1 1994 10-K =============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K /X/ Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended September 30, 1994 or / / Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ________ to __________ Commission file number: 1-8827 ARAMARK CORPORATION (Exact name of registrant as specified in its charter) Delaware 23-2319139 (State of incorporation) (I.R.S. Employer Identification No.) ARAMARK Tower 1101 Market Street Philadelphia, Pennsylvania 19107 (Address of principal executive offices) Telephone Number: 215-238-3000 The ARA Group, Inc. (Former name, if changed since last report) -------------------------- Securities registered pursuant to Section 12(b) of the Act: Name Of Each Exchange Title Of Each Class On Which Registered ------------------- ---------------------- 13% Subordinated Debentures Due 1997 Philadelphia Stock Exchange Securities registered pursuant to Section 12(g) of the Act: Class B Common Stock, $.01 par value Adjustable Rate Callable Nontransferable Series C Preferred Stock, $1.00 par value Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /X/ No / / Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. /X/ Aggregate market value of the voting stock held by nonaffiliates: $554 million Common stock outstanding at October 28, 1994: Class A Common stock - 2,074,947 shares Class B Common stock - 24,233,590 shares Documents incorporated by reference: Portions of the registrant's Proxy Statement for the 1995 annual meeting of stockholders are incorporated by reference in Part III of this Report. ===============================================================================

2 Effective as of October 10, 1994, The ARA Group, Inc. changed its name to ARAMARK Corporation, and ARA Services, Inc. changed its name to ARAMARK Services, Inc. There was no change in ownership or control of the Company. As used herein, references to the "Company" shall mean ARAMARK Corporation and its subsidiaries (including ARAMARK Services, Inc.) unless the context otherwise requires. References to "ARAMARK" shall mean ARAMARK Services, Inc. and its subsidiaries unless the context otherwise requires. PART I Item 1. Business Description of Business Segments The Company is engaged in providing or managing services, including food, leisure and support services, uniform services, health and education services and distributive services. ARAMARK was organized in 1959 in Delaware. The Company was formed in September 1984 by the management of ARAMARK and acquired ARAMARK 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. Financial information by business segment and geographic area appears in note 11 to the consolidated financial statements. The businesses of the Company have been grouped into the segments described below. Food, Leisure & Support Services The Company provides food, refreshment, specialized dietary and support services (including maintenance and housekeeping) to business, educational, governmental and medical institutions. These services (and to a lesser extent, merchandise operations) are also provided at leisure and other public facilities such as convention centers, stadiums, parks, arenas, race tracks and recreational facilities. Food, refreshment, specialized dietary and support services are operated at customer locations generally under contracts of indefinite duration which may be subject to termination by either party. However, food and related services at leisure and other public facilities generally are for fixed contract terms well in excess of one year. The Company's food, leisure and support services are performed under various financial arrangements including a management-fee basis and a profit-and-loss basis. See note 2 to the consolidated financial statements. In most instances, the equipment and facilities used in providing these services are owned by the customer. Vending machines and related equipment, however, are generally owned by the Company.

3 There is a high level of competition in the food, leisure and support services business from local, regional and national companies as well as from businesses and institutions which operate their own services. This competition takes a number of different forms, including pricing, maintaining high food and service standards, and innovative approaches to marketing with a strong emphasis on securing and retaining customer accounts. The Company believes that it is a significant provider of food, leisure and support services in the United States, Spain, Germany, Belgium and Canada, but that its volume of such business is small in relation to the total market. See note 10 to the consolidated financial statements for information relating to the seasonal aspects of this business segment. Subsequent to yearend, the Company entered into agreements to acquire certain Food, Leisure & Support Services businesses. See note 2 to the consolidated financial statements. Uniform Services The Company rents, 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 also operates one of the largest direct marketers of personalized work clothing, uniforms, casual apparel and related accessories, primarily in the United States. Service contracts for the rental and laundering of work apparel and other textile items are for well in excess of one year and typically for an initial term of five years. Generally, the direct marketing business is conducted under an invoice arrangement with customers. The uniform rental services business is highly competitive in the areas in which the Company operates, with numerous competitors in each major operating area. Although no one uniform rental services company is predominant in this industry, the Company believes that it is a significant competitor. Competition in the sale of work clothing and related items is from numerous retailers and other direct marketers at local, regional and national levels. In this market, while the Company is a significant competitor, the Company's volume of sales is small in relation to the total market. The significant competitive factors in the uniform services business are the quality of services provided to customers and the prices charged for such services. Health & Education Services The Company provides management services (including physician staffing and other specialized services) to hospital emergency and other departments and to military healthcare facilities and clinics as well as medical services to correctional institutions. The Company also provides child care services primarily at Company-operated facilities, and to a lesser extent on customer sites and in before and after school programs. -2-

4 Revenues from emergency and primary care management services are received generally from the hospitals and clinics at which the care is provided under contracts generally with a term of one or more years and from third party payors. Revenues from medical services to correctional institutions are received directly from governmental authorities under contracts with terms of one or more years. Child care services are provided to and are primarily paid for on a weekly basis directly by individual families under short-term agreements. The Company leases a significant number of its child care facilities under long-term arrangements. The Company believes it is a significant provider of emergency and primary care management services, medical services to correctional institutions and child care services in the United States. Competition in all phases of this business segment is from both national and local providers of health and education services as well as from private and public institutions which provide for their own health and education services. Significant competitive factors in the Company's health and education services businesses are the quality of care, reputation, physical appearance of facilities, the types of programs offered to the users of these services and the prices charged for such services. Distributive Services The Company 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. Distribution services are generally rendered under short-term agreements, which ordinarily permit the return of unsold magazines and books with full credit being given to the retailer and with the Company in turn receiving full credit from its suppliers. Competition in the distribution of books and periodicals exists primarily from magazine and book subscriptions, direct distribution by publishers to retailers and from other wholesale distributors. While the Company's volume of business in the distribution of books and periodicals is small in relation to the total market, the Company believes the volume of its wholesale periodical and book distribution units makes it a significant wholesale distributor. Subsequent to yearend the Company acquired a wholesale magazine and book distribution business. See note 2 to consolidated financial statements. Employees The Company employs approximately 133,000 persons, both full and part time, including approximately 30,000 employees outside the United States. Approximately 22,700 employees in the United States are represented by various labor unions. -3-

5 Item 2. Properties The principal property and equipment of the Company are its service equipment and fixtures (including vehicles) and real estate. The service equipment and fixtures include vending, commissary, warehouse and janitorial and maintenance equipment used primarily by the food, leisure and support services segment, and laundry equipment used by the uniform services segment. The vehicles include automobiles and delivery trucks used in the food, leisure and support services segment and in the distributive services and uniform services segments. The service equipment and fixtures represent approximately 61% of the net book value of all fixed assets as of September 30, 1994. The Company's real estate is comprised of child care facilities, of which a significant number are held under long-term operating leases. The Company also maintains other real estate and leasehold improvements which it uses in its distributive services and uniform services segments and in commissary and distribution operations in its food, leisure and support services segment. Additional information concerning property and equipment (including other real estate leases and noncancelable lease commitments) is included in notes 1 and 8 to the consolidated financial statements. No individual parcel of real estate owned or leased is of material significance to the Company's total assets. See note 11 to the consolidated financial statements for information concerning the identifiable assets of the Company's business segments. Item 3. Legal Proceedings The Company and its subsidiaries are not parties to any lawsuits (other than ordinary routine litigation incidental to its business) which are material to the Company's business or financial condition. See note 8 to the consolidated financial statements for additional information concerning legal proceedings. Item 4. Submission of Matters to a Vote of Security Holders Not Applicable. Item 4A. Directors and Executive Officers of the Registrant <TABLE> <CAPTION> Name (Age as of November 1, 1994) Office Held Director/Officer Since <S> <C> <C> Joseph Neubauer (53)................................Chairman, President...................................1979 and Director Robert J. Callander (63)............................Director..............................................1986 Alan K. Campbell (71)...............................Director..............................................1980 Ronald R. Davenport (58)............................Director..............................................1980 Davre J. Davidson (83)..............................Director..............................................1959 Philip L. Defliese (79).............................Director..............................................1979 Lee F. Driscoll, Jr. (68)...........................Director..............................................1973 Mitchell S. Fromstein (66)..........................Director..............................................1990 -4- </TABLE>

6 <TABLE> <CAPTION> <S> <C> <C> Edward G. Jordan (64)...............................Director..............................................1980 Thomas H. Kean (59).................................Director..............................................1994 Reynold C. MacDonald (76)...........................Director..............................................1977 James E. Preston (61)...............................Director..............................................1993 Julian L. Carr, Jr. (48)............................Executive Vice President..............................1988 John R. Farquharson (56)............................Executive Vice President..............................1976 James E. Ksansnak (54)..............................Executive Vice President..............................1986 and Chief Financial Officer William Leonard (46)................................Executive Vice President..............................1992 Martin W. Spector (56)..............................Executive Vice President,.............................1976 General Counsel and Secretary L. Frederick Sutherland (42)........................Executive Vice President ............................1983 Richard H. Vent (53)................................Executive Vice President..............................1982 Brian J. Gail (48)..................................Senior Vice President.................................1994 Dean E. Hill (43)...................................Vice President........................................1993 John P. Kallelis (56)...............................Vice President........................................1982 Brian G. Mulvaney (38)..............................Vice President........................................1993 Anthony J. Tanzola (55).............................Vice President........................................1976 Alan J. Griffith (40)...............................Controller and Chief..................................1994 Accounting Officer Melvin M. Mahoney (46)..............................Treasurer.............................................1985 Joan C. Mazzotti (44)...............................Assistant Secretary and...............................1994 Associate General Counsel Donald S. Morton (46)...............................Assistant Secretary and...............................1985 Associate General Counsel Richard M. Thon (38)................................Assistant Treasurer .................................1994 </TABLE> The principal occupations of the Company's directors and directorships currently held by directors are as follows: Mr. Neubauer has been president and chief executive officer of the Company since February 1983 and the chairman since April 1984. He is a director of Bell Atlantic - Pennsylvania, Inc., Federated Department Stores, Inc., First Fidelity Bancorporation, Penn Mutual Life Insurance Co. and Versa Services Ltd. Mr. Callander was vice chairman of Chemical Bank from February 1987 until August 1990. He was president of Chemical Bank and Chemical Banking Corporation from August 1990 to June 1992. He is a director of Barnes Group, Inc., Beneficial Corporation, Latin American Dollar Income Fund, New Asia Fund, Omnicom Group, Inc., and Scudder World Income Opportunities Fund. Dr. Campbell was vice chairman of the Company from April 1984 to February 1991 and was executive vice president from December 1980 until his retirement in September 1990. Mr. Davenport has been the chairman and president of Sheridan Broadcasting Corporation since 1972. He is a director of Bell Atlantic - Pennsylvania, Inc. -5-

7 Mr. Davidson founded ARAMARK in 1959, and was its chief executive officer and chairman until his retirement in July 1977. Mr. Defliese was the chairman and managing partner of Coopers & Lybrand prior to his retirement in 1977 and is currently Professor Emeritus, Graduate School of Business, Columbia University. Mr. Driscoll was a partner in the Philadelphia law firm of Ballard, Spahr, Andrews & Ingersoll from January 1984 until December 1990. He is a director of Versa Services Ltd. Mr. Fromstein has been chief executive officer and president of Manpower Inc. since March 1976. He is a director of Manpower Inc. and ARI Network Services, Inc. Mr. Jordan served as the president of The American College from October 1982 until December 1987. He is a director of Acme Steel Company and Pittston, Inc. Former Governor Kean was the Governor of the State of New Jersey from 1982 until 1990. He has been the president of Drew University since 1990. He is a director of Amerada Hess Corporation, Bell Atlantic Corporation, Beneficial Corporation, Fiduciary Trust International and United Health Care Corporation. Mr. MacDonald serves as a consultant to Acme Steel Company. He was chairman of Acme Steel Company from June 1986 until May 1992. He is a director of Acme Steel Company and Kaiser Resources. Mr. Preston has been the chairman, president, chief executive officer and a director of Avon Products, Inc. since 1989. He is a director of F. W. Woolworth Company and Reader's Digest Association. Except as set forth below, the principal occupations of the executive officers throughout the past five years have been the performance of the functions of the corporate offices shown above. Mr. Carr was vice president of the Company from November 1988 until February 1991 when he was elected to his current position. Mr. Farquharson was vice president of the Company from 1976 until February 1991 when he was elected to his current position. Mr. Gail was elected senior vice president of the Company in August 1994. Prior to joining the Company in May 1994, he was president and chief executive officer and prior thereto senior vice president of FCB - Philadelphia. Mr. Ksansnak was senior vice president of the Company from May 1986 until February 1991 when he was elected to his current position. Mr. Leonard was president of ARAMARK Uniform Services from 1984 until March 1992 when he was elected to his current position. -6-

8 Mr. Sutherland was vice president and treasurer of the Company from 1983 until February 1991 when he was elected senior vice president. In May 1993 he was elected to his current position. Mr. Vent was vice president of the Company from 1982 until February 1991 when he was elected to his current position. Mr. Hill was elected vice president of the Company in January 1993. Prior to joining the Company in 1993, he was vice president of Farley Industries, Inc. and Fruit of the Loom, Inc. Mr. Mulvaney was vice president of ARAMARK Uniform Services from 1988 until February 1993 when he was elected to his current position. Mr. Tanzola was vice president and controller of the Company from 1978 until 1993 when he assumed new responsibilities as vice president, controls. Mr. Griffith was assistant controller of the Company from May 1985 until November 1991 when he became the director of corporate planning. In December 1993 he became controller and chief accounting officer of the Company. Mr. Mahoney was elected treasurer of the Company in February 1991. He had been assistant treasurer since 1985. Mr. Thon was elected assistant treasurer of the Company in August 1994. Previously he held various treasury analyst positions since joining the Company in 1987. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters There are currently 1,147 record holders of Class B common stock of the Company, all of whom are employees or directors of the Company (or members of their families or trusts created by them). There are currently 132 record holders of the Class A common stock of the Company, all of whom are institutional investors, Company benefit plans or individuals not employed by the Company. There is no established public trading market for the common stock of the Company. However, employees of the Company are able to sell shares of common stock through various programs maintained by the Company. See note 7 to the consolidated financial statements for information regarding the Company's shareholders' agreement. Under the Company's primary credit agreement, there are various covenants that restrict the amount of cash dividends that may be paid to the holders of outstanding common stock of the Company and which also limit the amount of funds that may be transferred by ARAMARK to the Company for such purpose. See note 4 to the consolidated financial statements. -7-

9 Item 6. Selected Financial Data The following table presents summary consolidated financial data for the Company. The following data should be read in conjunction with the consolidated financial statements and the related notes thereto and Management's Discussion and Analysis of Results of Operations and Financial Condition, each included elsewhere herein. <TABLE> <CAPTION> ARAMARK Corporation and Subsidiaries -------------------------------------------------------------- Fiscal Year Ended on or near September 30 ---------------------------------------------------------------- 1994 1993 1992(1) 1991 1990 ------ ------ -------- ------ ----- (In millions, except per share amounts and ratios) Income Statement Data: <S> <C> <C> <C> <C> <C> Revenues...................................... $5,161.6 $4,890.7 $4,865.3 $4,774.4 $4,595.5 Earnings before interest and income taxes( 2) ....................... 272.0 268.9 261.6 260.2 257.0 Interest expense, net......................... 108.5 125.7 137.9 142.3 49.8 Income before extraordinary item and cumulative effect of change in accounting for income taxes (3).................................. 95.0 84.3 70.7 64.2 51.8 Net income.................................... 86.1 77.1 67.4 64.2 51.8 Earnings per share: (4)....................... Income before extraordinary item and cumulative effect of change in accounting for income taxes ( 3)............................... $1.87 $1.64 $1.40 $1.23 $.91 Net income................................. $1.69 $1.49 $1.33 $1.23 $.91 Ratio of earnings to fixed charges (5)........ 2.1x 1.9x 1.7x 1.6x 1.5x Balance Sheet Data (at period end): Total assets.................................. $2,122.0 $2,040.6 $2,005.0 $2,002.6 $1,917.2 Long-term borrowings: (6) Senior...................................... 691.5 533.8 629.5 722.1 728.7 Subordinated................................ 290.4 474.9 413.5 415.1 369.1 Common stock subject to potential repurchase (7).............................. 20.8 21.7 20.4 17.7 17.5 Shareholders' equity........................... 182.6 124.1 103.8 40.6 49.3 </TABLE> - ------------------------------------ (1) Fiscal 1992 is a fifty-three week period. See note 1 to the consolidated financial statements. (2) See note 2 to the consolidated financial statements. (3) See notes 3 and 6 to the consolidated financial statements. (4) Based on weighted average shares of common stock outstanding for all periods. See note 1 to the consolidated financial statements. (5) For the purposes 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). (6) See note 4 to the consolidated financial statements. (7) See note 7 to the consolidated financial statements. -8-

10 Item 7. Management's Discussion and Analysis of Results of Operations and Financial Condition RESULTS OF OPERATIONS Fiscal 1994 Compared to Fiscal 1993 Overview. Revenues for the fiscal year ended September 30, 1994 were $5.2 billion, a 6% increase over fiscal 1993. Earnings before interest and taxes of $272 million increased 1% compared to the prior year. Each of the Company's business segments reflected improvements in operating earnings. However, the 1994 results were adversely impacted by the Major League Baseball strike in the United States and Canada and costs associated with several corporate development and strategic initiatives, including costs related to a change in corporate identity. See note 11 to the consolidated financial statements. Earnings before interest and taxes for both fiscal 1994 and fiscal 1993 include other income of $5.8 million and $5.0 million, respectively, and in fiscal 1994 a gain of $4.7 million on the issuance of stock by an affiliate. See note 2 to the consolidated financial statements. The Company's operating income margin decreased to 5.2% from 5.5%. The decrease in margin is due primarily to the baseball strike and increased general corporate expenses referred to above. Interest expense declined $17.2 million or 14%, due primarily to lower borrowing levels and the impact of refinancing certain of the Company's indebtedness. Fiscal 1994 and 1993 net income include an extraordinary item for the early extinguishment of debt of $7.7 million and $7.2 million, respectively, as described in note 3 to the consolidated financial statements. Fiscal 1994 net income also includes a charge of $1.3 million related to the cumulative effect of adopting Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes. See note 6 to the consolidated financial statements. Segment Results. Food, Leisure and Support Services segment revenues were 4% greater than prior year. Increases related to new accounts, primarily in the U.S. business and education markets, and an acquisition of a company in Spain were partially offset by the effects of a divestiture in late fiscal 1993 and the baseball strike in fiscal 1994. See notes 2 and 11 to the consolidated financial statements. Uniform Services segment revenues increased 11% as a result of increased volume in both the uniform rental and direct marketing businesses. Health and Education Services segment revenues increased 9% as a result of new contracts at correctional institutions and hospitals and continued enrollment growth in the child care services business. Revenues for the Distributive Services segment increased 3% due to increased volume. Operating income for the Food, Leisure and Support Services segment increased 1% over the prior year. Increased earnings in the U.S. business dining market and the gain from the sale of stock of an affiliate were offset by the impact of the baseball strike, start-up costs on new contracts, and continued sluggish economic conditions in selected European markets. Depreciation and amortization in this segment increased by $9 million due to acquisition related amortization and depreciation on recent capital projects. Uniform -9-

11 Services operating income increased 9% as a result of the revenue growth. Operating income for the Health and Education Services segment increased 11% due to revenue growth plus improvements in operating efficiency due to leveraging of overhead costs. Distributive Services operating income increased 7%, primarily due to increased volume with costs remaining relatively constant. At the time of the filing of this Annual Report, the Major League Baseball strike, as well as the National Hockey League strike continue in the U.S. and Canada. Due to the uncertainty as to the length of the strikes, the Company cannot determine the potential impact on fiscal 1995 financial results. In fiscal 1994, management estimates that consolidated operating income and income before extraordinary item would have been approximately 3% and 5% higher, respectively, had the baseball strike not occurred. See note 11 to the consolidated financial statements. Fiscal 1993 Compared to Fiscal 1992 Overview. Revenues for the fiscal year ended October 1, 1993 were $4.9 billion. Operating income for fiscal 1993 was $269 million, an increase of $7 million or 3% over fiscal 1992. Excluding the unfavorable impact of currency translation, revenues and operating income increased 2% and 4%, respectively, over fiscal 1992. Operating results for fiscal 1993 and fiscal 1992 include other income of $5.0 million and $4.2 million, respectively. See note 2 to the consolidated financial statements. The Company's operating margin increased from 5.4% in fiscal 1992 to 5.5% in fiscal 1993 reflecting declines in cost of services provided and selling and general corporate expenses as a percentage of revenues. The declines are primarily due to the favorable impact of effective controls of costs relative to revenue growth plus the impact of unusual costs included in fiscal 1992 selling and general corporate expenses in connection with a potential acquisition and several special development programs. Interest expense declined $12.2 million or 9% due primarily to lower interest rates and the impact of refinancing the Company's senior notes and subordinated debentures. Fiscal 1993 and 1992 net income includes an extraordinary item due to early extinguishments of debt of $7.2 million and $3.3 million, respectively. See note 3 to the consolidated financial statements for a description of the debt refinancings and extraordinary item. Income before the extraordinary item for fiscal 1993 was $84.3 million, which exceeded the prior year by 19%. Segment Results. Food, Leisure and Support Services segment revenues approximated prior year. The impact of new accounts in international and domestic markets for this segment was offset by the adverse effect of economic conditions in the United States and Canada on selected business dining and other accounts and a 2% revenue decline attributable to unfavorable currency exchange rates. Uniform Services segment revenues increased 15% due to the acquisition of WearGuard in fiscal 1992 and growth in volume at uniform rental operations which accounted for 3% of the increase. Health and Education Services segment revenues, excluding the revenues of Living Centers which was divested in fiscal 1992, increased 12% due primarily to new contracts at correctional institutions and hospitals, continued enrollment growth at Children's World and a fiscal 1992 acquisition of a business providing management services to hospital -10-

12 emergency departments. Revenues for the Distributive Services segment declined slightly due to the continued adverse effect of the economic slowdown on consumer spending particularly in southern California. Operating income for the Food, Leisure and Support Services segment increased 3% over the prior year. The positive effects of new business, operating efficiencies, and effective controls over product and overhead costs plus a fiscal 1993 divestiture gain, described in note 2, contributed to the increase. This was partially offset by the previously described impact of adverse economic conditions, start-up costs at new accounts, a 2% decline in operating income attributable to unfavorable currency exchange rates and the reserve established for potential adjustments described in note 2. Uniform Services operating income increased 15% due to the acquisition of WearGuard in fiscal 1992 and revenue growth coupled with higher operating margins at uniform rental operations which accounted for 6% of the increase. Depreciation and amortization expense increased by $7.5 million for this segment due primarily to the acquisition of WearGuard in fiscal 1992. Excluding the fiscal 1992 operating results and divestiture gain related to Living Centers, operating income for the Health and Education Services segment increased 4% as higher revenues plus an increase in operating income due to the fiscal 1992 acquisition described above were partially offset by higher operating costs. Distributive Services operating income declined 8% reflecting lower operating margins as a result of the impact of the economic slowdown coupled with an increase in operating costs. FINANCIAL CONDITION AND LIQUIDITY Cash flows generated from operating activities during fiscal 1994 were more than sufficient to finance capital expenditures, acquisitions and common and preferred stock repurchases during the year. The Company expects to continue to fund capital expenditures, acquisitions and other liquidity needs from cash provided by operating activities, normal disposals of property and equipment and borrowings available under its credit facility. As of September 30, 1994, the Company has capital commitments of approximately $52 million related to several long-term concession contracts at stadiums and arenas. During fiscal 1994, the Company amended its credit facility, increasing the maximum borrowing amount from $650 million to $800 million, and extending the final maturity to October 2001. See note 4 to the consolidated financial statements. Currently the Company has approximately $325 million of unused committed credit availability under its credit facility. Subsequent to yearend, the Company has entered into definitive agreements for the acquisition of three businesses and is in the process of completing a tender offer for the remaining minority interest of its Canadian subsidiary. See note 2 to the consolidated financial statements. Although the credit availability is sufficient to fund these transactions, the Company intends to increase the amount of the credit facility to provide additional financing availability. During fiscal 1994, the Company redeemed $182.3 million of its 12-1/2% subordinated debentures. See note 3 to the consolidated financial statements. During fiscal 1994, the Company repurchased $17.6 million of its Series C Preferred Stock, repurchased $29.7 million of its Class B Common Stock and issued $13.2 million of subordinated installment notes as partial consideration. The Company also purchased $9.2 -11-

13 million of its Class A Common Stock. Additionally, the Company issued $12.4 million of Class B Common Stock to eligible employees, primarily through the exercise of installment stock purchase opportunities. Item 8. Financial Statements and Supplementary Data See Index to Financial Statements and Schedules at page S-1. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not Applicable. PART III Items 10, 11, 12, and 13 of Part III are incorporated by reference to the registrant's Proxy Statement for its 1995 Annual Stockholders' Meeting to be filed with the Commission pursuant to Regulation 14A (except for the stock price performance graph and the committee report on executive compensation in the Company's Proxy Statement). PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a) Index to Financial Statements See Index to Financial Statements and Schedules at page S-1. (b) Reports on Form 8-K None. (c) Exhibits Required by Item 601 of Regulation S-K See Index to Exhibits. (d) Financial Statement Schedules See Index to Financial Statements and Schedules at page S-1. -12-

14 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized. ARAMARK CORPORATION By: Alan J. Griffith ---------------------- Alan J. Griffith Controller and Chief Accounting Officer November 22, 1994 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on November 22, 1994. Signature Title - --------- ----------------------------------- Joseph Neubauer Chairman and President and Director Joseph Neubauer (Principal Executive Officer) James E. Ksansnak Executive Vice President James E. Ksansnak (Principal Financial Officer) Alan J. Griffith Controller Alan J. Griffith (Principal Accounting Officer) Robert J. Callander Alan K. Campbell Ronald R. Davenport Davre J. Davidson Philip L. Defliese Lee F. Driscoll, Jr. Directors Mitchell S. Fromstein Edward G. Jordan Thomas H. Kean Reynold C. MacDonald James E. Preston Martin W. Spector Martin W. Spector Attorney-in-Fact -13-

15 ARAMARK CORPORATION AND SUBSIDIARIES INDEX TO FINANCIAL STATEMENTS AND SCHEDULES Page ---- Report of Independent Public Accountants S-2 Report of Chartered Accountants S-3 Consolidated Balance Sheets - As of September 30, 1994 and October 1, 1993 S-4 Consolidated Statements of Income - Fiscal Years 1994, 1993 and 1992 S-6 Consolidated Statements of Cash Flows - Fiscal Years 1994, 1993 and 1992 S-7 Consolidated Statements of Shareholders' Equity - Fiscal Years 1994, 1993 and 1992 S-8 Notes to Consolidated Financial Statements S-11 Consolidated Supporting Schedules Filed: Schedule Number - -------- III - Condensed Financial Information of Registrant S-26 V - Property and Equipment S-30 VI - Accumulated Depreciation and Amortization of Property and Equipment S-33 VIII - Valuation and Qualifying Accounts and Reserves S-36 X - Supplementary Income Statement Information S-37 All other schedules are omitted because they are not applicable, not required, or the information required to be set forth therein is included in the consolidated financial statements or in notes thereto. S-1

16 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To ARAMARK Corporation: We have audited the accompanying consolidated balance sheets of ARAMARK Corporation (a Delaware corporation) (formerly The ARA Group, Inc.) and subsidiaries as of September 30, 1994 and October 1, 1993, and the related consolidated statements of income, shareholders' equity and cash flows for each of the three fiscal years in the period ended September 30, 1994. These consolidated financial statements and the schedules referred to below are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and schedules based on our audits. We did not audit the financial statements of Versa Services Ltd., the Company's Canadian subsidiary, which statements reflect assets representing 3.6% of consolidated assets as of both September 30, 1994 and October 1, 1993, and revenues representing 5.6%, 6.3% and 7.4% of consolidated revenues for the fiscal years 1994, 1993 and 1992, respectively. Those statements were audited by other auditors whose report has been furnished to us and our opinion, insofar as it relates to the amounts included for Versa Services Ltd., is based solely on the report of the other auditors. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the report of other auditors provide a reasonable basis for our opinion. In our opinion, based on our audits and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of ARAMARK Corporation and subsidiaries as of September 30, 1994 and October 1, 1993, and the results of their operations and their cash flows for each of the three fiscal years in the period ended September 30, 1994, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed in the index to financial statements are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. As discussed in Note 6 to the consolidated financial statements, ARAMARK Corporation changed its method of accounting for income taxes in fiscal 1994. ARTHUR ANDERSEN LLP Philadelphia, Pennsylvania November 7, 1994 S-2

17 REPORT OF CHARTERED ACCOUNTANTS To The Directors of Versa Services Ltd.: We have audited the consolidated balance sheets of Versa Services Ltd. as at September 28, 1994 and September 29, 1993 and the consolidated statements of income and retained earnings and cash flows for the fifty-two week period ended September 28, 1994, the fifty-two week period ended September 29, 1993, and the fifty-three week period ended September 30, 1992 (not presented separately herein). These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at September 28, 1994 and September 29, 1993, and the results of its operations and the changes in its financial position for the fifty-two week period ended September 28, 1994, the fifty-two week period ended September 29, 1993 and the fifty-three week period ended September 30, 1992 in accordance with accounting principles generally accepted in Canada. Mississauga, Canada ERNST & YOUNG November 16, 1994 Chartered Accountants S-3

18 ARAMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, 1994 and October 1, 1993 <TABLE> <CAPTION> (dollars in thousands, except per share amounts) - -------------------------------------------------------------------------------- 1994 1993 - -------------------------------------------------------------------------------- <S> <C> <C> ASSETS Current Assets: Cash and cash equivalents $ 27,426 $ 27,801 Short-term investments held by the Canadian subsidiary 16,203 -- Receivables (less allowances: 1994, $12,423; 1993, $10,242) 433,550 388,768 Inventories 256,950 249,858 Prepayments and other current assets 69,865 63,381 - -------------------------------------------------------------------------------- Total current assets 803,994 729,808 - -------------------------------------------------------------------------------- Property and Equipment, at Cost: Land, buildings and improvements 379,671 355,744 Service equipment and fixtures 888,134 783,393 Leased property under capital leases 8,204 8,204 - -------------------------------------------------------------------------------- 1,276,009 1,147,341 Less-Accumulated depreciation 594,102 498,962 - -------------------------------------------------------------------------------- 681,907 648,379 - -------------------------------------------------------------------------------- Goodwill 438,725 446,261 - -------------------------------------------------------------------------------- Other Assets 197,324 216,193 - -------------------------------------------------------------------------------- $2,121,950 $2,040,641 ================================================================================ </TABLE> The accompanying notes are an integral part of these financial statements. S-4

19 ARAMARK CORPORATION AND SUBSIDIARIES <TABLE> <CAPTION> - ------------------------------------------------------------------------------------------------- 1994 1993 - ------------------------------------------------------------------------------------------------- <S> <C> <C> LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current maturities of long-term borrowings $ 9,391 $ 15,615 Accounts payable 372,908 329,129 Accrued payroll and related expenses 142,911 132,045 Other accrued expenses and current liabilities 231,991 208,677 - ------------------------------------------------------------------------------------------------ Total current liabilities 757,201 685,466 - ------------------------------------------------------------------------------------------------ Long-Term Borrowings: Senior 697,695 544,971 Subordinated 290,414 474,875 Obligations under capital leases 3,231 4,443 - ------------------------------------------------------------------------------------------------ 991,340 1,024,289 Less-current portion 9,391 15,615 - ------------------------------------------------------------------------------------------------ Total long-term borrowings 981,949 1,008,674 - ------------------------------------------------------------------------------------------------ Deferred Income Taxes and Other Noncurrent Liabilities 168,638 182,693 Minority Interest 10,812 18,084 Common Stock Subject to Potential Repurchase Under Provisions of Shareholders' Agreement 20,791 21,651 Shareholders' Equity Excluding Common Stock Subject to Repurchase: Series C preferred stock, redemption value $1,000; authorized: 40,000 shares; issued: 1994 - 16,949 shares; 1993 - 34,596 shares 16,949 34,596 Class A common stock, par value $.01; authorized: 25,000,000 shares; issued: 1994 - 2,074,251 shares; 1993 - 2,068,396 shares 21 21 Class B common stock, par value $.01; authorized: 150,000,000 shares; issued: 1994 - 24,338,494 shares; 1993 - 24,276,512 shares 243 243 Earnings retained for use in the business 178,587 104,827 Cumulative translation adjustment 7,550 6,037 Impact of potential repurchase feature of common stock (20,791) (21,651) - ------------------------------------------------------------------------------------------------ Total 182,559 124,073 - ------------------------------------------------------------------------------------------------ $2,121,950 $2,040,641 ================================================================================================ </TABLE> The accompanying notes are an integral part of these financial statements. S-5

20 ARAMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME For the Fiscal Years Ended September 30, 1994, October 1, 1993 and October 2, 1992 (dollars in thousands, except per share amounts) <TABLE> <CAPTION> - ------------------------------------------------------------------------------------------------- 1994 1993 1992 - ------------------------------------------------------------------------------------------------- <S> <C> <C> <C> Revenues $ 5,161,578 $ 4,890,738 $ 4,865,343 - ------------------------------------------------------------------------------------------------- Costs and Expenses: Cost of services provided 4,686,086 4,432,840 4,412,374 Depreciation and amortization 143,763 130,511 125,798 Selling and general corporate expense 70,196 63,406 69,760 Other expense (income) (5,792) (4,955) (4,174) - ------------------------------------------------------------------------------------------------- 4,894,253 4,621,802 4,603,758 - ------------------------------------------------------------------------------------------------- Operating income 267,325 268,936 261,585 Gain on Issuance of Stock by an Affiliate 4,658 -- -- - ------------------------------------------------------------------------------------------------- Earnings before interest and income taxes 271,983 268,936 261,585 Interest Expense, net 108,499 125,671 137,862 - ------------------------------------------------------------------------------------------------- Income before income taxes 163,484 143,265 123,723 Provision For Income Taxes 67,119 57,526 51,507 Minority Interest 1,332 1,405 1,518 - ------------------------------------------------------------------------------------------------- Income Before Extraordinary Item and Cumulative Effect of Change in Accounting for Income Taxes 95,033 84,334 70,698 Extraordinary Item Due to Early Extinguishments of Debt (net of income taxes of $5,118 in 1994, $4,660 in 1993 and $1,943 in 1992) 7,677 7,202 3,317 Cumulative Effect of Change in Accounting for Income Taxes 1,277 -- -- - ------------------------------------------------------------------------------------------------- Net Income $ 86,079 $ 77,132 $ 67,381 ================================================================================================= Earnings Per Share: Income before extraordinary item and cumulative effect of change in accounting for income taxes $1.87 $1.64 $1.40 Net income $1.69 $1.49 $1.33 ================================================================================================= The accompanying notes are an integral part of these financial statements. S-6

21 ARAMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Fiscal Years Ended September 30, 1994, October 1, 1993 and October 2, 1992 (in thousands) </TABLE> <TABLE> <CAPTION> 1994 1993 1992 - ------------------------------------------------------------------------------------------ <S> <C> <C> <C> Cash flows from operating activities: Net income $ 86,079 $ 77,132 $ 67,381 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 143,763 130,511 125,798 Income taxes deferred (2,174) 6,058 13,695 Minority interest 1,332 1,405 1,518 Cumulative effect of accounting change 1,277 -- -- Gain on issuance of stock by affiliate (4,658) -- -- Extraordinary item 7,677 7,202 3,317 Changes in noncash working capital: Receivables (40,557) (933) (31,451) Inventories (6,915) (6,425) (9,901) Prepayments (15,675) 53,288 10,265 Accounts payable 36,956 (11,395) 18,855 Accrued expenses 36,926 (198) 8,814 Changes in noncurrent liabilities (1,368) 8,541 (14,940) Changes in other assets (6,445) 4,106 4,338 Other (9,186) (5,604) (6,822) - ------------------------------------------------------------------------------------------ Net cash provided by operating activities 227,032 263,688 190,867 - ------------------------------------------------------------------------------------------ Cash flows from investing activities: Purchases of property and equipment (145,935) (142,121) (157,313) Disposals of property and equipment 11,525 11,348 11,073 Sale of investments 13,543 15,945 -- Divestiture of certain businesses 7,297 11,928 180,765 Increase in short-term investments (16,203) -- -- Purchase of subsidiary stock (17,623) -- -- Acquisition of certain businesses: Working capital other than cash acquired (3,066) 8,697 (25,450) Property and equipment (573) (4,544) (32,896) Additions to intangibles (6,734) (45,547) (75,085) Assumed borrowings -- 2,885 1,994 Other 7,758 (5,368) (3,241) - ------------------------------------------------------------------------------------------ Net cash used in investing activities (150,011) (146,777) (100,153) - ------------------------------------------------------------------------------------------ Cash flows from financing activities: Proceeds from additional long-term borrowings 167,329 108,174 5,076 Payment of long-term borrowings including premiums (210,511) (157,407) (85,647) Redemption of preferred stock (17,647) (137) -- Proceeds from issuance of common stock 12,416 9,462 8,675 Repurchase of common stock (25,729) (45,795) (14,644) Payment of special dividend -- (24,157) -- Payment of preferred stock dividend (1,917) -- -- Other (1,337) (3,035) (126) - ------------------------------------------------------------------------------------------ Net cash used in financing activities (77,396) (112,895) (86,666) - ------------------------------------------------------------------------------------------ Increase (decrease) in cash and cash equivalents (375) 4,016 4,048 Cash and cash equivalents, beginning of year 27,801 23,785 19,737 - ------------------------------------------------------------------------------------------ Cash and cash equivalents, end of year $ 27,426 $ 27,801 $ 23,785 ========================================================================================== The accompanying notes are an integral part of these financial statements. S-7

22 ARAMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994 (in thousands) </TABLE> <TABLE> <CAPTION> - ------------------------------------------------------------------------------------------------------------------------------------ Impact of Potential Series C Class A Class B Cumulative Repurchase Preferred Common Common Capital Retained Translation Feature of Stock Stock Stock Surplus Earnings Adjustment Common Stock -------- --------- --------- ------- -------- ----------- ------------ <S> <C> <C> <C> <C> <C> <C> <C> Balance, October 1, 1993 $ 34,596 $ 21 $ 243 $ -- $ 104,827 $ 6,037 $ (21,651) Net income 86,079 Dividends on preferred stock (1,337) Issuance of Class A common stock to employee benefit plans 1 8,881 Issuance of Class B common stock 25 18,910 Retirement of common and preferred stock (17,647) (1) (25) (27,791) (10,982) Change during the period 1,513 860 --------- --------- --------- ------- --------- --------- --------- Balance, September 30, 1994 $ 16,949 $ 21 $ 243 $ -- $ 178,587 $ 7,550 $ (20,791) ========= ========= ========= ======== ========= ========= ========= </TABLE> The accompanying notes are an integral part of these financial statements. S-8

23 ARAMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY FOR THE FISCAL YEAR ENDED OCTOBER 1, 1993 (in thousands) <TABLE> <CAPTION> - ----------------------------------------------------------------------------------------------------------------------------------- Impact of Potential Series C Class A Class B Cumulative Repurchase Preferred Common Common Capital Retained Translation Feature of Stock Stock Stock Surplus Earnings Adjustment Common Stock ---------- --------- --------- -------- --------- ----------- ------------ <S> <C> <C> <C> <C> <C> <C> <C> Balance, October 2, 1992 $ -- $ 6 $ 53 $ -- $ 113,091 $ 11,070 $ (20,437) Net income 77,132 Special dividend 34,733 (59,514) Dividends on preferred stock (883) Issuance of Class A common stock to employee benefit plans 10,688 Issuance of Class B common stock 11 18,420 Retirement of common and preferred stock (137) (1) (3) (29,108) (24,801) Common stock split 16 182 (198) Change during the period (5,033) (1,214) --------- --------- --------- --------- --------- --------- --------- Balance, October 1, 1993 $ 34,596 $ 21 $ 243 $ -- $ 104,827 $ 6,037 $ (21,651) ========= ========= ========= ========= ========= ========= ========= </TABLE> The accompanying notes are an integral part of these financial statements. S-9

24 ARAMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY FOR THE FISCAL YEAR ENDED OCTOBER 2, 1992 (in thousands) <TABLE> <CAPTION> Impact of Potential Class A Class B Cumulative Repurchase Common Common Capital Retained Translation Feature of Stock Stock Surplus Earnings Adjustment Common Stock -------- -------- ------- --------- ----------- ------------ <S> <C> <C> <C> <C> <C> <C> Balance, September 27, 1991 $ 5 $ 56 $ -- $ 46,134 $ 12,081 $(17,662) Net income 67,381 Issuance of Class A common stock to employee benefit plans 1 8,619 Issuance of common stock 4 12,648 Retirement of common stock (7) (21,267) (424) Change during the period (1,011) (2,775) -------- -------- ------- -------- --------- -------- Balance, October 2, 1992 $ 6 $ 53 $ -- $113,091 $ 11,070 $(20,437) ======== ======== ======= ======== ========= ======== </TABLE> The accompanying notes are an integral part of these financial statements. S-10

25 ARAMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Effective October 10, 1994 the Company changed its name from The ARA Group, Inc. to ARAMARK Corporation. FISCAL YEAR The Company's fiscal year is the fifty-two or fifty-three week period which ends on the Friday nearest September 30th. The years ended September 30, 1994, October 1, 1993 and October 2, 1992 are fifty-two, fifty-two and fifty-three week periods, respectively. PRINCIPLES OF CONSOLIDATION, ETC. The consolidated financial statements include the accounts of the Company and all its subsidiaries. All significant intercompany balances and transactions have been eliminated and net income is reduced by the portion of income applicable to minority shareholders of less than wholly-owned subsidiaries. Certain 1993 items have been reclassified to conform to the 1994 presentation. In fiscal 1995, the Company is required to adopt the provisions of Statement of Financial Accounting Standards (SFAS) No. 112, "Employers' Accounting for Postemployment Benefits," and SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities." Adoption of these standards will not have a material impact on the consolidated financial statements. CURRENCY TRANSLATION Gains and losses resulting from the translation of financial statements of non-U.S. subsidiaries are reflected as a currency translation adjustment in shareholders' equity. Currency transaction gains and losses included in operating results for fiscal 1994, 1993 and 1992 were not significant. CURRENT ASSETS The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. At September 30, 1994, securities having maturities in excess of three months, all of which were owned by the Company's Canadian subsidiary, are classified as short-term investments and are recorded at cost which approximates market value. Inventories are valued at the lower of cost (principally the first-in, first-out method) or market. The LIFO (last-in, first-out) method of determining cost is used to value directly marketed work clothing and casual apparel. The stated value of inventories determined using the LIFO method is not significantly different from replacement or current cost. Personalized work apparel and linens in service are recorded at cost and are amortized over their estimated useful lives, approximately two years. In accordance with industry practice, magazines and books are sold to retailers with the right to return unsold items for ultimate credit from the publishers. The components of inventories as of the respective yearends are as follows: 1994 1993 - ------------------------------------------------------------------------------- Food 24.9% 29.0% Work apparel, casual apparel and linens 60.9% 55.7% Magazines and books 5.6% 4.7% Parts, supplies and novelties 8.6% 10.6% - ------------------------------------------------------------------------------- 100.0% 100.0% - ------------------------------------------------------------------------------- S-11

26 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued) PROPERTY AND EQUIPMENT Property and equipment are stated at cost and are depreciated over their estimated useful lives on a straight-line basis. Gains and losses on dispositions are included in operating results. Maintenance and repairs are charged to operations currently, and replacements and significant improvements are capitalized. The estimated useful lives for the major categories of property and equipment are 10 to 40 years for buildings and improvements and 3 to 10 years for service equipment and fixtures. GOODWILL Goodwill, which represents the excess of cost over fair value of the net assets of acquired businesses, is being amortized on a straight-line basis principally over 40 years. The Company develops operating income projections for each of its lines of business and evaluates the recoverability and amortization period of goodwill using these projections. Based upon management's current assessment, the estimated remaining amortization period of goodwill is appropriate and the remaining balance is fully recoverable. Accumulated amortization at September 30, 1994 and October 1, 1993 is $113.7 million and $97.4 million, respectively. OTHER ASSETS Other assets consist primarily of investments in less than 50% owned entities, contract rights, customer lists, long-term receivables and noncurrent marketable equity securities. Investments in which the Company owns more than 20% but less than a majority are accounted for using the equity method. Contract rights and customer lists are being amortized on a straight-line basis over the expected period of benefit, 5 to 20 years. Noncurrent marketable equity securities are stated at the lower of aggregate cost or market. At September 30, 1994 and October 1, 1993 the cost and market value of the Company's noncurrent marketable equity securities approximated $2 million and $5 million, respectively. OTHER LIABILITIES Other noncurrent liabilities consist primarily of deferred compensation, insurance accruals, deferred gains arising from sale and leaseback transactions and subordinated installment notes arising from repurchases of common stock. The Company is self-insured for a limited portion of the risk retained under its general liability and workers' compensation insurance arrangements. Self-insurance reserves are actuarially determined based on the estimated timing of future insurance claim payments associated with the Company's retained risk. The current and noncurrent portions of the self-insurance reserves for workers' compensation insurance are accrued on a present value basis using a discount rate which approximates a risk-free rate. EARNINGS PER SHARE Earnings per share is reported on a fully diluted Common Stock, Class B equivalent basis (which reflects Common Stock, Class A shares converted to a Class B basis; ten for one) and is based upon the weighted average number of common shares outstanding during the respective periods, plus the common equivalent shares, if dilutive, that would result from the exercise of stock options. Fully diluted earnings per share approximates primary earnings per share and is equivalent to fully diluted earnings per share under the "two-class" method. S-12

27 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued) SUPPLEMENTAL CASH FLOW INFORMATION 1994 1993 1992 ------ ------ ------ (in millions) Interest Paid $108.2 $113.5 $127.3 Income Taxes Paid $ 54.0 $ 41.0 $ 39.0 Significant noncash investing and financing activities are as follows: o During fiscal 1994, 1993, and 1992, the Company contributed $8.9 million, $10.7 million, and $8.6 million, respectively, of Class A Common Stock to its employee benefit plans to fund previously accrued obligations. In addition, during fiscal 1994, 1993 and 1992 the Company contributed $1.8 million, $1.7 million and $1.7 million, respectively, of stock units to its stock unit retirement plan in satisfaction of its accrued obligations. See Note 5 to the consolidated financial statements. o During the third quarter of fiscal 1993, the Company paid a special dividend on its common stock which included $34.7 million of new Series C Preferred Stock. See Note 7 to the consolidated financial statements. o During fiscal 1994 and 1993, the Company received $4.0 million and $5.9 million, respectively, of employee notes under its Deferred Payment program as partial consideration for the issuance of Common Stock Class B. Also, during fiscal 1994, 1993, and 1992, the Company issued subordinated installment notes of $13.2 million, $8.3 million and $7.1 million, respectively, as part consideration for repurchases of Common Stock. See Note 7 to the consolidated financial statements. NOTE 2. ACQUISITIONS AND DIVESTITURES, ETC.: During the fourth quarter of fiscal 1994, an affiliate, 33% owned by the Company, sold common stock through a public offering. The Company sold approximately 9% of its equity investment in connection with the public offering, receiving net proceeds of $6.9 million and recorded a gain of $5.8 million, which is included in "Other expense (income)." At the time a subsidiary/affiliate sells its stock to third parties, the Company recognizes the resultant change in its net investment in the subsidiary/affiliate through the income statement in accordance with the Securities and Exchange Commission Staff Accounting Bulletin No. 51 (SAB No. 51). In accordance with SAB No. 51, the Company recognized a pre-tax gain of $4.7 million, and recorded a related tax provision of $1.9 million, representing the increase in book value of the Company's remaining investment created by the sale of the incremental new shares in the public offering. The Company's percentage ownership of the affiliate after the transaction is 28%. S-13

28 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 2. ACQUISITIONS AND DIVESTITURES, ETC.: (Continued) In September 1993, the Company acquired an 80% interest in the contract food service division of the HUSA Group ("HUSA"), a provider of food services to hospitals, schools and governmental facilities located in Spain, for aggregate consideration, including all costs, of approximately $30 million. The purchase price of the HUSA acquisition was allocated principally to contract rights and goodwill. The Company's unaudited pro forma results of operations for fiscal 1993 and 1992 would not be materially different assuming the acquisition occurred as of the beginning of the respective periods. During the fourth quarter of fiscal 1993, the Company sold Encore Service Systems, Inc. for approximately $20 million resulting in a gain of approximately $15 million. In addition, all of the Company's remaining shares of Living Centers of America common stock were sold during fiscal 1993 for approximately $16 million, resulting in a gain of approximately $8 million. These gains have been included in "Other expense (income)" in the accompanying consolidated statements of income. Also included in "Other expense (income)" is an amount of $18 million to establish a reserve for potential adjustments related to certain cost-based food service contracts. This resulted from a 1993 internal review of billing procedures covering primarily insurance and employee fringe benefits. The review revealed some past inconsistencies between the billings and the literal contractual language. During the second quarter of fiscal 1992, the Company acquired the assets of WearGuard Corporation ("WearGuard"), a direct marketer of work clothing and casual apparel and late in the third quarter acquired the business of Coordinated Health Services, Inc. ("CHS"), a provider of physician staffing and patient billing services for hospital emergency departments for aggregate consideration of $124 million. Also in the second quarter of 1992, the Company divested approximately 90% of its interest in Living Centers of America, Inc. ("Living Centers") in a sale of stock through a public offering. The net effect of these transactions resulted in a reduction of the Company's indebtedness of approximately $69 million. "Other expense (income)" of $4.2 million in fiscal 1992 represents a gain of $13 million on the Living Centers divestiture transaction partially offset by charges for insurance and related matters. The Company's fiscal 1992 financial statements reflect results of operations and cash flows for WearGuard and CHS for seven months and four months, respectively. The Company's unaudited pro forma results of operations for fiscal 1992 would not be materially different assuming the acquisitions occurred as of the beginning of the period. Subsequent to fiscal yearend 1994, the Company has entered into definitive agreements for the acquisition of three businesses (two are in the Food, Leisure and Support business segment and one in the Distributive segment) for total consideration, in the form of cash and preferred stock, of approximately $260 million. Revenues of these businesses would increase the Company's total revenues by approximately 5.5%. The cash portion of the consideration will be financed through the Company's existing Credit Agreement. The acquisitions, subject to certain third party approvals, are presently expected to close by the end of calendar year 1994. In the fourth quarter of fiscal 1994, the Company initiated a tender offer for the 30% minority interest of its Canadian subsidiary. The transaction is expected to be completed by the end of calendar year 1994 for total consideration of approximately $33 million, of which $17.6 million has been paid as of September 30, 1994. NOTE 3. EXTRAORDINARY ITEM: The following items have been reflected as extraordinary items in the consolidated financial statements. During fiscal 1994, the Company redeemed the remaining $182.3 million of its 12-1/2% subordinated debentures for a premium. The debt extinguishment was financed through borrowings under the Company's revolving credit facility. The resultant extraordinary charge was $7.7 million or $0.15 per share. S-14

29 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 3. EXTRAORDINARY ITEM: (Continued) During fiscal 1993, the Company repurchased the entire $100 million of its 10.55% senior notes for a premium and concurrently issued $100 million of 8-1/4% senior notes. The Company also paid a premium to redeem $38.6 million of its 12-1/2% subordinated debentures. During fiscal 1992, the Company exchanged $28.6 million of 10% subordinated debentures plus a premium for $28.6 million of its 13% subordinated debentures and paid a premium to redeem $1.5 million of its 12-1/2% subordinated convertible notes. NOTE 4. BORROWINGS: Long-term borrowings at September 30, 1994 and October 1, 1993 are summarized in the following table: <TABLE> <CAPTION> 1994 1993 ---------- ---------- (in thousands) <S> <C> <C> SENIOR: Credit facility borrowings $401,600 $ 260,700 10-1/4% note, due April 1998 50,000 50,000 8-1/4% notes, payable in installments through 1999 100,000 100,000 10-5/8% notes, due August 2000 100,000 100,000 Other, including mortgages and notes payable 46,095 34,271 - -------------------------------------------------------------------------------- 697,695 544,971 - -------------------------------------------------------------------------------- SUBORDINATED: 8-1/2% subordinated notes, due June 2003 100,000 100,000 10% exchangeable debentures and notes, due August 2000 59,299 61,465 12% debentures, due April 2000 125,000 125,000 12-1/2% debentures, due July 2001 -- 182,295 12-1/2% convertible notes, due February 2000 2,340 2,340 13% debentures, due January 1997 3,775 3,775 - -------------------------------------------------------------------------------- 290,414 474,875 - -------------------------------------------------------------------------------- OBLIGATIONS UNDER CAPITAL LEASES 3,231 4,443 - -------------------------------------------------------------------------------- 991,340 1,024,289 Less-current portion 9,391 15,615 - -------------------------------------------------------------------------------- $ 981,949 $1,008,674 ================================================================================ </TABLE> The $800 million revolving credit facility ("Credit Agreement") is provided by a group of banks and matures in October 2001 with quarterly commitment reductions of $12.5 million starting in December 1995 which increase annually thereafter. Interest under the credit agreement is based on the Prime Rate plus a spread of 0% to 5/8% (as of September 30, 1994 - 0%), London Inter-Bank Offered Rate (LIBOR) plus a spread of 1/8% to 1-1/8% (as of September 30, 1994 - 1/2%) or the Certificate of Deposit Rate plus a spread of 1/4% to 1-1/4% (as of September 30, 1994 - 5/8%), at the option of the Company. The spread is based on certain financial ratios and borrowing levels as defined. The Company pays a fee of 1/4 of 1% on the entire credit facility. The 8-1/4% notes are payable in $20 million annual installments commencing March 1995 with a final maturity of March 1999. The $20 million installment due in fiscal 1995 has been classified as non-current in the accompanying consolidated balance sheet as the Company has the ability and intent to finance it through additional borrowings under the Credit Agreement. S-15

30 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 4. BORROWINGS: (Continued) The 10-5/8% senior notes require a sinking fund payment of $50 million in August 1999 with a final maturity in August 2000. The 8-1/2% subordinated notes may be redeemed at the Company's option, in whole or in part, beginning June 1998 at a price equal to 104.25% of their principal amount and thereafter at prices declining to par in 2002, together with accrued interest. The 10% subordinated exchangeable debentures and notes may be exchanged at any time in whole or part, at the option of the holder, for 10-5/8% senior notes due August 2000 at an exchange ratio of .93. The 12% subordinated debentures may be redeemed at the Company's option, in whole or in part, beginning April 1995 at a price equal to 105% of the principal amount and thereafter at prices declining to par in April 1997, together with accrued interest. The 12-1/2% subordinated convertible notes are convertible at par, in whole, at the option of the holder, into a series of the Company's 13% subordinated debentures due January 1997. At any time on or after January 15, 1998, the Company may, at its option, redeem the notes, in whole or in part, at a price equal to 100% of their principal amount plus accrued interest. The 13% subordinated debentures may be redeemed by the Company on or after January 15, 1996, in whole or in part, at a price equal to 100% of their principal amount plus accrued interest. The fair value of the Company's aggregate senior and subordinated debt, based primarily on quoted market prices, was $705 million and $291 million, respectively at September 30, 1994 and $568 million and $511 million, respectively, at October 1, 1993. Accrued interest on borrowings totaling $23.6 million in 1994 and $29.2 million in 1993 is included in current liabilities as "Other accrued expenses." At September 30, 1994, the Company has $200 million of interest rate exchange agreements fixing the rate on a like amount of borrowings under the Credit Agreement at an average effective rate of 5.7% for remaining periods ranging between 1 and 34 months. The counterparties to the interest rate exchange agreements are major international banks. The Company continually monitors its positions and the credit ratings of its counterparties, and does not anticipate nonperformance by the counterparties. All interest rate agreements are accounted for as hedges and the related gains or losses are recognized in income as a component of interest expense over the period being hedged. As of October 1, 1993 the Company had $202 million of interest rate exchange agreements fixing the rate on a like amount of variable rate borrowings at an average effective rate of 6.3%. During fiscal 1993, the Company entered into a $28 million foreign currency swap agreement maturing in August 1996, which hedges the currency exposure of its net investment in Spain. See Note 2 to the consolidated financial statements. The fair value of the Company's swap agreements as of September 30, 1994 is approximately $5.5 million. At October 1, 1993, the fair value of the swap agreements was not significant. The Credit Agreement contains restrictive covenants which provide, among other things, limitations on the incurrence of debt, dispositions of material assets, payment of dividends and repurchases of capital stock. The terms of the Credit Agreement also limit the transfer of funds to the Company by its subsidiaries and require that the Company maintain certain specified minimum ratios of cash flow to fixed charges and to total borrowings and certain minimum levels of net worth (as defined). At September 30, 1994, the Company was in compliance with all of these covenants. S-16

31 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 4. BORROWINGS: (Continued) Long-term borrowings maturing in the next five years, excluding capital lease obligations, are as follows: Amount ------------- (in thousands) 1995 $ 8,701 1996 22,080 1997 25,571 1998 71,771 1999 85,015 NOTE 5. EMPLOYEE PENSION AND PROFIT SHARING PLANS: The Company maintains contributory and non-contributory defined benefit pension plans, primarily in Canada and the United Kingdom, providing retirement benefits to eligible employees not covered by collective bargaining agreements. Total pension expense under these plans for fiscal 1994, 1993 and 1992 was $1.4 million, $1.3 million and $1.1 million, respectively. The Company's policy is to fund the minimum contribution required under the applicable law. Defined benefit pension expense for 1994, 1993 and 1992 includes the following components: <TABLE> <CAPTION> 1994 1993 1992 ------- ------- ------- (in thousands) <S> <C> <C> <C> Service cost - benefits earned during the period $ 1,791 $ 1,628 $ 1,758 Interest cost on projected benefit obligations 2,459 2,309 2,228 Change in market valuation and return on plan assets (37) (5,071) (675) Net amortization and deferral (2,857) 2,456 (2,194) ------- ------- ------- $ 1,356 $ 1,322 $ 1,117 ======= ======= ======= Assumptions: Discount rate 8.4% 8.2% 8.2% Compensation increase 5.3% 5.4% 5.4% Rate of return on assets 8.4% 8.3% 8.4% </TABLE> The discount rates and rates of return on assets represent weighted averages that reflect the combined assumptions of plans located primarily in Canada and the United Kingdom. The defined benefit pension plans' funded status at September 30, 1994 and October 1, 1993 is as follows: <TABLE> <CAPTION> 1994 1993 ------- ------- (in thousands) <S> <C> <C> Pension plan obligations: Accumulated benefits (including vested benefits of $26,805 and $24,047 in 1994 and 1993, respectively) $ 26,983 $ 24,374 ======== ======== Projected benefits $ 33,728 $ 31,050 Market value of assets (primarily listed securities and government obligations) 35,179 32,665 -------- -------- Funded status 1,451 1,615 Unrecognized net loss (gain) 96 (767) Unrecognized net transition asset (2,905) (3,206) Unrecognized prior service cost 1,565 1,658 -------- ------- Prepaid (accrued) pension cost $ 207 $ (700) ======== ======= </TABLE> S-17

32 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 5. EMPLOYEE PENSION AND PROFIT SHARING PLANS: (Continued) In the United States, the Company also maintains qualified contributory and non-contributory retirement plans for eligible employees, with Company contributions to the plans based on earnings performance or salary level. Qualified non-contributory profit sharing plans are maintained by certain businesses, with annual contributions determined by management. The Company has a non-qualified stock unit retirement plan for certain employees. The total expense of the above plans for fiscal 1994, 1993 and 1992 was $14.5 million, $14.1 million and $13.6 million, respectively. During fiscal 1994, 1993 and 1992, the Company contributed 59,919 shares, 86,184 shares and 75,684 shares, respectively, of Common Stock, Class A to these plans to fund previously accrued obligations. In addition, during fiscal 1994, 1993 and 1992, the Company contributed to the stock unit retirement plan 143,125 stock units, 159,144 stock units and 175,596 stock units, respectively, which are convertible into Common Stock, Class B, in satisfaction of its accrued obligations. The value of the stock units was credited to capital surplus. The Company participates in various multi-employer union administered pension plans. Contributions to these plans, which are primarily defined benefit plans, result from contractual provisions of labor contracts and were $11.9 million, $10.2 million and $10.3 million for fiscal 1994, 1993 and 1992, respectively. NOTE 6. INCOME TAXES: Effective October 2, 1993, the Company adopted SFAS No. 109, "Accounting for Income Taxes." Prior to fiscal 1994, the Company followed the provisions of Accounting Principles Board Opinion No. 11. SFAS No. 109 requires deferred tax assets or liabilities to be recognized for the estimated future tax effects of temporary differences between the financial reporting and tax bases of the Company's assets and liabilities based on the enacted tax law and statutory tax rates applicable to the periods in which the temporary differences are expected to affect taxable income. The cumulative effect of this change in accounting principle was a charge of $1.3 million, or $0.03 per share, in the first quarter of fiscal 1994. The components of income before income taxes by source of income are as follows: <TABLE> <CAPTION> 1994 1993 1992 - --------------------------------------------------------------------------------------------------------------- (in thousands) <S> <C> <C> <C> United States $143,052 $121,818 $ 99,582 Non-U.S. 20,432 21,447 24,141 - --------------------------------------------------------------------------------------------------------------- $163,484 $143,265 $123,723 =============================================================================================================== The provision for income taxes consists of: 1994 1993 1992 - --------------------------------------------------------------------------------------------------------------- (in thousands) Current: Federal $51,935 $34,345 $22,737 State and local 11,827 7,024 5,614 Non-U.S. 5,531 10,099 9,461 - --------------------------------------------------------------------------------------------------------------- 69,293 51,468 37,812 - --------------------------------------------------------------------------------------------------------------- Deferred: Federal (1,516) 5,230 11,034 State and local (351) 736 1,499 Non-U.S. (307) 92 1,162 - --------------------------------------------------------------------------------------------------------------- (2,174) 6,058 13,695 - --------------------------------------------------------------------------------------------------------------- $67,119 $57,526 $51,507 =============================================================================================================== </TABLE> S-18

33 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 6. INCOME TAXES: (Continued) The provision for income taxes varies from the amount determined by applying the United States Federal statutory rate to pre-tax income as a result of the following: <TABLE> <CAPTION> 1994 1993 1992 - --------------------------------------------------------------------------------------------------------------- (% of pre-tax income) <S> <C> <C> <C> United States statutory income tax rate 35.0% 34.8% 34.0% Increase (decrease) in taxes, resulting from: State income taxes, net of Federal tax benefit 4.6 3.7 4.2 Permanent book/tax differences, primarily resulting from purchase accounting 3.0 2.4 4.6 Tax credits (1.5) (1.5) (2.4) Other, net (.1) .8 1.2 - --------------------------------------------------------------------------------------------------------------- Effective income tax rate 41.0% 40.2% 41.6% =============================================================================================================== </TABLE> As of September 30, 1994, the components of the net deferred tax asset are as follows: Deferred tax liabilities: Property and equipment $64,718 Inventory 5,484 Other 4,725 ------- Gross deferred tax liability 74,927 ------- Deferred tax assets: Insurance 17,797 Employee compensation and benefits 30,228 Accruals and allowances 20,648 Intangibles 9,954 Other 2,254 Valuation allowance (1,000) ------ Net deferred tax asset 79,881 ------ Net deferred tax asset $ 4,954 ====== The Company does not provide for U.S. or foreign taxes on the undistributed earnings of non-U.S. subsidiaries that are considered to be permanently reinvested. At September 30, 1994, undistributed earnings of these foreign subsidiaries or affiliates totaled $38.7 million, which will not be subject to U.S. tax until distributed as dividends. Foreign tax credits will be available to reduce U.S. taxes on this income upon distribution. Determination of the unrecognized deferred tax liability for temporary differences related to the undistributed earnings is not practicable. S-19

34 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 6. INCOME TAXES: (Continued) The components of deferred income taxes for years prior to the adoption of SFAS No. 109 are as follows: 1993 1992 ---- ---- (in thousands) Excess of tax over book depreciation $ 1,905 $ 5,445 Accrued vacation 52 (3,272) Provision for insurance costs (3,009) (1,668) Tax vs. book basis of dispositions 5,598 12,755 Other 1,512 435 ------- ------- $ 6,058 $13,695 ======= ======= NOTE 7. CAPITAL STOCK: There are two classes of common stock authorized and outstanding, Common Stock, Class A and Common Stock, Class B. Each Class A and Class B Share is entitled to one vote on all matters submitted to stockholders, voting together as a single class except where otherwise required by law. Each Class A Share is entitled to ten times the dividends and other distributions payable on each Class B Share. Class B Shares may be held only by employees, directors and their family members, and upon termination of employment each Class B Share is automatically converted into 1/10 of a Class A Share. During the third quarter of fiscal 1993, the Company paid a special dividend of $5 per Class B equivalent share on all shares of its Common Stock owned as of April 19, 1993, with $2 per Class B equivalent share, or $24.2 million, paid in cash and $3 per Class B equivalent share, or $34.7 million, in new Series C Preferred Stock ("Preferred Stock"). Concurrent with the dividend, the Company repurchased for cash 55,495 shares of its Class A Common Stock for $28.9 million. Holders of the Preferred Stock are entitled to cumulative dividends payable semi-annually; voting rights in the event of failure to pay dividends for four consecutive periods (two years); and upon liquidation, $1,000 per share plus accrued and unpaid dividends. The current dividend rate on the Preferred Stock is $60 per share and is reset annually in December of each year at a rate equal to $1,000 multiplied by 80% of Chemical Bank's announced prime rate of interest, but not less than $60 per share nor greater than $100 per share. The Preferred Stock may be repurchased, in whole or in part, at any time only at the Company's option at a price equal to $1,000 per share plus accrued and unpaid dividends. During fiscal 1994 the Company repurchased 17,647 preferred shares for $17.6 million. On November 9, 1993, the Company's Board of Directors declared a four-for-one split of the Class B and Class A Common Stock effected in the form of a stock dividend to shareholders of record on November 10. The Company issued 18,158,097 shares of Common Stock, Class B and 1,544,868 shares of Common Stock, Class A in connection with the stock split. The stated par value of $.01 per share of Class B and Class A common stock was not changed. As of September 30, 1994 the Company's stock option plans provided for the issuance of up to 33,001,148 options to purchase shares of Common Stock, Class B. The Company granted installment stock purchase opportunities under its stock ownership program in fiscal 1994, 1993 and 1992 which provide for the purchase of shares of Common Stock, Class B. Installment stock purchase opportunities are exercisable in six annual installments with the exercise price of each purchase opportunity equal to the current fair market value at the time the purchase opportunity is granted. During fiscal 1994, the Company implemented a program to extend non-qualified stock options to additional qualified employees. Under the program, options vest after three years and may be exercised for a period of three years after vesting. The exercise price of each option is equal to the current fair market value at the date of grant. In 1993, the Company implemented the Deferred Payment Program which enables holders of non-qualified stock options and installment purchase opportunities to defer a portion of the total amount required to exercise the options. Interest currently S-20

35 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 7. CAPITAL STOCK: (Continued) accrues on deferred payments at 6% compounded annually and is payable when the deferred payments are due. At September 30, 1994 and October 1, 1993 the receivables from individuals under the Deferred Payment Program were $9.8 million and $5.9 million, respectively, which are classified in the consolidated balance sheet as a reduction of Shareholders' Equity. The Company holds as collateral all shares purchased in which any portion of the purchase price is financed under the Deferred Payment Program until the deferred payment is received from the individual by the Company. Status of the options, including installment stock purchase opportunities, under the various ownership programs follows: <TABLE> <CAPTION> Number of Shares Average Option Price ---------------------------------- --------------------------- 1994 1993 1992 1994 1993 1992 ---- ---- ---- ---- ---- ---- <S> <C> <C> <C> <C> <C> <C> Options granted 4,314,635 2,776,296 3,716,400 $11.19 $9.14 $8.13 Options exercised 2,588,030 4,904,360 1,757,568 $6.33 $3.14 $4.95 Options outstanding 10,383,764 10,030,024 12,500,840 $8.05 $6.26 $4.88 </TABLE> At September 30, 1994, 1,129,160 of the outstanding option shares were exercisable at an average option price of $1.81. The Company has reserved 11,063,004 shares of Common Stock, Class B at September 30, 1994 for issuance of stock pursuant to its employee ownership and benefit programs. The Company and its shareholders are parties to an Amended and Restated Shareholders' Agreement. Pursuant to this agreement, holders of common stock who are individuals, upon their death, complete disability or normal retirement, may cause the Company to repurchase up to 30% of their shares for cash at the then appraised value, but only to the extent such repurchase by the Company is permitted under the Credit Agreement. Under this Credit Agreement restriction, repurchases of capital stock cannot exceed an aggregate limit, which amount was $20.8 million at September 30, 1994 and $21.7 million at October 1, 1993. Pursuant to interpretations of its rules related to "Redeemable Preferred Stock," the Securities and Exchange Commission has requested that these amounts representing the Company's potential repurchase of its Common Stock be presented as a separate item and accordingly, the Company's Shareholders' Equity reflects this reclassification in the consolidated financial statements. Also, the Shareholders' Agreement provides that the Company may, at its option, repurchase shares from individuals who are no longer employees. Such repurchased shares may be resold to others including replacement personnel at prices equal to or greater than the repurchase price. Generally, payment for shares repurchased can be, at the Company's option, in cash or subordinated installment notes, which are subordinated to all other indebtedness of the Company. Interest on these notes is payable semi-annually and principal payments are made annually over varying periods not to exceed ten years. The noncurrent portion of these notes ($24.9 million as of September 30, 1994, $20.4 million as of October 1, 1993) is included in the consolidated balance sheets as "Other Noncurrent Liabilities" and the current portion of these notes ($8.7 million as of September 30, 1994 and $6.2 million as of October 1, 1993) is included in the consolidated balance sheets as "Accounts Payable." NOTE 8. COMMITMENTS AND CONTINGENCIES: 1994 1993 - ------------------------------------------------------------------------------- (in thousands) Facilities under capital leases $8,204 $8,204 Less-accumulated amortization 5,590 4,891 - ------------------------------------------------------------------------------- $2,614 $3,313 =============================================================================== Rental expense for all operating leases was $121.2 million, $119.4 million and $118.5 million for fiscal 1994, 1993 and 1992, respectively. S-21

36 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 8. COMMITMENTS AND CONTINGENCIES: (Continued) Following is a schedule of the future minimum rental commitments under all noncancelable leases as of September 30, 1994: Fiscal Year Operating Capital - ----------------------------------------------------------------------- (in thousands) 1995 $115,003 $ 962 1996 71,781 778 1997 63,407 695 1998 58,555 551 1999 53,384 368 Subsequent years 218,265 743 - ------------------------------------------------------------------------ Total minimum rental obligations $580,395 4,097 =============================================== Less-amount representing interest 866 - ------------------------------------------------------------------------ Present value of capital leases 3,231 Less-current portion 690 - ------------------------------------------------------------------------- Noncurrent obligations under capital leases $2,541 ========================================================================= The Company has capital commitments of approximately $52 million at September 30, 1994 in connection with several long-term concession contracts at stadiums and arenas. The Company is party to certain claims and litigation arising in the ordinary course of business, including a dispute with a former insurance carrier involving certain coverages relating to prior years. The Company believes it has meritorious defenses to the insurance and other claims and is of the opinion that adequate reserves have been provided for the ultimate resolution of these matters. NOTE 9. ARAMARK SERVICES, INC. AND SUBSIDIARIES: The following financial information has been summarized from the separate consolidated financial statements of ARAMARK Services, Inc. (a wholly owned subsidiary of ARAMARK Corporation) and the subsidiaries which it currently owns. ARAMARK Services, Inc. is the borrower under the Credit Agreement and certain other senior debt described in Note 4 and incurs the interest expense thereunder. This interest expense is only partially allocated to all of the other subsidiaries of ARAMARK Corporation. <TABLE> <CAPTION> 1994 1993 1992 ---- ---- ---- (in thousands) <S> <C> <C> <C> Revenues $2,763,098 $2,607,630 $2,613,564 Cost of services provided 2,594,291 2,439,471 2,446,908 Net income (loss) 18,677 (357) 2,864 1994 1993 ---- ---- (in thousands) Current assets $ 355,841 $ 339,920 Noncurrent assets 1,223,750 1,221,164 Current liabilities 398,814 364,653 Noncurrent liabilities 1,093,563 1,126,087 Minority interest 10,812 18,084 S-22

37 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 10. QUARTERLY RESULTS (Unaudited): The following table summarizes quarterly financial data for fiscal 1994 and 1993. </TABLE> <TABLE> <CAPTION> Fiscal Quarter --------------------------------------------------- 1994 First Second Third Fourth Year - --------------------------------------------------------------------------------------------------------------- (in thousands, except earnings per share) <S> <C> <C> <C> <C> <C> Revenues $1,292,020 $1,257,614 $1,309,085 $1,302,859 $5,161,578 Cost of services provided 1,179,726 1,156,230 1,185,363 1,164,767 4,686,086 Income before extraordinary item and cumulative effect of accounting change 18,387 13,124 27,121 36,401 95,033 Extraordinary item (1) 702 117 2,518 4,340 7,677 Net income (2) 16,408 13,007 24,603 32,061 86,079 Earnings per share: Income before extraordinary item and cumulative effect of accounting change $.36 $.25 $.53 $.73 $1.87 Net income $.32 $.25 $.48 $.64 $1.69 </TABLE> <TABLE> <CAPTION> Fiscal Quarter --------------------------------------------------- 1993 First Second Third Fourth Year - ---------------------------------------------------------------------------------------------------------------- (in thousands, except earnings per share) <S> <C> <C> <C> <C> <C> Revenues $1,214,882 $1,188,456 $1,242,155 $1,245,245 $4,890,738 Cost of services provided 1,110,111 1,090,870 1,124,615 1,107,244 4,432,840 Income before extraordinary item 16,192 11,634 22,280 34,228 84,334 Extraordinary item (1) 4,297 -- 902 2,003 7,202 Net income 11,895 11,634 21,378 32,225 77,132 Earnings per share: Income before extraordinary item $.32 $.23 $.44 $.68 $1.64 Net income $.24 $.23 $.42 $.64 $1.49 </TABLE> (1) See Note 3. (2) Includes cumulative effect of change in accounting for income taxes of $1,277 in the fiscal 1994 first quarter. See Note 6. In the first and second fiscal quarters, within the Food, Leisure and Support Services Segment there is a lower level of activity at the higher margin leisure and recreational food service operations which is partly offset by increased activity in the educational market. In addition, there is a seasonal increase in volume of directly marketed work clothing and casual apparel during the first quarter. Whereas in the third and fourth fiscal quarters, there is a significant increase at leisure and recreational accounts which is partially offset by the effect of summer closings in the educational market. S-23

38 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 11. BUSINESS SEGMENTS: The Company provides or manages services in the following business segments: Food, Leisure and Support Services - Food, refreshment, specialized dietary and support services, including maintenance and housekeeping, provided to business, educational, governmental and medical institutions and in recreational and other facilities serving the general public. Fiscal 1994 operating income includes a $5.8 million gain on the sale of stock of an affiliate and the 1993 operating income includes a $15 million gain from a divestiture and a reserve of approximately $18 million for potential adjustments as described in Note 2. The 1994 segment operating results have been adversely impacted by the U.S. Major League Baseball strike which began on August 12. Had the strike not occurred, it is estimated that segment revenues and operating income would have been approximately 2% and 6% greater than the reported results, respectively. Also, total Company operating income and income before extraordinary items would have been approximately 3% and 5% higher, respectively. Uniform Services - Rental of personalized work apparel and linens for business and institutions on a contract basis and the direct marketing of work clothing, casual apparel, and accessories. Health and Education Services - General management of child care centers, and specialized services to emergency rooms, and other hospital specialties, and medical services to correctional institutions. As described in Note 2, the Company divested Living Centers, the operator of nursing care facilities, in February 1992 and sold its remaining Living Centers common stock during fiscal 1993. Revenues related to Living Centers for fiscal 1992 were $132.8 million. The Health and Education Services segment operating income for fiscal 1992 includes a divestiture gain of $13 million, as described in Note 2. Approximately 40% of the segment operating income for fiscal 1992 was related to Living Centers, including the 1992 divestiture gain. The operating income of this segment, excluding Living Centers results, was $32.5 million in 1992. Distributive Services - Wholesale distribution of magazines and other published materials to retail locations patronized by the general public. Revenues by segment are substantially comprised of services to unaffiliated customers and clients. Operating income reflects expenses directly related to individual segments plus an allocation of expenses applicable to more than one segment. General corporate expenses include expenses not specifically identifiable with an individual segment. Fiscal 1994 expenses include unusual costs related to several corporate development and strategic initiatives, including costs related to a change in corporate identity. In 1992 unusual costs were incurred in connection with a potential acquisition and several special development programs. Direct selling expenses are approximately 1% of revenues for fiscal 1994, 1993 and 1992. Corporate assets consist principally of goodwill not allocable to any individual segment and other noncurrent assets. <TABLE> <CAPTION> Revenues Operating Income --------------------------------- ----------------------------------- 1994 1993 1992 1994 1993 1992 ----- ---- ---- ---- ---- ---- (in millions) <S> <C> <C> <C> <C> <C> <C> Food, Leisure & Support Services $3,274.3 $3,149.6 $3,151.8 $138.4 $137.4 $133.2 Uniform Services 810.5 731.0 632.9 96.0 87.6 76.5 Health & Education 673.3 619.3 687.3 37.2 33.7 53.0 Distributive 403.5 390.8 393.3 26.5 24.8 27.1 -------- -------- -------- ------ ------ ------- Total $5,161.6 $4,890.7 $4,865.3 298.1 283.5 289.8 ======== ======== ======== General Corporate and Other Expenses (30.8) (22.6) (28.2) Gain on Sale of Remaining Living Centers Common Stock - 8.0 - ------ ------ ------- Operating Income 267.3 268.9 261.6 Gain on Issuance of Stock by an Affiliate 4.7 - - Interest expense, net (108.5) (125.7) (137.9) ------ ------- ------- Income Before Income Taxes, Minority Interest, Extraordinary Item, and Accounting Change $163.5 $ 143.2 $ 123.7 ====== ======= ======= </TABLE> S-24

39 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 11. BUSINESS SEGMENTS: (Continued) Depreciation and Amortization, Capital Expenditures and Identifiable Assets <TABLE> <CAPTION> Depreciation Capital and Amortization Expenditures ------------------------------- --------------------------------- 1994 1993 1992 1994 1993 1992 ---- ---- ---- ---- ---- ---- (in millions) <S> <C> <C> <C> <C> <C> <C> Food, Leisure & Support Services $ 85.5 $ 76.6 $ 75.9 $ 83.2 $ 82.4 $104.2 Uniform Services 36.3 33.9 26.4 39.9 37.9 67.1 Health & Education 16.5 15.1 18.5 18.4 22.5 15.6 Distributive 2.3 2.1 2.2 2.0 1.4 1.8 ------ ------ ------ ------ ------ ------ 140.6 127.7 123.0 143.5 144.2 188.7 Corporate 3.2 2.8 2.8 3.0 2.5 1.5 ------ ------ ------ ------ ------ ------ $143.8 $130.5 $125.8 $146.5 $146.7 $190.2 ====== ====== ====== ====== ====== ====== </TABLE> Identifiable Assets ------------------------------------- 1994 1993 1992 ---- ---- ---- (in millions) Food, Leisure & Support Services $1,085.7 $1,054.6 $1,046.5 Uniform Services 608.7 570.7 567.6 Health & Education 280.2 261.3 241.0 Distributive 74.2 65.6 69.1 -------- -------- -------- 2,048.8 1,952.2 1,924.2 Corporate 73.2 88.4 80.8 -------- -------- -------- $2,122.0 $2,040.6 $2,005.0 ======== ======== ======== Most services are provided in the United States, with operations also being conducted in Belgium, Canada, the Czech Republic, Germany, Hungary, Japan, Korea, Mexico, Spain and the United Kingdom. The Company's non-U.S. operations for each year contributed approximately 15% of total revenues and 9% of total operating income, and identifiable assets for these operations were approximately 11% of the total. S-25

40 ARAMARK CORPORATION AND SUBSIDIARIES SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT ARAMARK CORPORATION BALANCE SHEETS SEPTEMBER 30, 1994 AND OCTOBER 1, 1993 (in thousands) ASSETS 1994 1993 ----------- ---------- Current Assets: Receivables $ 498 $ 341 Inventories 187 270 Prepayments 2,032 1,411 ----------- ---------- Total current assets 2,717 2,022 ----------- ---------- Property & Equipment, net 9,436 7,857 Investment in Subsidiaries 634,154 611,573 Notes Receivable from ARAMARK Services, Inc. 225,000 400,000 Other Assets 6,634 6,304 ----------- ---------- $ 877,941 $1,027,756 =========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $ 12,832 $ 10,457 Accrued expenses 23,093 25,760 ----------- ---------- Total current liabilities 35,925 36,217 ---------- ---------- Long-Term Borrowings 290,414 474,875 Other Noncurrent Liabilities 45,217 39,048 Payable to Subsidiaries 303,035 331,892 Common Stock Subject to Potential Repurchase Under Provisions of Shareholders' Agreement 20,791 21,651 Shareholders' Equity Excluding Common Stock Subject to Repurchase: Series C preferred stock, redemption value $1,000 16,949 34,596 Class A common stock, par value $.01 21 21 Class B common stock, par value $.01 243 243 Earnings retained for use in the business 178,587 104,827 Cumulative translation adjustment 7,550 6,037 Impact of potential repurchase feature of common stock (20,791) (21,651) ---------- ---------- Total 182,559 124,073 ---------- ---------- $ 877,941 $1,027,756 ========== ========== The accompanying notes are an integral part of these financial statements. S-26

41 ARAMARK CORPORATION AND SUBSIDIARIES SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued) ARAMARK CORPORATION STATEMENTS OF INCOME FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 1994, OCTOBER 1, 1993 AND OCTOBER 2, 1992 (in thousands) <TABLE> <CAPTION> 1994 1993 1992 ------- -------- --------- <S> <C> <C> <C> Equity in Net Income of Subsidiaries $86,079 $ 67,640 $ 67,381 ------- -------- -------- Gain on Divestiture of an affiliate - 14,570 - ------- -------- -------- Management Fee Income 67,571 49,592 48,426 ------- -------- -------- General and Administrative Expenses 45,808 27,652 26,156 ------- -------- -------- Interest (Income) Expense - Intercompany interest income (38,778) (36,774) (37,481) Interest expense 47,746 54,503 54,491 ------- -------- -------- Interest Expense, net 8,968 17,729 17,010 ------- -------- -------- Income before income taxes 98,874 86,421 72,641 Provision for Income Taxes 5,118 6,748 1,943 ------- -------- -------- Income Before Extraordinary Item 93,756 79,673 70,698 Extraordinary Item Due to Early Extinguishments of Debt (net of income taxes of $5,118 in 1994, $1,670 in 1993 and $1,943 in 1992) 7,677 2,541 3,317 ------- ------- -------- Net income $86,079 $77,132 $67,381 ======== ======== ======== </TABLE> The accompanying notes are an integral part of these financial statements. S-27

42 ARAMARK CORPORATION AND SUBSIDIARIES SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued) ARAMARK CORPORATION STATEMENTS OF CASH FLOWS FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 1994, OCTOBER 1, 1993 AND OCTOBER 2, 1992 (in thousands) <TABLE> <CAPTION> 1994 1993 1992 ------- ------- ------- Cash flows from operating activities: <S> <C> <C> <C> Net income $ 86,079 $ 77,132 $ 67,381 Equity in net income of subsidiaries (86,079) (67,640) (67,381) Extraordinary item 7,677 2,541 3,317 Gain on divestiture - (14,570) - Other, primarily noncash working capital (8,408) 4,298 (547) ------- ------- ------- Net cash provided by (used in) operating activities (731) 1,761 2,770 ------- ------- ------- Cash flows from investing activities: Purchases of property and equipment (3,023) (2,486) (1,480) Other 2,072 120 140 ------- ------- ------- Net cash used in investing activities (951) (2,366) (1,340) ------- ------- ------- Cash flows from financing activities: Proceeds from additional long-term borrowings - 100,000 - Payment of long-term borrowings including premiums (194,694) (45,470) (3,952) Change in notes receivable from ARAMARK Services, Inc. 175,000 (100,000) - Change in intercompany payable to subsidiaries 54,253 106,702 8,491 Redemption of preferred stock (17,647) (137) - Proceeds from issuance of common stock 12,416 9,462 8,675 Repurchase of common stock (25,729) (45,795) (14,644) Payment of special dividend - (24,157) - Dividends paid to preferred shareholders (1,917) - - ------- ------- ------- Net cash provided by (used in) financing activities 1,682 605 (1,430) ------- ------- ------- Change in cash $ - $ - $ - ======= ======= ======= </TABLE> The accompanying notes are an integral part of these financial statements. S-28

43 ARAMARK CORPORATION AND SUBSIDIARIES SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued) ARAMARK CORPORATION NOTES TO FINANCIAL STATEMENTS Note 1. These statements should be read in conjunction with the Company's consolidated financial statements and notes thereto beginning on page S-4. Property and equipment are stated at cost and are depreciated over their estimated useful lives on a straight-line basis. Other assets consist primarily of long-term receivables arising from the divestiture of subsidiaries. Other noncurrent liabilities consist primarily of deferred compensation and subordinated installment notes arising from repurchases of common stock. Note 2. During fiscal 1993, certain subsidiaries of the Company made a dividend distribution totaling approximately $140 million. This transaction resulted in a reduction in the payable to subsidiaries. Note 3. The Company has guaranteed certain obligations of ARAMARK Services, Inc., its wholly-owned subsidiary, primarily those incurred pursuant to the Credit Agreement borrowings. See Note 4 to the Company's consolidated financial statements. Total guarantees were $725 million on September 30, 1994. S-29

44 ARAMARK CORPORATION AND SUBSIDIARIES SCHEDULE V - PROPERTY AND EQUIPMENT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994 <TABLE> <CAPTION> Additions, at Cost ------------------------------ Balance, as of Acquisition Retirements, Balance, as of October 1, of Including September 30, Classification 1993 Businesses(1) Other Divestitures Other(2) 1994 - -------------- --------------- -------------- ----------- ------------ -------- -------------- (in thousands) <S> <C> <C> <C> <C> <C> Land, buildings and improvements $ 355,744 $ -- $ 24,815 $ 13,716 $ 12,828 $ 379,671 Service equipment and fixtures 783,393 573 121,120 17,064 112 888,134 Leased property under capital leases 8,204 -- -- -- -- 8,204 ---------- ---------- ---------- ----------- ---------- ---------- Total $1,147,341 $ 573 $ 145,935 $ 30,780 $ 12,940 $1,276,009 ========== ========== ========== ========== ========== ========== </TABLE> (1) Represents the fair market value at the date of acquisition of assets acquired in business combinations accounted for as purchases. (2) Reflects primarily the adoption of SFAS No. 109 and the impact of currency translation. S-30

45 ARAMARK CORPORATION AND SUBSIDIARIES SCHEDULE V - PROPERTY AND EQUIPMENT FOR THE FISCAL YEAR ENDED OCTOBER 1, 1993 <TABLE> <CAPTION> Additions, at Cost ------------------------ Balance, as of Acquisition Retirements, Balance, as of October 2, of Including October 1, Classification 1992 Businesses(1) Other Divestitures Other(2) 1993 - -------------- ------------- ------------- ------- ------------- -------- ------------- (in thousands) <S> <C> <C> <C> <C> <C> <C> Land, buildings and improvements $ 349,648 $ 9 $ 30,875 $ 12,285 $ (12,503) $ 355,744 Service equipment and fixtures 672,753 4,535 111,246 14,512 9,371 783,393 Leased property under capital leases 9,956 -- -- 1,752 -- 8,204 ---------- ----------- ----------- ----------- ----------- ---------- Total $1,032,357 $ 4,544 $ 142,121 $ 28,549 $ (3,132) $1,147,341 ========== ========== ========== ========== =========== ========== </TABLE> (1) Represents the fair market value at the date of acquisition of assets acquired in business combinations accounted for as purchases. (2) Reflects the impact of currency translation and reclassification of assets between categories. S-31

46 ARAMARK CORPORATION AND SUBSIDIARIES SCHEDULE V - PROPERTY AND EQUIPMENT FOR THE FISCAL YEAR ENDED OCTOBER 2, 1992 <TABLE> <CAPTION> Additions, at Cost ------------------------ Balance, as of Acquisition Retirements, Balance, as of September 27, of Including October 2, Classification 1991 Businesses(1) Other Divestitures Other(2) 1992 - -------------- -------------- ------------ ----- ------------ -------- ------------ (in thousands) <S> <C> <C> <C> <C> <C> <C> Land, buildings and improvements $ 426,944 $ 13,038 $ 33,755 $ 123,425 $ (664) $ 349,648 Service equipment and fixtures 572,141 17,864 123,558 40,683 (127) 672,753 Leased property under capital leases 10,213 1,994 -- 2,251 -- 9,956 ----------- ------------ ----------- ------------ ----------- ----------- Total $1,009,298 $ 32,896 $ 157,313 $ 166,359 $ (791) $1,032,357 =========== =========== =========== ============ =========== ========== </TABLE> (1) Represents the fair market value at the date of acquisition of assets acquired in business combinations accounted for as purchases. (2) Reflects the impact of currency translation. S-32

47 <TABLE> <CAPTION> ARAMARK CORPORATION AND SUBSIDIARIES SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY AND EQUIPMENT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994 Balance, as of Charged Retirements, Balance, as of October 1, to Including September 30, Classification 1993 Income(1) Divestitures 1994 - -------------- -------------- ---------- ------------- -------------- (in thousands) <S> <C> <C> <C> <C> Buildings and improvements $103,888 $ 17,564 $ 4,299 $117,153 Service equipment and fixtures 390,183 89,243 8,067 471,359 Leased property under capital leases 4,891 699 -- 5,590 -------- --------- -------- -------- Total $498,962 $107,506 $ 12,366 $594,102 ========= ========= ======== ======== </TABLE> (1) Reference is made to Note 1 of the consolidated financial statements concerning the Company's depreciation policies. S-33

48 ARAMARK CORPORATION AND SUBSIDIARIES SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY AND EQUIPMENT FOR THE FISCAL YEAR ENDED OCTOBER 1, 1993 <TABLE> <CAPTION> Balance, as of Charged Retirements, Balance, as of October 2, to Including October 1, Classification 1992 Income(1) Divestitures Other (2) 1993 - -------------- --------------- -------- ------------- ---------- ------------- (in thousands) <S> <C> <C> <C> <C> <C> Buildings and improvements $ 97,822 $ 15,547 $ 7,282 $(2,199) $103,888 Service equipment and fixtures 315,128 82,987 10,131 2,199 390,183 Leased property under capital leases 4,772 441 322 -- 4,891 --------- -------- --------- ------- -------- Total $417,722 $ 98,975 $ 17,735 $ -- $498,962 ======== ======== ========= ======= ======== </TABLE> (1) Reference is made to Note 1 of the consolidated financial statements concerning the Company's depreciation policies. (2) Reflects reclassification between categories. S-34

49 ARAMARK CORPORATION AND SUBSIDIARIES SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY AND EQUIPMENT FOR THE FISCAL YEAR ENDED OCTOBER 2, 1992 <TABLE> <CAPTION> Balance, as of Charged Retirements, Balance, as of September 27, to Including October 2, Classification 1991 Income(1) Divestitures 1992 - -------------- -------------- --------- ------------ -------------- (in thousands) <S> <C> <C> <C> <C> Buildings and improvements $ 93,368 $ 18,014 $ 13,560 $ 97,822 Service equipment and fixtures 254,575 79,740 19,187 315,128 Leased property under capital leases 4,309 1,367 904 4,772 --------- --------- ---------- --------- Total $352,252 $ 99,121 $ 33,651 $417,722 ========= ========= ========== ======== </TABLE> (1) Reference is made to Note 1 of the consolidated financial statements concerning the Company's depreciation policies. S-35

50 ARAMARK CORPORATION AND SUBSIDIARIES SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 1994, OCTOBER 1, 1993 AND OCTOBER 2, 1992 <TABLE> <CAPTION> Additions Reductions ---------------------- ------------------------ Balance, Acquisition Divestiture Deductions Balance, Beginning of of Charged to of from End of Description Fiscal Year Businesses Income Businesses Reserves (1) Fiscal Year - ----------- ------------- ------------ ---------- ----------- ------------ ----------- (in thousands) Fiscal Year 1994 <S> <C> <C> <C> <C> <C> <C> Reserve for doubtful accounts, advances & current notes receivable $10,242 $ 1,288 $ 6,141 $ -- $ 5,248 $12,423 ======= ======= ======= ======= ======= ======== Fiscal Year 1993 Reserve for doubtful accounts, advances & current notes receivable $ 9,881 $ 37 $ 7,425 $ 19 $ 7,082 $10,242 ======= ======= ======= ======== ======= ======== Fiscal Year 1992 Reserve for doubtful accounts, advances & current notes receivable $13,178 $ 730 $ 7,136 $ 2,939 $ 8,224 $ 9,881 ======= ======= ======= ======== ======= ======== </TABLE> (1) Allowances granted and amounts determined not to be collectible. S-36

51 ARAMARK CORPORATION AND SUBSIDIARIES SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 1994, OCTOBER 1, 1993 AND OCTOBER 2, 1992 (in thousands) <TABLE> <CAPTION> 1994 1993 1992 -------- -------- ------- <S> <C> <C> <C> Maintenance and repairs $ 47,190 $ 42,104 $ 46,241 Depreciation and amortization of intangible assets 143,763 130,511 125,798 Rents 121,176 119,372 118,475 Taxes, other than payroll and income taxes (1) -- -- -- Royalties (1) -- -- -- Advertising Costs (1) -- -- -- </TABLE> (1) Not presented because each amount was less than one percent of revenues. S-37

52 INDEX TO EXHIBITS <TABLE> <CAPTION> <S> <C> 3.1 Restated Certificate of Incorporation. 3.2 Corporate By-laws, as amended, are incorporated by reference to the Company's Registration Statement of Form S-8 (No. 33-14365). 4.1 Amended and Restated Stockholders' Agreement. 4.2 Amended and Restated Registration Rights Agreement is incorporated by reference to the Company's quarterly report on Form 10-Q for the fiscal quarter ended April 1, 1988. Long-term debt instruments authorizing debt which does not exceed 10% of the total consolidated assets of the Company are not filed herewithin but will be furnished on request of the Commission. 10.1 Agreement relating to employment and post-employment competition dated December 21, 1983 with Richard H. Vent is incorporated by reference to the Company's Annual Report on Form 10K for the fiscal year ended October 2, 1987. 10.2 Summary Employment, Consulting and Retirement Agreement dated October 16, 1984 with Davre J. Davidson is incorporated by reference to ARAMARK's Annual Report on Form 10K for the fiscal year ended September 28, 1984. 10.3 Agreement relating to employment and post-employment competition dated May 6, 1986 with James E. Ksansnak is incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended September 29, 1989. 10.4 Agreement relating to employment and post-employment competition dated October 4, 1991 with William Leonard is incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended October 1, 1993. 10.5 Restated Employment Agreement dated November 13, 1991 with Joseph Neubauer is incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended September 27, 1991. 10.6 Agreement relating to employment and post-employment competition dated October 1, 1991 with Julian L. Carr, Jr. 10.7 Amended and Restated Credit and Guaranty Agreement dated as of March 12, 1993. 11 Computation of Earnings Per Share. 12 Ratio of Earnings to Fixed Charges. 21 Subsidiaries of Registrant. 23.1 Consent of Arthur Andersen LLP, Independent Public Accountants. 23.2 Consent of Ernst & Young, Chartered Accountants. 24 Powers of Attorney. 27 Financial Data Schedule. </TABLE>

1 RESTATED CERTIFICATE OF INCORPORATION OF ARAMARK CORPORATION (Originally Incorporated on September 7, 1984 under the name "ARA Acquiring Company") FIRST: The name of the Corporation is ARAMARK CORPORATION. SECOND: The address of the Corporation's registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of the Corporation's registered agent at such address is The Corporation Trust Company. THIRD: The nature of the business or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. FOURTH: The total number of shares of all classes of stock which the Corporation shall have the authority to issue is 185,000,000 shares, consisting of (i) 10,000,000 shares of Series Preferred Stock, $1.00 par value per share (the "Series Preferred Stock"), and (ii) 25,000,000 shares of Common Stock, Class A, $.01 par value per share (the "Class A Common Stock"), and (iii) 150,000,000 shares of Common Stock, Class B, $.01 par value per share (the "Class B Common Stock"). The Class A Common Stock and the Class B Common Stock are referred to collectively as the "Common Stock". The Board of Directors shall have the full authority permitted by law to fix full or limited, or no voting power, and such other designations, powers, preferences, and relative, participating, optional, special or other rights (including, as examples and not as a limitation, multiple voting powers and conversion rights), and qualifications, limitations or restrictions of any series of the class of Series Preferred Stock that may be desired. 4A. Common Stock A statement of the designations, powers, preferences, and rights of the Common Stock, and the qualifications, limitations and restrictions in respect thereof, is as follows: 1. Classes. The Common Stock shall be divided into two classes, the Class A Common Stock and the Class B Common Stock. The Common Stock shall be issuable only in whole shares. The powers, preferences and rights of the Class A Common Stock and the Class B Common Stock, and the qualifications, limitations and restrictions thereon, shall be in all respects identical, except as otherwise provided in this Part 4A.

2 2. Dividends. Subject to any provision in this Article FOURTH with respect to any stock of the Corporation to the contrary, out of the assets of the Corporation which are by law available for the payment of dividends, dividends and other distributions may be, but shall not be required to be, declared and paid upon shares of Common Stock, and the holders of shares of Class A Common Stock and Class B Common Stock shall be entitled to receive the same dividends and other distributions, ratably with the holder of one share of Class A Common Stock entitled to receive ten times what the holder of one share of Class B Common Stock is entitled to receive; provided, however, that in the case of dividends or other distributions payable in Common Stock, only shares of Class B Common Stock shall be distributed with respect to Class B Common Stock and only shares of Class A Common Stock shall be distributed with respect to Class A Common Stock, and any such distribution shall be made ratably, with the holder of one share of Class A Common Stock entitled to receive the same number of shares of Class A Common Stock as the number of shares of Class B Common Stock the holder of one share of Class B Common Stock shall be entitled to receive; and provided further, that the Board of Directors, may declare and pay dividends and other distributions with respect to the Class A Common Stock without declaring or paying any dividend or other distribution with respect to the Class B Common Stock. 3. Voting Rights. (a) Subject to the special voting rights of the holders of any other stock of the Corporation, the Common Stock (and any other stock of the Corporation which may be entitled to vote with the holders of Common Stock), voting as a single class except where the Class A Common Stock and the Class B Common Stock (and such other stock) are required by law to vote as separate classes, shall possess all of the voting power of the Corporation with respect to the election of directors and for all other purposes. (b) Each share of Common Stock, whether Class A Common Stock or Class B Common Stock, shall be entitled to one vote on all matters submitted to a vote of the Corporation's stockholders. 4. Liquidation. Upon the liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, after provision for the payment of creditors and after provision shall be made for holders of all shares of stock of the Corporation having a preference upon liquidation, dissolution or winding up, the remaining assets of the Corporation shall be distributed among the holders of Common Stock, ratably, with the holder of one share of Class A Common Stock entitled to receive ten times what the holder of one share of Class B Common Stock is entitled to receive, and, to the extent provided in this Article FOURTH, the holders of any other stock of the Corporation which may be entitled to share in such distribution. 5. Conversion of Class B Common Stock. (a) Each share of Class B Common stock may at any time, but only with the prior approval of the Board of Directors, be converted at the election of the holder thereof into one-tenth of a

3 fully paid and nonassessable share of Class A Common Stock. Subject to the terms of any such approval, the holder of shares of Class B Common Stock may elect to convert any or all of such shares at one time or at various times in such holder's discretion. Such right shall be exercised by the surrender of the certificate representing each share of Class B Common Stock to be converted to the agent for the registration of transfer of shares of Class B Common Stock at its office, or to the Corporation at its principal executive offices, accompanied by a written notice of the election by the holder thereof to convert and (if so required by the transfer agent or by the Corporation) by instruments of transfer, in form satisfactory to the transfer agent and to the Corporation, duly executed by such holder or the holder's duly authorized attorney. (b) If a holder of Class B Common Stock ceases to be either a director or full-time employee of the Corporation or any of its Subsidiaries (a "Management Investor") or a Permitted Transferee of a person who is then a Management Investor, then each share of Class B Common Stock held by such holder shall thereupon be converted into one-tenth of a share of Class A Common Stock effective immediately. No share of Class B Common Stock may be issued other than to a Management Investor or a person who would be a Permitted Transferee of a Management Investor, and any such share issued to any other person shall ipso facto be converted into one-tenth of a share of Class A Common Stock effective at the time of the purported issuance. (c) At any time when the Board of Directors authorizes and directs the conversion of all the Class B Common Stock into Class A Common Stock, then, at the time designated by the Board for the occurrence of such event, each outstanding share of Class B Common Stock shall be converted into one-tenth of a share of Class A Common Stock and no further shares of Class B Common Stock may be issued thereafter. (d) In the event of any such conversion pursuant to paragraph (a), (b) or (c), the certificate or certificates representing shares of Class B Common Stock held by such holder shall thereupon and thereafter be deemed to represent the number of whole shares of Class A Common Stock issuable upon such conversion and the right to receive cash in lieu of fractional shares pursuant to paragraph (f) hereof. Upon the surrender of any such certificate to the agent for the registration of transfer of shares of Class B Common Stock at its office, or to the Corporation at its principal executive offices, such certificate shall be cancelled and a certificate for the number of whole shares of Class A Common Stock to which he shall be entitled, together with a cash adjustment for any fraction of a share if not evenly convertible pursuant to paragraph (f) hereof, shall be issued and delivered to the holder thereof as hereinafter provided. (e) The issuance of a certificate for shares of Class A Common Stock upon conversion of shares of Class B Common Stock shall be made without charge for any stamp or other similar tax in respect of such issuance. However, if any such certificate is to be issued in a name other than that of the holder of the share or shares of Class B Common Stock converted, the person or persons requesting issuance thereof shall pay to the transfer agent or to the Corporation the amount of any tax which may be payable in respect of any such transfer, or shall establish to the satisfaction of the transfer agent or of the Corporation that such tax has been paid. As promptly as practicable after the surrender for conversion of a certificate representing shares of Class B Common Stock and the payment of any tax as herein before provided, the Corporation will deliver or cause to be delivered at the office of the transfer agent to, or upon the written order of, the holder of such certificate, a certificate or certificates representing the number of whole shares of Class A Common Stock issuable upon such conversion, issued in such name or names as such holder may direct together with a cash adjustment for any fraction of a

4 share as provided pursuant to paragraph (f) hereof, if not evenly convertible. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of the surrender of the certificate representing shares of Class B Common Stock (if on such date the transfer books of the Corporation shall be closed, then immediately prior to the close of business on the first date thereafter that said books shall be open) or, in the case of a conversion under paragraph (b) or (c) of this Section, immediately upon the event giving rise to the conversion, and all rights of such holder arising from ownership of shares of Class B Common Stock shall cease at such time, and the person or persons in whose name or names the certificate representing shares of Class A Common Stock are to be issued shall be treated for all purposes as having become the record holder or holders of such shares of Class A Common Stock at such time and shall have and may exercise all the rights and powers appertaining thereto. No adjustments in respect of any past dividends and other distributions shall be made upon the conversion of any share of Class B Common Stock; provided, however, that if any share of Class B Common Stock shall be converted subsequent to the record date for the payment of a dividend or other distribution on shares of Class B Common Stock but prior to such payment, the registered holder of such shares at the close of business on such record date shall be entitled to receive the dividend or other distribution payable to holders of Class B Common Stock. The Corporation shall at all times reserve and keep available, solely for the purpose of issue upon conversion of outstanding shares of Class B Common Stock, such number of shares of Class A Common Stock as may be issuable upon the conversion of all such outstanding shares of Class B Common Stock, provided that the Corporation may deliver shares of Class A Common Stock held in the treasury of the Corporation. (f) No fractions of shares of Class A Common Stock are to be issued upon conversion, but in lieu thereof the Corporation will pay therefor in cash, a sum equal to the number of shares of Class B Common Stock not evenly convertible multiplied by the per share fair market value of the Class B Common Stock, as determined by an Appraiser according to the most recent existing appraisal; provided, however, that such appraisal shall be as of a date not more than six months prior to its use hereunder. 4B. Series C Stock A statement of the powers, designations, preferences, rights, qualifications, limitations and restrictions of 40,000 shares of Series Preferred Stock is as follows: 1. Designation. There shall be a series of Series Preferred Stock which shall consist of 40,000 shares and shall be designated as Adjustable Rate Callable Nontransferable Series C Preferred Stock (the "Series C Stock"). The number of authorized shares of Series C Stock may be increased by resolution of the Board of Directors. 2. Rank. (a) Rank of Series C Stock. To the extent and in the manner provided in this Part 4B, the Series C Stock shall, with respect to dividend rights and rights on liquidation, rank (i) junior to or on parity with, as the case may be, any other stock of the Corporation, the terms of which shall specifically provide that such stock shall rank senior to, or on parity with, as the case may be, the Series C Stock with respect to dividend rights or rights on liquidation or both, and (ii) senior to any other stock of the Corporation.

5 (b) Certain Definitions. The following terms as used in this Part 4B, shall be deemed to have the meanings set forth in this section. (i) The term "Participating Stock" shall mean the Class A Common Stock and the Class B Common Stock and any other stock of the Corporation of any class which has the right to participate in the distribution of either earnings or assets of the Corporation without limit as to the amount or percentage. (ii) The term "Parity Stock" with respect to Series C Stock shall mean the Series C Stock and all other stock of the Corporation ranking equally therewith as to the payment of dividends or the distribution of assets upon liquidation. The term "Dividend Parity Stock" with respect to Series C Stock shall mean the Series C Stock and all other stock of the Corporation ranking equally therewith as to the payment of dividends. The term "Liquidation Parity Stock" with respect to Series C Stock shall mean the Series C Stock and all other stock of the Corporation ranking equally therewith as to distribution of assets upon liquidation. (iii) The term "Junior Stock" with respect to Series C Stock shall mean the Participating Stock and all other stock of the Corporation ranking junior thereto as to the payment of dividends and the distribution of assets upon liquidation. The term "Dividend Junior Stock" with respect to Series C Stock shall mean the Participating Stock and all other stock of the Corporation ranking junior thereto as to the payment of dividends. The term "Liquidation Junior Stock" with respect to Series C Stock shall mean the Participating Stock and all other stock of the Corporation ranking junior thereto as to distribution of assets upon liquidation. (iv) The term "Senior Stock" with respect to Series C Stock shall mean all stock of the Corporation ranking senior thereto as to the payment of dividends or distribution of assets upon liquidation. 3. Dividends. (a) Cumulative Dividends. The holders of record of Series C Stock shall be entitled to receive, as and if declared by the Board of Directors, cumulative cash dividends thereon at the per annum rate per share equal to the Established Dividend Rate (as defined in paragraph (c)), and no more, but only out of funds legally available for the payment of such distributions under the General Corporation Law of the State of Delaware. Dividends on the Series C Stock shall be payable semi-annually on June 15 and December 15 in each year. Dividends shall accrue from the date of original issuance. Accumulations of dividends shall not bear interest. (b) Limitations Upon Dividend Arrearage. Unless full cumulative dividends upon the Series C Stock have been paid, no dividend or other distribution (except in Junior Stock) shall be declared or paid on Dividend Junior Stock and no amount shall be set aside for or applied to the redemption, purchase or other acquisition of (i) any Dividend Junior Stock or Liquidation Junior Stock other than by exchange therefor of Junior Stock or out of the proceeds of a substantially concurrent sale of shares of Junior Stock or (ii) any Parity Stock except in accordance with a purchase or exchange offer made simultaneously by the Corporation to all holders of record of Parity Stock which, considering the annual dividend rates and the other relative rights and preferences of such

6 shares, in the opinion of the Board of Directors (whose determination shall be conclusive), will result in fair and equitable treatment among all such shares. In the event that stated dividends on all Dividend Parity Stock (including, by way of example and not as a limitation, full cumulative dividends on the Series C Stock) are not paid in full, all shares of Dividend Parity Stock shall participate ratably in the payment of dividends, including accumulations, if any, in accordance with the sums which would be payable thereon if all dividends thereon were declared and paid in full. (c) The "Established Dividend Rate" shall initially be $60.00, and shall be reset as provided in this paragraph. On each December 16, beginning December 16, 1993 and continuing so long as any shares of Series C Stock shall be outstanding, the Established Dividend Rate shall be reset at a rate equal to $1,000 multiplied by 80% of the Prime Rate that shall have been in effect at the close of business on the December 1 next preceding (or if such December 1 shall not have been a business day, the business day next preceding such December 1), rounded up to the nearest $1.00; provided, however, that the Established Dividend Rate shall in no event be less than $60.00 nor greater than $100.00. For purposes of the preceding sentence, the "Prime Rate" shall mean the rate of interest publicly announced from time to time by Chemical Bank at its main office in New York City as its Prime Rate. The Corporation shall file with the duly appointed transfer agent for the Series C Stock a certificate stating the new Established Dividend Rate determined as provided in this paragraph and showing the computation thereof, and will cause a notice stating the new Established Dividend Rate and the computation thereof to be mailed to the holders of shares of Series C Stock. 4. Liquidation Rights. (a) Liquidation Value. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of Series C Stock shall be entitled to receive from the assets of the Corporation, payment in cash, of $1,000 per share, plus a further amount equal to unpaid cumulative dividends on Series C Stock accrued to the date when such payments shall be made available to the holders thereof, and no more, before any amount shall be paid or set aside for, or any distribution of assets shall be made to the holders of Liquidation Junior Stock. If, upon such liquidation, dissolution or winding up, the amounts available for distribution to the holders of all Liquidation Parity Stock shall be insufficient to permit the payment in full to such holders of the preferential amounts to which they are entitled, then such amounts shall be paid ratably among the shares of Liquidation Parity Stock in accordance with the respective preferential amounts (including unpaid cumulative dividends, if any) payable with respect thereto if paid in full. (b) Actions Not Considered Liquidation. None of the following shall be considered a liquidation, dissolution or winding up of the Corporation within the meaning of this section: (1) a consolidation or merger of the Corporation with or into any other corporation; (2) a merger of any other corporation into the Corporation; (3) a reorganization of the Corporation; (4) the purchase or redemption of all or part of the outstanding shares of any class or classes of the Corporation; (5) a sale or transfer of all or any part of the assets of the Corporation; or (6) a share exchange to which the Corporation is a party.

7 5. Redemption. (a) Optional Redemption. The Series C Stock may be called for redemption and redeemed at the option of the Corporation by resolution of the Board of Directors, in whole at any time or in part at any time or from time to time upon the notice hereinafter provided for in paragraph (c), by the payment therefor of the redemption price per share of $1,000 plus an amount equal to the accrued and unpaid cumulative dividends thereon to the date fixed by the Board of Directors as the redemption date. In addition, the Corporation may so call for redemption at any time after January 1, 1994 all, but not less than all, of the shares of Series C Stock held by any person, but only if such person is not also a holder of shares of either Class A Common Stock or Class B Common Stock. (b) No Mandatory Redemption. There is no mandatory sinking fund for, or other required redemption of, the Series C Stock. (c) Manner of Redemption. (i) If less than all of the outstanding shares of Series C Stock shall be called for redemption (and such redemption is not pursuant to the second sentence of paragraph (a)), the particular shares to be redeemed shall be selected by lot or by such other equitable manner as may be prescribed by resolution of the Board of Directors. (ii) Notice of redemption of any shares of Series C Stock shall be given by the Corporation by first-class mail, not less than 30 nor more than 60 days prior to the date fixed by the Board of Directors of the Corporation for redemption (the "redemption date"), to the holders of record of the shares to be redeemed at their respective addresses then appearing on the records of the Corporation. The notice of the redemption shall state: (1) the redemption date; (2) the redemption price; (3) if less than all outstanding shares of Series C Stock of the holder are to be redeemed, the identification of the shares of Series C Stock to be redeemed; (4) that dividends on the shares to be redeemed shall cease to accrue on the redemption date; and (5) the place or places where such shares of Series C Stock to be redeemed are to be surrendered for payment of the redemption price. (iii) Notice having been mailed as aforesaid, from and after the redemption date (unless default shall be made by the Corporation in providing money for the payment of the redemption price of the shares called for redemption), dividends on the shares of Series C Stock so called for redemption shall cease to accrue, and from and after the redemption date or such earlier date as funds shall be set aside for payment of the redemption price (unless default shall be made by the Corporation in providing money for the payment of the redemption price of the shares called for redemption) said shares shall no longer be deemed to be outstanding, and all rights of the holders thereof as stockholders of the Corporation (except the right to receive from the Corporation the redemption price) shall cease. Upon surrender in accordance with said notice of the certificates for any shares so redeemed (properly endorsed or assigned for transfer, if the Board of Directors of the Corporation shall so require and the notice shall so state), such shares shall be redeemed by the Corporation at the redemption price aforesaid. (iv) Shares of Series C Stock redeemed by the Corporation shall be restored to the status of authorized and unissued shares of Series Preferred Stock, undesignated as to series, and, except as otherwise provided by the express terms of the series redeemed or of any other outstanding series, may be reissued by the

8 Corporation as shares of one or more series of Series Preferred Stock other than Series C Stock. 6. Voting Rights. (a) No Voting Rights Generally. Except as expressly provided to the contrary in this resolution or as otherwise required by law, the holders of Series C Stock shall have no right to vote at, or to participate in, any meeting of stockholders of the Corporation, or to receive any notice of such meeting. (b) Rights Upon Dividend Arrearage. (i) In the event that dividends upon the Series C Stock shall be in arrears in an amount equal to four full semi-annual dividends thereon, the number of directors constituting the full board shall be increased by two, and the holders of the Series C Stock voting noncumulatively and separately as a single class together with the holders of any other shares of Series Preferred Stock having the right to elect directors as a class under such circumstances, shall be entitled to elect two members of the Board of Directors of the Corporation at the next annual meeting of stockholders of the Corporation or at a special meeting called as hereinafter provided in this section. Such voting rights of the holders of Series C Stock shall continue until all accumulated and unpaid dividends thereon shall have been paid in full, whereupon such special voting rights of the holders of Series C Stock shall cease (and the respective terms of the two additional directors shall thereupon expire and the number of directors constituting the full board shall be decreased by two) subject to being again revived from time to time upon the recurrence of the conditions described in this section as giving rise thereto. (ii) At any time when such right of holders of Series C Stock to elect two additional directors shall have so vested, the Corporation may, and upon the written request of the holders of record of not less than 10% of the Series C Stock then outstanding (or 10% of all Series Preferred Stock having the right to vote for such directors in case holders of shares of other series of Series Preferred Stock shall also have the right to elect directors as a class in such circumstances) shall, call a special meeting of holders of such Series C Stock (and other series of Series Preferred Stock, if applicable) for the election of directors. In the case of such a written request, such special meeting shall be held within 60 days after the delivery of such request, and, in either case, at the place and upon the notice provided by law and in the bylaws of the Corporation; except that the Corporation shall not be required to call such a special meeting if such request is received less than 120 days before the date fixed for the next ensuing annual meeting of stockholders of the Corporation. (iii) Whenever the number of directors of the Corporation shall have been increased by two as provided in this section, the number as so increased may thereafter be further increased or decreased in such manner as may be permitted by the bylaws of the Corporation and without the vote of the holders of Series C Stock. No such action shall impair the right of the holders of Series C Stock to elect and to be represented by two directors as provided in this section. (iv) The two directors elected as provided in this section shall serve until the next annual meeting of stockholders of the Corporation and until their respective successors shall be elected and qualified or the earlier expiration of their terms as

9 provided in this section. No such director may be removed without the vote or consent of holders of a majority of the shares of Series C Stock (or holders of a majority of shares of Series Preferred Stock having the right to vote in the election of such director in case holders of shares of other series of Series Preferred Stock shall also have the right to elect such director as a class). If, prior to the expiration of the term of any such director, a vacancy in the office of such director shall occur, such vacancy shall, until the expiration of such term, in each case be filled by appointment made by the remaining director elected as provided in this section. 7. Restrictions on Transfer. The shares of Series C Stock shall not be transferable prior to February 1, 1997 (other than by will or the laws of descent), except that such shares may be transferred to the Corporation pursuant to a redemption or purchase thereof. On and after February 1, 1997, the shares of Series C Stock shall be freely transferable at any time, at the option of the holder. 8. No Conversion Rights. The holders of shares of Series C Stock shall not have the right to convert such shares into other securities of the Corporation. FIFTH: Subject to the rights of holders of Series Preferred Stock to elect additional directors under certain circumstances, the Corporation shall be governed in accordance with the following provisions: 5A. Number of Directors The Board of Directors of the Corporation shall consist of not less than nine and not more than 19 members and the Chief Executive Officer of the Corporation shall always be one of the members. The exact number of directors within such minimum and maximum shall be fixed by the Board of Directors. 5B. Election Directors need not be elected by written ballot. SIXTH: The following terms shall have the accompanying defined meanings: 1. "Appraiser" shall mean a firm headquartered in the United States of nationally recognized standing in the business of appraisal or valuation of securities which does not own any stock of the Corporation and which has been selected by the Board of Directors to act as an independent appraiser. 2. "Permitted Transferee" shall have the meaning as defined in the Stockholders' Agreement. 3. "Stockholders' Agreement" shall mean the Amended and Restated Stockholders' Agreement dated as of April 7, 1988, by and among the Corporation and the persons named therein as the same may be amended and a copy of which is on file with the Secretary of the Corporation. 4. "Subsidiary" shall mean any corporation or other entity of which the Corporation shall, directly or indirectly, own 50% or more of the equity, as determined by the Board of Directors and any other

10 corporation or other entity in which the Corporation shall directly or indirectly have an equity investment and which the Board of Directors shall in its sole discretion designate. SEVENTH: The By-Laws of the Corporation may be made, altered, amended, changed, added to or repealed by the Board of Directors of the Corporation without the assent or vote of the stockholders. EIGHTH: Each person who was or is made a party or is threatened to be made a party to or is involuntarily involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative ("proceeding"), by reason of the fact that he or a person of whom he is the legal representative is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer or representative or in any other capacity while serving as a director, officer or representative shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended, against all expenses, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by him in connection therewith; provided, however, that the Corporation shall indemnify any such person seeking indemnity in connection with an action, suit or proceeding (or part thereof) initiated by such person only if action, suit or proceeding (or part thereof) was authorized by the Board of Directors. Such right shall be a contract right and shall include the right to be paid by the Corporation expenses incurred in defending any such proceeding in advance of its final disposition upon delivery to the Corporation of an undertaking, by or on behalf of such person, to repay all amounts so advanced if it should be determined ultimately that such person is not entitled to be indemnified under this section or otherwise. If a claim under this Article is not paid in full by the Corporation within ninety days after a written claim has been received by the Corporation, the claimant unpaid may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the Delaware General Corporation Law for the Corporation to indemnify the claimant for the amount claim, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant had not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant had not met the applicable standard of conduct. The rights conferred by this Article shall not be exclusive of any other right which such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, By-Laws, agreement, vote of stockholders or disinterested directors or otherwise.

11 The Corporation may maintain insurance, at its expense, to protect itself and any such director, officer or representative against any such expense, liability or loss, whether or not the Corporation would have the power to indemnify him against such expense, liability or loss under the Delaware General Corporation Law. NINTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation in the manner now or hereafter prescribed by law, and all rights and powers conferred herein on stockholders, directors and officers are subject to this reserved power. TENTH: Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed by the Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said Court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the Court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all stockholders or class of stockholders of the Corporation, as the case may be, and also on the Corporation. ELEVENTH: To the fullest extent permitted by the Delaware General Corporation Law as the same exists or may hereafter be amended, a director of this Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as director.

12 IN WITNESS WHEREOF, this Restated Certificate of Incorporation, which restates and integrates but does not further amend the Corporation's Certificate of Incorporation, as heretofore amended and restated, having been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of the State of Delaware, has been duly executed this 8th day of November, 1994. ARAMARK CORPORATION Attest:/s/ Donald S. Morton By: /s/ Martin W. Spector --------------------------- -------------------------- Donald S. Morton Martin W. Spector Assistant Secretary Executive Vice President





1 AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT OF ARAMARK CORPORATION AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT dated as of the 14th day of December, 1994, which further amends and restates the Amended and Restated Stockholders' Agreement dated as of December 14, 1984 (the "Agreement"), by and among ARAMARK CORPORATION (formerly The ARA Group, Inc. and ARA Holding Company), a Delaware corporation ("ARAMARK"), and the parties identified on the books of ARAMARK as "Management Investors" or their "Permitted Transferees" or as "Individual Investors" or "Institutional Investors". In consideration of the terms and conditions herein contained, the parties hereto mutually agree as follows: The parties hereto (other than ARAMARK) and any other person who hereafter acquires equity securities of ARAMARK pursuant to the provisions of, and subject to the restrictions and rights set forth in, this Agreement are sometimes hereinafter referred to collectively, as the "Stockholders" or, individually, as a "Stockholder." The Management Investors and the Individual Investors are sometimes hereinafter referred to collectively as the "Investor Group." Institutional Investors and Individual Investors are sometimes hereinafter referred to collectively as "Outside Investors." Unless otherwise explicitly set forth herein, the term "Management Investors" shall mean only those individuals so identified on the books of ARAMARK, exclusive of such individuals' respective heirs, Permitted Transferees (as identified on the books of ARAMARK) or other Transferees (as defined in Section 2.03(a) hereof); provided that the Board of Directors of ARAMARK may, from time to time and in its sole discretion, designate any Stockholder then employed by ARAMARK or its Subsidiaries a "Management Investor." Stockholders who are Permitted Transferees are identified as such on the books of ARAMARK, along with the identity of their respective transferors. Where a full-time employee or director has acquired or acquires equity securities of ARAMARK in joint tenancy with their spouses or in any other manner other than sole direct ownership, such employee or director is deemed to be a Management Investor and such record owner is deemed to be his or her Permitted Transferee. A Transferee who is not already a party to this Agreement, by executing the document referred to in Section 2.03(a) hereof, shall thereby become entitled to the benefits of this Agreement and shall be deemed to be an "Institutional Investor", except: if such Transferee is an employee of ARAMARK, then he or she shall be deemed to be a "Management Investor"; if such Transferee is a Transferee pursuant to Section 3.01 of an Individual

2 Investor, then he or she shall be deemed to be an "Individual Investor"; if such Transferee is a Transferee pursuant to Section 3.01 of a Management Investor (or of his or her Permitted Transferee), then he or she shall be deemed to be a "Permitted Transferee" of such Management Investor. Determination of the classification of a Stockholder by the Board of Directors shall be conclusive and binding on all parties hereto. ARAMARK's Class B Common Stock, par value $.01 per share ("Class B Common Stock"), and Class A Common Stock, par value $.01 per share ("Class A Common Stock") are collectively referred to herein as the "Common Stock," and when so referred to shall be treated as one class to which all the provisions of this Agreement apply. Pursuant to ARAMARK's Restated Certificate of Incorporation (the "Certificate of Incorporation"), upon the termination of employment of a Management Investor, the shares of Class B Common Stock held by such Management Investor and his or her Permitted Transferees shall be converted into shares of Class A Common Stock; and upon any transfer of shares of Class B Common Stock in accordance with the terms of this Agreement other than to a Management Investor or Permitted Transferee of a Management Investor, such shares shall be converted into shares of Class A Common Stock. Shares so converted shall continue to be subject to the terms and conditions of this Agreement. For purposes of this Agreement only, the employment of a Management Investor shall be deemed terminated if he or she shall cease to be a director or an active, full-time employee of ARAMARK or its Subsidiaries. Such termination of employment shall not change the designation of such person as a Management Investor. The parties hereto desire to restrict the sale, assignment, transfer, encumbrance or other disposition of the Common Stock, including issued and outstanding shares of Common Stock as well as shares of Common Stock which may be issued hereafter, or which may become issuable pursuant to the exercise of options, and to provide for certain rights and obligations with respect thereto as hereinafter provided. 1. Certain Definitions. 1.01 "Affiliate" shall mean a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with another Person. 1.02 "Appraisal Price" of shares of Common Stock shall mean the fair market value of such shares, as determined by an Appraiser according to the most recent existing appraisal of shares of Common Stock, which appraisal shall be as of a date not more than six months prior to the use thereof. Such determination by the Appraiser shall be conclusive and binding on all Stockholders and ARAMARK. With respect to shares of Class A Common Stock resulting from the conversion of shares of Class B Common Stock pursuant to the terms of the Certificate of Incorporation, the "Appraisal Price of (an equivalent number of) shares of Class B Common Stock" shall mean the Appraisal Price, had the conversion not occurred, of such shares of Class B Common Stock.

3 1.03 "Appraiser" shall mean a firm headquartered in the United States of nationally recognized standing in the business of appraisal or valuation of securities which does not own any stock of ARAMARK and which has been selected by the Board of Directors to act as an independent appraiser. The Board of Directors shall review its selection of an Appraiser annually. 1.04 "Call" or "Called" shall mean ARAMARK's option to purchase Common Stock from the holder thereof referred to in Sections 6 and 7 hereof. 1.05 "Completely Disabled" and "Complete Disability" shall mean a "permanent and total disability" as now defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). 1.06 "Normal Retirement" shall mean voluntary termination of employment with ARAMARK after attaining the age of 60, on at least 90 days prior written notice of such termination, where the retiree does not intend to, at the time of termination, and in fact does not, engage in full-time employment following such termination other than employment that is with a governmental or a charitable, non-profit organization and that is not competitive with ARAMARK. 1.07 "Person" shall mean a corporation, an association, a partnership, an organization, a business, an individual, a government or political subdivision thereof or a governmental agency. 1.08 "Promissory Note" shall mean a subordinated installment note of ARAMARK substantially in the form of Exhibit A to this Agreement, with a stated annual rate of interest equal to the Applicable Federal Rate (as such term is defined in the Code) as of the issue date of the Promissory Note, as determined by ARAMARK; with equal annual installments of principal equal in amount to the least of (1) 10% of the original principal amount of the Promissory Note, (2) the Management Investor's highest annual base salary as an employee of ARAMARK, or (3) $100,000; and with the final installment of principal equal to the outstanding balance and due at the final maturity; and with the first installment of principal due on the April 15 or October 15 occurring closest to the first anniversary of the issue date of the Promissory Note; and with the final maturity no later than the tenth anniversary of the Management Investor's termination of employment; and with such other insertions as ARAMARK shall reasonably make. 1.09 "Put" shall mean the option of the holder to cause ARA to purchase Common Stock referred to in Section 5 hereof. 1.10 "Subsidiary" shall mean any corporation or other entity of which ARAMARK shall, directly or indirectly, own 50% or more of the equity, as determined for purposes of this Agreement by the ARAMARK Board of Directors and any other corporation or other entity in which ARAMARK shall directly or indirectly have an equity investment and which the ARAMARK Board of Directors shall in its sole discretion designate.

4 2. Limitations on Transfers of Shares. 2.01 Transfers Prohibited Unless Specifically Permitted. No Stockholder shall transfer any shares of Common Stock at any time, unless such sale, assignment, pledge or encumbrance or other transfer shall have been effected in accordance with the terms of Section 3, 4, 5, 6 or 7 of this Agreement. ARAMARK shall not transfer upon its books any shares of Common Stock held or owned by any of the Stockholders to any person except in accordance with this Agreement. 2.02 Inconsistent Agreements Prohibited. Unless approved by the Board of Directors, no Stockholder shall grant any proxy or enter into or agree to be bound by any voting trust with respect to Common Stock nor shall any Stockholder enter into any stockholder agreement or arrangement of any kind with any person with respect to Common Stock inconsistent with the provisions of this Agreement (whether or not such agreement and arrangement is with other Stockholders or holders of Common Stock that are not parties to this Agreement), including but not limited to, any agreement or arrangement with respect to the acquisition, disposition or voting of shares of Common Stock, or act, for any reason, as a member of a group or in concert with any other persons in connection with the acquisition, disposition or voting of shares of Common Stock in any manner which is inconsistent with the provisions of this Agreement. 2.03 Requirements for all Transfers. (a) Transferee Must Agree to be Bound by Agreement. Unless otherwise explicitly provided herein, no Stockholder shall sell, assign, pledge, encumber or otherwise transfer any shares of Common Stock to any person (all such persons, regardless of the method of transfer, shall be referred to collectively as "Transferees" and individually as a "Transferee") unless (a) such Transferee shall have executed, as a condition to its acquisition of shares (or, in the case of a Transferee by will or the laws of descent, record ownership on the books of ARAMARK) of Common Stock, an appropriate document confirming that such Transferee takes such shares subject to all the terms and conditions of this Agreement and (b) such document shall have been delivered to and approved by ARAMARK prior to such Transferee's acquisition of shares (or, in the case of a Transferee by will or the laws of descent, record ownership on the books of ARAMARK) of Common Stock. ARAMARK shall not unreasonably withhold or delay its approval of any such document. (b) Transfer Must Comply with Securities Laws. No Stockholder shall sell, assign, pledge, encumber or otherwise transfer any shares of Common Stock at any time if such action would constitute a violation of any federal or state securities or blue sky laws or a breach of the conditions to any exemption from registration of the Common Stock under any such laws or a breach of any undertaking or agreement of such Stockholder entered into pursuant to such laws or in connection with obtaining an exemption thereunder. Any Stockholder who proposes to sell, assign, pledge, encumber or transfer any shares of Common Stock may deliver to ARAMARK an opinion of

5 counsel that such action would not result in any such violation or breach. The delivery of such opinion shall be deemed to establish compliance with the provisions of this Section 2.03(b) unless, within ten days after the receipt by ARAMARK of such opinion, counsel for ARAMARK shall deliver an opinion that such action would result in any such violation or breach (such opinion to state the basis of the legal conclusions reached therein). (c) Endorsement of Stock Certificates. Each certificate representing shares of Common Stock shall bear endorsements reading substantially as follows: The securities represented by this certificate are subject to the right of the Corporation to repurchase such securities on the terms and conditions set forth in a Stockholders' Agreement dated as of December 14, 1984, as the same may be amended from time to time, a copy of which may be obtained from the Corporation or from the holder of this instrument. No transfer of such securities will be made on the books of the Corporation unless accompanied by evidence of compliance with the terms of such Agreement. Such certificate shall bear any additional endorsement which may be required for compliance with federal or state securities or blue sky laws. In the case of uncertificated shares of Common Stock, the books of ARAMARK shall bear appropriate notations reflecting the foregoing. 3. Certain Permitted Transfers of Shares. 3.01 Estate Planning Transfers, etc. Subject to the restrictions set forth in Section 2.03 and Section 4.06, a Stockholder shall be entitled to make the following transfers of shares of Common Stock: (A) if made for nominal consideration or as gifts: (i) any transfer or assignment to any one or more of the following relatives of the Stockholder - spouse, child, grandchild, parent - or to a trust of which there are and continue to be, during the term of this Agreement no principal beneficiaries other than one or more of such relatives; (ii) any transfer to any charitable organization which qualifies as such under Section 501 (c) (3) or any successor provision of the Code; (iii) any transfer to a legal representative in the event any Stockholder becomes mentally incompetent; (iv) any transfer of record title to any nominee or custodian, provided that the Stockholder so transferring such shares remains the beneficial owner thereof; (B) any transfer among members of a family, their trusts or other entities, if approved by the Board of Directors; (C) any transfer among Institutional Investors which became Stockholders in December 1984; and (D) with respect to a corporate or partnership Stockholder transfer between an Affiliate and such corporate or partnership Stockholder (it being understood with respect to such Affiliate that the later sale of such Affiliate as part of a sale or series of sales of substantial assets other than Common Stock would not constitute an indirect sale of Common Stock by such corporate or partnership Stockholder, and need not be made within the terms of this Agreement, provided that an officer of such institution certifies that such sale is not being undertaken to evade the transfer restrictions herein).

6 3.02 Permitted Pledges. A Stockholder shall be entitled to pledge his or her shares of Common Stock to ARAMARK, a commercial bank, savings and loan institution or any other lending or financial institution as security for any indebtedness of such Stockholder to such lender; provided that such lender shall first agree not to dispose of such shares except in compliance with the provisions of this Agreement. 3.03 Authority of Board of Directors to Approve Transfers; Actions by Board of Directors. Notwithstanding any other provision of this Agreement, the Board of Directors shall have the authority to approve any transfer, or class, category or type of transfer, of Common Stock. Such authority of the Board of Directors shall extend to, among other things, (i) the authority to create an internal market for shares of the Company's stock pursuant to which Management Investors would be offered the opportunity to sell a portion of their shares at the times and on the terms set by the Board of Directors, and (ii) the authority to waive entirely the restrictions (including, without limitation, restrictions relating to rights of first offer and reoffer, calls upon termination of employment and sales, transfers and other dispositions of shares) set forth in this Agreement which relate to Management Investors and which do not relate to Outside Investors. Any such approval may be revoked by the Board at any time without notice and such revocation shall be effective with respect to any action, including any or all transfers or proposed transfers, unless, prior to such revocation, the shares have been presented to the transfer agent for the purpose of registering such transfer, in proper form and satisfying the requirements of Section 8-401 of the Uniform Commercial Code or such other applicable law relating to the duty of an issuer to register securities transfers. The Board of Directors may delegate any and all authority it has under this Agreement to any committee thereof and/or to any authorized officer or agent. 4. Rights of First Offer and Reoffer of Shares. 4.01 Transfers by Management Investors. (a) A Management Investor or Permitted Transferee may sell shares of Common Stock, by complying with the terms of this Section 4. The selling Management Investor shall first give written notice (a "Management Investor's Notice") to ARAMARK stating such selling Management Investor's desire to make such transfer, the number of shares of Common Stock to be transferred (the "Offered Management Shares"), and the price which the selling Management Investor proposes to be paid for the Offered Management Shares, which proposed price shall not be greater than the Appraisal Price of (an equivalent number of) shares of Class B Common Stock (the "First Offer Price"). (b) Upon receipt of the Management Investor's Notice, ARAMARK shall have the irrevocable and exclusive option to buy up to all of the Offered Management Shares at the First Offer Price; provided, however, that ARAMARK shall not have the right to purchase any of the Offered Management Shares unless either (i) ARAMARK purchases all such Offered Management Shares, or (ii) such selling Management Investor

7 consents to the purchase of less than all of the Offered Management Shares. ARAMARK's option under this Section 4.01(b) shall be exercisable by a written notice to such selling Management Investor, given within 45 days from the date of receipt of the Management Investor's Notice. 4.02 Transfers by Outside Investors. (a) An Outside Investor may sell shares of Common Stock, including pursuant to the registration rights under Section 2.1 of ARAMARK's Amended and Restated Registration Rights Agreement amended and restated as of April 7, 1988 (the "Registration Rights Agreement"), by complying with the terms of this Section 4. The selling Outside Investor shall first give written notice (a "Seller's Notice") to ARAMARK stating such selling Outside Investor's desire to make such transfer, the number of shares of Common Stock to be transferred (the "Offered Investors' Shares"), and the price which the selling Outside Investor proposes to be paid for the Offered Investors' Shares (the "First Offer Investors' Price"). (b) Upon receipt of the Seller's Notice, ARAMARK shall have the irrevocable and exclusive option to buy up to all of the Offered Investors' Shares at the First Offer Investors' Price; provided, however, that ARAMARK shall not have the right to purchase any of the Offered Investors' Shares unless either (i) ARAMARK purchases all such Offered Investors' Shares, or (ii) such selling Outside Investor consents to the purchase of less than all of the Offered Investors' Shares. ARAMARK's option under this Section 4.02(b) shall be exercisable by a written notice to such selling Outside Investor, given within 45 days from the date of the receipt of Seller's Notice. 4.03 Transfer of Offered Shares to Third Parties. If the Management Investor's Notice or the Seller's Notice (collectively, the "Notice") required to be given pursuant to Section 4.01 or 4.02, as the case may be, has been duly given, and ARAMARK determines not to exercise its option to purchase the Offered Management Shares or the Offered Investors' Shares (collectively, the "Offered Shares") or determines (with the consent of the Stockholder who has made the First Offer) to exercise its option to purchase less than all the Offered Shares, then the Stockholder who has made such First Offer shall be free, for a period of 90 days from the earlier of (i) the expiration of the option period with respect to such First Offer pursuant to Section 4.01 or 4.02, as the case may be, or (ii) the date such Stockholder shall have received written notice from ARAMARK stating that ARAMARK intends not to exercise in whole or in part the option granted under Section 4.01 or 4.02, as the case may be, to sell to any third-party Transferees the remaining Offered Shares, at a price equal to or greater than the First Offer Price, in the case of Management Investors or their Permitted Transferees, and the First Offer Investors' Price, in the case of Outside Investors; provided, however, that the Transferee complies with the provisions of Section 2.03; and provided further that, in the case where such selling Stockholder is a Management Investor or a Permitted Transferee, such Transferee shall have been approved by ARAMARK as a suitable investor in a privately-owned services management company. ARAMARK shall not unreasonably withhold or delay such approval. Anything

8 herein to the contrary notwithstanding, the 90-day period described in this Section 4.03 shall be extended until the completion of all sales pursuant to a registration statement, a request for which was made substantially concurrently with the Notice. 4.04 Reoffers. In the event the proposed purchase price of a third-party Transferee for the Offered Shares is less than the First Offer Price or the First Offer Investors' Price, as the case may be, the Stockholder desiring to sell at such lesser price shall not sell or otherwise transfer any of the Offered Shares unless such selling Stockholder shall first reoffer the Offered Shares at such lesser price to ARAMARK by giving written notice (the "Reoffer Notice") to ARAMARK of such selling Stockholder's intention to make such transfer at such lower price (the "Reoffer Price"). ARAMARK shall then have an irrevocable and exclusive option to purchase all or part of the Offered Shares at the Reoffer Price, exercisable in the same manner as provided in Section 4.01 or 4.02, as the case may be. In the event ARAMARK does not then elect to purchase all the remaining Offered Shares, or ARAMARK elects (with the consent of the Stockholder desiring to sell) to purchase less than all the remaining Offered Shares, the remaining Offered Shares may be sold by such selling Stockholder within 30 days following the earlier of (i) the expiration of the option period with respect to such Reoffer pursuant to Section 4.01 or 4.02, as the case may be, or (ii) the last date on which such selling Stockholder shall have received written notice from ARAMARK stating that ARAMARK intends not to exercise in whole or in part the option granted in this Section 4.04, at a price equal to or greater than the Reoffer Price; provided, however, that the Transferee complies with the provisions of Section 2.03; and provided further that, in the case where such selling Stockholder is a Management Investor or a Management Investor's Permitted Transferee, such Transferee shall have been approved by ARAMARK as a suitable investor in a privately-owned services management company. ARAMARK shall not unreasonably withhold or delay such approval. 4.05 Waiting Period With Respect to Subsequent Transfers. In the event that ARAMARK does not exercise its option to purchase any or all of the Offered Shares at the First Offer Price or the First Offer Investors' Price, as the case may be, or at the Reoffer Price, and the Stockholder desiring to sell shall not have sold the remaining Offered Shares to any Transferee for any reason before the expiration of the 30 day period described in Section 4.04 in the event of a Reoffer, or, if no Reoffer Notice is given, the 90 day period described in Section 4.03, then such selling Stockholder shall not sell any shares of Common Stock to any Transferee or other Stockholder (other than to Permitted Transferees pursuant to Section 3.01) at any price for a period of three months from the last day of such 30 or 90 day period, as the case may be. 4.06 No Sales of Control. (a) Subject to Section 4.06(b) and except as provided in Section 3.03 (transfers approved by the Board of Directors), no Person or group of Persons, as defined in Section 13 (d) (3) of the Securities Exchange Act of 1934 (the "Exchange Act"), including for the purposes of this paragraph as part of such Person's group, Transferees pursuant to Section 3.01, shall become (whether through the purchase of shares pursuant to this Agreement or otherwise or through any other

9 action) the holder, directly or indirectly, of 10% or more of either the outstanding shares of Class A Common Stock or the outstanding shares of Class B Common Stock. Any transaction resulting in a violation of this Section 4.06(a) shall be void, and of no effect against ARAMARK, and ARAMARK shall not record any such purported transfer on its books. Two or more Stockholders owning in the aggregate 10% or more of such outstanding shares shall not be deemed to be a group of Persons for the purposes of this Section 4.06 solely because such Stockholders are parties to this Agreement or because such Stockholders are related by blood or marriage and/or because such Stockholders are officers or directors of ARAMARK. (b) The provisions of Section 4.06(a) shall not apply to the acquisition by ARAMARK, directly or indirectly, of shares of Common Stock, notwithstanding that as a result of such acquisition any Person or group of Persons acting in concert would own 10% or more of such outstanding shares subsequent to such an acquisition, but shall apply to any subsequent acquisition or other action by such Person or group of Persons. 4.07 Form of Consideration for Shares. No offer to purchase or to sell shares of Common Stock shall be deemed to be a valid offer under this Section 4 unless the purchase price of such offer is payable in cash or securities that can be readily valued by reference to quoted trading prices. The purchase price of shares upon exercise of an option under this Section 4 in respect of a Notice which specifies only cash as the form of consideration shall be payable only in cash. 4.08 Merger Transaction. Subject to any applicable provisions of the Certificate of Incorporation or any loan agreement or instruments to which ARAMARK is a party, ARAMARK may enter into any agreement of merger to merge with or into any other corporation; and, in such event, Sections 4.01 through 4.07 of this Agreement shall not be applicable to such merger and all shares may be transferred for such consideration as approved by the Board of Directors and the Stockholders in accordance with applicable law. 4.09 Transfers in a Public Offering. In the event a request is made under Section 2.1 of the Registration Rights Agreement for a demand registration, then the procedures set forth in Sections 4.02 through 4.05 shall be modified in the following respects: (a) Such request shall also provide the information required to be stated in a Seller's Notice, and shall also constitute a Seller's Notice. (b) Prior to the expiration of the 21 day period under the Registration Rights Agreement within which ARAMARK is to file a registration statement covering the shares the holder of which requested a demand registration, ARAMARK shall have the irrevocable and exclusive option to buy all (and only all) of the Offered Investors' Shares at the First Offer Investors' Price, which shall be the proposed public offering price after reduction for commissions, discounts and the like.

10 (c) In the event the public offering price (after reduction for commissions, discounts and the like) is more than 10% lower than the First Offer Investors' Price, or the number of shares included in the offering is reduced to less than 75% of the shares as to which the Seller's Notice was delivered (otherwise than by reason of a cut down by the Underwriter) then Section 4.04 shall apply, but such section shall not otherwise apply to any sale pursuant to a registration statement. (d) In the event all of the Offered Investors' Shares are elected to be purchased, the demand registration shall be held in abeyance pending the closing of such purchase in accordance with this Agreement. 5. Put of Shares upon Death, Complete Disability or Normal Retirement. 5.01 Put in Event of Death, Complete Disability or Normal Retirement. Subject to any instruments or agreements of ARAMARK from time to time in effect restricting or otherwise governing the repurchase or retirement of shares of ARAMARK's capital stock (the "Loan Agreements") and to applicable law, unless a Call pursuant to Section 6.01 shall have been exercised by ARAMARK, upon the death, Complete Disability or Normal Retirement of any Investor Group member, at the option of such Investor Group member, such Investor Group member's estate, heirs or personal representative, and such Investor Group member's Permitted Transferees (other than Permitted Transferees specified in Section 3.01(A)(ii)) (collectively, the "Holders" of such Investor Group member's shares) and within 30 days of receipt by ARAMARK of a Seller's Notice from such Holders, which notice must be given within 30 days from the date of the appointment of a personal representative of such Investor Group member, the date he or she became Completely Disabled, or the date of his or her Normal Retirement, ARAMARK shall purchase from such Holders the shares of Common Stock held by such Holders specified in such Seller's Notice up to 30% of such shares so held at a purchase price determined in accordance with Section 5.02. ARAMARK shall be under no obligation to purchase such shares unless it shall have received a Seller's Notice from such Holders in accordance with this Section 5.01. 5.02 Purchase Price of Put Shares. The purchase price for the shares of Common Stock purchased pursuant to Section 5.01 shall be the Appraisal Price of (an equivalent number of) shares of Class B Common Stock, for the shares of a Holder of a Management Investor's shares, and shall be the Appraisal Price of shares of Class A Common Stock for the shares of a Holder of an Individual Investor's shares. ARAMARK shall satisfy its obligation to purchase shares upon the exercise of any Put granted under Section 5.01 with cash. 6. Call of Shares upon Termination of Employment. 6.01 Call in Event of Termination. Unless the shares of Common Stock held by a Management Investor and his or her Permitted Transferees have been earlier sold pursuant to Section 4 (rights of first offer and reoffer), including the earlier recording of the transfer of such shares on the books of ARAMARK, ARAMARK shall have an exclusive and irrevocable

11 option, at any time and from time to time during the period of 10 years following the termination of employment of such Management Investor for any reason whatsoever (including without limitation death, Complete Disability or Normal Retirement) to make a purchase or purchases of up to all of the shares of Common Stock owned by such Management Investor and his or her Permitted Transferees, at a purchase price, with respect to any such exercise, determined in accordance with Section 6.02. 6.02 Purchase Price. The purchase price per share for any shares of Common Stock purchased pursuant to Section 6.01 shall be the lesser of (i) the Appraisal Price of (an equivalent number of) shares of Class B Common Stock at the time ARAMARK gives notice that it is exercising its Call option and (ii) the Appraisal Price of (an equivalent number of) shares of Class B Common Stock at the date of termination of employment, plus in the case where ARAMARK gives notice it is exercising its Call option more than 120 days after the date of termination of employment, 8% simple interest on such amount from the date of termination of employment through the date ARAMARK gives notice that it is exercising its Call option. ARAMARK shall satisfy its obligations to purchase shares upon the exercise of such Calls with cash up to the least of $100,000, or the Management Investor's highest annual base salary as an employee of ARAMARK, or 10% of the aggregate purchase price for such Called shares and, at the Company's option, with cash and/or Promissory Notes valued at their principal amount for the remainder. 7. Involuntary Transfer of Shares. 7.01 Certain Involuntary Transfers; Seller's Notice. Except for involuntary transfers (by foreclosure or otherwise) to ARAMARK of shares of Common Stock pledged to ARAMARK, in the event a Stockholder shall involuntarily transfer directly or indirectly any or all of his or her shares, for any reason other than as a result of those events specified in Section 6, such Stockholder shall give written notice within 30 days of such involuntary transfer (the "Stockholder Notice") to ARAMARK, with a copy to the Transferee, stating the fact that the involuntary transfer occurred, the reason therefor, the date of the transfer, the name and address of the Transferee and the number of shares acquired by the Transferee (the "Acquired Shares"). For purposes of this Section 7 an involuntary transfer shall include, without limitation, a court-ordered transfer, constructive trust or other device designed to transfer economic benefit of share ownership. 7.02 Right to Repurchase. For a period of 60 days from the date of receipt of the Stockholder Notice or, failing receipt of such notice, 60 days from the date ARAMARK sends written notice to the Transferee that the transfer is deemed to be an involuntary transfer subject to repurchase under this Agreement, ARAMARK shall have an irrevocable and exclusive option to buy all of the Acquired Shares, exercisable in the same manner as provided in Section 4.01, and the provisions of such applicable Section shall be followed in their entirety except that the purchase price shall be as provided in Section 7.03. 7.03 Purchase Price. The purchase price for shares purchased pursuant to Section 7.02 shall be payable in cash and shall be equal to the Appraisal Price of (an equivalent number of) shares of Class B Common Stock at the time ARAMARK gives notice that it is exercising its Call option.

12 8. Limited Access to Information. 8.01 No Duty to Disclose Information. Each of the parties to this Agreement acknowledges and agrees that it is in the best interests of ARAMARK and the Stockholders taken as a whole for ARAMARK to be able to conduct orderly transactions in Common Stock on a continual basis (including in connection with the internal market and repurchases upon termination of employment and otherwise), and for ARAMARK concurrently to be able to consider from time to time on a confidential basis potential transactions which could affect the fair market value and/or the Appraisal Price of the Common Stock. Each of the parties to this Agreement acknowledges and agrees that, at the time of a sale by a Stockholder of shares of Common Stock pursuant to this Agreement, there may have occurred or be proposed or pending an event or a transaction that could affect the Appraisal Price of the Common Stock, and that the Appraisal Price of the Common Stock (and, accordingly, the repurchase price) may be substantially less than the fair market value as of the current date, and further acknowledges and agrees that ARAMARK may have valid business reasons not to, and in any case shall not be required to, disclose any event or transaction that may have occurred or be proposed or pending at the time of any such sale. 8.02 Sale of ARAMARK Following Call. In the event that any entity, person, or any group of persons acting in concert (excluding the Management Investors as a group), acquires in any manner shares of Common Stock with 50% of the ordinary voting rights of the outstanding shares of Common Stock or in the event of the redemption or repurchase of all the shares of Common Stock in connection with a sale of all or substantially all the assets of ARAMARK, or the winding up, dissolution or liquidation of ARAMARK, within 90 days from the date of a sale pursuant to Section 6.01 then, subject to the Loan Agreements, ARAMARK and/or the purchaser of such shares of Common Stock with 50% of the ordinary voting rights of the outstanding shares of Common Stock shall pay to the Holders whose shares have been so purchased the excess, if any, of the amount per share realized by ARAMARK's stockholders upon such acquisition, redemption, repurchase, winding up, dissolution or liquidation over the purchase price per share paid to such Holders pursuant to Section 6 less the interest paid on any Promissory Notes paid as consideration for such stock and less a financing cost for carrying such stock for any cash received, based on an interest rate equal to the rate paid by ARAMARK under the Loan Agreements at the date of payment hereunder, for the period from the date of payment to such Holders pursuant to Section 6 to the date of such acquisition, redemption, repurchase, winding up, dissolution or liquidation, for each share purchased by ARAMARK. Determination of whether or not any such payment is appropriate, and the amount of such payment, shall be made by the Board of Directors; and such determination shall be conclusive and binding on all parties hereto. 9. No Right to Continued Employment. Neither this Agreement nor the ownership of Common Stock by a Management Investor shall confer upon any Management Investor any right to continue in the employ of ARAMARK or any of its Subsidiaries or limit in any respect the right of ARAMARK or its Subsidiaries to terminate his or her employment at any time.

13 10. Closing. 10.01 Closing Date; Purchase Price. Any selling Stockholder and ARAMARK, as purchaser, of shares of Common Stock pursuant to Section 4, 5, 6 or 7 shall mutually determine a closing date (the "Closing Date") which, unless this Agreement otherwise explicitly provides, shall be not more than 60 business days after ARAMARK gives notice that it will purchase such shares; provided, however, that absent agreement, the Closing Date shall be the business day determined by ARAMARK. In respect of shares of Common Stock distributed by any employee benefit plan upon termination of employment, the Closing Date shall be such date selected by ARAMARK consistent with the orderly administration of such plan. Notwithstanding anything in this Agreement to the contrary, the Closing Date may be delayed in any case in which ARAMARK cannot, in compliance with the Loan Agreements or applicable law, purchase any shares of Common Stock that it is otherwise obligated to purchase until the earliest practicable date when such closing may be effected in compliance with such Loan Agreements or applicable law. The closing shall be held at 11:00 a.m., local time, at the offices of ARAMARK or at such other time or place as the parties may agree. The determination date of the Appraisal Price shall be appropriately changed if the Closing Date is delayed in accordance with the foregoing paragraph. 10.02 Shares No Longer Outstanding. If a selling Stockholder shall fail to deliver the certificates representing the shares of Common Stock to be sold or shall otherwise fail to perform any obligation required to be performed at the closing and ARAMARK shall have been ready to purchase such shares at the closing, then effective at the closing, such shares shall no longer be deemed to be outstanding, and all rights of the holder thereof as stockholder of ARAMARK (except the right to receive from ARAMARK the purchase price therefor) shall cease. 10.03 Deliveries at Closing; Method of Payment of Purchase Price. On the Closing Date, any selling Stockholder shall deliver certificates with appropriate transfer tax stamps affixed and with stock powers endorsed in blank, representing the shares of Common Stock to be purchased, and ARAMARK, as purchaser shall deliver to such Stockholder the purchase price which is payable in cash (or by wire transfer or check) and the other consideration, if any, to be given in exchange for such shares. In addition, if the person selling shares is the personal representative of a deceased Stockholder, the personal representative shall also deliver to the purchaser or purchasers (i) copies of letters testamentary or letters of administration evidencing his or her appointment and qualification, (ii) a certificate issued by the Internal Revenue Service pursuant to Section 6325 of the Code discharging the shares being sold from liens imposed by the Code and (iii) an estate tax waiver issued by the state of the decedent's domicile. 11. Term. The terms and provisions of this Agreement which relate to Management Investors may be terminated by an instrument in writing signed by Management Investors who hold, in combination with their Permitted Transferees, at least the majority of the Common Stock held by Management Investors and their Permitted Transferees and by ARAMARK. The terms and provisions of this Agreement which relate to Outside Investors shall terminate on April 7, 2008 or, if earlier, on the

14 closing date of the first to occur of (i) any merger or other business combination of ARAMARK with or into any other corporations, except a merger or other business combination in which the stockholders of ARAMARK immediately prior thereto constitute more than a majority of the stockholders (by value of equity securities held) following such merger, and (ii) the sale of shares of Class A Common Stock to the public pursuant to an underwritten, registered public offering under the Securities Act of 1993, as amended (the "Securities Act") as a result of which offering the public (including for this purpose all purchasers in the underwriting irrespective of any relationship with ARAMARK) owns 10% or more of the outstanding shares of Class A Common Stock, provided such shares have a fair market value equal to at least $25,000,000 at the time of the offering. Notwithstanding the foregoing, the restrictive terms and provisions set forth herein with respect to the rights and obligations of Management Investors shall terminate, effective upon or after the occurrence of a public offering pursuant to clause (ii) above, to the extent the existence of such terms and provisions would impair the ability of ARAMARK to list its Common Stock on the New York Stock Exchange or, in the written opinion of the lead underwriter, significantly impair the value of the Common Stock proposed to be sold in a public offering. 12. Registration of Common Stock. In the event of any registration under the Securities Act and public offering of Common Stock, each Stockholder shall, at a meeting convened for the purpose of amending the Certificate of Incorporation, vote to increase the authorized number of shares of Common Stock and, if necessary, to subdivide the outstanding shares of Common Stock of ARAMARK, in both instances as recommended by a majority of the members of the Board in order to effectuate such public offering. 13. Injunctive Relief. It is acknowledged that it will be impossible to measure in money the damages that would be suffered if the parties fail to comply with any of the obligations herein imposed on them and that in the event of any such failure, an aggrieved person will be irreparably damaged and will not have an adequate remedy at law. Any such person shall, therefore, be entitled to injunctive relief, including specific performance, to enforce such obligations, and if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law. 14. Notices. All notices, statements, instructions or other documents required to be given hereunder, shall be in writing and shall be given either personally, or by mailing the same in a sealed envelope, first-class mail, postage prepaid, addressed to ARAMARK at its principal offices to the attention of the General Counsel and to the other parties at their addresses reflected in the stock records of ARAMARK, or sent by telegram, telex, telecopy or similar form of telecommunication. Each Stockholder, by written notice given to ARAMARK in accordance with this Section 14 may change the address to which notices, statements, instructions or other documents are to be sent to such Stockholder. All notices, statements, instructions and other documents hereunder that are mailed shall be deemed to have been given on the date of mailing. 15. Cooperation. ARAMARK agrees that it will use all reasonable efforts under the circumstances to help any Stockholder desiring to dispose of its Common Stock pursuant to the provisions of this Agreement to do so.

15 16. Miscellaneous. 16.01 Successor and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties, and their respective successors and assigns. The provisions of this Agreement are for the sole benefit of the parties hereto and their heirs, executors, administrators, legal representatives, successors and assigns, and they shall not be construed as conferring any rights on any other persons. If any Transferee of any Stockholder shall acquire any shares of Common Stock, in any manner, whether by operation of law or otherwise, such shares shall be held subject to all of the terms of this Agreement, and by taking and holding such shares such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement. ARAMARK may assign to any other Person its rights with respect to any specific transaction pursuant to Section 4, 5, 6 or 7, provided that Person complies with the provisions of Section 2.03. 16.02 Governing Law. Regardless of the place of execution, this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be wholly performed in such State. 16.03 Headings. Paragraph headings are inserted herein for convenience only and do not form a part of this Agreement. 16.04 Entire Agreement; Amendment. This Agreement contains the entire agreement among the parties hereto with respect to the transactions contemplated herein, supersedes all prior written agreements and negotiations and oral understandings, if any, and may not be amended, supplemented or discharged except by performance or by an instrument in writing signed by the holders of at least three-fourths of the Common Stock held by the Institutional and Individual Investors (taken as a whole), and by Management Investors who hold (in combination with their Permitted Transferees) at least a majority of the Common Stock held by Management Investors and their Permitted Transferees, and by ARAMARK. In the event of the amendment or modification of this Agreement in accordance with its terms, the Stockholders shall cause the Board of Directors of ARAMARK to meet within 30 days following such amendment or modification or as soon thereafter as is practicable for the purpose of amending the Certificate of Incorporation and By-Laws of ARAMARK, as may be required as a result of such amendment or modification, and proposing such amendments to the stockholders of ARAMARK entitled to vote thereon, and such action shall be the first action to be taken at such meeting. This amended and restated Agreement shall become effective upon the later of (i) December 14, 1994 and (ii) the date ARAMARK has received and holds duly executed (and not previously rescinded) instruments in writing approving such amended and restated Agreement from the required parties as provided in this Section 16.04. 16.05 Inspection. A copy of this Agreement shall be filed with the Secretary of ARAMARK and kept with the records of ARAMARK and shall be made available for inspection by any stockholder of ARAMARK at the principal offices of ARAMARK.

16 16.06 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [Signature Pages Omitted]

17 EXHIBIT A (to Amended and Restated Stockholders' Agreement) THIS NOTE IS NOT TRANSFERABLE UNLESS AS A CONDITION PRECEDENT TO THE EFFECTIVENESS OF ANY TRANSFER THE PAYEE HAS OBTAINED THE WRITTEN CONSENT OF THE COMPANY AS TO THE PROPOSED TRANSFER. $__________ Philadelphia, Pennsylvania ________________, 19___ SUBORDINATED INSTALLMENT NOTE 1. For value received, ARAMARK CORPORATION (formerly The ARA Group, Inc. and ARA Holding Company), a Delaware corporation (the "Company"), hereby promises to pay to (the "Payee") the sum of $ in equal, annual installments ofand one final installment of $ on each [April/October] 15 commencing on [April/October] 15, 19 , and to pay simple interest at the rate of % per annum on the unpaid balance thereof, semi-annually in arrears on each April 15 and October 15. 2. The Payee may not sell, assign or otherwise transfer or encumber any portion of this Note or interest herein without first procuring the written consent of the Company, which consent the Company is under no obligation to provide. No transfer of this Note shall be effective unless such transfer is in compliance with the foregoing, including the requirements set forth in the legend provided for above. 3. Both the principal of this Note and interest thereon are payable in lawful money of the United States of America at 1101 Market Street, Philadelphia, PA 19107, or such address of any subsequent principal executive office of the Company within the United States of America as the Company shall designate in writing to the Payee, or at the option of the Company, by check mailed to the Payee at such address for the Payee as is indicated on the books of the Company. 4. This Note may be prepaid in full, or in part, any time, without premium or penalty. All prepayments shall be applied first to accrued interest and then to installments of principal in the order of their maturities. 5. The indebtedness evidenced by this Note and the payment of the principal of and interest on this Note are hereby expressly subordinated, to the extent and in the manner hereinafter set forth, to the prior payment in full of all Senior Indebtedness.

18 5.1 "Senior Indebtedness" means the principal of, premium, if any, interest and any other amounts due on (1) all Indebtedness incurred, assumed or guaranteed by the Company, either before or after the date hereof, (excluding any debt which by the terms of the instrument creating or evidencing the same is not superior in right of payment to this Note), including, without limitation, (a) any amount payable with respect to any lease, conditional sale or installment sale agreement or other financing instrument or agreement which in accordance with generally accepted accounting principles is, at the date hereof or at the time the lease, conditional sale or installment sale agreement or other financing instrument or agreement is entered into, or assumed or guaranteed by, directly or indirectly, the Company, required to be reflected as a liability on the face of the balance sheet of the Company, (b) any amounts payable in respect to any interest rate exchange agreement, currency exchange agreement or similar agreement and (c) any subordinated indebtedness of a corporation merged with or into or acquired by the Company; and (2) any renewals or extensions or refunding of any such Senior Indebtedness or evidences of indebtedness issued in exchange for such Senior Indebtedness. 5.2 "Indebtedness" means (a) all items, except items of capital stock or of surplus or of general contingency reserves or of reserves for deferred income taxes, which in accordance with generally accepted accounting principles in effect on the date hereof should be included in determining total liabilities as shown on the liability side of a balance sheet of the Company as at the date of which Indebtedness is to be determined, (b) all indebtedness secured by any mortgage, pledge, lien or conditional sale or other title retention agreement existing on any property or asset owned or held by the Company, whether or not such indebtedness shall have been assumed, and (c) all indebtedness of others which the Company has directly or indirectly guaranteed, endorsed, discounted or agreed (contingently or otherwise) to purchase or repurchase or otherwise acquire, or in respect of which the Company has agreed to supply or advance funds or otherwise to become liable directly or indirectly with respect thereto, including, without limitation, indebtedness arising out of the sale or transfer of accounts or notes receivable or any moneys due or to become due. 6. In the event of any dissolution, winding up, liquidation or reorganization of the Company (whether voluntary or involuntary and whether in bankruptcy, insolvency or receivership proceedings, or upon an assignment for the benefit of creditors or any readjustment of debt, arrangement or composition among creditors or any other marshalling of the assets and liabilities of the Company or otherwise), then holders of Senior Indebtedness shall first be paid in full, or provision made for such payment, before any payment or distribution, directly or indirectly (including by way of set off) is made upon the principal of or interest on this Note, and to that end the holders of Senior Indebtedness shall be entitled to receive in payment thereof any payment or distribution of assets of the Company, whether in cash or property or securities, which may be payable or deliverable in any such proceeding in respect of this Note. The Payee irrevocably authorizes, empowers and directs all receivers, custodians, trustee, liquidators, conservators and others having authority in the premises to effect all such payments and deliveries. Notwithstanding any statute, including without limitation the Federal Bankruptcy Code, any rule of law or bankruptcy procedures to the contrary, the right of the holders of the Senior Indebtedness to have all of the Senior Indebtedness paid and satisfied in full prior to the payment of any amounts due the payee under this Note shall include, without limitation, the right of the holders of the Senior Indebtedness to be paid in full all interest accruing on the Senior Indebtedness due them after the filing of any petition by or against the Company in connection with any bankruptcy or similar proceeding or any other proceeding referred to in paragraph 6 hereof, prior to the payment of any amounts in respect of the Note, including, without limitation, any interest due to the Payee accruing after such date.

19 7. No payment, directly or indirectly (including by way of set off), shall be made by the Company with respect to the principal of or interest on this Note if (i) an event of default has happened with respect to any Senior Indebtedness, as defined therein or in the instrument under which the same is outstanding which if occurring prior to the stated maturity of such Senior Indebtedness, permits holders thereof upon the giving of notice or passage of time, or both, to accelerate the maturity thereof ("Senior Indebtedness Default") and has not been cured, (ii) a payment by the Company to or for the benefit of Payee would, immediately after giving effect thereto, result in a Senior Indebtedness Default, or (iii) full payment of all amounts then due for principal of (or premium, if any), interest or any other amounts due on Senior Indebtedness shall not then have been made or duly provided for. Upon the occurrence of any events described in (i), (ii) or (iii) described above, notwithstanding any event of default under this Note by the Company, the Payee may not accelerate the maturity of all or any portion of this Note, or take any action towards collection of all or any portion of this Note or enforcement of any rights, powers or remedies under this Note, or applicable law until the earlier of the date on which a Senior Indebtedness Default (or in the case of (iii) required payments shall have been duly provided for) have been cured or such Senior Indebtedness has been paid in full. 8. In the event that, notwithstanding the foregoing, the Company shall make any payment prohibited by Section 6 or 7, then, except as hereinafter in this Section otherwise provided, unless and until any such Senior Indebtedness Default shall have been cured or waived or shall cease to exist, such payment shall be held in trust for the benefit of and shall be paid over to the holders of Senior Indebtedness or their representative or representatives or to the trustee or trustees under any indenture under which any instrument evidencing the Senior Indebtedness may have been issued, as their respective interests may appear, to the extent necessary to pay in full all Senior Indebtedness then due, after giving effect to any concurrent payment to the holders of such Senior Indebtedness. 9. Subject to the payment in full of all Senior Indebtedness at the time outstanding, the Payee shall be subrogated to the rights of the holders of Senior Indebtedness to receive payments or distributions of assets of the Company applicable to the Senior Indebtedness until this Note shall be paid in full, and no payments or distributions to the holders of Senior Indebtedness by or on behalf of the Company from the proceeds that would otherwise be payable to the Payee, or by or on behalf of the Payee, shall as between the Company and the Payee, be deemed to be a payment by the Company to or for the account of holders of Senior Indebtedness. 10. No holder of Senior Indebtedness shall be prejudiced in his or her right to enforce subordination of this Note by any act on the part of the Company. The above provisions in regard to subordination are intended solely for the purpose of defining the relative rights of the Payee on the one hand, and the holders of Senior Indebtedness, on the other hand, and nothing contained in this Note is intended to or shall impair, as between the Company, its creditors other than the holders of Senior Indebtedness and the Payee, the obligation of the Company, which is absolute and unconditional, to pay to the Payee, subject to the rights of the holders of Senior Indebtedness, the principal of and interest on this Note as and when the same shall become due and payable in accordance with its terms, subject to the rights, if any, under the above subordination provisions, of holders of Senior Indebtedness to receive cash, property or securities of the Company payable in respect thereof.

20 11. The principal of this Note and accrued unpaid interest thereon shall (if not already due and payable) upon written demand by the Payee become due and payable forthwith, if there shall have been a default in the payment of any interest on, or principal of, this Note when it becomes due and payable (but only if such payment is not prohibited by the provisions of this Note), and such default shall have continued for a period of 30 days after written notice of such default shall have been given to the Company and shall be continuing at the time of such written demand. 12. No course of dealing between the Company and the Payee or any delay on the part of the Payee in exercising any rights under this Note shall operate as a waiver of any rights of the Payee. 13. All notices and other communications hereunder shall be in writing and shall be deemed to have been given when delivered, or deposited in the mails, first-class, postage prepaid, or delivered to a telegraph office for transmission, if to the Payee, at such address for the Payee as is indicated on the books of the Company or if to the Company, at the address of the principal executive offices of the Company as provided above. 14. This Note shall be governed by the laws of the State of Delaware. ARAMARK CORPORATION By: ______________________________ Treasurer


1 AGREEMENT RELATING TO EMPLOYMENT AND POST-EMPLOYMENT COMPETITION* This Agreement is between the undersigned individual ("Employee") and ARA Services, Inc. ("ARA"). RECITALS -------- A. ARA is a service management company which provides a variety of services to business and industry, private and public institutions, and the general public primarily in the following markets: food and refreshment services; healthcare; childcare, periodical distribution, uniform rental and maintenance. B. ARA has a proprietary interest in its business methods and systems ("Systems") which include, but are not limited to, policy and procedure manuals, computer programs, financial forms and information, supplier information, supplier information, recipes, accounting forms and procedures, personnel policies and information on the needs of clients, all of which information is not publicly disclosed and is considered by ARA to be confidential trade secrets; and C. ARA intends to employ Employee in a position where Employee will have access to information relating to ARA's Systems and ARA will encourage Employee to develop personal relationships with ARA's clients and prospective clients; and D. ARA will be vulnerable to unfair post-employment competition by Employees since Employee will have access to ARA Systems and will have a personal relationship with ARA's clients and prospective clients; and E. In consideration of the severance and other employment benefits provided for herein, Employee was willing to enter into this Agreement with ARA as a condition of employment, pursuant to which Employee will limit his right to compete against ARA following termination of employment for any reason to the limited extent set forth in this Agreement. * This Agreement covers individuals in Grade N or Higher.

2 NOW, THEREFORE, intending to be legally bound, the parties agree as follows: Article 1. NON-DISCLOSURE AGREEMENT: ARA may, pursuant to Employee's employment hereunder provide and confide to Employee ARA's Systems, techniques and methods of operation developed at great expense by ARA and which Employee recognizes to be unique assets of ARA's business. Employee shall not, during or after the term of employment, directly or indirectly, in any manner utilize or disclose to any person, firm, corporation, associaiton or other entity, except where required by law: (a) any such Systems, techniques and methods of operation; (b) any sales prospects, customer lists, products, research or data of any kind; or (c) any information relating to strategic plans, sales costs, profits or the financial condition of ARA or any of its customers or prospective customers, which is not generally known to the public or recognized as standard practice in the industries in which ARA shall be engaged. Article 2. NONCOMPETITION AGREEMENT: A. Subject to the provisions of Paragraphs B and E, below, Employee, for a period of two (2) years folowing termination of his employment, shall not, without ARA's written permission, directly or indirectly, on Employee's behalf or on behalf of any other person, firm, corporation, association or other entity, engage in, or in any way be concerned with or negotiate for, or acquire or maintain any ownership interest in any business or activity which is the same, similar to or competitive with that conducted by, engaged in or developed for later implementation by ARA at any time during the term of Employee's employment. B. The provisions set forth in Paragraph A, above, shall apply to (i) all fifty states and (ii) each foreign country, possession or territory in which ARA may be engaged in business at the termination of Employee's employment or at any time within twelve (12) months prior thereto; but only if Employee was directly or indirectly involved or exposed to plans for such business at any time within twelve (12) months prior to termination. C. Employee further agrees that Employee shall not for a period of two years, directly or indirectly, at any time in any manner, induce or attempt to influence any employees of ARA to terminate their employment with ARA. D. Employee acknowledges that in the event of any violation by Employee of the provisions set forth in Article 1 above or this Article 2, ARA will sustain serious, irreparable and substantial harm to its business, the extent of which will be difficult to determine and impossible to remedy by an action at law for money damages. Accordingly,

3 Employee agrees that, in the event of such violation or threatened violation by Employee, ARA shall be entitled to an injunction before trial from any court of competent jurisdiction as a matter of course upon the posting of not more than a nominal bond, in addition to all such other legal and equitable remedies as may be available to ARA. Employee further agrees that, in the event any of the provisions of this Agreement are determined by a court of competent jurisdiciton to be contrary to any applicable statute, law or rule, or for any reason unenforceable as written, such court may modify any of such provisions so as to permit enforcement therefor as thus modified. E. Notwithstanding anything to the contrary in this Agreement, if ARA elects to terminate Employee's employment for any reason other than good and sufficient cause, then, in such event the term of the non-competition provision set forth in Paragrph A above shall be reduced to the number of months that Employee is entitled to severance pursuant to the Following Article 4A, below. Article 3. EXECUTIVE CORPS PROGRAMS: Employee shall be eligible to participate in the following Executive Corps programs while a member of the Executive Corps to the extent ARA continues to make such programs available to Executive Corps members: * Executive Corps Health Care Plan * Executive Corps Long Term Disability Insurance * Survivor Income Protection Plan * Executive Corps Automobile Program Such Executive Corps programs may be amended or revoked at any time, without notice to Employee, in the sole discretion of ARA. Article 4. SEVERANCE BENEFITS: If Employee is terminated by ARA for any reason other than good and sufficient cause, Employee shall be entitled to the following severance benefits: A. Severance Pay: Employee shall receive severance payments equivalent to

4 Employee's base salary rate for the number of months set forth below: Years of ARA Continuous Service Completed from Last Hire Date - ----------------------------- 10 or 2 3 4 5 6 7 8 9 more - - - - - - - - ----- 9 9 10 11 12 13 14 16 18 Severance payments shall be made in installments in accordance with ARA's normal payroll cycle. B. Other Severance Benefits: (1) Group medical and life insurance coverages shall continue under then prevailing terms as long as severance payments are being made to Employee. Deductions for Employee's share of the premiums will be made from Employee's severance payments. Group medical coverage provided during such period shall be applied against ARA's obligation to continue group medical coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"). Upon termination of group medical and life insurance coverages, Employee may convert, at his cost, to individual policies. (2) Employee's eligibility to receive or participate in all other benefit and compensation plans, including, but not limited to Management Incentive Bonus, Long Term Disability, Retirement Savings, and Stock Option Plans, shall terminate as of the effective date of Employee's termination unless provided otherwise under the terms of a particular benefit or compensation plan, provided, however, participation in programs made available solely to Executive Corps members shall cease as of the effective date of Employee's termination or the date Employee's Executive Corps membership ceases, whichever should occur first. C. Termination for good and sufficient cause: shall include termination for such things as fraud or dishonesty, willful failure to perform assigned duties, willful violation of ARA's Business Conduct Policy, or intentionally working against the best interests of ARA.

5 D. If Employee is terminated by ARA, for reasons other than good and sufficient cause, Employee will receive severance payments and benefits for the number of months set forth above in Paragraph A, whether or not Employee commences other non-competitive employment while he is receiving such payments and benefits, provided, however, ARA reserves the right to terminate all severance payments and benefits if Employee violates the covenants set forth in Article 2, above. E. ARA expressly reserves the right to revoke or amend, in whole or in part, the severance provisions set forth in this agreement at any time, for any reason, provided, however, in the event Employee is terminated for reasons other than good and sufficient cause subsequent to such revocation or amendment, Employee shall be entitled to no less than the monthly severance payments which Employee would have received under this Agreement had he been terminated by ARA on the date ARA elected to revoke or amend the severance provisions. F. During any period of disability following termination of Employment, Employee agrees that disability payments received by him pursuant to health and accident or disability policies, whether on account of total or partial disability, shall be credited against the severance payments due him hereunder. Article 5. TERM OF EMPLOYEMENT: Employee acknowledges that ARA has the right to terminate Employee's employment at any time for any reason whatsoever, provided, however, that any termination by ARA for reasons other than good and sufficient cause shall result in the severance benefits described in Article 4, above, to become due in accordance with the terms of this Agreement. Employee further acknowledges that the severance payments made and other benefits provided by ARA are in full satisfaction of any claims that Employee may have against ARA resulting from ARA's exercise of its right to terminate Employee's employment, except for those fringe benefits which are intended to survive termination such as the right to receive payments pursuant to retirement plans and similar rights. Article 6. MISCELLANEOUS: A. As used throughout this Agreement, ARA shall include The ARA Group, Inc., a Delaware corporation, and its subsidiaries and affiliates, or any corporation, joint venture, or other entity in which The ARA Group Inc. or its subsidiaries or affiliates has an equity interest in excess of ten percent (10%).

6 B. Reference to the masculine gender shall include the feminine gender. C. This Agreement shall supercede and substitute for any previous employment agreement between employee and ARA, and is entered into in consideration of the mutual undertakings of the parties, the cancellation of all previous agreements, and the release of the parties of their respective rights and obligations under any previous employment agreement, excepting only such rights and obligations which by their nature are intended to survive termination or cancellation of such employment agreement. In the event Employee's previous employment agreement provided for a longer severance period than set forth in this Agreement, then the Employee's right to severance set forth in the previous employment agreement shall survive, but any payments made shall be credited against the severance payments otherwise due under the provisions of Article 4A, hereof. D. Employee and ARA acknowledge that for purpose of Article 4 Employee's last hire date with ARA is April 22, 1978. IN WITHNESS WHEREOF, the parties hereto have caused this Agreement to be signed. /s/ JULIAN L. CARR, JR. -------------------------- JULIAN L. CARR, JR. ARA SERVICES, INC. ("ARA") By: /s/ JAMES E. KSANSNAK -------------------------- JAMES E. KSANSNAK Date: October 1, 1991 --------------- 09/91



1 CONFORMED COPY $800,000,000 AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT dated as of March 12, 1993 among ARA SERVICES, INC., as Borrower THE ARA GROUP, INC., as Parent Guarantor THE BANKS LISTED HEREIN and CHEMICAL BANK and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agents

2 TABLE OF CONTENTS* Page ---- ARTICLE I DEFINITIONS SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . . . 1 SECTION 1.02. Accounting Terms and Determinations. . . . . . . 23 SECTION 1.03. Types of Borrowings. . . . . . . . . . . . . . . 23 SECTION 1.04. Investment Grade Status. . . . . . . . . . . . . 23 ARTICLE II THE LOANS SECTION 2.01. Commitments to Lend. . . . . . . . . . . . . . . 24 SECTION 2.02. Notice of Committed Borrowings . . . . . . . . . 24 SECTION 2.03. Money Market Borrowings. . . . . . . . . . . . . 26 SECTION 2.04. Swingline Advances . . . . . . . . . . . . . . . 28 SECTION 2.05. Notice to Banks; Funding of Loans. . . . . . . . 29 SECTION 2.06. Maturity of Loans. . . . . . . . . . . . . . . . 30 SECTION 2.07. Notes. . . . . . . . . . . . . . . . . . . . . . 30 SECTION 2.08. Interest . . . . . . . . . . . . . . . . . . . . 31 SECTION 2.09. Facility Fees. . . . . . . . . . . . . . . . . . 36 SECTION 2.10. Reduction of Commitments . . . . . . . . . . . . 37 SECTION 2.11. Optional Prepayments . . . . . . . . . . . . . . 39 SECTION 2.12. Payments . . . . . . . . . . . . . . . . . . . . 40 SECTION 2.13. Funding Losses . . . . . . . . . . . . . . . . . 40 SECTION 2.14. Withholding Tax Exemption. . . . . . . . . . . . 41 ARTICLE III CONDITIONS SECTION 3.01. Effectiveness. . . . . . . . . . . . . . . . . . 42 SECTION 3.02. Conditions to Borrowing. . . . . . . . . . . . . 43 SECTION 3.03. Representation by Borrower . . . . . . . . . . . 44 SECTION 3.04. Transitional Provisions. . . . . . . . . . . . . 44 ---------- *The Table of Contents is not a part of this Agreement.

3 ARTICLE IV REPRESENTATIONS AND WARRANTIES Page ---- SECTION 4.01. Corporate Existence and Power. . . . . . . . . . 45 SECTION 4.02. Corporate and Governmental Authori- zation; No Contravention . . . . . . . . . . 45 SECTION 4.03. Binding Effect . . . . . . . . . . . . . . . . . 46 SECTION 4.04. Financial Information. . . . . . . . . . . . . . 46 SECTION 4.05. Litigation . . . . . . . . . . . . . . . . . . . 47 SECTION 4.06. Compliance with ERISA. . . . . . . . . . . . . . 47 SECTION 4.07. Environmental Matters. . . . . . . . . . . . . . 47 SECTION 4.08. Taxes. . . . . . . . . . . . . . . . . . . . . . 48 SECTION 4.09. Compliance with Laws . . . . . . . . . . . . . . 48 SECTION 4.10. Not an Investment Company. . . . . . . . . . . . 48 SECTION 4.11. No Defaults. . . . . . . . . . . . . . . . . . . 48 SECTION 4.12. Possession of Franchises, Licenses, etc. . . . . . . . . . . . . . . . . . . . . 49 ARTICLE V COVENANTS SECTION 5.01. Information. . . . . . . . . . . . . . . . . . . 49 SECTION 5.02. Payment of Obligations . . . . . . . . . . . . . 52 SECTION 5.03. Maintenance of Property; Insurance . . . . . . . 53 SECTION 5.04. Conduct of Business and Maintenance of Existence . . . . . . . . . . . . . . . . 53 SECTION 5.05. Inspection of Property, Books and Records. . . . . . . . . . . . . . . . . . . 54 SECTION 5.06. Maintenance of Stock of Subsidiaries . . . . . . 54 SECTION 5.07. Limitation on Subsidiary Debt. . . . . . . . . . 54 SECTION 5.08. Negative Pledge. . . . . . . . . . . . . . . . . 55 SECTION 5.09. Consolidations, Mergers and Sales of Assets . . . . . . . . . . . . . . . . . . . 56 SECTION 5.10. Restricted Payments. . . . . . . . . . . . . . . 57 SECTION 5.11. Fixed Charge Coverage. . . . . . . . . . . . . . 59 SECTION 5.12. Debt Coverage. . . . . . . . . . . . . . . . . . 59 SECTION 5.13. Minimum Consolidated Net Worth . . . . . . . . . 60 SECTION 5.14. Subordinated Debt. . . . . . . . . . . . . . . . 60 SECTION 5.15. Transactions with Affiliates . . . . . . . . . . 60 SECTION 5.16. Use of Proceeds. . . . . . . . . . . . . . . . . 61 ARTICLE VI DEFAULTS SECTION 6.01. Events of Default. . . . . . . . . . . . . . . . 61 SECTION 6.02. Notice of Default. . . . . . . . . . . . . . . . 64

4 ARTICLE VII THE AGENTS Page ---- SECTION 7.01. Appointment and Authorization. . . . . . . . . . 65 SECTION 7.02. Agents and Affiliates. . . . . . . . . . . . . . 65 SECTION 7.03. Action by Agents . . . . . . . . . . . . . . . . 65 SECTION 7.04. Consultation with Experts. . . . . . . . . . . . 65 SECTION 7.05. Liability of Agents. . . . . . . . . . . . . . . 65 SECTION 7.06. Indemnification. . . . . . . . . . . . . . . . . 66 SECTION 7.07. Credit Decision. . . . . . . . . . . . . . . . . 66 SECTION 7.08. Agency Fees. . . . . . . . . . . . . . . . . . . 66 SECTION 7.09. Successor Agents . . . . . . . . . . . . . . . . 66 ARTICLE VIII CHANGES IN CIRCUMSTANCES AFFECTING FIXED RATE LOANS SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair . . . . . . . . . . . . 67 SECTION 8.02. Illegality . . . . . . . . . . . . . . . . . . . 68 SECTION 8.03. Increased Cost . . . . . . . . . . . . . . . . . 68 SECTION 8.04. Base Rate Loans Substituted for Affected Fixed Rate Loans. . . . . . . . . . 70 ARTICLE IX GUARANTEE SECTION 9.01. The Guarantee. . . . . . . . . . . . . . . . . . 71 SECTION 9.02. Guarantee Unconditional. . . . . . . . . . . . . 71 SECTION 9.03. Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances. . . . . . . . . . . . . . . . 73 SECTION 9.04. Waiver . . . . . . . . . . . . . . . . . . . . . 73 SECTION 9.05. Subrogation and Contribution . . . . . . . . . . 73 SECTION 9.06. Stay of Acceleration . . . . . . . . . . . . . . 73 ARTICLE X JUDICIAL PROCEEDINGS SECTION 10.01. Consent to Jurisdiction . . . . . . . . . . . . 73 SECTION 10.02. Enforcement of Judgments. . . . . . . . . . . . 74 SECTION 10.03. Service of Process. . . . . . . . . . . . . . . 74 SECTION 10.04. No Limitation on Service or Suit. . . . . . . . 74

5 ARTICLE XI MISCELLANEOUS Page ---- SECTION 11.01. Notices . . . . . . . . . . . . . . . . . . . . 75 SECTION 11.02. No Waiver . . . . . . . . . . . . . . . . . . . 75 SECTION 11.03. Expenses; Documentary Taxes; Indemnification for Litigation . . . . . . . 75 SECTION 11.04. Amendments and Waivers. . . . . . . . . . . . . 76 SECTION 11.05. Sharing of Set-Offs . . . . . . . . . . . . . . 77 SECTION 11.06. New York Law. . . . . . . . . . . . . . . . . . 78 SECTION 11.07. Successors and Assigns. . . . . . . . . . . . . 78 SECTION 11.08. Collateral. . . . . . . . . . . . . . . . . . . 79 SECTION 11.09. Counterparts. . . . . . . . . . . . . . . . . . 79 SECTION 11.10. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . 80

6 Schedule I - Commitment Reduction Schedule Schedule II - Debt Exhibit A - Note Exhibit B - Opinion of Counsel of the Borrower and the Parent Guarantor (See Tab 1) Exhibit C - Opinion of Special Counsel for the Agents (See Tab 2) Exhibit D - Amended and Restated Stock Pledge Agreement (See Tab 3) Exhibit E - Amended and Restated Subsidiary Guaranty Agreement (See Tab 4) Exhibit F - Management Equity Note Exhibit G - Invitation for Money Market Quotes Exhibit H - Money Market Quote

7 AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT AGREEMENT dated as of March 12, 1993 (the "Agreement") among ARA SERVICES, INC., a Delaware corporation (the "Borrower"), THE ARA GROUP, INC., a Delaware corporation (the "Parent Guarantor"), the BANKS party hereto and CHEMICAL BANK and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agents. WHEREAS, the parties hereto have previously entered into a Credit and Guaranty Agreement dated as of March 12, 1993 (the "Original Agreement"); WHEREAS, the parties hereto wish to amend the Original Agreement to make mutually satisfactory changes in the terms of the Original Agreement; WHEREAS, in such connection, the Borrower desires to be entitled to borrow up to $800,000,000 on a revolving credit basis pursuant to this Agreement; WHEREAS, when all of the conditions specified in Section 3.01 have been satisfied, the Original Agreement will be automatically amended and restated to read in full as set forth herein; NOW, THEREFORE, the parties hereto agree as follows: ARTICLE I 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 Chemical Bank in its capacity as administrative agent for the Banks hereunder. "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 Borrower) 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.

8 "Agents" means Chemical 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. "Agreement" means the Original Agreement, as amended and restated by this Amended Agreement and as the same may be further amended or restated from time to time in accordance with the terms hereof. "Amended Agreement" means this Amended and Restated Credit Agreement dated as of March 12, 1993 among ARA Services, Inc., the Parent Guarantor, the Banks and the Agents. "Applicable Discount" has the meaning set forth in Section 2.08(g). "Applicable Margin" has the meaning set forth in Section 2.08(g). "Applicable Pricing Adjustment Percentage" has the meaning set forth in Section 2.08(h). "Assessment Rate" has the meaning set forth in Section 2.08(c). "Asset Reduction Amount" means, at any date (the "Date of Determination"), an amount equal to 75% of the excess, if any, of (a) the aggregate Net Cash Proceeds received by the Parent Guarantor or any Restricted Subsidiary (x) during the period beginning on March 12, 1993 and ending one year prior to the Date of Determination in respect of Major Asset Sales consummated during such period, (y) after March 12, 1993, in respect of Dispositions of accounts receivable (except for any such Disposition which is excluded from the scope of article 9 of the Uniform Commercial Code as in effect on the Effective Date in the State of New York by section 9-104(f) thereof) and (z) after March 12, 1993, in respect of Major Sale and Leaseback Transactions over (b) the sum of (i) $400,000,000 plus (ii) the aggregate amount invested in Major Asset Acquisitions during the period beginning on March 12, 1993 and ending on the Date of Determination plus (iii) 133-1/3% of the amount of any previous commitment reduction pursuant to Section 2.10(c)(i). "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 Level Priority Debt" means Priority Debt permitted pursuant to subparagraphs (i) through (vii), inclusive, of subsection 5.07(b) and subsections (a) through (g), inclusive, of Section 5.08. "Base Overdue Interest Rate" has the meaning set forth in Section 2.08(b).

9 "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. "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). "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, Chemical Bank and CoreStates Bank, N.A. "Code" means the Internal Revenue Code of 1986, as amended, or any successor statute. "Collateral" means the "Collateral" as defined in the Stock Pledge Agreement. "Collateral Agent" means Chemical Bank in its capacity as collateral agent under the Stock Pledge Agreement. "Collateral Documents" means the Stock Pledge Agreement, and all supplementary assignments, security agreements, pledge agreements and other documents delivered or to be delivered pursuant hereto or thereto. "Commitment" means, with respect to each Bank, the amount set forth opposite the name of such Bank on the signature pages of this Amended Agreement (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. "Commitment Reduction Date" means each of the dates set forth in Schedule I. "Committed Loan" means a loan made by a Bank pursuant to Section 2.01.

10 "Committed Outstandings" means the aggregate outstanding principal amount of Committed Loans. "Common Stock" means the Common Stock, par value $.01 per share, of the Parent Guarantor. "Consolidated Capital Funds" means at any date (the "Date of Determination") the sum of Consolidated Net Worth as of the Date of Determination and the lesser of (i) the aggre- gate principal amount of Subordinated Debt outstanding as of the Date of Determination and (ii) $375,000,000. "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 Appli- cable Period in respect of rental expense over (y) the aggre- gate 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 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 Con- solidated Subsidiaries for such period, adjusted by (i) sub- tracting therefrom any portion thereof attributable to the direct or indirect investment by the Parent Guarantor or any of its Consolidated Subsidiaries in any Investment Subsidiary and (ii) adding thereto the aggregate amount of dividends (other than stock dividends) paid by any Investment Subsidiary to the Parent Guarantor or any of its other Subsidiaries during such period. "Consolidated Net Worth" means at any date (the "Date of Determination") without duplication (i) the consoli- dated shareholders' equity (exclusive of (x) the cumulative

11 foreign currency translation adjustment as determined in accordance with generally accepted accounting principles and (y) any portion of such consolidated shareholders' equity attributable to retained earnings of any Investment Subsidiary or undistributed profits of the general partnership in which any Investment Subsidiary holds a general partnership inter- est) 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 Total Assets" means at any date the consolidated assets of the Parent Guarantor and its Consolidated Subsidiaries 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. To the extent that any "holdback" or similar deferred contingent payment obligation of a purchaser of accounts receivable in connection with a disposition thereof subject to Section 2.10(c)(i) is reflected as an asset of the Parent Guarantor or one of its Subsidiaries in such consolidated financial statements, a corresponding Contingent Liability shall be deemed to exist for purposes of this definition. "Credit" means any Loan or Swingline Advance. "Current Quarter" has the meaning set forth in Section 2.08(h). "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 5.08, all contingent obligations) of such Person to reimburse any other Person for amounts which have

12 been drawn under 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); provided that each obligation of a general partnership that constitutes Debt of an Investment Subsidiary solely by reason of such Investment Subsidiary's status as a general partner thereof shall be considered Debt of such Investment Subsidiary in an amount equal to (a) the amount of such obligation times (b) the percentage of the ownership interests in such general partnership owned by such Investment Subsidiary. "Default" means any condition or event that consti- tutes 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. "Deferred Stock Units" means Deferred Stock Units representing the right to receive shares of Common Stock, and issued under any Restricted Subsidiary's Stock Unit Retirement Plan, as amended from time to time. "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 a 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 Administra- tive Questionnaire (or identified in its Administrative Ques- tionnaire as its Domestic Lending Office) or such other office as such Bank may hereafter designate as its Domestic Lending Office by notice to the Borrower and the Administrative Agent; provided that any Bank may so designate separate Domestic

13 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). "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 (A) on a pro forma basis as if such acquisition or sale had occurred on the first day thereof and (B) exclusive of any gain or loss on account of any Major Asset Sale. "Effective Date" means the date this Amended 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 Borrower, the Parent Guarantor and any other 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 Borrower, the Parent Guarantor or any other 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.

14 "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 Borrower and the Administrative Agent. "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, Chemical Bank and CoreStates Bank, N.A. "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 $60,000,000. "Excess Priority Debt" means Priority Debt other than Base Level Priority Debt. "Excluded Dividend" means a dividend on shares of the capital stock of any Restricted Subsidiary held by the Parent Guarantor (and not by another Subsidiary), which dividend is comprised of assets which are to be (and in fact are) reinvested (including through intercompany accounts in accordance with normal practice) by the Parent Guarantor substantially simultaneously in (i) the Borrower, (ii) a Spin- Off Subsidiary, (iii) a Wholly Owned Subsidiary of the

15 Borrower or of a Spin-Off Subsidiary or (iv) another Wholly Owned Subsidiary of the Parent Guarantor which is a party to the Subsidiary Guaranty Agreement and all of whose capital stock is pledged to the Collateral Agent under the Stock Pledge 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 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 Chemical Bank on such day on such transactions as determined by the Administrative Agent. "Financing Documents" means this Agreement, the Notes, the Collateral Documents and the Subsidiary Guaranty Agreement. "Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money Market Loans or any combination of the foregoing. "Fixed Rate Outstandings" means the aggregate outstanding principal amount of CD Loans and Euro-Dollar Loans. "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.

16 "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: (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 the provisions of paragraph (a) of this proviso, end on the last day of a calendar month; and (c) if any Interest Period includes a Commitment Reduction Date but does not end on such date, then (i) the principal amount (if any) of each Euro-Dollar Loan required to be repaid on such date shall have an Interest Period ending on such date and (ii) the remainder (if any) of each such Euro-Dollar Loan shall have an Interest Period determined as set forth above; (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)(i) 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) if any Interest Period includes a Commitment Reduction Date but does not end on such date, then (i) the principal amount (if any) of each CD Loan required to be repaid on such date shall have an Interest Period ending on such date and (ii) the remainder (if any) of each such CD Loan shall have an Interest Period determined as set forth above; (3) with respect to each Base Rate Borrowing, the period commencing on the date of such Borrowing and ending on the next succeeding Commitment Reduction Date; provided that any Interest Period 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;

17 (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 for any such Borrowing shall end on a date after a Commitment Reduction Date unless, after giving effect thereto, the aggregate principal amount of Credits having Interest Periods ending after such Commitment Reduction Date would not exceed the aggregate Commitments after giving effect to the scheduled reduction of the Commitments on such Commitment Reduction Date; 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 Dealers Association, Inc. Master Agreement (or any predecessor or successor agreement), or any other interest rate swap agreement or similar agreement between the Borrower and one or more of the Banks. "Investment" means with respect to any Person (the "Investor"), any investment or series of related investments in the same Person or an affiliate thereof, whether individually or in the aggregate in excess of $1,000,000 and, in the case of any series of investments, without regard to any differences between or among the types of investments comprising such series, by the Investor in any other Person, whether by means of share purchase, capital contribution, loan, purchase of Debt, time deposit or otherwise; provided, that the performance by any Person of its obligations under any guarantee shall not be considered an Investment; and provided further that non-convertible, non-participating Debt of any Person received as consideration by the Parent Guarantor or any of its Subsidiaries in connection with a Disposition shall not be considered an Investment. "Investment Grade Status" has the meaning set forth in Section 1.04. "Investment Subsidiary" means any Subsidiary formed for the purpose of holding a general partnership interest in Spectacor Management Group, a general partnership ("SMG"), or in any other general partnership which is principally engaged in the management of arenas and other public assembly facili- ties; provided that (i) such general partnership interest represents one-half or less of the ownership interests in such general partnership and constitutes substantially all of the

18 assets of such Subsidiary, (ii) such Subsidiary engages in no substantial business other than owning such general partner- ship interest and taking actions as a general partner of such general partnership, (iii) no other Subsidiary owns a general partnership interest in such general partnership and (iv) in the case of any general partnership other than SMG, (A) at least 15% of the ownership interests in such general partner- ship are owned by one or more Persons (other than such Subsi- diary or any Affiliate) that are also partners in SMG or affiliates thereof and (B) the partners of SMG and their affiliates own in the aggregate 50% or more of the ownership interests in such general partnership. "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 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 Restricted Subsidiaries, or any series of such acquisi- tions 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 Restricted 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.

19 "Major Asset Sale" means any Disposition by the Parent Guarantor or any of its Restricted 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 Restricted Subsidiaries from or in respect of such Disposition exceeds $25,000,000; and provided further that (i) no such Disposition by any Wholly Owned Restricted Subsidiary of the Parent Guarantor to any other Wholly Owned Restricted Subsidiary of the Parent Guarantor shall constitute a Major Asset Sale, (ii) no Sale and Leaseback Transaction shall constitute a Major Asset Sale and (iii) for purposes of Section 2.10(c)(i), no Disposition of any account receivable (except for any such Disposition which is excluded from the scope of article 9 of the Uniform Commercial Code as in effect on the Effective Date in the State of New York by section 9-104(f) thereof) shall constitute a Major Asset Sale. "Major Sale and Leaseback Transaction" means any Sale and Leaseback Transaction, or any series of related Sale and Leaseback Transactions, in respect of which 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 Restricted Subsidiaries from or in respect of such transaction or series of transactions exceeds $2,000,000; provided that a Sale and Leaseback Transaction consummated not later than the last day of the fiscal year of the Parent Guarantor following the fiscal year during which the acquisition of the related property was effected or construction of the related property was completed shall not be deemed a Major Sale and Leaseback Transaction. "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 F 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. "Material Financial Obligations" means a principal or face amount of Debt and/or payment or collateralization obligations in respect of Derivatives Obligations of the Borrower and/or one or more of its Subsidiaries, arising in one or more related or unrelated transactions, exceeding in the aggregate $10,000,000. "Maximum Money Market Aggregate Amount" means at any time an amount equal to the aggregate Commitments at such time; provided that at any time the Maximum Money Market Aggregate Amount shall be reduced by the lesser of $400,000,000 or the amount of the aggregate Commitments at such time if the Reference Ratio is not more than 0.30 to 1. "Money Market Auction" means a solicitation of Money Market Quotes setting forth Money Market Rates pursuant to Section 2.03.

20 "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 Borrower 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. "Net Cash Proceeds" means, in the case of any Major Asset Sale, Major Sale and Leaseback Transaction or Disposition of accounts receivable, the cash proceeds received by the Parent Guarantor or any of its Restricted Subsidiaries, at any time or from time to time, from or in respect thereof (including, without limitation, cash received on or in respect of any instrument evidencing an obligation of the purchaser to make payments to the Parent Guarantor or such Restricted Subsidiary), less (x) any expenses reasonably incurred by the Parent Guarantor or such Restricted Subsidiary in respect thereof and (y) any taxes paid or payable by the Parent Guarantor or such Restricted Subsidiary (as certified by a Principal Officer of the Parent Guarantor) in respect of the receipt of such cash. "Notes" means promissory notes of the Borrower, substantially in the form of Exhibit A hereto, evidencing the obligation of the 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 Borrower, the Parent Guarantor and each Subsidiary from time to time party to the Subsidiary Guaranty Agreement. "Original Agreement" means the Credit and Guaranty Agreement dated as of March 12, 1993 among the parties hereto, as in effect immediately prior to the effectiveness of this Amended Agreement.

21 "Original Stock Pledge Agreement" means the Stock Pledge Agreement dated as of December 19, 1984 among the Parent Guarantor, the Borrower and the Collateral Agent, as executed and delivered by the parties thereto and as amended and restated prior to the Effective Date. "Original Subsidiary Guaranty Agreement" means the Subsidiary Guaranty Agreement dated as of December 14, 1984 among the Borrower, the Parent Guarantor and certain Subsidiaries of the Parent Guarantor, as executed and delivered by the parties thereto and as amended and restated prior to the Effective Date. "Parent" means, with respect to any Bank, any Person controlling such Bank. "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 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 Chemical 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, senior vice president, treasurer or general counsel of the Parent Guarantor or the Borrower. "Priority Debt" means any unsecured Debt of a Subsidiary (other than the Borrower) and any secured Debt of the Parent Guarantor or any of its Subsidiaries; except that, if any long-term senior unsecured Debt of the Borrower ever achieves Investment Grade Status, "Priority Debt" shall mean only any secured Debt of the Parent Guarantor or any of its Subsidiaries. "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

22 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. "Redeemable Stock" means any capital stock that is redeemable other than at the sole option of the issuer. "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. "Reference Ratio" means, for purposes of determining a Maximum Money Market Aggregate Amount, an Applicable Pricing Adjustment Percentage or an applicable facility fee rate for purposes of Section 2.09(b) for any day during any 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. The foregoing determinations (but not determinations of compliance with Section 5.12) for each day during the Current Quarter shall be based upon the Reference Ratio as defined above. "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 5.16. "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. "Restricted Payment" means (i) any dividend or other distribution on any shares of the capital stock of the Parent Guarantor (except dividends payable solely in shares of capital stock) or on any Deferred Stock Units, (ii) any dividend or other distribution on any shares of the capital stock of any Restricted Subsidiary held by the Parent Guarantor (and not by another Subsidiary) (such shares of

23 capital stock held by the Parent Guarantor, together with the capital stock of the Parent Guarantor and Deferred Stock Units, being hereinafter referred to as "Restricted Stock") other than Excluded Dividends, (iii) any payment on account of the purchase, redemption, retirement or acquisition of (a) any shares of Restricted Stock (except shares acquired upon the conversion thereof into other shares of capital stock of the issuer), excluding the issuance of Management Equity Notes in exchange for such shares, but including repayments of principal of such Management Equity Notes or (b) any option, warrant or other right to acquire shares of Restricted Stock or (iv) any loan or advance by any Subsidiary to the Parent Guarantor. "Restricted Subsidiary" means, with respect to any Person, any Subsidiary of such Person other than Versa Services, Ltd., a Canadian corporation, and its Subsidiaries. "Revolving Credit Period" means the period from the Effective Date to and including October 31, 2001 (or, if such day is not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day). "Sale and Leaseback Transaction" means any arrange- ment with any Person providing for the leasing by the Parent Guarantor or any Restricted 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 Restricted Subsidiaries to such Person with the intention of entering into such a lease. "Secured Interest Rate Indebtedness" means the obligations of the Borrower to the Banks or any of them in respect of the Interest Rate Agreements. "Senior Debt" means Total Borrowed Funds, exclusive of Subordinated Debt. "Series Preferred Stock" means any series of Series Preferred Stock issued by the Parent Guarantor from time to time. "Share Transactions" means (i) any repurchase by the Parent Guarantor of outstanding shares of its Class A Common Stock, Series Preferred Stock or (pursuant to a substantially pro rata offer to repurchase) Class B Common Stock or (ii) any declaration and payment of special dividends (other than in capital stock of the Parent Guarantor) to the holders of its Class A Common Stock or Class B Common Stock (or both), provided that any such repurchase (other than any repurchase of Series Preferred Stock which was, prior to March 31, 1995, issued as a dividend or in exchange for Class A Common Stock or Class B Common Stock) or declaration and payment is made prior to March 31, 1995. "Single Asset" means, in the case of any Disposition by the Parent Guarantor or any of its Restricted Subsidiaries, (a) any asset, (b) any group of assets used in connection with

24 the same line of business of the Parent Guarantor or such Restricted 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. "Spin-Off Subsidiary" means a Subsidiary of the Borrower, the capital stock of which is distributed to the Parent Guarantor in accordance with Section 5.10(d). "Stock Pledge Agreement" means the Amended and Restated Stock Pledge Agreement among the Parent Guarantor, the Borrower and the Collateral Agent, in the form of Exhibit D hereto. "Stockholders' Agreement" means the Amended and Restated Stockholders' Agreement dated as of April 7, 1988 among the Parent Guarantor and the investors listed therein, as the same may be amended from time to time. "Subordinated Debt" means any Debt of the Parent Guarantor (i) which is subordinated to the Notes by substan- tially the same subordination terms as those set forth in the Subordinated Indenture dated as of June 1, 1993 between the Parent Guarantor and The Bank of New York, as trustee, or such other subordination provisions as shall have been approved in writing by the Required Banks, and (ii) in the case of Subordinated Debt issued after the Effective Date, as to which no principal repayments are required on or prior to October 31, 2001. "Subordinated Intercompany Notes" means: (i) the subordinated notes delivered to the Parent Guarantor in connection with the advance to the Borrower of an amount equal to the initial principal amount of the Subordinated Debt described in clause (i) of the definition of "Subordinated Debt" and (ii) other subordinated notes of the Borrower, subordinated to the Notes by substantially the same subordina- tion terms as those applicable to the subordinated note described in clause (i) above, or such other subordination provisions as shall have been approved in writing by the Required Banks, delivered to the Parent Guarantor in connec- tion with the loan to the Borrower of the principal amount thereof; provided that the financial terms of such notes are substantially as favorable to the Borrower as the terms that could have been obtained at the time of creation thereof from an unaffiliated lender. "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 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 Amended and Restated Subsidiary Guaranty Agreement among the Borrower, the Parent Guarantor and certain Subsidiaries, in the form of Exhibit E hereto.

25 "Swingline Advance" means an advance made by a Bank to the 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. "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 March 12, 1993 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 Restricted Subsidiary" means, with respect to any Person, a Wholly Owned Subsidiary of such Person which is also a Restricted Subsidiary of such Person. "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 1, 1993 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 Borrower notifies the Agents that the Borrower wishes 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

26 the Agents notify the Borrower that the Required Banks wish to amend Article V for such purpose), then the Borrower's 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 Borrower 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 the 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). SECTION 1.04. Investment Grade Status. Long-term senior unsecured Debt of the Borrower will have achieved "Investment Grade Status", if such Debt (a) is not enhanced by any security or instrument issued by another Person and (b) is rated and is known to the Administrative Agent to be rated: (i) Baa3 or better by Moody's Investors Service, Inc. ("Moody's"); or (ii) BBB- or better by Standard & Poor's Corporation ("S&P"). For purposes of the preceding sentence, (x) the Administrative Agent shall be deemed to know that such Debt is rated the ratings specified in clause (i) or (ii) above if and only if a letter to such effect addressed to the Borrower by Moody's or S&P is delivered to the Administrative Agent and such letter is dated no more than 6 months prior to the date of delivery and (y) such Debt shall be deemed to be rated any rating specified in a letter addressed and delivered to the Borrower by Moody's or S&P and a copy of which is delivered to the Administrative Agent if such letter states that such Debt would be rated such rating immediately upon the termination of the Collateral Documents and without the taking of any other action by any Person or the occurrence of any other event or condition.

27 ARTICLE II 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 the 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 shall not exceed the amount of such Bank's Commitment. Each Borrow- ing 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 Borrower may borrow under this Section, repay or, to the extent permitted by Section 2.11, prepay Loans and reborrow at any time during the Revolving Credit Period pursuant to this Section. SECTION 2.02. Notice of Committed Borrowings. (a) The 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 the 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. (b) The provisions of subsection (a) above notwithstanding, if the 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

28 to an outstanding Committed Borrowing consisting of Base Rate Loans, then, unless the 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 (iii) 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 two Euro-Dollar Borrowings and two 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, the 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 the Borrower. The Banks may, but shall have no obligation to, make such offers and the 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 the 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 G 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. The 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.

29 (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 H 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 H hereto or does not specify all of the information required by subsection (c)(ii); (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

30 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 determinations of the amounts of Money Market Loans shall be conclusive in the absence of manifest error. SECTION 2.04. Swingline Advances. (a) The Borrower may at any time during the Revolv- ing 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 the Borrower shall have no obligation to request or accept any such offer. (b) The Borrower may not request or accept any offer to make a Swingline Advance: (i) the final maturity date of which is more than 180 days after the date of such Swingline Advance; or

31 (ii) the principal amount of which, when added to then outstanding Swingline Advances, would exceed an amount equal to the excess, if any, of (x) the Maximum Money Market Aggregate Amount at such time over (y) the aggregate outstanding principal amount of Money Market Loans at such time; or (iii) the principal amount of which, when added to the aggregate principal amount of all Credits then outstanding, exceeds (or would exceed at any time during the term of such Swingline Advance) the aggregate Commitments at such time. (c) The 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. 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 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

32 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 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 shall be evidenced by a single Note 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. (b) Each Bank may, by notice to the Borrower and the Administrative Agent, request that its Credits of a particular type be evidenced by a separate Note 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 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 the 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 Borrower 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.

33 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 plus the Applicable Margin, if any. Such interest rates shall be adjusted automatically on and as of the effective date of any change in the Base Rate or the Applicable Margin. 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 plus the Applicable Margin, if any (the "Base Overdue Interest Rate"). (c) Each CD Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the applicable Adjusted CD Rate plus the Applicable Margin less the Applicable Discount, if any; 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, the Applicable Margin or the Applicable Discount and (ii) if any CD Loan or any portion thereof shall, as a result of clause (2)(b)(i) of the definition of Interest Period, have an Interest Period of less than 30 days, such portion 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 such Loan plus the Applicable Margin and (ii) the Base Overdue Interest Rate for such day. 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%

34 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. Section 327.3(d) (or any 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 the applicable Interest Period at an interest rate per annum equal to the sum of the Applicable Margin plus the applicable Adjusted Euro-Dollar Rate, less the Applicable Discount, if any. Such interest rate shall be adjusted automatically on and as of the effective date of any change in the Euro-Dollar Reserve Percentage, the Applicable Margin or the Applicable Discount. 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. 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.

35 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 the 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 the 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, the Borrower shall be entitled to select a duration of 12 months for such Interest Period. (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 Applicable Margin 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 "Applicable Margin" at any date shall be equal to the sum of the Applicable Pricing Adjustment Percentage, if positive, plus (i) 5/8 of 1% in the case of CD Loans and (ii) 1/2 of 1% in the case of Euro-Dollar Loans. The "Applicable Discount" shall be equal to the absolute value of the Applicable Pricing Adjustment Percentage, if negative.

36 (h) The "Applicable Pricing Adjustment Percentage" shall be for each day during any fiscal quarter of the Parent Guarantor (the "Current Quarter"), the percentage, if any, indicated in the table set forth below opposite the ratio category applicable to the Reference Ratio. The Parent Guarantor shall, prior to the first day of each fiscal quarter of the Parent Guarantor during which the Applicable Pricing Adjustment Percentage for any type of Loan differs from that in effect 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 calculations necessary to determine each of the ratios referred to above as of the relevant time periods. Base Rate CD Loans and Reference Ratio Loans Euro-Dollar Loans --------------- ------------- ----------------- 0.30 to 1, or less + 3/8 of 1% + 3/8 of 1% More than 0.30 to 1, but not more than 0.35 to 1 + 1/4 of 1% + 1/4 of 1% More than 0.35 to 1, but not more than 0.40 to 1 0 0 More than 0.40 to 1, but not more than 0.45 to 1 0 - 1/8 of 1% More than 0.45 to 1, but not more than 0.50 to 1 0 - 1/4 of 1% More than 0.50 to 1 0 - 3/8 of 1% (i) For each day on which Committed Outstandings exceed $400,000,000, additional interest shall be payable at the rate of 1/4 of 1% per annum on an amount equal to the excess of the Committed Outstandings at such day over $400,000,000. Such interest shall be payable on each Commitment Reduction Date. (j) 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.

37 (k) 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. (l) 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. (m) 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 Borrower shall pay to the Administrative Agent for the account of the Banks a facility fee accrued from and including the Effective Date to and including the last day of the Revolving Credit Period on the daily average aggregate amount of the Commitments (whether used or unused). (b) The facility fees referred to in paragraph (a) of this Section 2.09 shall accrue at the rate of 1/4 of 1% per annum; 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 Current Quarter of the Parent Guarantor if the Reference Ratio is more than 0.45 to 1 for such fiscal quarter. (c) Such facility fees 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 last day of the Revolving Credit Period. From the effective date of any termination or reduction of Commitments, such facility fees shall cease to accrue or be correspondingly reduced. If the Commitments are terminated in their entirety or reduced, facility fees accrued on the total Commitments, or accrued on the aggregate amount of the reduction of the Commitments (in the case of such a reduction), shall be payable on the effective date of such termination or reduction. (d) 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.

38 SECTION 2.10. Reduction of Commitments. (a) The Borrower at its 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 (any such reduction to be applied ratably to the respective Commitments of all Banks). For this purpose, the Commitments shall be deemed unused at any time to the extent (and only to the extent) that the 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 Commit- ments pursuant to this subsection (a) or subsection (c) below, the Administrative Agent shall promptly notify each Bank of such termination or reduction. (b) On each Commitment Reduction Date, the Commit- ments shall be reduced by the applicable amount (if any) set forth in Schedule I (adjusted in accordance with subsection (e) of this Section 2.10). (c) In addition, the Commitments shall be reduced in the following amounts: (i) in the event that the Asset Reduction Amount is greater than zero, an amount equal to such Asset Reduction Amount; and (ii) upon the incurrence by the Parent Guarantor or any of its Subsidiaries of Excess Priority Debt (other than Excess Priority Debt arising out of the refinancing, extension, renewal or refunding of other Excess Priority Debt, except to the extent, and only to the extent, that the outstanding principal amount of such other Excess Priority Debt is increased), an amount equal to the cash proceeds of such Excess Priority Debt, net of the reasonable expenses of the Parent Guarantor or such Subsidiary in connection with such incurrence. (d) The reductions required by subsection (c) of this Section 2.10 shall be effective on each date on which the Asset Reduction Amount first exceeds zero, in the case of reductions required by subparagraph (i), or on the date of receipt by the Parent Guarantor or any of its Subsidiaries or Restricted Subsidiaries, as the case may be, of the amounts described in subparagraph (ii); 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 or Restricted Subsidiaries, as the case may be, of proceeds which, together with all other amounts described in subparagraphs (i) and (ii) of subsection (c) above not previously applied pursuant to subsection (c) of this Section 2.10, aggregate $10,000,000 or more. The Borrower shall give the Administrative Agent at least four Euro-Dollar Business Days' notice of each reduction in the Commitments pursuant to subsection (c) of this Section 2.10 and a certificate of a Principal Officer of the Parent Guarantor, setting forth the information, in form and

39 substance satisfactory to the Administrative Agent, necessary to determine the amount of each such reduction and, in the case of a reduction in the Commitments required pursuant to Section 2.10(c)(i), the date thereof. (e) Each reduction of the Commitments pursuant to subsection (c) of this Section 2.10 shall be applied ratably to the respective Commitments of the Banks. The amount of any mandatory reduction of the Commitments pursuant to subsection (c) of this Section 2.10 shall be applied to reduce the amount of subsequent mandatory reductions pursuant to subsection (b) of this Section 2.10 in inverse chronological order; provided that, if the Borrower so elects in its notice thereof given pursuant to subsection (d) of this Section 2.10, such mandatory reduction shall be applied to reduce the amount of subsequent mandatory reductions pursuant to such subsection (b) pro rata by amount. Each optional reduction of the Commitments pursuant to subsection (a) of this Section 2.10 shall be applied first to reduce the amount of the mandatory reductions of the Commitments pursuant to subsection (b) of this Section 2.10 on the four Commitment Reduction Dates next succeeding the date of such optional reduction, in forward chronological order, and any remaining amount of such optional reduction shall be applied to reduce the amount of subsequent mandatory reductions pursuant to such subsection (b) of the Commitments pro rata by amount. (f) On each Commitment Reduction Date or date on which a reduction required by subsection (c) becomes effective, the Borrower shall repay or prepay such principal amount of the outstanding Loans, 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 Borrower in the related Notice or Notices of Borrowing; provided that if there shall have been a mandatory reduction of the Commitments pursuant to subsection (c) 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 Borrower through the Administrative Agent (and the facility fee provided for in Section 2.09(a) shall continue to accrue on the amount of such deferred payment until such payment is made). Each repayment or prepayment pursuant to this subsection (f) shall be made together with accrued interest to the date of payment or prepayment, and shall be applied ratably to payment of the Loans of the several Banks in the related Borrowing. SECTION 2.11. Optional Prepayments. (a) The Borrower may, upon at least one Domestic Business Day's notice to the Administrative Agent, prepay any Base Rate Borrowing without premium or penalty in whole at any time or from time to time in part in an aggregate amount equal to $5,000,000 or

40 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) Except as provided in Section 8.02, the Borrower may not prepay all or any portion of the principal amount of any Fixed Rate Loan prior to the maturity thereof. (c) Swingline Advances shall be prepayable as may be mutually agreed by the Borrower and the Bank making any such Swingline Advance. (d) 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 2.12. 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 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 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 the Borrower prior to the date on which any payment is due to the Banks hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the 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 the

41 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 2.13. Funding Losses. If the Borrower makes any payment of principal with respect to any Fixed Rate Loan (pursuant to Article 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 the 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 2.11(d), the 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 Loan), 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 the Borrower a certificate as to the amount of such loss or expense, which certificate shall be conclusive in the absence of manifest error. SECTION 2.14. 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 of the 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 further undertakes to deliver to each of the 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 the 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 the Borrower and the Administrative Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax.

42 ARTICLE III CONDITIONS SECTION 3.01. Effectiveness. This Amended 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 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 a certificate of a Principal Officer of the Borrower to the effect that, as of the Effective Date and simultaneously with the initial Borrowings made pursuant to this Agreement immediately upon its effectiveness, all amounts payable under the Original Agreement (excluding amounts payable with respect to the Money Market Borrowings specified in Section 3.04(a)) have been paid in full; (e) receipt by the Agents of a certificate of a Principal Officer of each of the Parent Guarantor and the 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; (f) receipt by the Agents of an opinion of the General Counsel or Associate General Counsel of the 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; (g) receipt by the Agents of an opinion of Davis Polk & Wardwell, special counsel for the Agents,

43 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; (h) receipt by the Agents of all documents they may reasonably request relating to the existence of the 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; and (i) receipt by the Administrative Agent for the account of each Bank of a participation fee in an amount determined by the Administrative Agent on the basis set forth in the Borrower's letters dated May 27, 1994 to the Banks; provided that this Amended Agreement shall not become effec- tive or be binding on any party hereto unless all of the foregoing conditions are satisfied not later than July 29, 1994. On the Effective Date the Original Agreement shall be automatically amended and restated in its entirety to read as set forth herein. The Administrative Agent shall promptly notify the Borrower and the Banks of the Effective Date, and such notice shall be conclusive and binding on all parties hereto. The Notes delivered to each Bank under the Original Agreement shall become void on the Effective Date and, upon receiving its new Note delivered pursuant to clause (b) of this Section 3.01, each Bank will cancel its original Notes and return them to the Borrower. No failure of a Bank so to cancel and return its original Notes shall affect the validity or enforceability of its new Note. 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 Adminis- trative 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, (i) 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 and (ii) the aggregate outstanding principal amount of Money Market Loans shall not exceed an amount equal to (A) the Maximum Money Market Aggregate Amount at such time less (B) the aggregate outstanding principal amount of Swingline Advances at such time;

44 (c) the fact that, immediately after such Borrow- ing: (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(c), 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) Each Money Market Loan or Swingline Advance outstanding under the Original Agreement and made on or prior to the Effective Date shall mature on the last day of the then current Interest Period applicable thereto under the Original Agreement. (b) Each of the Banks consents to (i) the amendment and restatement of the Original Stock Pledge Agreement substantially in the form of the Stock Pledge Agreement attached as Exhibit D hereto and (ii) the amendment and restatement of the Original Subsidiary Guaranty substantially in the form of the Subsidiary Guaranty Agreement attached as Exhibit E hereto. ARTICLE IV REPRESENTATIONS AND WARRANTIES The Parent Guarantor and the 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, the Borrower and each Subsidiary of either 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

45 the case of such Subsidiaries, to the extent that failure to comply with the foregoing statements could not, in the aggregate, have a material adverse effect on the business, financial position, results of operations or prospects of the Parent Guarantor and its Consolidated Subsidiaries, considered as a whole), and each of the Parent Guarantor, the Borrower and each Subsidiary of either 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 have a material adverse effect on the business, financial position, results of operations or prospects of the Parent Guarantor and its Consolidated Subsidiaries, considered as a whole. SECTION 4.02. Corporate and Governmental Authori- zation; 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 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 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 (other than the Liens created by the Collateral Documents) 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 the 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 1, 1993 and the related consolidated statements of income and cash flows for the fiscal year then ended, reported on by Arthur Andersen & Co., 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) The unaudited consolidated balance sheet of the Parent Guarantor and its Consolidated Subsidiaries as of April 1, 1994 and the related unaudited consolidated

46 statements of income and cash flows for the six months then ended, set forth in the Parent Guarantor's quarterly report for the fiscal quarter ended April 1, 1994 as filed with the Securities and Exchange Commission on Form 10-Q, a copy of which has been delivered to each of the Banks, fairly present, in conformity with generally accepted accounting principles applied on a basis consistent with the financial statements referred to in subsection (a) of this Section (except with respect to any inconsistency resulting from the adoption by the Parent Guarantor of Financial Accounting Standards Board Statement No. 109 as of December 31, 1993), 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 six-month period (subject to normal year-end adjustments). (c) Since April 1, 1994, 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 Borrower 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, the Borrower or any Subsidiary of either 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 Borrower 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. No member of the ERISA Group has caused there to be an "accumulated funding deficiency", as such term is defined in Section 412 of the Code or Section 302 of ERISA, with respect to any Plan in an aggregate amount exceeding $100,000, whether or not waived. Each member of the ERISA Group has paid, when due, all contributions it has been required to make to any Multi- employer Plan. Each member of the ERISA Group is in compli- ance in all material respects with the presently applicable provisions of ERISA and the Code. No Plan has been termin- ated, and within the past five years there has not been a "complete withdrawal" or a "partial withdrawal" from a Multi- employer Plan, as such terms are defined in Sections 4203 and 4205, respectively, of ERISA, which could have a material adverse effect on the financial condition of the ERISA Group. No member of the ERISA Group has incurred any undischarged liability in excess of $100,000 to the PBGC or a Plan under Title IV of ERISA. No member of the ERISA Group has (i) sought a waiver of the minimum funding standard under Section 412 of the Code in respect of any Plan or (ii) failed to make any contribution or payment to any Plan or made any amendment to any Plan 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.

47 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 have a material adverse effect on the business, financial condition, results of opera- tions or prospects of the Parent Guarantor and its Consoli- dated Subsidiaries, considered as a whole. SECTION 4.08. Taxes. United States Federal income tax returns of the Borrower and its Subsidiaries have been examined and closed through the fiscal year ended on October 3, 1986. The Parent Guarantor, the Borrower and each Subsidiary of either 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 anticipated that could materially and adversely affect the business, financial position, results of operations or prospects of the Parent Guarantor and its Consolidated Subsidiaries, considered as a whole. SECTION 4.09. Compliance with Laws. The Parent Guarantor, the Borrower and each Subsidiary of either are 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, the Borrower or such Subsidiary is contesting in good faith or (ii) the failure to comply with which cannot reasonably be expected to have a material adverse effect on the business, financial position, results of operations or prospects of the Parent Guarantor and its Consolidated Subsidiaries, considered as a whole. 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. No Defaults. Neither the Parent Guarantor nor the Borrower nor any Subsidiary of either is in violation of, or in default under, any term or provision of any charter, by-law, mortgage, indenture, agreement, instrument, statute, rule, regulation, judgment, decree, order, writ or injunction applicable to it, such that such violations or defaults in the aggregate might have a material adverse effect on the business, financial position, results of operations or prospects of the Parent Guarantor and its Consolidated Subsidiaries, considered as a whole, or the ability of any Obligor to perform its obligations under the Financing Documents to which it is a party.

48 SECTION 4.12. Possession of Franchises, Licenses, etc. The Parent Guarantor, the Borrower and each Subsidiary of either own or possess all franchises, patents, trademarks, service marks, trade names, copyrights, licenses and other rights that are necessary in any material respect for the ownership, maintenance and operation of their respective properties and assets, and neither the Parent Guarantor nor the Borrower nor any Subsidiary of either is in violation of any provision thereof in any material respect. ARTICLE V COVENANTS The Parent Guarantor and the 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: (a) within 90 days after the end of each fiscal year of the Parent Guarantor, consolidated balance sheets of the Borrower and its 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 & Co. 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 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 after the end of each of the first three quarters of each fiscal year of the Parent Guarantor, consolidated balance sheets of the Borrower and its 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

49 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 the Borrower and the Parent Guarantor, respectively; (c) once during each fiscal year of the Parent Guarantor, in accordance with its normal business practice, projected consolidated balance sheets of the Parent Guarantor and its Consolidated Subsidiaries as of the end of such fiscal year, and the related consolidated statements of projected cash flows and projected income (in each case substantially in the form customarily prepared by the Parent Guarantor) for such fiscal year, based on the Parent Guarantor's best estimates, information and assumptions at the time; (d) 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 5.06 through 5.14, inclusive, on the date of such financial statements, and identifying any Excluded Dividends declared or paid by any Subsidiary of the Parent Guarantor (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, (iii) stating whether, since the date of the most recent previous delivery of financial statements pursuant to paragraph (a) or (b) of this Section 5.01, there has been any material adverse change in the business, financial position, results of operations or prospects of the Parent Guarantor and its Consolidated Subsidiaries or of the Borrower and its Consolidated Subsidiaries, in each case considered as a whole, not reflected in the financial statements delivered simultaneously therewith and, if so, the nature of such material adverse change and (iv) 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; (e) forthwith upon the occurrence of any Default, a certificate of the chief financial officer, Treasurer or

50 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; (f) promptly upon the mailing thereof to the shareholders of the Parent Guarantor generally, copies of all financial statements, reports and proxy statements so mailed; (g) 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; (h) 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 $1,000,000 or notice that any Multiemployer Plan is in reorganization, is insolvent or has been terminated, a copy of such notice; (iii) 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 (vii) 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 Borrower setting forth details as to such occurrence and action, if any, which the Borrower or applicable member of the ERISA Group is required or proposes to take; (i) as soon as reasonably practicable after a Principal Officer obtains knowledge of the commencement of, or of a material threat of the commencement of, an action, suit or proceeding against the Parent Guarantor or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official in which, in

51 the reasonable opinion of the Parent Guarantor or the Borrower, 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 Borrower and the other Obligors, considered as a whole, or which in any manner questions the validity or enforceability of any Financing Document, information as to the nature of such pending or threatened action, suit or proceeding and will provide such additional information as may be reasonably requested by any Bank; and (j) 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. 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 financially sound and responsible insurance companies, 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. Notwith- standing 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.

52 SECTION 5.04. Conduct of Business and Maintenance of Existence. (a) Subject to Section 5.09, the Parent Guar- antor 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 Sections 5.09 and 5.10, nothing in this Section 5.04(a) shall prohibit the termination of the corporate existence of any Subsidiary (other than the Borrower) 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(a) shall prohibit the termination of the corporate existence of the Borrower or the Parent Guarantor, if such termination is the result of the merger of the Borrower with the Parent Guarantor pursuant to Section 5.09 hereof. (b) The Parent Guarantor's principal assets will at all times be Investments in its Subsidiaries and corporate assets used to service its Subsidiaries and Investments. 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 Subsidiaries. The Parent Guarantor will at all times maintain ownership of 100% of the outstanding shares of each class of capital stock of the Borrower, unless the Borrower and the Parent Guarantor shall have merged in accordance with Section 5.09 hereof. SECTION 5.07. Limitation on Subsidiary Debt. (a) The Parent Guarantor will not permit any of its Subsidiaries to incur or at any time be liable with respect to any Debt owing to the Parent Guarantor except Debt of the Borrower under Subordinated Intercompany Notes. (b) Until the long-term unsecured Debt of the Borrower achieves Investment Grade Status, the Parent Guarantor will not permit any of its Subsidiaries (other than the Borrower) to incur or at any time be liable with respect to any Debt except:

53 (i) Debt consisting of Guarantees under the Financing Documents; (ii) Debt listed on Schedule II; (iii) Debt of any Person outstanding at the date such Person becomes a Subsidiary of the Parent Guarantor and not created in contemplation of such event; (iv) Debt arising out of the refinancing, extension, renewal or refunding of any Debt permitted by any of the foregoing clauses of this Section 5.07(b), provided that the outstanding principal amount of such Debt is not increased; (v) Guarantees by a Subsidiary of Debt of the Borrower; (vi) Debt owing to a Restricted Subsidiary; (vii) Debt not otherwise permitted by the foregoing clauses of this Section 5.07(b) in an aggregate principal amount at any time outstanding not to exceed, together with the outstanding principal amount of Debt secured by Liens pursuant to subsection 5.08(g), an amount equal to 15% of Consolidated Total Assets; and (viii) subject to Section 2.10(c)(ii), Excess Priority Debt. SECTION 5.08. Negative Pledge. The Parent Guar- antor 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 created pursuant to the Financing Documents and Liens on Schedule II; (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 5.08, provided that the outstanding principal amount of such Debt is not increased and is not secured by any additional assets; (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

54 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 $10,000,000 (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 5.08 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 the lesser of (i) an amount equal to 5% of Consolidated Total Assets and (ii) an amount equal to 15% of Consolidated Total Assets less the outstanding principal amount of unsecured Debt permitted pursuant to clause (vii) of Section 5.07(b); and (h) subject to Section 2.10(c)(ii), any Lien on any asset or assets of the Parent Guarantor or any of its Subsidiaries securing Excess Priority Debt. SECTION 5.09. Consolidations, Mergers and Sales of Assets. (a) The Parent Guarantor will not, and will not permit any of its Restricted Subsidiaries to, consolidate or merge with or into any Person, except that (i) the Borrower may merge with any Person (other than the Parent Guarantor) if the Borrower is the surviving corporation and if, immediately after such merger (and giving effect thereto), no Default shall have occurred and be continuing, (ii) any other Restricted Subsidiary of the Parent Guarantor may consolidate or merge with or into any other Person if the surviving corporation is a Wholly Owned Subsidiary of the Parent Guarantor and if, immediately after such consolidation or merger (and giving effect thereto), no Default shall have occurred and be continuing and (iii) if any long-term senior unsecured Debt of the Borrower ever achieves Investment Grade Status, then the Borrower may merge with the Parent Guarantor, if (x) immediately after such merger (and giving effect thereto), no Default shall have occurred and be continuing and (y) when the Borrower is to be the surviving corporation, the Borrower has signed an instrument of assumption in form and substance satisfactory to the Required Banks immediately prior to such merger.

55 (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 Subsid- iaries, taken as a whole. SECTION 5.10. Restricted Payments. The Parent Guarantor will not, and will not permit any of its Subsid- iaries to, declare or make any Restricted Payment except that, if, after giving effect thereto, no Default shall have occurred and be continuing, (a) the Parent Guarantor may declare or make Restricted Payments, if, after giving effect thereto, the aggregate of all Restricted Payments, not otherwise permitted under this Section 5.10, declared or made subsequent to October 3, 1992 (net of cash received upon the sale of capital stock (excluding any Series Preferred Stock issued pursuant to subsection 5.10(b) and any Redeemable Stock) and Deferred Stock Units subsequent to October 3, 1992) does not exceed the sum of (i) $25,000,000 plus (ii) 25% of Consolidated Net Income for the period from October 3, 1992 through October 1, 1993 plus (iii) 50% of Consolidated Net Income for the period from October 2, 1993 through the end of the Parent Guarantor's most recent fiscal quarter (treated for this purpose as a single accounting period). For purposes of calculating the net cash received upon the sale of capital stock or Deferred Stock Units, the contribution of shares of capital stock or Deferred Stock Units to an employee benefit plan shall be deemed a sale of such shares (or, in the case of a contribution of Deferred Stock Units, shall be deemed a sale of the shares of Common Stock for which such Deferred Stock Units may be exchanged) for cash at the then appraised value of such shares, provided that the amount contributed is in accordance with the regular practice of the Parent Guarantor and its Subsidiaries relating to contributions to employee benefit plans. Nothing in this Section shall prohibit the payment of any dividend or distribution within 60 days after the declaration thereof if such declaration was not prohibited by this Section; (b) the Parent Guarantor may from time to time declare or make Restricted Payments not otherwise permitted under this Section 5.10 solely for the purpose of the Share Transactions, provided that the aggregate amount of such Restricted Payments made after March 12, 1993 does not exceed $100,000,000; (c) any Subsidiary of the Parent Guarantor may make Restricted Payments in cash to the Parent Guarantor to enable the Parent Guarantor to make payments otherwise permitted under this Agreement; (d) the Borrower may distribute to the Parent Guarantor all (but not less than all) capital stock of a Subsidiary of the Borrower; provided that:

56 (A) in the case of a Spin-Off Subsidiary, such Spin-Off Subsidiary is a party to the Subsidiary Guaranty Agreement at the time of such distribution; (B) in the case of a Spin-Off Subsidiary, all capital stock of such Spin-Off Subsidiary shall have been duly pledged to the Collateral Agent under the Stock Pledge Agreement at or prior to the time of such distribution; and (C) at or prior to the time of such distri- bution, the Administrative Agent shall have received (i) a certificate of a Principal Officer to the effect that, after giving effect to such distribution, no Default shall have occurred and be continuing and (ii) an opinion of counsel substantially to the effect set forth in paragraphs 2, 4, 5, 6 and 8 of Exhibit B hereto with appropriate changes to refer to the Spin-Off Subsidiary; and (e) any Subsidiary may distribute non-cash assets in kind to the Parent Guarantor to the extent that such assets are or will be used in the corporate headquarters function of the Parent Guarantor, wherever such function may be performed. Notwithstanding subsections (a) and (b) of this Section 5.10, the aggregate cash amount paid in respect of any repurchase made from a stockholder pursuant to his or her election to require the Parent Guarantor to repurchase shares in accor- dance with the terms of Section 5 of the Stockholders' Agreement (Put of Shares upon Death, Complete Disability or Normal Retirement), 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 March 12, 1993, shall not exceed an amount equal to 4% of Consolidated Capital Funds, as reflected in the most recent consolidated 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. SECTION 5.11. Fixed Charge Coverage. As of the last day of each fiscal quarter ending on or after the last day of any of the fiscal years set forth below 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 the ratio of (i) the number set forth below opposite such fiscal year to (ii) 1.0: Fiscal Year Ending in September or October Ratio ----------------- ----- 1993 1.8 1994 1.9 1995 2.0 1996 2.1 1997 2.2 1998 2.3 1999 2.4 2000 2.5 2001 2.6

57 SECTION 5.12. Debt Coverage. As of the last day of each fiscal quarter ending on or after the last day of any of the fiscal years set forth below of the Parent Guarantor, the Leverage Ratio at such day shall not be less than the ratio of (i) the number set forth below in the column opposite such fiscal year to (ii) 1.0: Fiscal Year Ending in September or October Leverage Ratio -------------- -------------- 1993 .28 1994 .28 1995 .30 1996 .32 1997 .36 1998 .42 1999 .48 2000 .55 2001 .65 SECTION 5.13. Minimum Consolidated Net Worth. Consolidated Net Worth shall at no time on or after the last day of any fiscal year of the Parent Guarantor set forth below be less than the amount set forth on the table below opposite such fiscal year: Fiscal Year Ending in September Consolidated or October Net Worth ---------------- ------------ 1993 $ 75,000,000 1994 $115,000,000 1995 $165,000,000 1996 $205,000,000 1997 $270,000,000 1998 $340,000,000 1999 $430,000,000 2000 $525,000,000 2001 $625,000,000 SECTION 5.14. Subordinated Debt. The Parent Guarantor will not, nor will it permit any of its Subsidiaries to, directly or indirectly, redeem, retire, purchase, acquire or otherwise make any payment in respect of the principal of any Subordinated Debt, unless, after giving effect thereto, Consolidated Capital Funds is equal to or greater than the sum of (i) the amount of Consolidated Net Worth required under Section 5.13 plus (ii) $200,000,000. SECTION 5.15. 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

58 Subsidiary as the terms which could have been obtained from a Person which was not an Affiliate; provided that Restricted Payments permitted by Section 5.10 shall not be limited by this Section 5.15. SECTION 5.16. Use of Proceeds. The proceeds of Credits hereunder will be used for general corporate purposes. None of such proceeds will be used in violation of any applicable law or regulation and, without limiting the generality of the foregoing, no use of such proceeds for general corporate purposes will include any use thereof, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any "margin stock" within the meaning of Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time ("Regulation U"). ARTICLE VI 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) the Borrower shall fail to pay when due any principal of any Note; or (b) the 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 5.16, inclu- sive; 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 para- graph (a), (b) or (c) above) for 30 days after the Parent Guarantor or the Borrower shall have become aware of such failure; or (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

59 (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 $10,000,000, 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 the Borrower 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 the Borrower 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 $125,000,000 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 (other than any Investment 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 Sub- sidiary (other than any Investment 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 of 60 days; or an order for relief shall be entered against the Parent Guarantor or any Subsidiary (other than any Investment Subsidiary) under the Federal bankruptcy laws as now or hereafter in effect; or

60 (j) any member of the ERISA Group shall fail to pay when due an amount or amounts aggregating in excess of $500,000 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 $5,000,000 (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 condi- tion 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 $20,000,000 or an aggregate payment obligation in excess of $35,000,000; or (k) a judgment or order for the payment of money in excess of $1,000,000 (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 (other than any Investment Subsidiary) and such judgment or order shall continue unsatisfied and unstayed for a period of 30 days; or (l) any Wholly Owned Subsidiary of the Parent Guarantor organized under the laws of the United States, any State thereof or any political subdivision thereof or therein 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 Subsidiary shall have become a Wholly Owned Subsidiary of the Parent Guarantor; 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;

61 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 the 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 the Borrower declare the Notes (together with accrued interest thereon) and all other amounts payable by the Borrower 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 the 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 Borrower, 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 Borrower hereunder shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. SECTION 6.02. Notice of Default. The Administra- tive Agent shall give notice to the Parent Guarantor and the 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 VII 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 Chemical 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 Chemical 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. 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.

62 SECTION 7.04. Consultation with Experts. Either Agent may consult with legal counsel (who may be counsel for the Parent Guarantor or the 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, indepen- dently 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. SECTION 7.08. Agency Fees. The Borrower shall pay fees to the Agents in the amounts and on the dates agreed to prior to the date hereof by the Borrower and the Agents.

63 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 $50,000,000. 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. ARTICLE VIII 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 appli- cable 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, 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

64 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 regula- tion, 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 authority, 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 the Borrower, whereupon until such Bank notifies the 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, the Borrower shall immediately prepay in full the then outstanding principal amount of each such Euro-Dollar Loan, together with accrued interest thereon. Concurrently with prepaying each such Euro-Dollar Loan, the 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 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

65 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 (A) with respect to any CD Loan any such requirement included in an applicable Domestic Reserve Percentage or Assessment Rate and (B) 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 Borrower 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. (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 applicabil- ity, 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

66 Administrative Agent), the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank (or its Parent) for such reduction. The Borrower 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 Borrower 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. (c) Each Bank will promptly notify the 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 Fixed Rate 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 Borrower 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 Borrower that the 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.

67 ARTICLE IX 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, the due and punctual payment of all other sums now or hereafter owed by the Borrower 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 Secured Interest Rate Indebtedness. In case of failure by the 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 the 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; (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, struc- ture 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,

68 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, con- stitute 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 Borrower 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 the Borrower under this Agreement is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the 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. 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 the Borrower with respect to such payment or otherwise to be reimbursed, indemnified or exonerated by the 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 accelera- tion of the time for payment of any amount payable by the Borrower under this Agreement or the Notes is stayed upon the insolvency, bankruptcy or reorganization of the 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.

69 ARTICLE X 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. 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 Admin- istrative 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.

70 ARTICLE XI 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, the 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. SECTION 11.03. Expenses; Documentary Taxes; Indemnification for Litigation. (a) The Borrower shall 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 Borrower agrees 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.

71 (b) The Parent Guarantor and the Borrower agree jointly and severally 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 provi- sion 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, the 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) postpone the date or reduce the amount of any reduction of the Commitments pursuant to Section 2.10(b) or (v) 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; and provided further that an amendment or waiver of the payment obligations of the Borrower with respect to any Swingline Advance shall be effective if, and only if, signed by the Borrower and the Bank making such Swingline Advance. The release of the Collateral is governed by Section 13 of the Stock Pledge Agreement. 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 Borrower 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 Borrower 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.

72 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 proportion 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. The 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 par- ticipation as fully as if such holder of a participation were a direct creditor of the 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 respective successors and assigns, except that neither the Parent Guarantor nor the Borrower may assign or transfer any of its rights or obligations under this Agreement or the Stock Pledge 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 Borrower's consent, 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 Borrower relating to any Credit or Credits including, without limitation, the right to approve any

73 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 partici- pation 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), (iii) or (iv) 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 to the Bank voting instructions with respect to such proposal within 30 days after such participant's receipt of such proposal and the 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 Borrower as to the amount of its Commitment subject to such participation and the identity of the participant. Each of the Agents and the 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 Borrower's 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 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 "Rep- resenting Bank") represents to each Agent and each other Bank that the Representing Bank in good faith is not relying upon any "margin stock" (as defined in Regulation U) 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.

74 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. 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. ARA SERVICES, INC. By /s/ Melvin M. Mahoney --------------------- Title: Treasurer The ARA Tower 1101 Market Street Philadelphia, Pennsylvania 19107 Facsimile number: (215) 238-3284 (215) 238-3282 THE ARA GROUP, INC. By /s/ Melvin M. Mahoney --------------------- Title: Treasurer The ARA Tower 1101 Market Street Philadelphia, Pennsylvania 19107 Facsimile number: (215) 238-3284 (215) 238-3282

1 EXHIBIT 11 ARAMARK CORPORATION AND SUBSIDIARIES COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE (1) (In thousands, except per share data) <TABLE> <CAPTION> Fiscal Year Ended --------------------------------------------------------------------------- September 30, October 1, October 2, September 27, September 28, 1994 1993 1992 1991 1990 -------------- ---------- ----------- -------------- ------------ Earnings: <S> <C> <C> <C> <C> <C> Net income $ 86,079 $ 77,132 $ 67,381 $ 64,223 $ 51,825 Preferred stock dividends (1,337) (883) -- -- (2,965) --------- --------- -------- -------- -------- Net income available to common stock $ 84,742 $ 76,249 $ 67,381 $ 64,223 $ 48,860 ========= ========= ======== ======== ======== Shares: Weighted average number of common shares outstanding (2) 46,616 46,133 44,746 45,595 48,725 Additional shares assuming conversion of preferred stock (3) -- -- -- 1,477 -- Impact of potential exercise opportunities under the ARAMARK Ownership Program 3,512 4,873 5,898 5,263 5,178 --------- --------- -------- -------- -------- Total common and common equivalent shares 50,128 51,006 50,644 52,335 53,903 ========= ========= ======== ======== ======== Fully diluted earnings per common and common equivalent share $ 1.69 $ 1.49 $ 1.33 $ 1.23 $ .91 ========= ========= ======== ======== ======== </TABLE> (1) Primary and fully diluted earnings per share are approximately the same. Weighted average shares outstanding and earnings per share amounts for the period ending October 1, 1993 and prior have been retroactively adjusted to reflect the November 1993 four-for-one stock split described in Note 7. (2) Includes Class B plus Class A Common Shares stated on a Class B Common Share Equivalent Basis. (3) Reflects conversion of Preferred Stock stated on a Class B Common Share Equivalent Basis for fiscal 1991.




1 EXHIBIT 12 ARAMARK CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (1) (In thousands) <TABLE> <CAPTION> Fiscal Year Ended ---------------------------------------------------------------------------------- September 30, October 1, October 2, September 27, September 28, 1994 1993 1992 1991 1990 ------------ ---------- ---------- ----------- ------------- <S> <C> <C> <C> <C> <C> Income before income taxes and minority interest $ 163,484 $ 143,265 $ 123,723 $ 117,899 $ 107,220 Fixed charges, excluding capitalized interest 150,432 168,158 180,913 190,118 195,965 Other, net (477) 1,222 1,231 (1,819) (282) ------------ ---------- ---------- ----------- ------------ Earnings, as adjusted $ 313,439 $ 312,645 $ 305,867 $ 306,198 $ 302,903 ============ ========== =========== =========== ============ Interest expense $ 110,040 $ 128,367 $ 141,180 $ 145,727 $ 154,345 Capitalized interest 27 47 47 14 590 Portion of operating lease rentals representative of interest factor 40,392 39,791 39,733 44,391 41,620 ----------- ---------- ----------- ----------- ------------- Fixed charges $ 150,459 $ 168,205 $ 180,960 $ 190,132 $ 196,555 =========== ========== =========== =========== ============ Ratio of earnings to fixed charges 2.1x 1.9x 1.7x 1.6x 1.5x =========== ========== =========== =========== ============ </TABLE> (1) 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).



1 EXHIBIT 21 SUBSIDIARIES OF ARAMARK CORPORATION ARA RBI, Inc. ARAMARK Advertising Services, Ltd. ARAMARK Business Dining Services of Texas, Inc. ARAMARK Cleanroom Services, Inc. ARAMARK Coliseum Limited ARAMARK Coliseum Management, Inc. ARAMARK Coliseum Manager Limited ARAMARK Consumer Discount Company ARAMARK Correctional Services, Inc. ARAMARK Educational Group, Inc. ARAMARK Educational Services, Inc. ARAMARK Educational Services of Texas, Inc. ARAMARK Educational Services of Vermont, Inc. ARAMARK Enterprises, Inc. ARAMARK Facilities Management, Inc. ARAMARK Facility Services, Inc. ARAMARK Food and Support Services Group, Inc. ARAMARK Health & Education Services, Inc. ARAMARK Healthcare Support Services, Inc. ARAMARK Healthcare Support Services of Puerto Rico, Inc. ARAMARK Healthcare Support Services of Texas, Inc. ARAMARK Healthcare Support Services of the Virgin Islands,Inc. ARAMARK/HMS Holding Company ARAMARK/HMS Company, Inc. ARAMARK Industrial Services, Inc. ARAMARK Kitty Hawk, Inc. ARAMARK Leisure Convention Services, Inc. ARAMARK Leisure Services Group, Inc. ARAMARK Leisure Services, Inc. ARAMARK Leisure Services/International Group, Inc. ARAMARK Leisure Services of Texas, Inc. ARAMARK Leisure Services of Wisconsin, Inc. ARAMARK Magazine & Book Services, Inc. ARAMARK Marketing Services Group, Inc. ARAMARK Mile High Enterprises, Inc. ARAMARK Pittsburgh Limited ARAMARK Pittsburgh Stadium Concessions, Inc. ARAMARK Refreshment Services Inc. ARAMARK Senior Notes Company ARAMARK Services of Puerto Rico, Inc. ARAMARK SWV Corporation

2 ARAMARK Terminal Newsstands, Inc. ARAMARK Terminal Shops, Inc. ARAMARK Uniform Services, Inc. ARAMARK Uniform Manufacturing Company ARAMARK Virginia Sky-Line Co., Inc. ARASERVE of Kansas, Inc. Childrens World Learning Centers, Inc. Coordinated Health Services, Inc. Corporation for Holding Stock, Inc. Correctional Medical Services, Inc. Correctional Medical Services of Delaware, Inc. CWLC Brokerage, Inc. Davres, Inc. Delsac VI, Inc. Delsac VII, Inc. Delsac VIII, Inc. Delsac X, Inc. Fashion-Tex Services, Inc. Lake Powell Resorts & Marinas, Inc.. Landy Textile Rental Services, Inc. Linen Supply Service, Inc. Medical Claims Management Group, Inc. Mesa Verde Company Professional Anesthesia Services, Inc. Smithsub, Inc. Spectrum Emergency Care, Inc. Spectrum Emergency Care of New Mexico, Inc. Spectrum Healthcare of Delaware, Inc. Spectrum Healthcare Resources, Inc. Spectrum Healthcare Resources of Delaware, Inc. Spectrum Healthcare Services, Inc. Spectrum Primary Care, Inc. Spectrum Primary Care of Delaware, Inc. Szabo Food Service, Inc. WearGuard Corporation Woodhaven Foods, Inc.



1 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report dated November 7, 1994 included in this Form 10-K for the fiscal year ended September 30, 1994 into the Company's previously filed Registration Statements on Form S-8, Registration Nos. 33-11818, 33-30879, 33-33329 and 33-44002, and on Form S-3, Registration Nos. 33-41357, 33-47564 and 33-52587. ARTHUR ANDERSEN LLP Philadelphia, Pennsylvania November 22, 1994


1 EXHIBIT 23.2 CONSENT OF CHARTERED ACCOUNTANTS We consent to the incorporation by reference in the Registration Statements of ARAMARK Corporation and, where applicable, ARAMARK Services, Inc., on Form S-8, registration numbers 33-11818, 33-30879, 33-33329, and 33-44002, and on Form S-3, registration numbers 33-41357, 33-47564 and 33-52587, and in the related Prospectuses, our report dated November 16, 1994, with respect to the consolidated financial statements of Versa Services Ltd. as at September 28, 1994, the fifty-two week period ended September 29, 1993 and the fifty-three week period ended September 30, 1992 (not presented separately herein or in the aforementioned Registration Statements or in the related Prospectuses), included in this annual report on Form 10-K. Mississauga, Canada ERNST & YOUNG Chartered Accountants November 16, 1994

1 ALAN K. CAMPBELL POWER OF ATTORNEY The undersigned director of ARAMARK Corporation, a Delaware corporation (the "Company"), hereby appoints Joseph Neubauer, James E. Ksansnak, Martin W. Spector and Donald S. Morton, as his Attorney-in-Fact and hereby grants to each of them acting alone without the others, for him and in his name as such director, full power to: (a) sign the Annual Report on Form 10-K for the fiscal year ended September 30, 1994, and amendments thereto which the Company may file with the Securities and Exchange Commission pursuant to the requirements of Section 13 and/or Section 15(d) of the Securities Exchange Act of 1934; and (b) perform every other action which any such Attorney-in-fact may deem necessary or proper in connection with any of such reports or amendments (all as approved by the Company's principal executive, financial and accounting officers whose signatures to such report or amendment thereto shall be conclusive evidence of such approval). Dated: November 7, 1994 /s/ Alan K. Campbell --------------------- Alan K. Campbell

2 DAVRE J. DAVIDSON POWER OF ATTORNEY The undersigned director of ARAMARK Corporation, a Delaware corporation (the "Company"), hereby appoints Joseph Neubauer, James E. Ksansnak, Martin W. Spector and Donald S. Morton, as his Attorney-in-Fact and hereby grants to each of them acting alone without the others, for him and in his name as such director, full power to: (a) sign the Annual Report on Form 10-K for the fiscal year ended September 30, 1994, and amendments thereto which the Company may file with the Securities and Exchange Commission pursuant to the requirements of Section 13 and/or Section 15(d) of the Securities Exchange Act of 1934; and (b) perform every other action which any such Attorney-in-fact may deem necessary or proper in connection with any of such reports or amendments (all as approved by the Company's principal executive, financial and accounting officers whose signatures to such report or amendment thereto shall be conclusive evidence of such approval). Dated: November 7, 1994 /s/ Davre J. Davidson --------------------- Davre J. Davidson

3 EDWARD G. JORDAN POWER OF ATTORNEY The undersigned director of ARAMARK Corporation, a Delaware corporation (the "Company"), hereby appoints Joseph Neubauer, James E. Ksansnak, Martin W. Spector and Donald S. Morton, as his Attorney-in-Fact and hereby grants to each of them acting alone without the others, for him and in his name as such director, full power to: (a) sign the Annual Report on Form 10-K for the fiscal year ended September 30, 1994, and amendments thereto which the Company may file with the Securities and Exchange Commission pursuant to the requirements of Section 13 and/or Section 15(d) of the Securities Exchange Act of 1934; and (b) perform every other action which any such Attorney-in-fact may deem necessary or proper in connection with any of such reports or amendments (all as approved by the Company's principal executive, financial and accounting officers whose signatures to such report or amendment thereto shall be conclusive evidence of such approval). Dated: November 7, 1994 /s/ Edward G. Jordan -------------------- Edward G. Jordan

4 JAMES E. PRESTON POWER OF ATTORNEY The undersigned director of ARAMARK Corporation, a Delaware corporation (the "Company"), hereby appoints Joseph Neubauer, James E. Ksansnak, Martin W. Spector and Donald S. Morton, as his Attorney-in-Fact and hereby grants to each of them acting alone without the others, for him and in his name as such director, full power to: (a) sign the Annual Report on Form 10-K for the fiscal year ended September 30, 1994, and amendments thereto which the Company may file with the Securities and Exchange Commission pursuant to the requirements of Section 13 and/or Section 15(d) of the Securities Exchange Act of 1934; and (b) perform every other action which any such Attorney-in-fact may deem necessary or proper in connection with any of such reports or amendments (all as approved by the Company's principal executive, financial and accounting officers whose signatures to such report or amendment thereto shall be conclusive evidence of such approval). Dated: November 7, 1994 /s/ James E. Preston --------------------- James E. Preston

5 JOSEPH NEUBAUER POWER OF ATTORNEY The undersigned director of ARAMARK Corporation, a Delaware corporation (the "Company"), hereby appoints Joseph Neubauer, James E. Ksansnak, Martin W. Spector and Donald S. Morton, as his Attorney-in-Fact and hereby grants to each of them acting alone without the others, for him and in his name as such director, full power to: (a) sign the Annual Report on Form 10-K for the fiscal year ended September 30, 1994, and amendments thereto which the Company may file with the Securities and Exchange Commission pursuant to the requirements of Section 13 and/or Section 15(d) of the Securities Exchange Act of 1934; and (b) perform every other action which any such Attorney-in-fact may deem necessary or proper in connection with any of such reports or amendments (all as approved by the Company's principal executive, financial and accounting officers whose signatures to such report or amendment thereto shall be conclusive evidence of such approval). Dated: November 7, 1994 /s/ Joseph Neubauer ------------------- Joseph Neubauer

6 LEE F. DRISCOLL, JR. POWER OF ATTORNEY The undersigned director of ARAMARK Corporation, a Delaware corporation (the "Company"), hereby appoints Joseph Neubauer, James E. Ksansnak, Martin W. Spector and Donald S. Morton, as his Attorney-in-Fact and hereby grants to each of them acting alone without the others, for him and in his name as such director, full power to: (a) sign the Annual Report on Form 10-K for the fiscal year ended September 30, 1994, and amendments thereto which the Company may file with the Securities and Exchange Commission pursuant to the requirements of Section 13 and/or Section 15(d) of the Securities Exchange Act of 1934; and (b) perform every other action which any such Attorney-in-fact may deem necessary or proper in connection with any of such reports or amendments (all as approved by the Company's principal executive, financial and accounting officers whose signatures to such report or amendment thereto shall be conclusive evidence of such approval). Dated: November 7, 1994 /s/ Lee F. Driscoll, Jr. ----------------------- Lee F. Driscoll, Jr.

7 MITCHELL S. FROMSTEIN POWER OF ATTORNEY The undersigned director of ARAMARK Corporation, a Delaware corporation (the "Company"), hereby appoints Joseph Neubauer, James E. Ksansnak, Martin W. Spector and Donald S. Morton, as his Attorney-in-Fact and hereby grants to each of them acting alone without the others, for him and in his name as such director, full power to: (a) sign the Annual Report on Form 10-K for the fiscal year ended September 30, 1994, and amendments thereto which the Company may file with the Securities and Exchange Commission pursuant to the requirements of Section 13 and/or Section 15(d) of the Securities Exchange Act of 1934; and (b) perform every other action which any such Attorney-in-fact may deem necessary or proper in connection with any of such reports or amendments (all as approved by the Company's principal executive, financial and accounting officers whose signatures to such report or amendment thereto shall be conclusive evidence of such approval). Dated: November 7, 1994 /s/ Mitchell S. Fromstein -------------------------- Mitchell S. Fromstein

8 PHILIP L. DEFLIESE POWER OF ATTORNEY The undersigned director of ARAMARK Corporation, a Delaware corporation (the "Company"), hereby appoints Joseph Neubauer, James E. Ksansnak, Martin W. Spector and Donald S. Morton, as his Attorney-in-Fact and hereby grants to each of them acting alone without the others, for him and in his name as such director, full power to: (a) sign the Annual Report on Form 10-K for the fiscal year ended September 30, 1994, and amendments thereto which the Company may file with the Securities and Exchange Commission pursuant to the requirements of Section 13 and/or Section 15(d) of the Securities Exchange Act of 1934; and (b) perform every other action which any such Attorney-in-fact may deem necessary or proper in connection with any of such reports or amendments (all as approved by the Company's principal executive, financial and accounting officers whose signatures to such report or amendment thereto shall be conclusive evidence of such approval). Dated: November 7, 1994 /s/ Philip L. Defliese ---------------------- Philip L. Defliese

9 REYNOLD C. MACDONALD POWER OF ATTORNEY The undersigned director of ARAMARK Corporation, a Delaware corporation (the "Company"), hereby appoints Joseph Neubauer, James E. Ksansnak, Martin W. Spector and Donald S. Morton, as his Attorney-in-Fact and hereby grants to each of them acting alone without the others, for him and in his name as such director, full power to: (a) sign the Annual Report on Form 10-K for the fiscal year ended September 30, 1994, and amendments thereto which the Company may file with the Securities and Exchange Commission pursuant to the requirements of Section 13 and/or Section 15(d) of the Securities Exchange Act of 1934; and (b) perform every other action which any such Attorney-in-fact may deem necessary or proper in connection with any of such reports or amendments (all as approved by the Company's principal executive, financial and accounting officers whose signatures to such report or amendment thereto shall be conclusive evidence of such approval). Dated: November 7, 1994 /s/ Reynold C. MacDonald ------------------------- Reynold C. MacDonald

10 ROBERT J. CALLANDER POWER OF ATTORNEY The undersigned director of ARAMARK Corporation, a Delaware corporation (the "Company"), hereby appoints Joseph Neubauer, James E. Ksansnak, Martin W. Spector and Donald S. Morton, as his Attorney-in-Fact and hereby grants to each of them acting alone without the others, for him and in his name as such director, full power to: (a) sign the Annual Report on Form 10-K for the fiscal year ended September 30, 1994, and amendments thereto which the Company may file with the Securities and Exchange Commission pursuant to the requirements of Section 13 and/or Section 15(d) of the Securities Exchange Act of 1934; and (b) perform every other action which any such Attorney-in-fact may deem necessary or proper in connection with any of such reports or amendments (all as approved by the Company's principal executive, financial and accounting officers whose signatures to such report or amendment thereto shall be conclusive evidence of such approval). Dated: November 7, 1994 /s/ Robert J. Callander ----------------------- Robert J. Callander

11 RONALD R. DAVENPORT POWER OF ATTORNEY The undersigned director of ARAMARK Corporation, a Delaware corporation (the "Company"), hereby appoints Joseph Neubauer, James E. Ksansnak, Martin W. Spector and Donald S. Morton, as his Attorney-in-Fact and hereby grants to each of them acting alone without the others, for him and in his name as such director, full power to: (a) sign the Annual Report on Form 10-K for the fiscal year ended September 30, 1994, and amendments thereto which the Company may file with the Securities and Exchange Commission pursuant to the requirements of Section 13 and/or Section 15(d) of the Securities Exchange Act of 1934; and (b) perform every other action which any such Attorney-in-fact may deem necessary or proper in connection with any of such reports or amendments (all as approved by the Company's principal executive, financial and accounting officers whose signatures to such report or amendment thereto shall be conclusive evidence of such approval). Dated: November 7, 1994 /s/ Ronald R. Davenport ----------------------- Ronald R. Davenport

12 THOMAS H. KEAN POWER OF ATTORNEY The undersigned director of ARAMARK Corporation, a Delaware corporation (the "Company"), hereby appoints Joseph Neubauer, James E. Ksansnak, Martin W. Spector and Donald S. Morton, as his Attorney-in-Fact and hereby grants to each of them acting alone without the others, for him and in his name as such director, full power to: (a) sign the Annual Report on Form 10-K for the fiscal year ended September 30, 1994, and amendments thereto which the Company may file with the Securities and Exchange Commission pursuant to the requirements of Section 13 and/or Section 15(d) of the Securities Exchange Act of 1934; and (b) perform every other action which any such Attorney-in-fact may deem necessary or proper in connection with any of such reports or amendments (all as approved by the Company's principal executive, financial and accounting officers whose signatures to such report or amendment thereto shall be conclusive evidence of such approval). Dated: November 7, 1994 /s/ Thomas H. Kean ------------------ Thomas H. Kean

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