INVITATION FOR MONEY MARKET QUOTES
To: [Name of Bank]
Re: Invitation for Money Market Quotes to [ARAMARK Services, Inc./ARAMARK
Uniform Services Group, Inc.] (the "BORROWER")
Pursuant to Section 2.03 of the Credit and Guaranty Agreement (as amended
from time to time, the "CREDIT AGREEMENT") dated as of January 7, 1998 among the
Borrower, [ARAMARK Uniform Services Group, Inc./ARAMARK Services, Inc.], ARAMARK
Corporation, the Banks party thereto and The Chase Manhattan Bank and Morgan
Guaranty Trust Company of New York, as Agents, we are pleased to invite you to
submit Money Market Quotes to us for the following proposed Money Market
Borrowing(s):
Date of Borrowing: ___________________
Principal Amount/1/ Interest Period/2/
- ---------------- ---------------
$
Such Money Market Quotes should offer a Money Market Rate.
Please respond to this invitation by no later than 10:00 A.M. (New York
City time) on [date].
Terms used herein have the meanings assigned to them in the Credit
Agreement.
[ARAMARK SERVICES, INC./ARAMARK
UNIFORM SERVICES GROUP, INC.]
By___________________________________
Title:
- ---------------
/1/ Amount must be $5,000,000 or a larger multiple of $1,000,000.
/2/ Not less than 7 nor more than 270 days, subject to the provisions of
the definition of Interest Period.
<PAGE>
EXHIBIT G
FORM OF MONEY MARKET QUOTE
[ARAMARK SERVICES, INC./
ARAMARK UNIFORM SERVICES
GROUP, INC.]
ARAMARK Tower
1101 Market Street
Philadelphia, Pennsylvania 19107
Attention:
Re: Money Market Quote to [ARAMARK Services, Inc./ARAMARK Uniform Services
Group, Inc.] (the "BORROWER")
In response to your invitation dated _____________, 19__, we hereby make
the following Money Market Quote on the following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank
(including telephone number):
3. Date of Borrowing:
4. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
G-1
<PAGE>
Principal Interest Money Market
Amount/1/ Period/2/ Rate/3/
- --------------------------------------------------------------------------------
$
$
[Provided, that the aggregate principal amount of Money Market Loans for
which the above offers may be accepted shall not exceed $__________.]*
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Credit
and Guaranty Agreement dated as of January 7, 1998 among the Borrower,
[ARAMARK Uniform Services Group, Inc./ARAMARK Services, Inc.], ARAMARK
Corporation, the Banks party thereto and The Chase Manhattan Bank and
Morgan Guaranty Trust Company of New York, as Agents (as amended from
time to time, the "CREDIT AGREEMENT"), irrevocably obligates us to make
the Money Market Loan(s) for which any offer(s) are accepted, in whole
or in part.
Terms used herein have the meanings assigned to them in the Credit
Agreement.
Very truly yours,
[NAME OF BANK]
Dated:_________________ By:__________________________
Authorized Officer
- ---------------
/1/ Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the individual
offers exceeds the amount the Bank is willing to lend. Bids must be made for
$5,000,000 or a larger multiple of $1,000,000.
/2/ Not less than 7 nor more than 270 days, as specified in the related
Invitation. No more than five bids are permitted for each Interest Period.
/3/ Specify rate of interest per annum (specified to 1/10,000th of 1%).
<PAGE>
EXHIBIT 99.4(b)(a)
AMENDMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT dated as of May 7, 1998 to the Credit Agreement dated as of
January 7, 1998 (the "CREDIT AGREEMENT") among ARAMARK SERVICES, INC., ARAMARK
UNIFORM SERVICES GROUP, INC. and ARAMARK CORPORATION, the BANKS party thereto
and THE CHASE MANHATTAN BANK and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Agents.
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Credit Agreement as set
forth below;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Credit Agreement
has the meaning assigned to such term in the Credit Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Credit Agreement shall, after this Amendment becomes effective,
refer to the Credit Agreement as amended hereby.
Section 2. Definition Amendment. Section 1.01 of the Credit Agreement is
amended by adding the following definition:
"TENDER OFFER" means an offer by the Parent Guarantor to buy its shares
of common stock from the holders thereof at a price and upon terms and
conditions to be determined by the board of directors of the Parent
Guarantor or an authorized committee thereof, and the subsequent purchase
by the Parent Guarantor of such shares, all of which shall be completed no
later than August 15, 1998.
Section 3. Covenant Amendment. (a) Section 5.11 of the Credit Agreement
is amended to read in its entirety as follows:
Section 5.11. Minimum Consolidated Net Worth Consolidated Net Worth
shall (i) at no date on or after October 3, 1997 be less than negative
$300,000,000, (ii at no date on or after October 2, 1998 be less than
negative $250,000,000, (iii) at no date on or after October 1, 1999 be
<PAGE>
less than negative $150,000,000, (iv) at no date on or after September 29,
2000 be less than negative $50,000,000 and (v) at no date on or after
September 28, 2001 be less than negative $50,000,000 plus an amount equal
to 50% of Consolidated Net Income for each Fiscal Year ending on or after
September 29, 2001 but prior to the date of determination for which
Consolidated Net Income is positive (but with no deduction on account of
negative Consolidated Net Income for any fiscal year of the Parent
Guarantor); provided, however, that the amounts set forth in clause (i)
through (v) inclusive shall be adjusted upward by $25,000,000 for each full
multiple of $25,000,000 by which the actual cost of funding the Tender
Offer is less than $700,000,000. The Parent Guarantor will provide to the
Agents a certificate of a Principal Officer setting forth the calculation
of the actual cost of the Tender Offer within ten Domestic Business Days of
the completion of such Tender Offer.
(b) The first sentence of Section 5.13 of the Credit Agreement is amended
to read in its entirety as follows:
The proceeds of Credits hereunder will be used for general corporate
purposes, including in connection with the Tender Offer or other
repurchases of shares.
Section 4. Representations and Warranties. The Parent Guarantor and
Borrowers jointly and severally represent and warrant that (i) the
representations and warranties set forth in Article 4 of the Credit Agreement
will be true on and as of the Amendment Effective Date and (ii) no Default will
have occurred and be continuing on such date.
Section 5. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
Section 6. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
Section 7. Effectiveness. This Amendment shall become effective on the
later of (i) the completion of the Tender Offer upon terms and conditions
approved by the board of directors of the Parent Guarantor, or an authorized
committee thereof, and (ii) the date when the Agents shall have received from
each of the Parent Guarantor, the Borrowers and Banks comprising the Required
Banks a counterpart hereof signed by such party or facsimile or other written
confirmation (in form satisfactory to the Agents) that such party has signed a
counterpart hereof.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.
ARAMARK SERVICES, INC.
By:_____________________________
Title:
Address:
ARAMARK UNIFORM SERVICES GROUP, INC.
By:_____________________________
Title:
Address:
ARAMARK CORPORATION
By:_____________________________
Title:
Address:
THE CHASE MANHATTAN BANK
By:_____________________________
Title:
Address:
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By:_____________________________
Title:
Address:
3
<PAGE>
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
By:_____________________________
Title:
Address:
CORESTATES BANK, N.A.
By:_____________________________
Title:
Address:
CREDIT LYONNAIS
NEW YORK BRANCH
By:_____________________________
Title:
Address:
FIRST UNION NATIONAL BANK
By:_____________________________
Title:
Address:
NATIONSBANK, N.A.
By:_____________________________
Title:
Address:
<PAGE>
PNC BANK NATIONAL ASSOCIATION
By:_____________________________
Title:
Address:
THE BANK OF NEW YORK
By:_____________________________
Title:
Address:
THE SUMITOMO BANK, LIMITED
NEW YORK BRANCH
By:_____________________________
Title:
Address:
WACHOVIA BANK, N.A.
By:_____________________________
Title:
Address:
BANK OF HAWAII
By:_____________________________
Title:
Address:
<PAGE>
THE BANK OF NOVA SCOTIA
By:_____________________________
Title:
Address:
BANK ONE, N.A.
By:_____________________________
Title:
Address:
BANKBOSTON, N.A.
By:_____________________________
Title:
Address:
BHF-BANK AKTIENGESELLSCHAFT
By:_____________________________
Title:
Address:
CIBC INC.
By:_____________________________
Title:
Address:
<PAGE>
COMERICA BANK
By:_____________________________
Title:
Address:
FLEET NATIONAL BANK
By:_____________________________
Title:
Address:
KREDIETBANK N.V.
By:_____________________________
Title:
Address:
MELLON BANK, N.A.
By:_____________________________
Title:
Address:
NATIONAL WESTMINSTER BANK PLC
By:_____________________________
Title:
Address:
<PAGE>
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH
By:_____________________________
Title:
Address:
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., NEW YORK BRANCH
By:_____________________________
Title:
Address:
U.S. BANK NATIONAL ASSOCIATION
By:_____________________________
Title:
Address:
