<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 16, 1997
REGISTRATION NO. 333-33659
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE DIAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 51-0374887
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
15501 NORTH DIAL BOULEVARD
SCOTTSDALE, AZ 85260-1619
(602) 754-3425
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
MALCOLM JOZOFF
CHAIRMAN OF THE BOARD OF DIRECTORS, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
THE DIAL CORPORATION
15501 NORTH DIAL BOULEVARD
SCOTTSDALE, AZ 85260-1619
(602) 754-3425
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES OF ALL COMMUNICATIONS, INCLUDING COMMUNICATIONS SENT TO AGENT FOR
SERVICE, SHOULD BE SENT TO:
<TABLE>
<S> <C>
STUART H. GELFOND, ESQ. JANE E. OWENS
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON SENIOR VICE PRESIDENT AND GENERAL COUNSEL
ONE NEW YORK PLAZA THE DIAL CORPORATION
NEW YORK, NEW YORK 10004-1980 15501 NORTH DIAL BOULEVARD
(212) 859-8000 SCOTTSDALE, AZ 85260-1619
(602) 754-3425
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective depending upon
market conditions and other factors.
------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED PRICE(1)(2) REGISTRATION FEE(3)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock, par value $.01 per share(4)............... $115,000,000 $34,849
========================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee.
(2) The proposed maximum aggregate offering price of the securities being
registered also includes the offering price of any shares initially offered
or sold outside the United States that are thereafter sold or resold in the
United States. Offers and sales of shares outside the United States are
being made pursuant to the exemption afforded by Rule 901 of Regulation S
and this Registration Statement shall not be deemed effective with respect
to such offers and sales.
(3) Calculated pursuant to Rule 457(o) under the Securities Act.
(4) Including associated preferred share purchase rights which will be issued
for no additional consideration.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, OCTOBER 16, 1997
PROSPECTUS
[THE DIAL CORPORATION LOGO]
COMMON STOCK
------------------------
The Dial Corporation (the "Company" or "Dial") may from time to time offer
shares of its common stock, par value $.01 per share (the "Common Stock").
The Common Stock is listed on the New York Stock Exchange (the "NYSE")
under the symbol "DL." On October 15, 1997, the last reported sale price of the
Common Stock on the NYSE was $17 11/16.
SEE "RISK FACTORS," BEGINNING ON PAGE 5, FOR A DISCUSSION OF CERTAIN
FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK
OFFERED HEREBY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The Company may sell the Common Stock to or through underwriters, through
dealers or agents, directly to purchasers or through a combination of such
methods. See "Plan of Distribution." The accompanying Prospectus Supplement sets
forth the names of any underwriters, dealers or agents, if any, involved in the
sale of the Common Stock in respect of which this Prospectus is being delivered
and any applicable fee, commission or discount arrangements with them.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
The date of this Prospectus is October , 1997.
<PAGE> 3
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (together with any amendments
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the shares of Common Stock being
offered hereby. This Prospectus, which forms part of the Registration Statement,
and the accompanying Prospectus Supplement do not contain all of the information
set forth in the Registration Statement and the exhibits and schedules thereto,
to which reference is hereby made. Statements made in this Prospectus and the
accompanying Prospectus Supplement as to the contents of any contract, agreement
or other document referred to are not necessarily complete. With respect to each
such contract, agreement or other document filed as an exhibit to the
Registration Statement or to a document incorporated by reference herein,
reference is made to such exhibit or document for a more complete description of
the matter involved, and each such statement shall be deemed qualified in its
entirety by such reference. For further information with respect to the Company
and the Common Stock offered hereby, reference is hereby made to the
Registration Statement and to the exhibits and schedules thereto.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. The Registration Statement, the exhibits and schedules forming a
part thereof, the reports, proxy statements and other information filed by the
Company with the Commission in accordance with the Exchange Act may be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and
will also be available for inspection and copying at the regional offices of the
Commission located at 7 World Trade Center, New York, New York 10048 and at 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
material may also be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Such materials may also be obtained through the Commission's
Internet address at "http://www.sec.gov." The Common Stock is listed on the
NYSE, and the Registration Statement and such reports, proxy statements and
certain other information can also be inspected at the offices of the NYSE, 20
Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company under the Exchange
Act with the Commission are incorporated herein by reference: the Company's
Annual Report on Form 10-K for the fiscal year ended December 28, 1996,
Quarterly Report on Form 10-Q for the fiscal quarter ended March 29, 1997 and
Quarterly Report on Form 10-Q for the fiscal quarter ended June 28, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of the initial filing of the
Registration Statement but prior to the consummation of the offering of the
Common Stock shall be deemed to be incorporated in this Prospectus by reference
and to be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus or any Prospectus Supplement to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute part of this Prospectus or any Prospectus
Supplement.
The Company will provide without charge to each person, including any
beneficial owner, to whom a Prospectus and any Prospectus Supplement is
delivered, upon written or oral request by such person, a copy of any or all of
the documents incorporated herein by reference (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference into
the document that this Prospectus or any Prospectus Supplement incorporates by
reference). Requests should be directed to The Dial Corporation, Attention:
Lowell L. Robertson, 15501 North Dial Boulevard, Scottsdale, Arizona 85260-1619,
telephone number (602) 754-3425.
2
<PAGE> 4
Prior to August 15, 1996, the business of the Company was operated as the
consumer products business (the "Consumer Products Business") of Viad Corp (then
known as The Dial Corp) ("Former Parent"). On August 15, 1996, Former Parent
distributed to its stockholders all of the Company's then outstanding common
stock (the "Distribution") causing the Company to become a separate
publicly-traded company. Unless otherwise indicated, (i) all references in this
Prospectus to the "Company" or "Dial" for periods prior to the Distribution
refer to the Consumer Products Business of Former Parent and for periods
following the Distribution refer to the Company and its consolidated
subsidiaries, (ii) all financial information contained in this Prospectus has
been prepared as if the Company had always been a separate operating company,
(iii) the industry data contained herein are derived from publicly available
industry trade journals and reports, including, with respect to market rank and
market share, reports published by Information Resources, Inc., and other
publicly available sources which the Company has not independently verified but
which the Company believes to be reliable, and (iv) references to years and
periods are to fiscal years and periods and, with respect to comparative
industry data, years are calendar years. Unless otherwise noted, all market
share data as of any particular date are as of the 52 weeks then ended and are
based on sales in the U.S. market, which with respect to soap products is
measured by ounces sold, with respect to detergent products is measured by
standard cases sold and with respect to air fresheners and canned meats is
measured by units sold.
This Prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. When used
in this Prospectus, the words "anticipates," "intends," "plans," "believes,"
"estimates" and similar expressions are intended to identify forward-looking
statements. Such statements, including, but not limited to, the Company's
statements regarding potential international expansion, the estimated benefits
of the Company's cost-cutting program and potential product introductions, are
based on management's beliefs as well as on assumptions made by and information
currently available to management and involve certain risks and uncertainties,
certain of which are beyond the Company's control. The Company's actual results
and stockholder values could differ materially from those expressed in any
forward-looking statements made by or on behalf of the Company. In light of
these risks and uncertainties, there can be no assurance that the
forward-looking information contained in this Prospectus will in fact transpire.
See "Risk Factors."
3
<PAGE> 5
THE COMPANY
Dial is a leading consumer products company with net sales of approximately
$1.4 billion and operating income before restructuring charges and asset
write-downs of approximately $125 million in 1996. The Company markets its
products primarily under such well-known household brand names as DIAL(R) soaps,
PUREX(R) detergents, RENUZIT(R) air fresheners and ARMOUR(R) canned meats.
The Company was incorporated in the State of Delaware on June 3, 1996. The
Company's corporate headquarters and principal executive offices are located at
15501 North Dial Boulevard, Scottsdale, Arizona 85260-1619, telephone number
(602) 754-3425.
THE DISTRIBUTION
In August 1996, Former Parent spun-off its Consumer Products Business by
distributing to Former Parent's stockholders all of the Company's then
outstanding common stock. Former Parent effected the Distribution to enhance the
profitable growth prospects of both the Consumer Products Business and Former
Parent's services businesses, which businesses Former Parent continues to
operate today. Former Parent believed that the Distribution would enable the
Consumer Products Business to adopt strategies and pursue objectives that were
more appropriate to its industry and operations and place it in a better
position to raise capital and make acquisitions necessary for continued growth.
Any offering of Common Stock effected by the Company pursuant to the
Registration Statement will be done to preserve the status of the tax ruling
received by Former Parent and the Company from the Internal Revenue Service
("IRS") in connection with the Distribution. This ruling was issued on the basis
of certain representations made by Former Parent and the Company, including a
representation that the Company would issue at least $100 million in additional
equity securities by the first anniversary of the Distribution (August 15,
1997). See "The Distribution and Certain Related Transactions -- Material
Federal Income Tax Consequences of the Distribution." The IRS has granted the
Company's petition to extend the deadline for the issuance of such equity
securities to December 31, 1997. The Company intends to proceed with an offering
of Common Stock at such time or times it determines to be most beneficial to the
Company prior to December 31, 1997.
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RISK FACTORS
In addition to the other information in this Prospectus and the
accompanying Prospectus Supplement, the following factors should be considered
carefully before investing in the Common Stock offered hereby.
INTENSE COMPETITION IN THE CONSUMER PRODUCTS INDUSTRY
The consumer products industry, particularly its detergent, personal care
and air freshener categories, is intensely competitive. Among the Company's most
significant competitors are larger companies, including The Procter & Gamble
Company, Lever Brothers Co., a division of Unilever plc, and Colgate-Palmolive
Company, which companies may have substantially greater resources than the
Company and may be willing to commit significant resources to protecting their
own market shares or to capturing market share from the Company. As a result,
the Company may need to incur greater costs for trade and consumer promotions
and advertising to preserve or improve market share and to introduce and
establish new products and line extensions. At the same time, the Company may
need to undertake additional production-related cost-cutting measures to enable
it to respond to competitors' price cuts and marketing efforts without reducing
the Company's margins. There can be no assurance that the Company will be able
to make such additional expenditures or implement such cost-cutting measures or
that if made or implemented they will be effective.
CONSUMER PRICING PRESSURES
Consumer products, particularly those that are value-priced, are subject to
significant price competition. In April 1996, the Company undertook a pricing
initiative to lower the everyday list price point of its Purex detergent
products by approximately 15%. Although this initiative helped result in an 8%
increase in unit volume sales of such products in 1996 compared to 1995, there
can be no assurance that such volume growth will be maintained or that such
growth will be sufficient to offset lower revenues resulting from such price
reduction. For the six months ended June 28, 1997, Purex unit volume sales were
3% lower than unit volume sales during the six months ended June 29, 1996. There
can be no assurance that the Company will not be forced to engage in further
price-cutting initiatives for these or other products to respond to competitive
and consumer pressures. The failure of the Company's sales volumes to grow
sufficiently to improve overall revenues and income as a result of a competitive
price reduction could have a material adverse effect on the financial
performance of the Company.
TRADE CUSTOMER PRICING PRESSURES; COMPETITIVE RETAIL ENVIRONMENT
The Company faces pricing pressure from its trade customers. Because of the
competitive retail environment, retailers have increasingly sought to reduce
inventory levels and obtain pricing concessions from vendors. In addition,
because consumer products companies, including the Company, have historically
offered end-of-quarter discounts to achieve quarterly sales goals, trade
customers have been inclined to delay inventory restocking until quarter-end.
Over the past year, the Company has reduced end-of-quarter discounts to
retailers and, effective July 1, 1997, has changed its sales incentive structure
to emphasize not only quarterly revenue targets but also trade spending
management and other personal performance targets. The Company does not believe
the reduction in discounts has had or will have an adverse effect on sales
although there can be no assurance in that regard. The Company is also subject
to the risk that high-volume customers could seek alternative pricing
concessions or better trade terms. The Company's performance is also dependent
upon the general health of the retail environment and could be materially
adversely affected by changes therein and by the financial difficulties of
retailers.
DEPENDENCE ON KEY CUSTOMERS
Wal-Mart Stores Inc. (and its affiliate, SAM'S Club) ("Wal-Mart"), the
Company's largest customer, accounted for approximately 17% of the Company's net
sales for the six months ended June 28, 1997. The Company's top ten customers
accounted for approximately 34% of net sales for the six months ended June 28,
1997. The Company believes that this concentration of its domestic sales may
continue to increase over time.
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The loss of, or a substantial decrease in the volume of purchases by, Wal-Mart
or any of the Company's other top customers could have a material adverse effect
on the Company's results of operations.
PRICE VOLATILITY OF RAW MATERIALS; SINGLE SOURCE SUPPLIER
While the Company believes that it may in certain circumstances be able to
respond to price increases for certain raw materials by increasing sales prices,
rapid increases in the prices of such raw materials could have a short-term
material adverse impact on financial results. For example, tallow (a key
ingredient in Dial bar soaps) has experienced price fluctuations within the
range of $0.17 and $0.28 per pound from January 1, 1995 to June 28, 1997.
Recently, the price of tallow has been at the lower end of its two-year price
range. Since several competitors use considerably less tallow in their bar soap
products, the Company may not be able to increase the prices of its Dial bar
soaps in response to fluctuations in tallow prices. In addition, the
antibacterial agent, Triclosan, which is the active ingredient used in Liquid
Dial products, is sourced from a single supplier. Although the Company has an
adequate supply of Triclosan for its current and foreseeable needs, a disruption
in this supply could have a short-term material adverse impact on the Company's
financial results. Although the Company seeks to enter into contracts to provide
up to six-month supplies of tallow, Triclosan and packaging materials, long-term
hedging opportunities against price increases for these items are generally not
available.
DEPENDENCE ON DOMESTIC MARKETS; RISKS ASSOCIATED WITH INTERNATIONAL EXPANSION
While a number of the Company's competitors have diversified their revenues
to include a strong international component, the Company is currently dependent
primarily on revenues generated by customers in the U.S. markets (approximately
94% of sales for the six months ended June 28, 1997). With respect to a number
of the Company's most significant product categories, including detergents and
bar soaps, the U.S. markets are mature and characterized by high household
penetration. The Company's unit sales growth in these domestic markets will
depend on increasing usage by consumers and in capturing market share from
competitors. There can be no assurance that the Company will succeed in
implementing its strategies to achieve such domestic growth.
To reduce its dependence on domestic revenues, the Company has adopted a
strategy to further penetrate international markets. In implementing this
strategy, the Company faces barriers to entry and the risk of competition from
local and other companies that already have established global businesses, risks
generally associated with conducting business internationally, including
exposure to currency fluctuations, limitations on foreign investment,
import/export controls, nationalization, unstable governments and legal systems
and the additional expense and risks inherent in operating in geographically and
culturally diverse locations. Because the Company plans to develop its
international business through acquisitions as well as joint ventures, co-
packaging arrangements and/or other alliances, the Company may also be subject
to risks associated with such acquisitions, ventures, arrangements and
alliances, including those relating to the marriage of different corporate
cultures and shared decision-making. In addition, since the Company's current
international distribution capabilities are extremely limited, the Company will
also need to acquire a distribution network or enter into alliances with
existing distributors before it can effectively conduct operations in new
markets. There can be no assurance that the Company will succeed in increasing
its international business in a profitable manner, and a failure to expand this
business may have a material adverse effect on the Company's future growth.
The Company has a significant number of registered foreign trademarks as
well as pending foreign trademark applications. There can be no assurance that
the Company will successfully register any foreign trademarks for which
applications are currently pending or that such trademarks, once registered,
together with any existing registered foreign trademarks, will be protected in
the foreign markets in which they are used.
ADVERSE PUBLICITY
Certain news broadcasts by major U.S. television networks have focused on
the use of antibacterial agents to kill germs on various surfaces. Triclosan,
the active ingredient in Liquid Dial, has also been a focus of these
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broadcasts. Although none of the broadcasts disputed that Triclosan kills germs
on the skin, some third party experts did question whether it provides any
additional protection beyond that provided by non-antibacterial soap products.
Although the Company has test results that it believes prove that Triclosan
provides consumers with additional protection in limiting exposure to
bacteria-related diseases, there can be no assurance that the adverse publicity
stemming from these broadcasts will not adversely affect the Company's sales of
its antibacterial soap products and its results of operations.
Because the Company shares the use of the Armour trademark for food
products with ConAgra Inc., the manufacturer of Armour-branded non-canned meat
products, the Company faces the risk that consumer preferences and perceptions
with respect to any of the Company's Armour products may be influenced by
adverse publicity affecting any of the Armour-branded products of ConAgra, Inc.
ENVIRONMENTAL CONCERNS REGARDING DETERGENT COMPOUND
Nonlyphenol ethoxylate ("NPE") is an ingredient used in the Company's
liquid and powder detergent products. Certain environmental and regulatory
groups have raised concerns regarding the toxicity of compounds produced from
NPE as it decomposes and the adverse impact on the reproductive health of
certain aquatic animals exposed to those compounds. Although to the best of the
Company's knowledge none of the studies undertaken on NPE have demonstrated a
link between the compound and such effect in the environment or in human beings,
there can be no assurance that subsequent studies will not in fact demonstrate
such a link or demonstrate other adverse environmental consequences. Current
government regulations do not impose any restrictions on the use of NPE, or
impose any liability on any of the businesses that utilize NPE in the products
they manufacture. The Company believes, however, that a number of governmental
agencies in North America and Europe are discussing formal regulation of NPE in
the environment. The Company is in the process of reformulating its detergents
to eliminate this compound as an ingredient. The additional expense the Company
expects to incur as a result of this reformulation is not expected to have a
material adverse impact on the Company's financial results. In addition, the
Company believes that it will not incur any significant environmental liability
as a result of the use of NPE in its products.
DEPENDENCE ON KEY PERSONNEL
The operation of the Company requires managerial and operational expertise.
Of the Company's key personnel, only the Chief Executive Officer has an
employment contract with the Company. There can be no assurance that any of the
Company's key employees will remain in the Company's employ. The loss of such
key personnel could have a material adverse effect on the Company's operations.
TURNOVER; EMPLOYEE RELATIONS
Primarily as a result of the restructuring of its business, the Company
discharged approximately 950 salaried and non-salaried employees during 1995 and
1996. In addition, the Company experienced aggregate voluntary turnover of
salaried employees of approximately 16% in 1996 and approximately 18% (on an
annualized basis) during the first six months of 1997. Although the Company
believes that it presently has sufficient staffing, there can be no assurance
that the Company would not be materially adversely affected by any future
significant voluntary turnover of salaried or other employees.
Five of the Company's seven plants are unionized. Although no collective
bargaining agreements are due to expire in 1997, the Company's contract with the
International Brotherhood of Teamsters covering approximately 350 employees at
the Company's St. Louis, Missouri plant is scheduled for renegotiation in July
1998, its contract with the Oil, Chemical and Atomic Workers union covering
approximately 100 employees at the Company's Bristol, Pennsylvania plant is
scheduled for renegotiation in May 1999, its contract with the United Food and
Commercial Workers union covering approximately 475 employees at the Company's
Aurora, Illinois plant is scheduled for renegotiation in August 1999 and its
contract with the United Food and Commercial Workers union covering
approximately 500 employees at the Company's Fort Madison, Iowa plant is
scheduled for renegotiation in September 1999. In 1993, the Company's St. Louis,
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<PAGE> 9
Missouri plant experienced a five-week work stoppage. Although the Company
believes that its relations with the employees at this plant and other plants
are satisfactory, there can be no assurance that the Company will not face
similar labor disputes in the future or that such disputes will not be material
to the Company.
ENVIRONMENTAL MATTERS
The Company is subject to a variety of environmental and health and safety
laws in each jurisdiction in which it operates. These laws and regulations
pertain to the Company's present and past operations.
Since 1980, the Company has received notices or requests for information
with respect to 27 sites that have been deemed "Superfund" sites under the
federal Comprehensive Environmental Response, Compensation and Liability Act,
five of which are currently active, 14 of which are inactive, and eight of which
have been settled. The Company is also engaged in investigatory and remedial
activities with respect to four closed plants previously operated by Former
Parent. As of June 28, 1997, the Company had accrued in its financial statements
approximately $13 million in reserves for expenses related to Superfund sites
and the clean-up of closed plant sites, which reserves it believes are adequate.
The Company does not anticipate that the costs to comply with such laws and
regulations or the costs related to Superfund and the clean-up of closed plant
sites will have any material adverse effect on the Company's capital
expenditures, earnings or competitive position; however, there can be no
assurance that other developments, such as the emergence of unforeseen claims or
liabilities or the imposition of increasingly stringent laws, regulations and
enforcement policies will not result in material costs in the future.
PROVISIONS WITH POTENTIAL ANTI-TAKEOVER EFFECT
The Company's Restated Certificate of Incorporation (the "Certificate of
Incorporation"), bylaws (the "Bylaws") and Rights Agreement (as defined herein)
contain certain provisions that may delay, defer or prevent a change in control
of the Company, may discourage bids for the Common Stock at a premium over its
market price and may materially adversely affect the market price of the Common
Stock. See "Description of Capital Stock -- Certain Anti-Takeover Effects of
Certain Provisions of Certificate of Incorporation, Bylaws, Rights and Delaware
Law."
USE OF PROCEEDS
The Company intends to use the net proceeds of the sale of the Common Stock
for general corporate purposes, including to repay indebtedness of the Company,
and for acquisitions.
8
<PAGE> 10
THE DISTRIBUTION AND CERTAIN RELATED TRANSACTIONS
GENERAL
In August 1996, Former Parent spun-off its Consumer Products Business by
distributing to Former Parent's stockholders all of the Company's then
outstanding common stock. Former Parent effected the Distribution to enhance the
profitable growth prospects of both the Consumer Products Business and Former
Parent's services businesses, which businesses Former Parent continues to
operate today. Former Parent effected the Distribution to enable the Consumer
Products Business to adopt strategies and pursue objectives that were more
appropriate to its industry and operations and to place it in a better position
to raise capital and make acquisitions necessary for continued growth.
GOVERNING AGREEMENTS
In connection with the Distribution, Former Parent and the Company entered
into various agreements, including a distribution agreement (the "Distribution
Agreement"), an interim services agreement (the "Interim Services Agreement"), a
letter of understanding on trademarks (the "Letter of Understanding on
Trademarks") and a tax sharing agreement (the "Tax Sharing Agreement"). The
Distribution Agreement governed the terms of the transfer of the assets and
personnel involved in the Consumer Products Business to the Company and the
assumption by the Company of certain known and contingent or unknown liabilities
relating directly to the Consumer Products Business as conducted on the date of
the Distribution (the "Distribution Date"). The liabilities assumed by the
Company included, among others, (i) liabilities associated with certain then
pending litigation (for which the Company was entitled to insurance coverage
under Former Parent's policies under certain circumstances), (ii) liabilities
under employee benefit plans and otherwise with respect to former employees of
the Consumer Products Business and employees of the Consumer Products Business
who became employees of the Company at the time of the Distribution and (iii)
liabilities arising out of specified pension and postretirement plans for former
employees of Armour and Company, a subsidiary of Former Parent until 1993. The
Interim Services Agreement provided that Former Parent would provide to the
Company certain office and administrative support, audit, tax accounting,
financial reporting consulting, environmental consulting, human resources and
insurance accounting and claims processing services, among other services, and
that the Company would provide to Former Parent certain employee benefits,
accounting, consulting, administration and travel-related services, among other
services, for a period of up to three years after the Distribution Date unless
earlier terminated. Most of these services have ceased. Under the Letter of
Understanding on Trademarks, Former Parent agreed to cease using the "Dial" name
in connection with any consumer products business conducted by it after the
Distribution. The Tax Sharing Agreement provided for the allocation between
Former Parent and the Company of certain federal, state, local and foreign tax
liabilities, as well as certain tax liabilities associated with the
Distribution. Under the terms of the agreement, the Company also agreed that for
the two-year period following the Distribution Date, it would not (i) cease to
engage in the active conduct of the trade or business conducted by it
immediately after the Distribution, (ii) engage in certain repurchases of stock
or (iii) liquidate or merge with any other corporation, unless it obtains a
satisfactory opinion of counsel or a tax ruling from the IRS. Although the
Company does not expect these limitations to significantly inhibit its financing
or acquisition activities or its ability to respond to unanticipated
developments, there can be no assurance that such limitations will not so affect
these activities or the Company's ability to respond to such developments. See
"-- Material Federal Income Tax Consequences of the Distribution."
MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION
In connection with the Distribution, Former Parent received a tax ruling
(the "Tax Ruling") from the IRS which stated, among other things, that the
Distribution qualified as a tax-free distribution under Section 355 of the
Internal Revenue Code of 1986, as amended (the "Code"), and that, accordingly,
so long as the Distribution qualified under Section 355 of the Code, neither
Former Parent nor the Company would recognize any income, gain or loss with
respect to the Distribution, and Former Parent's stockholders would not
recognize any income, gain or loss on their receipt of Common Stock. Should the
Distribution ultimately
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be determined not to qualify under Section 355 of the Code, Former Parent's
stockholders would be required to recognize ordinary dividend income for their
receipt of Common Stock in an amount equal to the fair market value of such
Common Stock on the Distribution Date.
The Tax Ruling was based on certain factual representations and assumptions
concerning Former Parent and the Company. Neither Former Parent nor the Company
is aware of any present facts or circumstances which would cause such
representations and assumptions to be untrue. However, certain post-Distribution
events, including events that would not be within the control of Former Parent
or the Company, could affect the validity of such representations or assumptions
and cause the Distribution not to qualify as a tax-free distribution under
Section 355 of the Code. The Company does not believe that any such events not
within the control of the Company have occurred to date and the likelihood of
any future events occurring which would adversely affect the tax-free treatment
of the Distribution is minimal.
Should the Distribution ultimately be determined not to qualify as a
tax-free distribution under Section 355 of the Code, Former Parent would be
required to recognize a gain on the Distribution in an amount equal to the
excess of the fair market value of the Common Stock distributed on the
Distribution Date over Former Parent's tax basis for such stock; this gain could
approach $1 billion. Under the Tax Sharing Agreement, the Company will be
required to indemnify Former Parent for this tax, plus applicable interest and
penalties, if the Distribution fails to qualify as tax-free as a result of any
transaction, act or omission involving the Company or its subsidiaries which is
inconsistent with the tax-free status of the Distribution, including a failure
of any representation made to the IRS in the request for the Tax Ruling
concerning the Company, or an omission by the Company that causes a failure to
fulfill any condition of the Tax Ruling or any assumption on which it is based.
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
Under the Certificate of Incorporation, the total number of shares of all
classes of stock that the Company has authority to issue is 310,000,000
consisting of 10,000,000 shares of Preferred Stock, par value $0.01 per share
(the "Preferred Stock"), and 300,000,000 shares of Common Stock. As of June 28,
1997, 96,102,553 shares of Common Stock were issued and 96,036,674 shares were
issued and outstanding (5,574,321 shares of which were held by an employee
equity trust). As part of the 10,000,000 shares of Preferred Stock authorized,
the Company has authorized and reserved for issuance 1,500,000 shares of Junior
Preferred Stock (as defined herein) in connection with the preferred share
purchase rights (the "Rights") issued by the Company in connection with the
Distribution.
The holders of Common Stock are entitled to one vote per share on all
matters voted on by the stockholders, including the election of directors and,
except as otherwise required by law or provided in any resolution adopted by the
Company's Board of Directors (the "Board") with respect to any series of
Preferred Stock, the holders of such Common Stock exclusively possess all voting
power. The Certificate of Incorporation does not provide for cumulative voting
in the election of directors. Subject to any preferential rights of any
outstanding series of Preferred Stock, the holders of Common Stock are entitled
to such dividends as may be declared from time to time by the Board from funds
available therefor, and upon liquidation are entitled to receive pro rata all
assets of the Company available for distribution to such holders. The Common
Stock does not have any preemptive rights. See "-- Certain Anti-Takeover Effects
of Certain Provisions of Certificate of Incorporation, Bylaws, Rights and
Delaware Law."
The Board is authorized to provide for the issuance of shares of Preferred
Stock, in one or more series, to establish the number of shares in each series
and to fix the designation, powers, preferences and rights of each such series
and the qualifications, limitations and restrictions thereof. See "-- Certain
Anti-Takeover Effects of Certain Provisions of Certificate of Incorporation,
Bylaws, Rights and Delaware Law."
The Common Stock is traded on the NYSE under the symbol "DL."
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CERTAIN ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF CERTIFICATE OF
INCORPORATION, BYLAWS, RIGHTS AND DELAWARE LAW
The Certificate of Incorporation, the Bylaws and the Rights contain certain
provisions that could make more difficult the acquisition of the Company by
means of a tender offer, a proxy contest or otherwise. The description set forth
below is intended as a summary only and is qualified in its entirety by
reference to the Certificate of Incorporation, the Bylaws and the Rights
Agreement (the "Rights Agreement") between the Company and Wells Fargo Bank of
Arizona, N.A., as rights agent, which are filed as exhibits to the Registration
Statement of which this Prospectus is a part.
CLASSIFIED BOARD OF DIRECTORS
The Certificate of Incorporation and the Bylaws provide that the Board be
divided into three classes of directors, with the classes to be as nearly equal
in number as possible. The Certificate of Incorporation and the Bylaws provide
that approximately one-third of the Company's directors will stand for election
at each annual meeting of stockholders to serve a three-year term.
The classification of directors has the effect of making it more difficult
for stockholders to change the composition of the Board. At least two annual
meetings of stockholders, instead of one, are generally required to effect a
change in a majority of the Board. Such a delay may help ensure that the
Company's directors, if confronted by a holder attempting to force a proxy
contest, a tender or exchange offer, or an extraordinary corporate transaction,
would have sufficient time to review the proposal as well as any available
alternatives to the proposal and to act in what they believe to be the best
interests of the stockholders. The classification provisions apply to every
election of directors, however, regardless of whether a change in the
composition of the Board would be beneficial to the Company and its stockholders
and whether or not a majority of the Company's stockholders believe that such a
change would be desirable.
The classification provisions also have the effect of discouraging a third
party from initiating a proxy context, making a tender offer or otherwise
attempting to obtain control of the Company, even though such an attempt might
be beneficial to the Company and its stockholders. The classification of the
Board could thus increase the likelihood that incumbent directors will retain
their positions. In addition, because the classification provisions may
discourage accumulations of large blocks of the Company's stock by purchasers
whose objective is to take control of the Company and remove a majority of the
Board, the classification of the Board could tend to reduce the likelihood of
fluctuations in the market price of Common Stock that might result from
accumulations of large blocks. Accordingly, stockholders could be deprived of
certain opportunities to sell their shares of Common Stock at a higher market
price than might otherwise be the case.
NUMBER OF DIRECTORS, FILLING VACANCIES AND REMOVAL
The Certificate of Incorporation provides that, subject to any rights of
holders of Preferred Stock to elect additional directors under specified
circumstances, the number of directors will be fixed in the manner provided in
the Bylaws. The Bylaws provide that, subject to any rights of holders of
Preferred Stock to elect directors under specified circumstances, the number of
directors will be fixed from time to time exclusively pursuant to a resolution
adopted by directors constituting a majority of the total number of directors
that the Company would have if there were no vacancies on the Board (the "Whole
Board"), but must consist of not more than eleven nor less than three directors.
In addition, the Certificate of Incorporation and Bylaws provide that, subject
to any rights of holders of Preferred Stock, and unless the Board otherwise
determines, any vacancies or newly created directorships will be filled only by
the affirmative vote of a majority of the remaining directors, though less than
a quorum. Accordingly, absent an amendment to the Certificate of Incorporation
and Bylaws, the Board could prevent any stockholder from enlarging the Board and
filling the new directorships with such stockholder's own nominees.
Under the Delaware General Corporation Law (the "DGCL"), unless otherwise
provided in the Certificate of Incorporation, directors serving on a classified
board may only be removed by the stockholders for cause. In addition, the
Certificate of Incorporation and the Bylaws provide that directors may be
removed only for cause and only upon the affirmative vote of holders of at least
80% of the voting power of all the then
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outstanding shares of stock entitled to vote generally in the election of
directors ("Voting Stock"), voting together as a single class.
NO STOCKHOLDER ACTION BY WRITTEN CONSENT AND SPECIAL MEETINGS
The Certificate of Incorporation and the Bylaws provide that, subject to
the rights of any holders of Preferred Stock, stockholder action can be taken
only at an annual or special meeting of stockholders and prohibit stockholder
action by written consent in lieu of a meeting. The Bylaws provide that, subject
to the rights of holders of any series of Preferred Stock, special meetings of
stockholders can be called only by the Chairman of the Board or by the Board
pursuant to a resolution adopted by a majority of the Whole Board. Stockholders
are not permitted to call a special meeting or to require that the Board call a
special meeting of stockholders. Moreover, the business permitted to be
conducted at any special meeting of stockholders is limited to the business
brought before the meeting pursuant to the notice of meeting given by the
Company.
The provisions of the Certificate of Incorporation and the Bylaws
prohibiting stockholder action by written consent may have the effect of
delaying consideration of a stockholder proposal until the next annual meeting
unless a special meeting is called by the Chairman or at the request of a
majority of the Whole Board. These provisions also prevent the holders of a
majority of the voting power of the Voting Stock from unilaterally using the
written consent procedure to take stockholder action and from taking action by
consent. Moreover, a stockholder could not force stockholder consideration of a
proposal over the opposition of the Chairman and the Board by calling a special
meeting of stockholders prior to the time the Chairman or a majority of the
Whole Board believes such consideration to be appropriate.
ADVANCE NOTICE PROVISIONS FOR STOCKHOLDER NOMINATIONS AND STOCKHOLDER
PROPOSALS
The Bylaws establish an advance notice procedure for stockholders to make
nominations of candidates for election as directors, or bring other business
before an annual meeting of stockholders of the Company (the "Stockholder Notice
Procedure").
The Stockholder Notice Procedure provides that only individuals who are
nominated by, or at the direction of, the Board, or by a stockholder who has
given timely written notice to the Secretary of the Company prior to the meeting
at which directors are to be elected, will be eligible for election as directors
of the Company. The Stockholder Notice Procedure provides that at an annual
meeting only such business may be conducted as has been brought before the
meeting by, or at the direction of, the Chairman or the Board or by a
stockholder who has given timely written notice to the Secretary of the Company
of such stockholder's intention to bring such business before such meeting.
Under the Stockholder Notice Procedure, for notice of stockholder nominations to
be made at an annual meeting to be timely, such notice must be received by the
Company not less than 70 days nor more than 90 days prior to the first
anniversary of the previous year's annual meeting (or, if the date of the annual
meeting is advanced by more than 20 days, or delayed by more than 70 days, from
such anniversary date, not earlier than the 90th day prior to such meeting and
not later than the later of (i) the 70th day prior to such meeting and (ii) the
tenth day after public announcement of the date of such meeting is first made).
Notwithstanding the foregoing, in the event that the number of directors to be
elected is increased and there is no public announcement naming all of the
nominees for director or specifying the size of the increased Board made by the
Company at least 80 days prior to the first anniversary of the preceding year's
annual meeting, a stockholder's notice will be timely, but only with respect to
nominees for any new positions created by such increase, if it is received by
the Company not later than the tenth day after such public announcement is first
made by the Company. Under the Stockholder Notice Procedure, for notice of a
stockholder nomination to be made at a special meeting at which directors are to
be elected to be timely, such notice must be received by the Company not earlier
than the 90th day before such meeting and not later than the later of (i) the
70th day prior to such meeting and (ii) the tenth day after public announcement
of the date of such meeting is first made.
With respect to the conduct of business other than the nomination of
directors, the Stockholder Notice Procedure provides that only such business
that is presented by the Board or by a stockholder who has given timely written
notice to the Company prior to the meeting at which such business is to be
conducted by the
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stockholders, will be presented for consideration at such meeting. Under the
Stockholder Notice Procedure, for notice of business to be conducted at an
annual meeting to be timely, such notice must be received by the Company not
less than 70 days nor more than 90 days prior to the first anniversary of the
previous year's annual meeting (or, if the date of the annual meeting is
advanced by more than 20 days, or delayed by more than 70 days, from such
anniversary date, not earlier than the 90th day prior to such meeting and not
later than the later of (i) the 70th day prior to such meeting and (ii) the
tenth day after public announcement of the date of such meeting is first made).
Under the Stockholder Notice Procedure, a stockholder's notice to the
Company proposing to nominate an individual for election as a director must
contain certain information, including, without limitation, the identity and
address of the nominating stockholder, the class and number of shares of stock
of the Company which are owned by such stockholder, and all information
regarding the proposed nominee that would be required to be included in a proxy
statement soliciting proxies for the proposed nominee. Under the Stockholder
Notice Procedure, a stockholder's notice relating to the conduct of business
other than the nomination of directors must contain certain information about
such business and about the proposing stockholders, including, without
limitation, a brief description of the business the stockholder proposes to
bring before the meeting, the reasons for conducting such business at such
meeting, the name and address of such stockholder, the class and number of
shares of stock of the Company beneficially owned by such stockholder, and any
material interest of such stockholder in the business so proposed. If the
Chairman of the Board or other officer presiding at a meeting determines that a
person was not nominated, or other business was not brought before the meeting
in accordance with the Stockholder Notice Procedure, such person will not be
eligible for election as a director, or such business will not be conducted at
such meeting, as the case may be.
By requiring advance notice of nominations by stockholders, the Stockholder
Notice Procedure affords the Board an opportunity to consider the qualifications
of the proposed nominees and, to the extent deemed necessary or desirable by the
Board, to inform stockholders about such qualifications. By requiring advance
notice of other proposed business, the Stockholder Notice Procedure also
provides a more orderly procedure for conducting annual meetings of stockholders
and, to the extent deemed necessary or desirable by the Board, provides the
Board with an opportunity to inform stockholders, prior to such meetings, of any
business proposed to be conducted at such meetings, together with any
recommendations as to the Board's position regarding action to be taken with
respect to such business, so that stockholders can better decide whether to
attend such a meeting or to grant a proxy regarding the disposition of any such
business.
Although the Bylaws do not give the Board any power to approve or
disapprove stockholder nominations for the election of directors or proposals
for action, they may have the effect of precluding a contest for the election of
directors or the consideration of stockholder proposals if the proper procedures
are not followed, and of discouraging or deterring a third party from conducting
a solicitation of proxies to elect its own slate of directors or to approve its
own proposal, without regard to whether consideration of such nominees or
proposals might be harmful or beneficial to the Company and its stockholders.
PREFERRED STOCK
The Certificate of Incorporation authorizes the Board to establish one or
more series of Preferred Stock and to determine, with respect to any series of
Preferred Stock, the terms and rights of such series, including (i) the
designation of the series, (ii) the number of shares of the series, which number
the Company's Board of Directors may thereafter (except where otherwise provided
in the Certificate of Designation for the Preferred Stock) increase or decrease
(but not below the number of shares thereof then outstanding), (iii) whether
dividends, if any, will be cumulative or noncumulative and the dividend rate and
the preferences, if any, of the series, (iv) the dates at which dividends, if
any, will be payable, (v) the redemption rights and price or prices, if any, for
shares of the series, (vi) the terms and amounts of any sinking fund provided
for the purchase or redemption of shares of the series, (vii) the amounts
payable on shares of the series in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company, (viii)
whether the shares of the series will be convertible into or exchangeable for
shares of any other class or series, or any other security, of the Company or
any other corporation, and, if so, the specification of such other class or
series or such other security, the conversion or exchange price or prices or
rate or rates, any
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adjustments thereof, the date or dates as of which such shares shall be
convertible or exchangeable and all other terms and conditions upon which such
conversion or exchange may be made, (ix) restrictions on the issuance of shares
of the same series or of any other class or series and (x) the voting rights, if
any, of the holders of such series.
The Company believes that the ability of the Board to issue one or more
series of Preferred Stock provides the Company with flexibility in structuring
possible future financings and acquisitions, and in meeting other corporate
needs which might arise. The authorized shares of Preferred Stock, as well as
shares of the Common Stock, will be available for issuance without further
action by the Company's stockholders, unless such action is required by
applicable law or the rules of any stock exchange or automated quotation system
on which the Company's securities may be listed or traded. The NYSE currently
requires stockholder approval as a prerequisite to listing shares in several
instances, including where the present or potential issuance of shares could
result in an increase of at least 20% in either the number of shares of Common
Stock or in the voting securities outstanding. If the approval of the Company's
stockholders is not required for the issuance of shares of Preferred Stock or
Common Stock, the Board may determine not to seek stockholder approval.
Although the Board has no intention at the present time of doing so, it
could issue a series of Preferred Stock that could, depending on the terms of
such series, impede the completion of a merger, tender offer or other takeover
attempt. The Board will make any determination to issue such shares based on its
judgment as to the best interests of the Company and its stockholders. The
Board, in so acting, could issue Preferred Stock having terms that could
discourage an acquisition attempt through which an acquiror may be able to
change the composition of the Board, including a tender offer or other
transaction that some, or a majority of, the Company's stockholders might
believe to be in their best interests or in which stockholders might receive a
premium for their stock over the then current market price of such stock.
BUSINESS COMBINATIONS
The Certificate of Incorporation provides that certain "business
combinations" (as defined in the Certificate of Incorporation) must be approved
by the holders of at least 66 2/3% of the voting power of the shares not owned
by an "interested stockholder" (as defined in the Certificate of Incorporation,
the beneficial owner of 10% of the Company's outstanding voting stock), unless
the business combinations are approved by the "Continuing Directors" (as defined
in the Certificate of Incorporation) or meet certain requirements regarding
price and procedure.
AMENDMENT OF CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND BYLAWS
Under the DGCL, the stockholders have the right to adopt, amend or repeal
the bylaws and, with the approval of the board of directors, the certificate of
incorporation of a corporation. In addition, if the certificate of incorporation
so provides, the bylaws may be adopted, amended or repealed by the board of
directors. The Certificate of Incorporation provides that, in addition to
approval by the Board, the affirmative vote of the holders of at least 80% of
the voting power of the outstanding shares of Voting Stock, voting together as a
single class, is required to amend provisions of the Certificate of
Incorporation relating to the prohibition of stockholder action without a
meeting; the number, election and term of the directors; the filling of
vacancies on the Board; the removal of directors; and the amendment of the
Bylaws. Approval by the Board, together with the vote of the holders of a
majority of the voting power of the outstanding shares of Voting Stock, is
required to amend all other provisions of the Certificate of Incorporation. The
Certificate of Incorporation further provides that the Bylaws may be amended by
the Board or by the affirmative vote of the holders of at least 80% of the
voting power of the outstanding shares of Voting Stock, voting together as a
single class. The Certificate of Incorporation also provides that, in addition
to approval by the Board, the affirmative vote of the holders of at least
66 2/3% of the voting power of the outstanding shares of Voting Stock, including
the affirmative vote of the holders of at least 66 2/3% of the voting power of
the outstanding shares of Voting Stock not owned directly or indirectly by an
interested stockholder or any affiliate thereof, is required to amend provisions
of the Certificate of Incorporation regarding certain business combinations.
These supermajority voting requirements will have the effect of making more
difficult any amendment by stockholders of the
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Bylaws or of any of the provisions of the Certificate of Incorporation described
above, even if a majority of the Company's stockholders believe that such
amendment would be in their best interests.
RIGHTS
In connection with the Distribution, the Company's Board of Directors
declared a dividend of one Right, paid on the Distribution Date in respect of
each share of Common Stock issued to the holder of record thereof as of the
close of business on the Distribution Date. Each share of Common Stock sold in
an offering will also be accompanied by a Right. Each Right entitles the
registered holder thereof to purchase from the Company one one-hundredth of a
share of Series A Junior Participating Preferred Stock, par value $0.01 per
share (the "Junior Preferred Stock"), of the Company at a price of $75.00 per
one one-hundredth of a share (the "Purchase Price"), subject to adjustment. The
terms of the Rights are set forth in the Rights Agreement.
Until the earlier to occur of (i) ten days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired beneficial ownership of 20% or more of the then
outstanding shares of the Common Stock or (ii) ten business days (or such later
date as may be determined by action of the Board prior to such time as any
person or group becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 20% or more of the outstanding shares of Common Stock (the earlier of
such dates being called the "Rights Distribution Date"), the Rights will be
evidenced by the certificates representing shares of Common Stock.
The Rights Agreement provides that until the Rights Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the shares of Common Stock. As soon as practicable following
the Rights Distribution Date, separate certificates evidencing the Rights
("Rights Certificates") will be mailed to holders of record of the shares of
Common Stock as of the close of business on the Rights Distribution Date and
such separate Rights Certificates alone will evidence the Rights.
The Rights will not be exercisable until the Rights Distribution Date. The
Rights will expire on August 15, 2006 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
The Purchase Price payable, and the number of shares of Junior Preferred
Stock or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
shares of Junior Preferred Stock, (ii) upon the grant to holders of the shares
of Junior Preferred Stock of certain rights or warrants to subscribe for or
purchase shares of Junior Preferred Stock at a price, or securities convertible
into shares of Junior Preferred Stock with a conversion price, less than the
then-current market price of the shares of Junior Preferred Stock or (iii) upon
the distribution to holders of the shares of Junior Preferred Stock of evidences
of indebtedness or assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in shares of Junior Preferred
Stock) or of subscription rights or warrants (other than those referred to
above). The number of outstanding Rights and the number of one one-hundredths of
a share of Junior Preferred Stock issuable upon exercise of each Right are also
subject to adjustment in the event of a stock split of Common Stock or a stock
dividend on Common Stock payable in Common Stock or subdivisions, consolidations
or combinations of Common Stock occurring, in any such case, prior to the Rights
Distribution Date.
Shares of Junior Preferred Stock purchasable upon exercise of the Rights
will not be redeemable. Each share of Junior Preferred Stock will be entitled to
a minimum preferential quarterly dividend payment of $1.00 per share but will be
entitled to an aggregate dividend equal to 100 times the dividend declared per
share of Common Stock. In the event of liquidation, the holders of the Junior
Preferred Stock will be entitled to a minimum preferential liquidation payment
of $100 per share but will be entitled to an aggregate payment equal to 100
times the payment made per share of Common Stock. Each share of Junior Preferred
Stock will have 100 votes, and shall be entitled to vote with Common Stock.
Finally, in the event of any merger, consolidation or other transaction in which
Common Stock is exchanged, each share of Junior Preferred Stock
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will be entitled to receive an amount equal to 100 times the amount received per
share of Common Stock. These rights are protected by customary antidilution
provisions.
Because of the nature of the dividend, liquidation and voting rights of
Junior Preferred Stock, the value of the one one-hundredth interest in a share
of Junior Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provisions will be made so that each holder
of a Right, other than Rights beneficially owned by the Acquiring Person (which
will thereafter be void), will thereafter have the right to receive upon
exercise thereof at the then current exercise price that number of shares of
Common Stock having a market value of two times the exercise price of the Right.
In the event that, at any time on or after the date that any person has become
an Acquiring Person, the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, proper provisions will be made so that each holder of a Right
will thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction will have a market
value of two times the exercise price of the Right.
At any time after any person or group of affiliated or associated persons
becomes an Acquiring Person and prior to the acquisition by such person or group
of 50% or more of the outstanding shares of Common Stock, the Board may exchange
the Rights (other than Rights owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of one share of Common
Stock, or one one-hundredth of a share of Junior Preferred Stock, per Right
(subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price.
At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 20% or more of the outstanding
shares of Common Stock, the Board may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price"). The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Company's Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
The terms of the Rights may be amended by the Board without the consent of
the holders of the Rights, including an amendment to lower (i) the threshold at
which a person or group of affiliated or associated persons becomes an Acquiring
Person and (ii) the percentage of Common Stock proposed to be acquired in a
tender or exchange offer that would cause the Rights Distribution Date to occur,
to not less than the greater of (a) the sum of .001% and the largest percentage
of the outstanding shares of Common Stock then known to the Company to be
beneficially owned by any person or group of affiliated or associated persons
and (b) 10%, except that from and after such time as any person or group of
affiliated or associated persons becomes an Acquiring Person no such amendment
may adversely affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. In the event that the Rights become
exercisable, the Company will register the shares of the Junior Preferred Stock
for which the Rights may be exercised, in accordance with applicable law.
The Rights have certain antitakeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
and thereby effect a change in the composition of the Board on terms not
approved by the Board, including by means of a tender offer at a premium to the
market price, other than an offer conditioned on a substantial number of Rights
being acquired. The Rights should not interfere with any merger or business
combination approved by the Board since the Rights may be redeemed by the
Company at the Redemption Price prior to the time that a person or group has
become an Acquiring Person. See "Risk Factors -- Provisions with Potential
Anti-Takeover Effect."
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<PAGE> 18
ANTI-TAKEOVER LEGISLATION
Section 203 of the DGCL provides that, subject to certain exceptions
specified therein, a corporation shall not engage in any business combination
with any "interested stockholder" for a three-year period following the time
that such stockholder becomes an interested stockholder unless (i) prior to such
time, the board of directors of the corporation approved either the business
combination or the transaction which resulted in the stockholder becoming an
interested stockholder, (ii) upon consummation of the transaction which resulted
in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (excluding certain shares) or
(iii) on or subsequent to such time, the business combination is approved by the
board of directors of the corporation and by the affirmative vote of at least
66 2/3% of the outstanding voting stock which is not owned by the interested
stockholder. Except as specified in Section 203 of the DGCL, an interested
stockholder is defined to include (i) any person that is the owner of 15% or
more of the outstanding voting stock of the corporation, or is an affiliate or
associate of the corporation and was the owner of 15% or more of the outstanding
voting stock of the corporation, at any time within three years immediately
prior to the relevant date and (ii) the affiliates and associates of any such
person.
Under certain circumstances, Section 203 of the DGCL makes it more
difficult for a person who would be an "interested stockholder" to effect
various business combinations with a corporation for a three-year period,
although the stockholders may elect to exclude a corporation from the
restrictions imposed thereunder. The Certificate of Incorporation does not
exclude the Company from the restrictions imposed under Section 203 of the DGCL.
It is anticipated that the provisions of Section 203 of the DGCL may encourage
companies interested in acquiring the Company to negotiate in advance with the
Board, since the stockholder approval requirement would be avoided if a majority
of the directors then in office approve either the business combination or the
transaction which results in the stockholder becoming an interested stockholder.
TRANSFER AGENT AND REGISTRAR
The transfer agent for the Common Stock is Harris Trust and Savings Bank.
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<PAGE> 19
CERTAIN UNITED STATES FEDERAL TAX
CONSIDERATIONS FOR NON-UNITED STATES HOLDERS
The following is a general discussion of certain United States federal
income and estate tax consequences of the ownership and disposition of Common
Stock applicable to Non-U.S. Holders. In general, a "Non-U.S. Holder" is any
holder of Common Stock other than (i) a citizen or resident of the United
States, (ii) a corporation or partnership created or organized in the United
States or under the laws of the United States or of any state, (iii) an estate,
the income of which is includable in gross income for United States federal
income tax purposes regardless of its source or (iv) a trust if (a) a court
within the United States is able to exercise primary supervision over the
administration of the trust and (b) one or more United States fiduciaries have
the authority to control all substantial decisions of the trust. This discussion
is based on current law and is for general information only. This discussion
does not address aspects of United States federal taxation other than income and
estate taxation and does not address all aspects of income and estate taxation,
nor does it consider any specific facts or circumstances that may apply to a
particular Non-U.S. Holder (including certain U.S. expatriates). ACCORDINGLY,
OFFEREES OF COMMON STOCK ARE URGED TO CONSULT THEIR TAX ADVISERS REGARDING THE
UNITED STATES FEDERAL, STATE, LOCAL AND NON-UNITED STATES INCOME AND OTHER TAX
CONSEQUENCES OF HOLDING AND DISPOSING OF SHARES OF COMMON STOCK.
An individual may, subject to certain exceptions, be deemed to be a
resident alien (as opposed to a non-resident alien) by virtue of being present
in the United States for at least 31 days in the calendar year and for an
aggregate of at least 183 days during a three year period ending in the current
calendar year (counting for such purposes all of the days present in the current
year, one-third of the days present in the immediately preceding year, and
one-sixth of the days present in the second preceding year). In addition to the
"substantial presence test" described in the immediately preceding sentence, an
alien may be treated as a resident alien if he or she (i) meets a lawful
permanent residence test (a so-called "green card" test) or (ii) elects to be
treated as a U.S. resident and meets the "substantial presence test" in the
immediately following year. Resident aliens are subject to U.S. federal tax as
if they were U.S. citizens.
DIVIDENDS
In general, dividends paid to a Non-U.S. Holder will be subject to United
States withholding tax at a 30% rate (or a lower rate prescribed by an
applicable tax treaty) unless the dividends are either (i) effectively connected
with a trade or business carried on by the Non-U.S. Holder within the United
States, or (ii) attributable to a permanent establishment in the United States
maintained by the Non-U.S. Holder if certain income tax treaties apply.
Dividends effectively connected with such a United States trade or business or
attributable to such a United States permanent establishment generally will not
be subject to United States withholding tax (if the Non-U.S. Holder files
certain forms, including IRS Form 4224, with the payor of the dividend) and
generally will be subject to United States federal income tax on a net income
basis, in the same manner as if the Non-U.S. Holder were a resident of the
United States. A Non-U.S. Holder that is a corporation may be subject to an
additional branch profits tax at a rate of 30% (or such lower rate as may be
specified by an applicable treaty) on the repatriation from the United States of
its "effectively connected earnings and profits," subject to certain
adjustments. To determine the applicability of a tax treaty providing for a
lower rate of withholding, dividends paid to an address in a foreign country are
presumed under current United States Treasury regulations to be paid to a
resident of that country absent knowledge to the contrary. Proposed United
States Treasury regulations, which are proposed to be effective for payments
made after December 31, 1997, however, generally would require Non-U.S. Holders
to file an IRS Form W-8 to obtain the benefit of any applicable tax treaty
providing for a lower rate of withholding tax on dividends. A Non-U.S. Holder
that is eligible for a reduced rate of U.S. withholding tax pursuant to a tax
treaty may obtain a refund of any excess amounts withheld by filing an
appropriate claim for refund with the IRS.
SALE OF COMMON STOCK
In general, a Non-U.S. Holder will not be subject to United States federal
income tax on any gain realized upon the disposition of such holder's shares of
Common Stock unless (i) the gain is effectively
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<PAGE> 20
connected with a trade or business carried on by the Non-U.S. Holder within the
United States or, alternatively, if certain tax treaties apply, is attributable
to a permanent establishment in the United States maintained by the Non-U.S.
Holder (and in either case, the branch profits tax discussed above may also
apply if the Non-U.S. Holder is a corporation); (ii) the Non-U.S. Holder is an
individual who holds shares of Common Stock as a capital asset and is present in
the United States for 183 days or more in the taxable year of disposition, and
either (a) such individual has a "tax home" (as defined for United States
federal income tax purposes) in the United States (unless the gain from the
disposition is attributable to an office or other fixed place of business
maintained by such Non-U.S. Holder in a foreign country and such gain has been
subject to a foreign income tax equal to at least 10% of the gain derived from
such disposition), or (b) the gain is attributable to an office or other fixed
place of business maintained by such individual in the United States; or (iii)
the Company is or has been a United States real property holding corporation (a
"USRPHC") for United States federal income tax purposes (which the Company does
not believe that it is or is likely to become) at any time within the shorter of
the five-year period preceding such disposition or such Non-U.S. Holder's
holding period. If the Company were or were to become a USRPHC at any time
during this period, gains realized upon a disposition of Common Stock by a
Non-U.S. Holder which did not directly or indirectly own more than 5% of the
Common Stock during this period generally would not be subject to United States
federal income tax, provided that the Common Stock had been regularly traded on
an established securities market.
ESTATE TAX
Common Stock owned or treated as owned by an individual who is not a
citizen or resident (as defined for United States federal estate tax purposes)
of the United States at the time of death will be includable in the individual's
gross estate for United States federal estate tax purposes (unless an applicable
estate tax treaty provides otherwise), and therefore may be subject to United
States federal estate tax.
BACKUP WITHHOLDING, INFORMATION REPORTING AND OTHER REPORTING REQUIREMENTS
The Company must report annually to the IRS and to each Non-U.S. Holder the
amount of dividends paid to, and the tax withheld with respect to, each Non-U.S.
Holder. These reporting requirements apply regardless of whether withholding was
reduced or eliminated by an applicable tax treaty. Copies of this information
also may be made available under the provisions of a specific treaty or
agreement with the tax authorities in the country in which the Non-U.S. Holder
resides or is established.
United States backup withholding tax (which generally is imposed at the
rate of 31% on certain payments to persons that fail to furnish the information
required under the United States information reporting requirements) and
information reporting requirements (other than those discussed above under
"-- Dividends") generally will not apply to dividends paid on Common Stock to a
Non-U.S. Holder at an address outside the United States. Backup withholding and
information reporting generally will apply, however, to dividends paid on shares
of Common Stock to a Non-U.S. Holder at an address in the United States, if such
holder fails to establish an exemption or to provide certain other information
to the payor.
The payment of proceeds from the disposition of Common Stock to or through
a United States office of a broker will be subject to information reporting and
backup withholding unless the owner, under penalties of perjury, certifies,
among other things, such owner's status as a Non-U.S. Holder or otherwise
establishes an exemption. The payment of proceeds from the disposition of Common
Stock to or through a non-U.S. office of a non-U.S. broker generally will not be
subject to backup withholding and information reporting, except as noted below.
In the case of proceeds from a disposition of Common Stock paid to or through a
non-U.S. office of a broker that is (i) a United States person, (ii) a
"controlled foreign corporation" for United States federal income tax purposes
or (iii) a foreign person 50% or more of whose gross income from certain periods
is effectively connected with a United States trade or business, information
reporting (but not backup withholding) will apply unless the broker has
documentary evidence in its files that the owner is a Non-U.S. Holder (and the
broker has no actual knowledge to the contrary). Proposed United States Treasury
regulations, which are proposed to be effective for payments made after December
31, 1997, state that backup
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<PAGE> 21
withholding will not apply to such payments unless the broker has actual
knowledge that the payee is a United States person.
Backup withholding is not an individual tax. Any amounts withheld under the
backup withholding rules from a payment to a Non-U.S. Holder will be refunded or
credited against the Non-U.S. Holder's United States federal income tax
liability, if any, provided that the required information is furnished to the
IRS.
PLAN OF DISTRIBUTION
The Company may sell Common Stock to or through one or more underwriters or
dealers and also may sell Common Stock directly to institutional investors or
other purchasers, or through agents.
The distribution of the Common Stock may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Common Stock, underwriters or agents may
receive compensation from the Company or from purchasers of Common Stock for
whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters may sell Common Stock to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers and agents that participate
in the distribution of Common Stock may be deemed to be underwriters, and any
discounts or commissions received by them from the Company and any profit on the
resale of Common Stock by them may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Company will be
described, in the related Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Common Stock may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
If so indicated in the related Prospectus Supplement, the Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Common Stock from the Company
pursuant to contracts providing for payment and delivery on a future date.
Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Company. The obligations of any purchaser
under any such contract will be subject to the condition that the purchase of
the Common Stock shall not at the time of delivery be prohibited under the laws
of the jurisdiction to which such purchaser is subject. The underwriters and
such other agents will not have any responsibility in respect of the validity or
performance of such contracts.
Certain of the underwriters or agents and their associates may engage in
transactions with and perform services for the Company or its affiliates in the
ordinary course of their respective businesses.
The Common Stock is listed on the NYSE under the symbol "DL." Any Common
Stock sold pursuant to the Registration Statement will be listed on the NYSE,
subject to official notice of issuance.
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LEGAL MATTERS
The validity of the Common Stock being offered hereby and certain other
legal matters relating to offerings pursuant to the Registration Statement will
be passed upon for the Company by Fried, Frank, Harris, Shriver & Jacobson (a
partnership including professional corporations), New York, New York.
EXPERTS
The financial statements incorporated in this Prospectus by reference from
the Company's Annual Report on Form 10-K for the year ended December 28, 1996
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses to be borne by the
Company, in connection with the issuance and distribution of the securities
being registered hereby, other than underwriting discounts and commissions.
<TABLE>
<S> <C>
SEC registration fee (actual)............................................. $ 34,849
NYSE filing fee........................................................... 22,757
-------
NASD fees (actual)........................................................ 12,000
Transfer agent and registrar fee and expenses............................. 8,000
Accounting fees and expenses.............................................. 100,000
-------
Legal fees and expenses................................................... 350,000
Blue Sky expenses and counsel fees........................................ 10,000
Printing and engraving expenses........................................... 230,000
-------
Miscellaneous............................................................. 7,394
-------
Total........................................................... $ 775,000
=======
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
CERTAIN PROVISIONS OF CERTIFICATE OF INCORPORATION AND BYLAWS
The Certificate of Incorporation provides that each person who is or was or
had agreed to become a director or officer of the Company, or each such person
who is or was serving or who had agreed to serve at the request of the Company
as a director or officer of another corporation, partnership, joint venture,
trust or other enterprise (each "Another Enterprise") (including the heirs,
executors, administrators or estate of such person), will be indemnified by the
Company, in accordance with the Bylaws, to the fullest extent permitted from
time to time by the DGCL, as the same exists or may hereafter be amended (but,
if permitted by applicable law, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to provide prior to
such amendment) or any other applicable laws as presently or hereafter in
effect. The Company may, by action of the Board, provide indemnification to
employees and agents of the Company, and to persons serving as employees or
agents of Another Enterprise, at the request of the Company, with the same scope
and effect as the foregoing indemnification of directors and officers. The
Company shall be required to indemnify any person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board or is a proceeding
to enforce such person's claim to indemnification pursuant to the rights granted
by the Certificate of Incorporation or otherwise by the Company. In addition,
pursuant to the Certificate of Incorporation, the Company has entered into
agreements with certain persons providing for indemnification greater or
different than that provided in the Certificate of Incorporation. See
"-- Indemnification Agreements."
The Bylaws provide that each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit, or
proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he or she or a person of whom he or
she is the legal representative is or was a director or officer of the Company
or is or was serving at the request of the Company as a director or officer of
another corporation or of Another 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 or officer or in any other capacity while
serving as a director or officer, will be indemnified and held harmless by the
Company to the fullest extent authorized by the DGCL as the same exists or may
in the future be amended (but, if permitted by applicable law, in the case of
any such amendment, only to the extent that such amendment permits the Company
to provide broader indemnification rights than said law permitted the Company to
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provide prior to such amendment), against all expense, liability and loss
(including attorneys' fees, judgments, fines, Employee Retirement Income
Security Act of 1974, as amended, excise taxes or penalties and amounts paid or
to be paid in settlement) reasonably incurred or suffered by such person in
connection therewith and such indemnification will continue as to a person who
has ceased to be a director or officer and will inure to the benefit of his or
her heirs, executors and administrators; provided, however, except as described
in the second following paragraph with respect to Proceedings to enforce rights
to indemnification, the Company will indemnify any such person seeking
indemnification in connection with a Proceeding (or part thereof) initiated by
such person only if such Proceeding (or part thereof) was authorized by the
Board.
Pursuant to the Bylaws, to obtain indemnification, a claimant is to submit
to the Company a written request for indemnification. Upon such written request
by a claimant, a determination, if required by applicable law, with respect to
the claimant's entitlement to indemnification will be made, (i) if requested by
the claimant, by independent legal counsel, or (ii) if the claimant does not so
request, by the Board (a) by a majority vote of the disinterested directors even
though less than a quorum, (b) if there are no disinterested directors or the
disinterested directors so direct, by independent legal counsel in a written
opinion to the Board, or (c) if the disinterested directors so direct, by the
stockholders of the Company. In the event the determination of entitlement to
indemnification is to be made by independent legal counsel at the request of the
claimant, the independent legal counsel will be selected by the Board unless
there shall have occurred within two years prior to the date of the commencement
of the action, suit or proceeding for which indemnification is claimed a "Change
in Control" (as defined in the Company's 1996 Stock Incentive Plan), in which
case the independent counsel shall be selected by the claimant unless the
claimant requests that such selection be made by the Board.
Pursuant to the Bylaws, if a claim for indemnification is not paid in full
by the Company within 30 days after a written claim for indemnification has been
received by the Company, the claimant may at any time thereafter bring suit
against the Company to recover the unpaid amount of the claim and, if successful
in whole or in part, the claimant will be entitled to be paid also the expense
of prosecuting such claim. The Bylaws provide that it will 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, if any is required, has been tendered to the Company)
that the claimant has not met the standard of conduct which make it permissible
under the DGCL for the Company to indemnify the claimant for the amount claimed,
but the burden of proving such defense will be on the Company. Neither the
failure of the Company (including, without limitation, the disinterested
directors, independent legal counsel or 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 or she has met the
applicable standards in the DGCL, nor an actual determination by the Company
(including the disinterested directors, independent legal counsel or
stockholders) that the claimant has not met such applicable standard of conduct,
will be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct in the DGCL. However, the Company
will be bound by a determination pursuant to the procedures set forth in the
Bylaws that the claimant is entitled to indemnification in any judicial
proceeding commenced pursuant to the Bylaws.
The Bylaws provide that the right to indemnification and the payment of
expenses incurred in defending a Proceeding in advance of its final disposition
conferred in the Bylaws will not be exclusive of any other right which any
person may have or may in the future acquire under any statute, provision of the
Certificate of Incorporation, the Bylaws, agreement, vote of stockholders or
disinterested directors or otherwise. The Bylaws permit the Company to maintain
insurance, at its expense, to protect itself and any director, officer, employee
or agent of the Company or Another Enterprise against any expense, liability or
loss, whether or not the Company would have the power to indemnify such person
against such expense, liability or loss under the DGCL. The Company has obtained
directors' and officers' liability insurance providing coverage to its directors
and officers. In addition, the Bylaws authorize the Company, to the extent
authorized from time to time by the Board, to grant rights to indemnification
and rights to be paid by the Company for the expenses incurred in defending any
Proceeding in advance of its final disposition, to any employee or agent of the
Company to the fullest extent of the provisions of the Bylaws with respect to
the indemnification and advancement of expenses of directors and officers of the
Company.
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The Bylaws provide that the right to indemnification conferred therein is a
contract right and includes the right to be paid by the Company for the expenses
incurred in defending any Proceeding in advance of its final disposition, except
that if the DGCL requires, the payment of such expenses incurred by a director
or officer in his or her capacity as a director or officer (and not in any other
capacity in which service was or is rendered by such person while a director or
officer, including, without limitation, service to an employee benefit plan) in
advance of the final disposition of a Proceeding, will be made only upon
delivery to the Company of an undertaking by or on behalf of such director or
officer, to repay all amounts so advanced if it is ultimately determined that
such director or officer is not entitled to be indemnified under the Bylaws or
otherwise.
FIDUCIARY DUTIES
The Certificate of Incorporation provides that a director of the Company
will not be personally liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL,
which concerns unlawful payments of dividends, stock purchases or redemptions or
(iv) for any transaction from which the director derived an improper personal
benefit.
While the Certificate of Incorporation provides directors with protection
from awards for monetary damages for breaches of their duty of care, it does not
eliminate such duty. Accordingly, the Certificate of Incorporation will have no
effect on the availability of equitable remedies such as an injunction or
rescission based on a director's breach of his or her duty of care.
INDEMNIFICATION AGREEMENTS
The Company is party to indemnification agreements with each of its
directors and certain of its officers (each, an "Indemnification Agreement,"
and, collectively, the "Indemnification Agreements"). The Indemnification
Agreements, among other things, require the Company to indemnify the officers
and directors to the fullest extent permitted by law, and to advance to the
directors all related expenses, subject to reimbursement if it is subsequently
determined that indemnification is not permitted. The Company must also
indemnify and advance all expenses incurred by directors seeking to enforce
their rights under the Indemnification Agreements, and cover directors and
officers under the Company's directors' liability insurance. Although the
Indemnification Agreements will offer substantially the same scope of coverage
afforded by provisions in the Certificate of Incorporation and the Bylaws, they
provide greater assurance to directors and officers that indemnification will be
available, because, as contracts, they cannot be modified unilaterally in the
future by the Board or by the stockholders to eliminate the rights provided, an
action that is possible with respect to the relevant provisions of the Bylaws,
at least as to prospective elimination of such rights.
There has not been in the past and there is not presently pending any
litigation or proceeding involving a director, officer, employee or agent of the
Company in which indemnification would be required or permitted by the
Indemnification Agreements. In addition, the Board is not aware of any
threatened litigation or proceeding which may result in a claim for
indemnification under any Indemnification Agreement.
The DGCL provides that a contract between a corporation and a director
thereof is not void or voidable solely because the interested director is
present at the meeting authorizing the contract if the material facts relating
to the contract are known to the board of directors and the board of directors
in good faith authorizes the contract by the affirmative vote of a majority of
the disinterested directors, or the material facts relating to the contract are
known to the stockholders and the stockholders in good faith authorize the
contract, or the contract is fair to the corporation at the time it is
authorized or approved.
STATE LAW PROVISIONS
The Company is incorporated under the laws of the State of Delaware.
Section 145(a) of the DGCL provides that a Delaware corporation may indemnify
any person who was, is or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation), by reason of the fact that he is
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or was a director, officer, employee or agent of the corporation or is or was
serving at the request of such corporation as a director, officer, employee or
agent of Another Enterprise. The indemnity may include expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Section 145(b) of the DGCL provides that a Delaware corporation may
indemnify any person who was, is or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation by reason of the fact that such person acted in any of the
capacities set forth above, against expenses (including attorney's fees)
actually and reasonably incurred by such person in connection with the defense
or settlement of such action or suit, provided such person acted in good faith
and in a manner such person reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification is permitted
in respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
court in which such action or suit was brought shall determine that despite the
adjudication of liability, such person is fairly and reasonably entitled to be
indemnified for such expenses which the court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director or
officer of a corporation has been successful in the defense of any action, suit
or proceeding referred to in subsections 145(a) and 145(b) or in the defense of
any claim, issue or matter therein, such person shall be indemnified against
expenses actually and reasonably incurred in connection therewith; that
indemnification provided for by Section 145 of the DGCL shall not be deemed
exclusive of any other rights to which the indemnified party may be entitled;
and that the corporation may purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him or incurred by him in any such capacity or arising out of his status as such
whether or not the corporation would have the power to indemnify him against
such liabilities under such Section 145 of the DGCL.
PURCHASE AGREEMENTS
The form of Purchase Agreement filed as Exhibit 1.1 hereto provides for the
indemnification of the Company, its controlling persons, its directors and
certain of its officers by the underwriters of any offering pursuant to the
Registration Statement against certain liabilities, including liabilities under
the Securities Act.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
No sales of unregistered securities of the Company have occurred since the
Distribution.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<C> <S>
1.1 Form of Purchase Agreement.*
3.1 Restated Certificate of Incorporation of the Company (incorporated by reference to
Exhibit 3(a) to the Company's Form 10, dated July 30, 1996 (File No. 001-11733)).
3.2 Restated Bylaws of the Company (incorporated by reference to Exhibit 3(b) to the
Company's Form 10, dated July 30, 1996 (File No. 001-11733)).
4.1 Rights Agreement (incorporated by reference to Exhibit 4 to the Company's Form 10,
dated July 30, 1996 (File No. 001-11733)).
4.2 Specimen Form of Company's Common Stock Certificate.**
5.1 Opinion of Fried, Frank, Harris, Shriver & Jacobson as to the validity of the
securities being registered.**
</TABLE>
II-4
<PAGE> 27
<TABLE>
<C> <S>
10.1 Credit Agreement, dated July 24, 1996, between the Company and various banks, Citicorp
USA, Inc., as administrative agent, and Bank of America National Trust and Savings
Association, as documentation agent (incorporated by reference to Exhibit 10(j) of the
Company's Form 10, dated July 30, 1996 (File No. 001-11733)).
10.2 Amended and Restated Trade Receivables Purchase and Sale Agreement, dated as of
February 12, 1997, among the Company, Ciesco, L.P. and Citicorp North America, Inc.,
as agent.
10.3 Trademark License Agreement, dated July 1, 1995, between The Dial Corp and ConAgra,
Inc.
10.4 License Agreement, dated December 18, 1983, as amended by the First Amendment to
License Agreement, dated July 1, 1995, between Armour International Company and
ConAgra, Inc.
10.5 The Dial Corporation 1996 Stock Incentive Plan (incorporated by reference to the
Company's registration statement on Form S-8, filed on October 1, 1996 (File No.
333-13187)).
10.6 The Dial Corporation Supplemental Capital Accumulation Plan (incorporated by reference
to the Company's Quarterly Report on Form 10-Q, filed November 12, 1996 (File No.
001-11793)).
10.7 The Dial Corporation Supplemental Pension Plan (incorporated by reference to the
Company's Quarterly Report on Form 10-Q, filed November 12, 1996 (File No.
001-11793)).
23.1 Consent of Fried, Frank, Harris, Shriver & Jacobson.**
23.2 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney.**
</TABLE>
- ---------------
* To be subsequently incorporated by reference in a filing made under the
Exchange Act.
** Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(i) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(a) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(b) to reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities Act of
1933 if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement.
(c) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
provided, however, that the undertakings set forth in paragraphs (i)(a) and
(i)(b) above do not apply if the registration statement is on Form S-3,
Form S-8 or Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this registration statement.
(ii) That, for the purpose of determining any liability under the
Securities Act of 1933, each such posteffective amendment shall be deemed
to be a new registration statement relating to the securities
II-5
<PAGE> 28
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(iii) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the questions whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-6
<PAGE> 29
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, The Dial
Corporation has duly caused this Amendment No. 1 to the Registration Statement
(File No. 333-33659) to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Scottsdale and the State of Arizona on the 16th
day of October, 1997.
THE DIAL CORPORATION
By: /s/ MALCOLM JOZOFF
------------------------------------
Malcolm Jozoff
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement (File No. 333-33659) has been signed below
by the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ --------------------------------- -----------------
<C> <S> <C>
/s/ MALCOLM JOZOFF Chairman of the Board, President October 16, 1997
- ------------------------------------------ and Chief Executive Officer
Malcolm Jozoff (Principal Executive Officer)
* Senior Vice President -- Finance October 16, 1997
- ------------------------------------------ (Principal Accounting Officer
Lowell L. Robertson and Principal Financial
Officer)
* Director October 16, 1997
- ------------------------------------------
Joy A. Amundson
* Director October 16, 1997
- ------------------------------------------
Herbert M. Baum
* Director October 16, 1997
- ------------------------------------------
Joe T. Ford
* Director October 16, 1997
- ------------------------------------------
Thomas L. Gossage
* Director October 16, 1997
- ------------------------------------------
Donald E. Guinn
* Director October 16, 1997
- ------------------------------------------
Michael T. Riordan
* Director October 16, 1997
- ------------------------------------------
Dennis C. Stanfill
</TABLE>
II-7
<PAGE> 30
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ --------------------------------- -----------------
<C> <S> <C>
* Director October 16, 1997
- ------------------------------------------
Barbara S. Thomas
* Director October 16, 1997
- ------------------------------------------
A. Thomas Young
/s/ MALCOLM JOZOFF
- ------------------------------------------
Malcolm Jozoff
Attorney-in-Fact
</TABLE>
II-8
<PAGE> 31
EXHIBIT INDEX
<TABLE>
<C> <S>
1.1 Form of Purchase Agreement.*
3.1 Restated Certificate of Incorporation of the Company (incorporated by reference to
Exhibit 3(a) to the Company's Form 10, dated July 30, 1996 (File No. 001-11733)).
3.2 Restated Bylaws of the Company (incorporated by reference to Exhibit 3(b) to the
Company's Form 10, dated July 30, 1996 (File No. 001-11733)).
4.1 Rights Agreement (incorporated by reference to Exhibit 4 to the Company's Form 10,
dated July 30, 1996 (File No. 001-11733)).
4.2 Specimen Form of Company's Common Stock Certificate.**
5.1 Opinion of Fried, Frank, Harris, Shriver & Jacobson as to the validity of the
securities being registered.**
10.1 Credit Agreement, dated July 24, 1996, between the Company and various banks, Citicorp
USA, Inc., as administrative agent, and Bank of America National Trust and Savings
Association, as documentation agent (incorporated by reference to Exhibit 10(j) of the
Company's Form 10, dated July 30, 1996 (File No. 001-11733)).
10.2 Amended and Restated Trade Receivables Purchase and Sale Agreement, dated as of
February 12, 1997, among the Company, Ciesco, L.P. and Citicorp North America, Inc.,
as agent.
10.3 Trademark License Agreement, dated July 1, 1995, between The Dial Corp and ConAgra,
Inc.
10.4 License Agreement, dated December 18, 1983, as amended by the First Amendment to
License Agreement, dated July 1, 1995, between Armour International Company and
ConAgra, Inc.
10.5 The Dial Corporation 1996 Stock Incentive Plan (incorporated by reference to the
Company's registration statement on Form S-8, filed on October 1, 1996 (File No.
333-13187)).
10.6 The Dial Corporation Supplemental Capital Accumulation Plan (incorporated by reference
to the Company's Quarterly Report on Form 10-Q, filed November 12, 1996 (File No.
001-11793)).
10.7 The Dial Corporation Supplemental Pension Plan (incorporated by reference to the
Company's Quarterly Report on Form 10-Q, filed November 12, 1996 (File No.
001-11793)).
23.1 Consent of Fried, Frank, Harris, Shriver & Jacobson.**
23.2 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney.**
</TABLE>
- ---------------
* To be subsequently incorporated by reference in a filing made under the
Exchange Act.
** Previously filed.
<PAGE> 1
EXHIBIT 10.2
AMENDED AND RESTATED
TRADE RECEIVABLES PURCHASE AND SALE AGREEMENT
Dated as of February 12, 1997
DIAL RECEIVABLES CORPORATION, a Delaware corporation (the
"Seller"), THE DIAL CORPORATION, a Delaware corporation ("Dial"), as Collection
Agent (as defined below), CIESCO L.P., a New York limited partnership (the
"Investor"), and CITICORP NORTH AMERICA, INC., a Delaware corporation
("Citicorp"), as agent for the Investor and the other Owners (the "Agent"),
agree as follows:
PRELIMINARY STATEMENTS: (1) Certain terms which are
capitalized and used throughout this Agreement (in addition to those defined
above) are defined in Article I of this Agreement.
(2) Dial, the Investor and Citicorp, as Agent, were each party
to that certain Trade Receivables Purchase and Sale Agreement dated as of August
15, 1996 (such Agreement being the "Original Seller Agreement"), whereby Dial
had from time to time sold to the Investor, and the Investor had from time to
time purchased from Dial, "Eligible Assets" (as defined in the Original Seller
Agreement) -- namely undivided percentage ownership interests in all the
outstanding "Pool Receivables" as defined therein and all "Related Security" and
"Collections" as defined therein and other proceeds thereof and with respect
thereto.
(3) On the Effective Date, the Seller and Dial each will have
entered into, and fully performed, the Purchase and Sale Assignment and
Assumption Agreement dated as of February 12, 1997 (the "Assignment and
Assumption"), whereby the Seller takes the place of Dial in and under the
Original Seller Agreement.
(4) The Seller will from time to time purchase from Dial
additional Pool Receivables in which the Seller intends to sell interests
represented by Eligible Assets hereunder.
(5) The parties hereto have agreed to amend and restate the
Original Seller Agreement, as modified by the Assignment and Assumption, on the
terms and conditions hereinafter set forth, to provide for, among other things,
the sale of such additional Pool Receivables.
(6) Dial has been requested and is willing to act as
Collection Agent.
(7) Citicorp has been requested and is willing to act as
Agent.
ACCORDINGLY, the parties hereby agree that, effective as of
the Effective Date and subject to the satisfaction of the conditions precedent
set forth in Section 3.01, the Original Seller Agreement is hereby amended and
restated in its entirety to read as follows:
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<PAGE> 2
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"Accounting Period" means those periods set forth for the
Seller and Dial in Schedule V hereto.
"Adjusted LIBO Rate" means, for any Fixed Period, an interest
rate per annum equal to the rate per annum obtained by dividing (i) the
rate per annum at which deposits in U.S. dollars are offered by the
principal office of Citibank in London, England to prime banks in the
London interbank market at 11:00 A.M. (London time) two Business Days
before the first day of such Fixed Period for a period equal to such
Fixed Period by (ii) a percentage equal to 100% minus Citibank's
Eurodollar Reserve Percentage for such Fixed Period.
"Administration Fee" has the meaning assigned to that term in
Section 2.11.
"Adverse Claim" means a lien, security interest, charge, or
encumbrance, or other right or claim of any Person.
"Affiliate" when used with respect to a Person means any other
Person controlling, controlled by or under common control with such
Person.
"Affiliated Obligor" means any Obligor which is an Affiliate
of another Obligor.
"Agent's Account" means the special account (account number
3901-1882) of the Agent maintained at the office of Citibank at 399
Park Avenue, New York, New York.
"Alternate Base Rate" means, for each day in any period, a
fluctuating interest rate per annum as shall be in effect from time to
time, which rate per annum shall at all times for such day during such
period be equal to the highest of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time as
Citibank's base rate for such day; or
(b) the sum (adjusted to the nearest 1/4 of one
percent or, if there is no nearest 1/4 of one percent, to the
next higher 1/4 of one percent) of (i) 1/2 of one percent per
annum, plus (ii) the rate obtained by dividing (A) the latest
three-week moving average of secondary market morning offering
rates in the United States for three-month certificates of
deposit of major United States money market banks, such
three-week moving average (adjusted to the basis of a year of
365 or 366 days, as the case may be) being determined weekly
on each Monday (or, if such day is not a Business Day on the
next succeeding Business Day) for the three-week period ending
on the previous Friday by Citibank on
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<PAGE> 3
the basis of such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Bank of New
York or, if such publication shall be suspended or terminated,
on the basis of quotations for such rates received by Citibank
from three New York certificate of deposit dealers of
recognized standing, by (B) a percentage equal to 100% minus
the average of the daily percentages specified during such
three-week period by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement)
for Citibank in respect of liabilities consisting of or
including (among other liabilities) three-month U.S. dollar
nonpersonal time deposits in the United States, plus (iii) the
average during such three-week period of the annual assessment
rates estimated by Citibank for determining the then current
annual assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring U.S.
dollar deposits of Citibank in the United States; or
(c) the Federal Funds Rate in effect from time to
time.
"Assignee" means Citibank, Citicorp or the Investor or any of
their respective Affiliates, or, with the consent of the Seller, any
other Person, as the assignee of an Eligible Asset pursuant to Section
9.01.
"Assignee Rate" means, for any Fixed Period for any Eligible
Asset, an interest rate per annum equal to 0.25 of 1% per annum above
the Adjusted LIBO Rate for such Fixed Period; provided, however, that:
(i) In the case of any such Fixed Period of one to
and including 13 days, the "Assignee Rate" for such Fixed
Period for such Eligible Asset shall be an interest rate per
annum equal to the Alternate Base Rate in effect on the first
day of such Fixed Period; and
(ii) If either (A) the introduction of or any change
in or in the interpretation of any law or regulation shall
make it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for any Owner to obtain
funds in the London interbank market during such Fixed Period
or (B) Citibank is unable for any reason to establish its
Adjusted LIBO Rate for such Fixed Period or (C) the Adjusted
LIBO Rate will not adequately reflect the cost to the Owner
thereof of making a Purchase of or maintaining such Eligible
Asset during such Fixed Period, then the "Assignee Rate" for
such Fixed Period for such Eligible Asset shall be the
interest rate per annum equal to the Alternate Base Rate in
effect from time to time;
provided, further, that the Agent and the Seller may agree in writing
from time to time upon a different "Assignee Rate"; and provided,
further, that the Assignee Rate for any Fixed Period for any Eligible
Asset shall in no event be lower than the Federal Funds Rate.
"Assignment" means an assignment, in substantially the form of
Exhibit A hereto, by which an Eligible Asset may be assigned pursuant
to Section 9.01.
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<PAGE> 4
"Assignment and Assumption" has the meaning assigned to that
term in Preliminary Statement (3).
"Average Maturity" means, on any day, that period (expressed
in days) equal to the average maturity of the Pool Receivables as shall
be calculated by the Collection Agent as set forth in the most recent
Investor Report in accordance with the provisions thereof; provided,
however, that, if the Agent shall disagree with any such calculation,
the Agent may recalculate the Average Maturity for such day.
"Breakage Fee" has the meaning specified in Section 2.14.
"Breakage Reserve" means, (i) for any Eligible Asset for which
the Investor Rate for any Fixed Period shall be either an MTN Fixed
Rate, or an initial MTN Floating Rate, which is in either case less
than 12% per annum and at any time during such Fixed Period, an amount
equal to the Breakage Fee for such Eligible Asset at such time,
computed in accordance with the formula contained in Section 2.14(a)
but giving effect to the Breakage Reserve Adjustments described below,
(ii) for any Eligible Asset for which the Investor Rate for any Fixed
Period shall be either an MTN Fixed Rate, or an initial MTN Floating
Rate, which is in either case equal to or higher than 12% per annum and
at any time during such Fixed Period, an amount to be determined by a
computation to which the Agent and the Seller shall have agreed in
writing pursuant to Section 2.04(c), and (iii) for any Eligible Asset
at any other time, zero. The "Breakage Reserve Adjustments" shall, in
the determination at any time of the Breakage Reserve for any Eligible
Asset for any Fixed Period, be:
"C" in the formula contained in Section 2.14(a) shall
equal the entire amount of the Capital of such Eligible Asset
at such time, and
"R" in such formula shall equal the fixed interest
rate per annum borne by Medium Term Notes, if any, issued by
the Owner of such Eligible Asset on the date of such
determination and having a term equal to the period from such
date to the last day of such Fixed Period, or, if there shall
be no such Medium Term Notes, the fixed interest rate per
annum which would be borne by Medium Term Notes if issued by
such Owner on the date of such determination for such a term,
such rate to be the average of quotations for such rate
received by the Agent from two securities dealers of
recognized standing selected by the Agent, adjusted to the
nearest 1/8 of 1% per annum or, if there is no nearest 1/8 of
1% per annum, to the next higher 1/8 of 1% per annum.
"Business Day" means any day on which banks are not authorized
or required to close in New York City or Los Angeles, California and,
if the applicable Business Day relates to any computation made with
respect to the Assignee Rate, on which dealings are carried on in the
London interbank market.
"Capital" of any Eligible Asset means the original amount paid
to the Seller for such Eligible Asset at the time of its acquisition by
the Investor pursuant to Sections 2.01 and 2.02 (including, without
limitation, under Sections 2.01 and 2.02 of the Original Seller
Agreement), or such amount divided or combined by any dividing or
combining of such Eligible Asset pursuant to Section 2.10 (including,
without limitation, under Section 2.10 of the Original Seller
Agreement), in each case reduced
-4-
<PAGE> 5
from time to time by Collections received and distributed on account of
such Capital pursuant to Section 2.07 (including, without limitation,
under Section 2.07 of the Original Seller Agreement); provided,
however, that such Capital of such Eligible Asset shall not be reduced
by any distribution of any portion of Collections if at any time such
distribution is rescinded or must otherwise be returned for any reason.
"Capital Adequacy Fee" means, for any Indemnified Party, the
amounts, if any, specified by such Indemnified Party to the Agent, and
by the Agent to the Seller, from time to time sufficient to compensate
such Indemnified Party if either (i) the introduction of or any change
in or in the interpretation of any law or regulation or (ii) compliance
by such Indemnified Party with any guideline or request from any
central bank or other governmental authority charged with the
administration or interpretation of such guideline or request (whether
or not having the force of law) affects or would affect the amount of
capital required or expected to be maintained by such Indemnified Party
or any corporation controlling such Indemnified Party and such
Indemnified Party determines that the amount of such capital is
increased by or based upon the existence of the Facility under this
Agreement, or, in the case of any Indemnified Party which is a
Participant, under any agreement entered into by such Participant with
respect hereto or with respect to the Participant Agreement, or the
existence of the Participant Agreement and facilities of similar types.
Such amounts are to be sufficient to compensate such Indemnified Party
in the light of such circumstances to the extent that such Indemnified
Party reasonably determines such increase in capital to be allocable to
the existence of the Facility under this Agreement or such other
agreement or the existence of the Participant Agreement. A certificate
as to such amounts submitted to the Seller by the Agent shall, in the
absence of manifest error, be conclusive and binding for all purposes.
"Certificate" means a certificate of assignment, by the Seller
to the Agent, in the form of Exhibit B hereto, evidencing each Eligible
Asset purchased by the Investor (including, without limitation, under
the Original Seller Agreement).
"Citibank" means Citibank, N.A., a national banking
association.
"Collateral" has the meaning assigned to that term in Section
11.01.
"Collection Agent" means at any time the Person (including the
Agent) then authorized pursuant to Article VI to service, administer
and collect Pool Receivables.
"Collection Agent Fee" has the meaning assigned to that term
in Section 2.11.
"Collection Agent Fee Reserve" for any Eligible Asset at any
time means the sum of (i) the Liquidation Collection Agent Fee for such
Eligible Asset at such time plus (ii) the unpaid Collection Agent Fee
relating to such Eligible Asset accrued to such time.
"Collection Delay Period" means 10 days or such other number
of days as the Agent may select upon three Business Days' notice to the
Seller.
"Collections" means, with respect to any Pool Receivable, all
cash collections and other cash proceeds of such Pool Receivable,
including, without limitation, all cash
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<PAGE> 6
proceeds of Related Security with respect to such Pool Receivable, and
any Collection of such Pool Receivable deemed to have been received
pursuant to Section 2.08 or Section 10.02 (including, without
limitation, under Sections 2.08 and 10.02 of the Original Seller
Agreement).
"Commercial Paper Note" means a promissory note having a term
not exceeding 270 days.
"Concentration Limit" for any Obligor means at any time 4%, or
such other percentage ("Special Concentration Limit") for any Obligor
designated by Agent in a writing delivered to the Seller; provided,
however, that in the case of an Obligor with any Affiliated Obligor,
the Concentration Limit, the Receivables related thereto and the
Outstanding Balance thereof shall be calculated as if such Obligor and
such Affiliated Obligor are one Obligor; provided, however, that the
Agent may cancel any Special Concentration Limit upon three Business
Days' notice to the Seller.
"Consent and Agreement" means a consent and agreement, in
substantially the form of Exhibit H hereto, with respect to the
Contribution and Sale Agreement.
"Contract" means an agreement between Dial and an Obligor, in
substantially the form of one of the forms of written contract set
forth in Schedule IV hereto or otherwise approved by the Agent, or in
the case of an open account agreement, as evidenced by one of the forms
of invoices set forth in Schedule IV hereto or otherwise approved by
the Agent, pursuant to or under which such Obligor shall be obligated
to pay for merchandise, insurance or services from time to time.
"Contribution and Sale Agreement" means the Receivables
Contribution and Sale Agreement dated as of the date hereof between the
Seller and Dial, as the same may, from time to time, be amended,
modified or supplemented with the prior written consent of the Agent.
"CP Rate" for any Fixed Period for any Eligible Asset means
the interest rate per annum equivalent to the rate (or if more than one
rate, the weighted average of the rates) at which Commercial Paper
Notes of the Owner thereof having a term equal to such Fixed Period and
to be issued to fund the Purchase or maintenance of such Eligible Asset
by such Owner may be sold by any placement agent or dealer selected by
such Owner, as agreed between each such agent or dealer and such Owner
and notified by such Owner to the Agent and the Collection Agent;
provided, however, if the rate (or rates) as agreed between any such
agent or dealer and such Owner with regard to any Fixed Period for any
Eligible Asset is a discount rate (or rates), the "CP Rate" for such
Fixed Period shall be the rate (or if more than one rate, the weighted
average of the rates) resulting from converting such discount rate (or
rates) to an interest-bearing equivalent rate per annum.
"Credit and Collection Policy" means those credit and
collection policies and practices in effect on the date hereof relating
to Contracts and Receivables described in Schedule III hereto, as
modified in compliance with Section 5.03(c).
"Debt" means, for any Person, (i) indebtedness for borrowed
money or for the deferred purchase price of property or services, (ii)
obligations as lessee under leases
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<PAGE> 7
which shall have been or should be, in accordance with generally
accepted accounting principles, recorded as capital leases, (iii)
obligations under guaranties in respect of indebtedness or obligations
of others of the kinds referred to in clause (i) or (ii) above, (iv)
liabilities in respect of unfunded vested benefits under plans covered
by Title IV of ERISA, and (v) withdrawal liability incurred under ERISA
by such Person or any of its Affiliates to any Multiemployer Plan.
"Default Ratio" means the ratio (expressed as a percentage)
computed as of the last day of each Accounting Period of the Seller by
dividing (i) the aggregate Outstanding Balance of all Pool Receivables
that were Defaulted Receivables (other than Defaulted Receivables that
were Disputed Items) on such date by (ii) the aggregate Outstanding
Balance of all Pool Receivables on such date.
"Defaulted Receivable" means a Receivable that is not a
Disputed Item: (i) as to which any payment, or part thereof, remains
unpaid for 61 days or more from the original due date for such payment;
(ii) as to which the Obligor thereof has taken any action, or suffered
any event to occur, of the type described in Section 7.01(g); or (iii)
which, consistent with the applicable Credit and Collection Policy,
would be written off the Seller's books as uncollectible.
"Delinquency Ratio" means the ratio (expressed as a
percentage) computed as of the last day of each Accounting Period of
the Seller by dividing (i) the aggregate Outstanding Balance of all
Pool Receivables that were Delinquent Receivables on such date by (ii)
the aggregate Outstanding Balance of all Pool Receivables on such date.
"Delinquent Receivable" means a Receivable that is not a
Defaulted Receivable or a Disputed Item and:
(i) as to which any payment, or part thereof, remains
unpaid for 31 days or more from the original due date for such
payment; or
(ii) which, consistent with the applicable Credit and
Collection Policy, would be classified as delinquent by the
Seller.
"Designated Obligor" means, at any time, all Obligors;
provided, however, that any Obligor shall cease to be a Designated
Obligor upon three Business Days' notice by the Agent to the Seller.
"Dial" has the meaning assigned to that term in the recital of
parties hereto.
"Disputed Item" means that portion of any Receivable the
payment of which is subject to a dispute, claim, offset or defense of
an Obligor.
"Disputed Item Ratio" means the ratio (expressed as a
percentage) computed as of the last day of each Accounting Period of
the Seller by dividing (i) the aggregate Outstanding Balance of all
Pool Receivables that became Disputed Items during the period of three
consecutive Accounting Periods ending on such date, by (ii) the
aggregate Outstanding Balance of all Pool Receivables which arose
during the period of three consecutive Accounting Periods ending on the
last day of the immediately preceding Accounting Period.
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<PAGE> 8
"Distribution" means the distribution of approximately 94.5
million shares of common stock of Dial, constituting 100% of the
outstanding common stock of Dial, to the holders of the common stock of
Viad Corp pursuant to the Distribution Agreement together with the
consummation of the other transactions to occur in connection with such
distribution, as set forth in the Distribution Agreement.
"Distribution Agreement" means that certain Distribution
Agreement dated as of July 25, 1996, by and among Viad Corp, Dial and
Exhibitgroup/Giltspur, Inc., in the form of Exhibit A to the Form 10.
"Effective Date" has the meaning assigned to that term in
Section 3.01.
"Eligible Asset" means, at any time, an undivided percentage
ownership interest at such time in (i) all then outstanding Pool
Receivables arising prior to the time of the most recent computation or
recomputation of such undivided percentage interest pursuant to Section
2.05, (ii) all Related Security with respect to such Pool Receivables
and (iii) all Collections with respect to, and other proceeds of, such
Pool Receivables. Such undivided percentage interest for such Eligible
Asset shall be computed as
C + YR + LR + CAFR
NRPB
where:
C = the Capital of such Eligible Asset at the
time of such computation.
YR = the Yield Reserve of such Eligible Asset at
the time of such computation.
LR = the Loss Reserve of such Eligible Asset at
the time of such computation.
CAFR = the Collection Agent Fee Reserve of such
Eligible Asset at the time of such
computation.
NRPB = the Net Receivables Pool Balance at the time
of such computation.
Each Eligible Asset shall be determined from time to time pursuant to
the provisions of Section 2.05. Each "Eligible Asset" under and as
defined in the Original Seller Agreement shall be an Eligible Asset
under this Agreement having the interests in the Pool Receivables and
the Related Security and Collections and other proceeds with respect
thereto as described in clauses (i), (ii) and (iii) above and being
computed from time to time as set forth above in this definition of
"Eligible Asset".
"Eligible Receivable" means, at any time and with respect to
any Eligible Asset, a Receivable, or any portion of any Receivable:
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<PAGE> 9
(i) the Obligor of which is a United States resident
and is not an Affiliate of any of the parties hereto and is
not a government or a governmental subdivision or agency;
(ii) the Obligor of which at the time of the initial
creation of an interest therein hereunder (including, without
limitation, under the Original Seller Agreement) is a
Designated Obligor;
(iii) the Obligor of which at the time of the initial
creation of an interest therein hereunder (including, without
limitation, under the Original Seller Agreement) is not the
Obligor of any Defaulted Receivables (other than any Defaulted
Receivable all or any portion of which is a Disputed Item) in
the aggregate amount of 10% or more of the aggregate
Outstanding Balance of all Pool Receivables of such Obligor;
(iv) which at the time of the initial creation of an
interest therein hereunder (including, without limitation,
under the Original Seller Agreement) is not a Defaulted
Receivable;
(v) which, according to the Contract related thereto,
is required to be paid in full within 61 days of the original
billing date therefor;
(vi) which is an account receivable representing all
or part of the sales price of merchandise, insurance and
services within the meaning of Section 3(c)(5) of the
Investment Company Act of 1940, as amended;
(vii) a purchase of which with the proceeds of notes
would constitute a "current transaction" within the meaning of
Section 3(a)(3) of the Securities Act of 1933, as amended;
(viii) which is an "account" within the meaning of
Section 9-106 of the UCC of the State of Arizona;
(ix) which is denominated and payable only in United
States dollars in the United States;
(x) which arises under a Contract which has been duly
authorized and which, together with such Receivable, is in
full force and effect and constitutes the legal, valid and
binding obligation of the Obligor of such Receivable
enforceable against such Obligor in accordance with its terms,
and either is not a Disputed Item (except as a result of the
discharge in bankruptcy of such Obligor) or, in the case of
any Tool Receivable which is a Disputed Item (but has not been
a Disputed Item for more than 61 days), the Outstanding
Balance of which, when combined with the aggregate Outstanding
Balance of all other such Disputed Items on the day of
determination, does not exceed $25,000,000;
(xi) which, together with the Contract related
thereto, does not contravene in any material respect any laws,
rules or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to truth in
lending, fair credit billing, fair credit reporting, equal
credit
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<PAGE> 10
opportunity, fair debt collection practices and privacy) and
with respect to which no party to the Contract related thereto
is in violation of any such law, rule or regulation in any
material respect;
(xii) which (A) satisfies all applicable requirements
of the Credit and Collection Policy and (B) complies with such
other criteria and requirements (other than those relating to
the collectibility of such Receivable) as the Agent may from
time to time specify to the Seller upon 30 days' notice; and
(xiii) as to which, at or prior to the time of the
initial creation of an interest therein through a Purchase,
the Agent has not notified the Seller that the Agent has
determined, in its sole discretion, that such Receivable (or
class of Receivables) is not acceptable for purchase by the
Investor hereunder.
"ERISA" means the U.S. Employee Retirement Income Security Act
of 1974, as amended from time to time.
"Eurodollar Reserve Percentage" of Citibank for any Fixed
Period means the reserve percentage applicable during such Fixed Period
under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or, if more than one such percentage shall
be so applicable, the daily average of such percentages for those days
in such Fixed Period during which any such percentage shall be so
applicable) for determining the maximum reserve requirement (including,
but not limited to, any emergency, supplemental or other marginal
reserve requirement) for Citibank in respect of liabilities or assets
consisting of or including Eurocurrency liabilities (as that term is
defined in Regulation D of the Board of Governors of the Federal
Reserve System as in effect from time to time) having a term equal to
such Fixed Period.
"Event of Investment Ineligibility" has the meaning assigned
to that term in Section 7.01.
"Event of Purchase Ineligibility" means any failure to satisfy
the condition(s) set forth in Section 3.02(b)(iii) or (iv).
"Expiry Date" means the date which is 364 days after August
15, 1996 or such later date as shall be determined pursuant to Section
2.13.
"Extension Period" has the meaning assigned to that term in
Section 2.13.
"Extension Request" has the meaning assigned to that term in
Section 2.13.
"Facility" means the willingness of the Investor to consider,
in its sole discretion pursuant to Article II, the purchase from the
Seller of undivided percentage interests in Pool Receivables by making
Purchases of Eligible Assets from time to time.
"Facility Termination Date" means the earlier of the Expiry
Date or the date of termination of the Facility pursuant to Section
2.03 or Section 7.01.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per
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<PAGE> 11
annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published
for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by
the Agent from three Federal funds brokers of recognized standing
selected by the Agent.
"Fee Determination Date" means (i) for any Eligible Asset for
purposes of the computation of the Breakage Fee for such Eligible Asset
under Section 2.14, each day on which an amount of Capital of such
Eligible Asset is reduced and (ii) for any Eligible Asset for purposes
of the computation of the Breakage Fee under the definition of
"Breakage Reserve" contained in this Section 1.01, each time such
calculation is made.
"Fee Letter" means the letter dated the date hereof between
the Seller and the Agent with respect to certain fees which the Seller
agrees to pay to the Agent pursuant to Section 2.11 of this Agreement.
"Fixed Period" means with respect to any Eligible Asset, a
period determined pursuant to Section 2.02 or 2.04; provided, however,
that:
(i) any Fixed Period in respect of which Yield is
computed by reference to the Assignee Rate shall be a period
of from one to and including 14 days, or a period of one, two,
three or six months as the Seller may select as provided for
above;
(ii) any such Fixed Period (other than of one day)
which would otherwise end on a day which is not a Business Day
shall be extended to the next succeeding Business Day, except
that, if such Fixed Period relates to the Adjusted LIBO Rate
and such extension would cause the last day of such Fixed
Period to occur in the next succeeding month, the last day of
such Fixed Period shall occur on the immediately preceding
Business Day;
(iii) in the case of Fixed Periods of one day for any
Eligible Asset, (a) if such Fixed Period is such Eligible
Asset's initial Fixed Period, such Fixed Period shall be the
day of the related Purchase; (b) any subsequently occurring
Fixed Period which is one day shall, if the immediately
preceding Fixed Period is more than one day, be the last day
of such immediately preceding Fixed Period, and, if the
immediately preceding Fixed Period is one day, be the day next
following such immediately preceding Fixed Period; and (c)
which occurs on a day immediately preceding a day which is not
a Business Day shall be extended to the next succeeding
Business Day; and
(iv) in the case of any Fixed Period for any Eligible
Asset which commences before the Termination Date for such
Eligible Asset and would otherwise end on a date occurring
after such Termination Date, such Fixed Period shall end on
such Termination Date and the duration of each Fixed Period
which commences on or after the Termination Date for such
Eligible Asset shall be of such duration as shall be selected
by the Agent.
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"Form 10" means that certain Registration Statement on Form 10
filed by Dial with the Securities and Exchange Commission on July 30,
1996.
"Government Receivable" means, at any time and with respect to
any Eligible Asset, a Receivable, which is not an Eligible Receivable,
that would qualify as an Eligible Receivable except that the Obligor of
which is a government or a governmental subdivision or agency.
"Indemnified Amounts" has the meaning assigned to that term in
Section 10.01.
"Indemnified Party" means each of the Investor, the other
Owners, the Agent and the Participants and the Affiliates of any of the
foregoing.
"Investor Investment Fee" has the meaning assigned to that
term in Section 2.11.
"Investor Rate" for any Fixed Period for any Eligible Asset
means one of the following rates, as determined for such Fixed Period
in accordance with the terms and conditions of Section 2.02 or 2.04:
(i) the CP Rate for such Fixed Period, or
(ii) the MTN Fixed Rate for such Fixed Period, or
(iii) the MTN Floating Rate in effect from time to
time for such Fixed Period;
provided, however, that if the Owner of such Eligible Asset shall not,
at any time and for any reason, fund its Purchase or maintenance of
such Eligible Asset for such Fixed Period by its issuing Commercial
Paper Notes or Medium Term Notes, the "Investor Rate" for such Fixed
Period shall then be the Assignee Rate for such Fixed Period or such
other rate as the Agent and the Seller shall agree to in writing; and
provided, further, however, that if such Owner so requests and the
Seller consents thereto, the "Investor Rate" for any Fixed Period of
one day shall be the Assignee Rate for such Fixed Period.
"Investor Report" means a report, in substantially the form of
Exhibit C hereto, furnished by the Collection Agent to the Agent for
each Owner pursuant to Section 2.08.
"Liquidation Collection Agent Fee" means for any Eligible
Asset at any date an amount equal to (i) the Capital of such Eligible
Asset as at such date multiplied by (ii) the product of (a) the
percentage per annum as at such date of the Collection Agent Fee and
(b) a fraction having as its numerator the number of days in the period
equal to the sum of the Average Maturity plus the Collection Delay
Period (each as in effect at such date) and 360 as its denominator.
"Liquidation Day" for any Eligible Asset means either (i) each
day during any Settlement Period for such Eligible Asset on which the
conditions set forth in Section
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<PAGE> 13
3.02 are not satisfied (and such failure of conditions is not waived in
writing by the Agent), provided that such conditions are also not
satisfied (and such failure of conditions is not waived in writing by
the Agent) on any succeeding day during such Settlement Period, or (ii)
each day which occurs on or after the Termination Date for such
Eligible Asset.
"Liquidation Fee" means, for each Eligible Asset for any Fixed
Period (computed without regard to clause (iv) of the definition of
"Fixed Period") during which any Liquidation Day or Termination Date
for such Eligible Asset occurs and for which the Investor Rate shall be
neither the MTN Fixed Rate nor the MTN Floating Rate, the amount, if
any, by which (i) the additional Yield (calculated without taking into
account any Liquidation Fee) which would have accrued on the reductions
of Capital of such Eligible Asset during such Fixed Period (as so
computed) if such reductions had remained as Capital, exceeds (ii) the
income, if any, received by the Owner of such Eligible Asset from such
Owner's investing the proceeds of such reductions of Capital.
"Liquidation Yield" means, for any Eligible Asset at any date,
an amount equal to the Rate Variance Factor as at such date multiplied
by the product of (i) the Capital of such Eligible Asset as at such
date and (ii) the product of (a) the Assignee Rate for such Eligible
Asset for a Fixed Period deemed to commence at such time for a period
of 30 days and (b) a fraction having as its numerator the number of
days in the period equal to the sum of the Average Maturity plus the
Collection Delay Period (each as in effect at such date) and 360 as its
denominator.
"Lock-Box Account" means a lock-box account or any other
account maintained for the purpose of receiving Collections.
"Lock-Box Bank" means any of the banks holding one or more
Lock-Box Accounts.
"Lock-Box Notice" means a notice, in substantially the form of
Exhibit D hereto, from the Seller or Dial, as applicable, to any
Lock-Box Bank.
"Loss Percentage" means, for any Eligible Asset at any date,
the greatest of (i) three times the highest Default Ratio for the Pool
Receivables as of the last day of any Accounting Period of the Seller
during the twelve Accounting Periods of the Seller (or, to the extent
that there are an insufficient number of prior Accounting Periods of
the Seller, Dial) immediately preceding such date, (ii) 1.5 times the
highest Disputed Item Ratio as of the last day of any Accounting Period
of the Seller during the twelve Accounting Periods of the Seller (or,
to the extent that there are an insufficient number of Accounting
Periods of the Seller, Dial) immediately preceding such date, and (iii)
12%.
"Loss Reserve" means, for any Eligible Asset at any date, an
amount equal to
LP x (C + YR)
where:
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LP = the Loss Percentage for such Eligible Asset
at the close of business of the Collection
Agent on such date.
C = the Capital of such Eligible Asset at the
close of business of the Collection Agent on
such date.
YR = the Yield Reserve for such Eligible Asset at
the close of business of the Collection
Agent on such date.
"Loss-to-Liquidation Ratio" means, for the Pool Receivables
with respect to any Accounting Period of the Seller for which an
Investor Report is sent to the Agent, the ratio (expressed as a
percentage and set forth on page three of the Investor Report) computed
by dividing (i) the aggregate Outstanding Balance of Pool Receivables
written off by the Seller during the three Accounting Periods of the
Seller (or, to the extent that there are an insufficient number of
Accounting Periods of the Seller, Dial) immediately preceding the last
day of such Accounting Period, by (ii) the aggregate Collections during
such preceding period of three Accounting Periods of the Seller (or, to
the extent that there are an insufficient number of Accounting Periods
of the Seller, Dial) for all Pool Receivables.
"Medium Term Note" means a promissory note having a term
exceeding 270 days but not exceeding three years.
"MTN Fixed Rate" for any Fixed Period for any Eligible Asset
means the fixed interest rate per annum offered by the Owner of such
Eligible Asset in respect of Medium Term Notes issued or to be issued
by such Owner for a term (or a remaining term) equal to such Fixed
Period and to be used by such Owner to fund the Purchase or maintenance
of such Eligible Asset, such fixed interest rate per annum to be
notified by or on behalf of such Owner to the Agent and the Collection
Agent.
"MTN Floating Rate" for any Fixed Period for any Eligible
Asset means the floating interest rate per annum (determined by
reference to an interest rate formula) in effect from time to time
offered by the Owner of such Eligible Asset in respect of Medium Term
Notes issued or to be issued by such Owner for a term (or a remaining
term) equal to such Fixed Period and to be used by such Owner to fund
the Purchase or maintenance of such Eligible Asset, such floating
interest rate per annum to be notified by or on behalf of such Owner to
the Agent and the Collection Agent.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA.
"Net Receivables Pool Balance" means at any time the
Outstanding Balance of the Eligible Receivables and Government
Receivables in the Receivables Pool at such time reduced by the sum of
(i) the aggregate Outstanding Balance of the Defaulted Receivables in
the Receivables Pool at such time, (ii) the aggregate Outstanding
Balance of Pool Receivables at such time which are Disputed Items and
have been Disputed Items for more than 61 days, (iii) the aggregate
amount by which the Outstanding Balance of all Government Receivables
exceeds 10% of the sum of (A) the aggregate Capital of Eligible Assets
outstanding at such time, and (B) the aggregate "Capital" of "Eligible
Assets" outstanding under the Participant Agreement at such
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<PAGE> 15
time, and (iv) the aggregate amount by which the Outstanding Balance of
all Pool Receivables of each Obligor exceeds the product of the
Concentration Limit for such Obligor at such time multiplied by the sum
of the aggregate Capital of all Eligible Assets outstanding at such
time plus the aggregate "Capital" of all "Eligible Assets" outstanding
at such time under the Participant Agreement.
"Notice of Purchase and/or Investor Rate" has the meaning
assigned to that term in Section 2.04.
"Obligations" has the meaning assigned to that term in Section
11.02.
"Obligor" means a Person obligated to make payments pursuant
to a Contract.
"Original Seller Agreement" has the meaning assigned to that
term in Preliminary Statement (2).
"Outstanding Balance" of any Receivable at any time means the
then outstanding principal balance thereof.
"Owner" means, for each Eligible Asset, upon its purchase the
Investor as the purchaser thereof and, if applicable, each Participant
which shall have purchased from the Investor or any Assignee thereof an
undivided interest in such Eligible Asset from time to time; provided,
however, that, upon any assignment thereof pursuant to Article IX, the
Assignee thereof shall be the Owner thereof.
"Parent Group" means Dial and all of its consolidated
subsidiaries other than the Seller.
"Participant" means a financial institution either as a
Participant as defined in and under the Participant Agreement or, at
any time for each Eligible Asset, any other Person which at such time
shall have purchased from the Investor or any Assignee thereof an
undivided interest in such Eligible Asset or shall have made a
commitment to the Agent to so purchase such an interest.
"Participant Agreement" means the Amended and Restated Trade
Receivables Purchase and Sale Agreement, dated as of the date hereof
among the Seller, Dial, as collection agent, the financial institutions
party thereto as Participants thereunder and Citicorp, individually and
as Agent, as the same may, from time to time, be amended, modified or
supplemented.
"Permitted Transaction" means any transaction permitted under
the certificate of incorporation and bylaws of the Seller delivered to
the Agent pursuant to Section 3.01, as the same may, from time to time,
be amended, modified or otherwise supplemented with the prior written
consent of the Agent.
"Person" means an individual, partnership, limited liability
company, corporation (including a business trust), joint stock company,
trust, unincorporated association, joint venture or other entity.
"Pool Receivable" means a Receivable in the Receivables Pool.
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<PAGE> 16
"Provisional Liquidation Day" means any day which could be a
Liquidation Day but for the proviso in clause (i) of the definition of
"Liquidation Day".
"Purchase" means a purchase by the Investor of an Eligible
Asset from the Seller pursuant to Article II (including, without
limitation, Article II of the Original Seller Agreement).
"Purchase Documents" means this Agreement, the Certificate,
the Lock-Box Notices, the Contribution and Sale Agreement, the Consent
and Agreement, the Assignment and Assumption and the Fee Letter,
collectively.
"Purchase Limit" means $90,000,000, as such amount may be
reduced pursuant to Section 2.03.
"Rate Variance Factor" means that number which reflects the
potential variance in selected interest rates over a period of time
designated by the Agent, as shall be computed by the Collection Agent
each Accounting Period as set forth in the Investor Report in
accordance with the provisions thereof; provided, however, that the
"factor" in column 3 of the "Rate Variance Factor" section of such
Investor Report may be changed from time to time upon at least five
days' prior notice by the Agent to the Collection Agent.
"Receivable" means the indebtedness of any Obligor under a
Contract arising from a sale by Dial (including, as of August 15, 1996,
any and all such indebtedness acquired by Dial from Viad Corp in
connection with the Distribution), and includes the right to payment of
any interest or finance charges and other obligations of such Obligor
with respect thereto.
"Receivables Pool" means at any time the aggregation of each
then outstanding Receivable in respect of which the Obligor is a
Designated Obligor or, as to any Receivable in existence on such date,
was a Designated Obligor on the date of any Purchase or reinvestment
pursuant to Section 2.06 (including, without limitation, Section 2.06
of the Original Seller Agreement).
"Reinvestment Termination Date" for any Eligible Asset means
that Business Day which the Seller designates or, if the conditions
precedent in Section 3.02 are not satisfied, such Business Day which
the Agent designates, as the Reinvestment Termination Date for such
Eligible Asset by notice to the Agent (if the Seller so designates) or
to the Seller (if the Agent so designates) at least one Business Day
prior to such Business Day.
"Related Security" means with respect to any Receivable:
(i) all of the interest of the Seller or Dial in the
merchandise (including returned merchandise), if any, relating
to the sale which gave rise to such Receivable;
(ii) all other security interests or liens and
property subject thereto from time to time purporting to
secure payment of such Receivable, whether pursuant
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to the Contract related to such Receivable or otherwise,
together with all financing statements signed by an Obligor
describing any collateral securing such Receivable; and
(iii) all guarantees, insurance and other agreements
or arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether
pursuant to the Contract related to such Receivable or
otherwise.
"Settlement Period" for any Eligible Asset means each period
commencing on the first day of each Fixed Period for such Eligible
Asset and ending on the last day of such Fixed Period, and, on and
after the Termination Date for such Eligible Asset, such period
(including, without limitation, a daily period) as shall be selected
from time to time by the Agent or, in the absence of any such
selection, each period of thirty days from the last day of the
immediately preceding Settlement Period; provided, however, that until
the Termination Date for such Eligible Asset, during any Fixed Period
for such Eligible Asset for which the Investor Rate shall be the MTN
Fixed Rate or the MTN Floating Rate, "Settlement Period" for such
Eligible Asset means each period ending May 31st or November 30th in
each year (or a shorter period if the last day of such Fixed Period
shall earlier occur) during such Fixed Period, the initial Settlement
Period during such Fixed Period for such Eligible Asset commencing on
the first day of such Fixed Period and ending on the earlier of the
next May 31st or November 30th of any year, and each subsequent
Settlement Period during such Fixed Period for such Eligible Asset
commencing on the last day of the immediately preceding Settlement
Period for such Eligible Asset and ending on the earlier of (i) the
next May 31st of any year, (ii) the next November 30th of any year or
(iii) the last day of such Fixed Period.
"Subordinated Note" means a subordinated promissory note in
the form of Exhibit B to the Contribution and Sale Agreement.
"Termination Date" for any Eligible Asset means the earlier of
(i) the Reinvestment Termination Date for such Eligible Asset and (ii)
the Facility Termination Date.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the specified jurisdiction.
"Viad Corp" means Viad Corp, a Delaware corporation.
"Yield" means for each Eligible Asset for any Fixed Period the
product of
IR x C x ED + LF + BF
BI
where:
IR = the Investor Rate for such Eligible Asset
for such Fixed Period (which rate shall be
the Assignee Rate, if the Owner of such
Eligible Asset shall not, for any reason,
fund its Purchase or maintenance of such
Eligible Asset for such Fixed Period by its
issuing Commercial Paper Notes or
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<PAGE> 18
Medium Term Notes and the Seller and the
Agent shall not have agreed on another
rate).
C = the Capital of such Eligible Asset during
such Fixed Period.
BI = that number of days comprising a year which
is the basis for computing the Investor Rate
for such Eligible Asset for such fixed
period.
ED = the actual number of days elapsed during
such Fixed Period.
LF = the Liquidation Fee, if any, for such
Eligible Asset for such Fixed Period.
BF = the Breakage Fee, if any, for such Eligible
Asset for such Fixed Period;
provided, however, that no provision of this Agreement or the
Certificate shall require the payment or permit the collection of Yield
in excess of the maximum permitted by applicable law; and provided,
further, that Yield for any Eligible Asset shall not be considered paid
by any distribution if at any time such distribution is rescinded or
must otherwise be returned for any reason.
"Yield Reserve" for any Eligible Asset at any time means the
sum of (i) the Liquidation Yield at such time for such Eligible Asset,
plus (ii) the accrued and unpaid Yield for such Eligible Asset, plus
(iii) the Breakage Reserve for such Eligible Asset.
SECTION 1.02. Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles. All terms used in Article 9 of the UCC in the
State of New York, and not specifically defined herein, are used herein as
defined in such Article 9.
SECTION 1.03. Computation of Time Periods. Unless otherwise
stated in this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding".
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Facility. On the terms and conditions
hereinafter set forth, the Investor may, in its sole discretion, make Purchases
from time to time during the period from the Effective Date to the Facility
Termination Date. Under no circumstances shall the Investor make any Purchase
if, after giving effect to such Purchase, the aggregate outstanding Capital of
Eligible Assets, together with the aggregate outstanding "Capital" of "Eligible
Assets" under the Participant Agreement, would exceed the Purchase Limit. The
Owner of each Eligible Asset shall, with the proceeds of Collections
attributable to such Eligible Asset, reinvest, pursuant to Section 2.06, in
additional undivided percentage interests in the Pool Receivables by making an
appropriate readjustment of such Eligible Asset. Nothing in this Agreement shall
be deemed to be or construed as a commitment by the Investor to purchase
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<PAGE> 19
any Eligible Asset at any time.
SECTION 2.02. Making Purchases. Each Purchase shall be made on
notice from the Seller to the Agent, given not later than 11:00 A.M. (New York
City time) on the third Business Day before the date of such Purchase if the
Seller requests as the Investor Rate the CP Rate or the Assignee Rate in
connection with such Purchase and not later that 11:00 A.M. (New York City time)
on the fifth Business Day before the date of such Purchase if the Seller
requests as the Investor Rate either the MTN Fixed Rate or the MTN Floating Rate
in connection with such Purchase. Each such notice of a proposed Purchase (i) if
the Seller requests as the Investor Rate the CP Rate or the Assignee Rate in
connection with such Purchase, shall be by telephone, telecopier, telex or
cable, specifying the requested (A) amount of such Purchase to be paid to the
Seller and (B) Business Day of such Purchase and duration of the initial Fixed
Period for the Eligible Asset to be purchased and (ii) if the Seller requests as
the Investor Rate either the MTN Fixed Rate or the MTN Floating Rate in
connection with such Purchase, shall be by telephone (confirmed immediately in
writing) or by telecopier, telegraph, telex or cable, confirmed immediately in
writing, in substantially the form of a Notice of Purchase and/or Investor Rate
referred to in Section 2.04, specifying therein the requested (A) amount of such
Purchase to be paid to the Seller, (B) Business Day of such Purchase and
duration of the initial Fixed Period for the Eligible Asset to be purchased and
(C) the other information to establish such Investor Rate as required by Section
2.04. The Investor shall promptly notify the Agent whether it has determined to
make such Purchase. The Agent shall promptly thereafter notify the Seller
whether the Investor has determined to make such Purchase and whether the
conditions for the requested Investor Rate set forth in Section 2.04 have been
satisfied. On the date of each Purchase, the Investor shall, upon satisfaction
of the applicable conditions set forth in Article III, make available to the
Agent the amount of its Purchase by deposit of such amount in same day funds to
the Agent's Account, and, after receipt by the Agent of such funds, the Agent
will cause such funds to be made immediately available to the Seller at
Citibank's office at 399 Park Avenue, New York, New York. The Investor shall on
the date of each Purchase, and the Owner of each Eligible Asset shall on the
first day of each Fixed Period (other than the initial Fixed Period) for such
Eligible Asset, notify the Agent of the Investor Rate for such Fixed Period.
SECTION 2.03. Termination or Reduction of the Purchase Limit.
(a) Optional. The Seller may, upon at least three Business
Days' notice to the Agent, terminate in whole or reduce in part the unused
portion of the Purchase Limit; provided, however, that for purposes of this
Section 2.03(a), the unused portion of the Purchase Limit shall be computed as
the excess of (A) the Purchase Limit immediately prior to giving effect to such
termination or reduction over (B) the sum of (i) the aggregate Capital of
Eligible Assets outstanding at the time of such computation and (ii) the
aggregate "Capital" of "Eligible Assets" outstanding under the Participant
Agreement at such time; provided, further, that each partial reduction shall be
in an amount equal to $1,000,000 or an integral multiple thereof.
(b) Mandatory. On each day on which the Seller shall, pursuant
to Section 2.03(a) of the Participant Agreement, reduce in part the unused
portion of the Commitments (as defined in the Participant Agreement), the
Purchase Limit shall automatically reduce by an equal amount. The Purchase Limit
shall automatically terminate in whole on any day on which the Seller shall
terminate in whole the Commitments pursuant to Section 2.03(a) of the
Participant Agreement.
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SECTION 2.04. Determination of Investor Rate and Fixed Periods
Therefor. (a) The Seller shall request the Investor Rate for each Fixed Period
for each Eligible Asset by notice from the Seller to the Agent (i) in the case
of the initial Fixed Period for such Eligible Asset, in the notice of the
proposed Purchase of such Fixed Asset given by the Seller pursuant to Section
2.02 and (ii) in the case of each subsequent Fixed Period for such Eligible
Asset, given not later than 11:00 A.M. (New York City time) on the first day of
such Fixed Period if the Seller requests as such Investor Rate the CP Rate and
not later than 11:00 A.M. (New York City time) on the fifth Business Day before
the first day of such Fixed Period if the Seller requests as such Investor Rate
either the MTN Fixed Rate or the MTN Floating Rate. Each such notice (i) if the
Seller requests as the Investor Rate the CP Rate, shall be by telephone,
telecopier, telex or cable, specifying in accordance with the other provisions
of this Section 2.04 the requested Fixed Period and Investor Rate therefor and
(ii) if the Seller requests as the Investor Rate either the MTN Fixed Rate or
the MTN Floating Rate, shall be by telephone (confirmed immediately in writing)
or by telecopier, telegraph, telex or cable, confirmed immediately in writing,
in substantially the form of Exhibit G hereto (a "Notice of Purchase and/or
Investor Rate", specifying therein, in accordance with the other provisions of
this Section 2.04, the requested Fixed Period and Investor Rate therefor
(including, in the case of a requested MTN Floating Rate, the requested "Spread"
or "Spread Multiplier", "Interest Rate Base", "Index Maturity", and "Interest
Reset Dates", specified in such Notice of Purchase and/or Investor Rate).
(b) If the Seller shall request as the Investor Rate for any
Fixed Period the CP Rate for such Fixed Period in accordance with subsection (a)
above and if the Agent shall approve such request, (i) such Investor Rate shall
be the CP Rate for such Fixed Period and (ii) such Fixed Period shall be such
number of days, not exceeding 270 days, as the Seller shall request, and the
Agent shall so approve; provided, however, that if the Agent shall not have
received a notice requesting such Investor Rate, or the Agent shall not have
approved such Fixed Period, before 11:00 A.M. (New York City time) on the first
day of such Fixed Period and no other Fixed Period or Investor Rate shall be
otherwise applicable pursuant to the provisions of this Agreement, such Fixed
Period shall be one day and the Investor Rate for such Fixed Period shall be the
CP Rate.
(c) If the Seller shall request as the Investor Rate for any
Fixed Period the MTN Fixed Rate or the MTN Floating Rate for such Fixed Period
in accordance with subsection (a) above and if the Agent shall approve such
request and if (in the event that clause (ii) of the definition of "Breakage
Reserve" contained in Section 1.01 applies) the Seller and the Agent shall have
agreed in writing to the computation of the Breakage Reserve for such Fixed
Period, (i) such Investor Rate shall be the MTN Fixed Rate or the MTN Floating
Rate (with, in the case of the MTN Floating Rate, the "Spread" or "Spread
Multiplier", "Interest Rate Base", "Index Maturity", and "Interest Reset Dates",
specified in such Notice of Purchase and/or Investor Rate), as so requested, for
such Fixed Period and (ii) such Fixed Period shall be such duration, exceeding
270 days but not exceeding three years, as the Seller shall request, and the
Agent shall approve, in the Notice of Purchase and/or Investor Rate related
thereto; provided, however, that if either (A) the Agent shall not have received
such Notice of Purchase and/or Investor Rate, or the Agent shall not have
approved such Investor Rate or such Fixed Period, before 11:00 A.M. (New York
City time) on the fifth Business Day before the first day of such Fixed Period
or (B) on or before the first day of such Fixed Period any Person who has agreed
to purchase the Medium Term Notes with reference to which such MTN Fixed Rate or
MTN Floating Rate is to be determined hereunder refuses to purchase and pay for
such
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<PAGE> 21
Medium Term Notes, then such Fixed Period shall be one day and the Investor Rate
for such Fixed Period shall be the CP Rate.
(d) Anything herein to the contrary notwithstanding, if the
provisions of the definition of "Investor Rate" contained in Section 1.01 shall
specify that the Investor Rate for any Fixed Period shall be the Assignee Rate
(or such other rate as the Agent and the Seller may agree to in writing), the
Investor Rate for such Fixed Period shall be the Assignee Rate (or such other
rate) for such Fixed Period.
SECTION 2.05. Eligible Asset. (a) Each Eligible Asset shall be
initially computed as of the opening of business of the Collection Agent on the
date of Purchase of such Eligible Asset. Thereafter until the Termination Date
for such Eligible Asset, such Eligible Asset shall be automatically adjusted as
of the close of business of the Collection Agent on each day (other than a
Liquidation Day). Such Eligible Asset shall remain constant from the time as of
which any such adjustment or readjustment is made until the time as of which the
next such readjustment, if any, shall be made. Any Eligible Asset, as adjusted
as of the day immediately preceding the Termination Date for such Eligible
Asset, shall remain constant at all times on and after such Termination Date.
Such Eligible Asset shall become zero at such time as the Owner of such Eligible
Asset shall have received the accrued Yield for such Eligible Asset and shall
have recovered the Capital of such Eligible Asset, and the Collection Agent
shall have received the accrued Collection Agent Fee for such Eligible Asset.
(b) If any Eligible Asset would otherwise be reduced on any
day on account of Receivables arising as or becoming Pool Receivables, the Owner
of such Eligible Asset may prevent such reduction by giving notice to the
Collection Agent, before the close of business of the Collection Agent on such
day, that such Eligible Asset's interest in such Receivables is to be limited so
as to prevent such reduction. If such notice is given for any day for any
Eligible Asset, the Receivables Pool for such Eligible Asset, and the Net
Receivables Pool Balance for such Eligible Asset, will include, with respect to
Receivables arising as or becoming Pool Receivables on such day, only such
number of such Receivables or such portion of such Receivables as shall cause
such Eligible Asset to remain constant, such Receivables or portion thereof
being included in the Receivables Pool for such Eligible Asset in the order of
the Seller's account numbers for such Receivables up to an aggregate amount so
as to cause such Eligible Asset to remain constant, and the remainder of such
Receivables or portion thereof shall be treated as Receivables arising on the
next succeeding Business Day.
SECTION 2.06. Non-Liquidation Settlement Procedures. On each
day (other than a Liquidation Day or a Provisional Liquidation Day) during each
Settlement Period for each Eligible Asset, the Collection Agent shall: (i) out
of Collections of Pool Receivables attributable to such Eligible Asset received
on such day, set aside and hold in trust for the Owner of such Eligible Asset an
amount equal to the Yield and Collection Agent Fee accrued through such day for
such Eligible Asset and not so previously set aside and (ii) reinvest the
remainder of such Collections, for the benefit of such Owner, by recomputation
of such Eligible Asset pursuant to Section 2.05 as of the end of such day and
the payment of such remainder to the Seller; provided, however, that, to the
extent that the Agent or any Owner shall be required for any reason to pay over
any amount of Collections which shall have been previously reinvested for the
account of such Owner pursuant hereto, such amount shall be deemed not to have
been so applied but rather to have been retained by the Seller and paid over for
the account of such Owner and, notwithstanding any provision hereof to the
contrary, such Owner shall have a claim for such amount. On the last day of each
Settlement Period for each
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Eligible Asset, the Collection Agent shall deposit to the Agent's Account for
the account of the Owner of such Eligible Asset the amounts set aside as
described in clause (i) of the first sentence of this Section 2.06. Upon receipt
of such funds by the Agent, the Agent shall distribute them to the Owner of such
Eligible Asset in payment of the accrued Yield for such Eligible Asset and to
the Collection Agent in payment of the accrued Collection Agent Fee payable with
respect to such Eligible Asset. If there shall be insufficient funds on deposit
for the Agent to distribute funds in payment in full of the aforementioned
amounts, the Agent shall distribute funds, first, in payment of the accrued
Yield for such Eligible Asset, and second, in payment of the accrued Collection
Agent Fee payable with respect to such Eligible Asset.
SECTION 2.07. Liquidation Settlement Procedures. On each
Liquidation Day and on each Provisional Liquidation Day during each Settlement
Period for each Eligible Asset, the Collection Agent shall set aside and hold in
trust for the Owner of such Eligible Asset the Collections of Pool Receivables
attributable to such Eligible Asset received on such Day. On the last day of
each Settlement Period for each Eligible Asset, the Collection Agent shall
deposit to the Agent's Account for the account of the Owner of such Eligible
Asset the amounts set aside pursuant to the preceding sentence but not to exceed
the sum of (i) the accrued Yield for such Eligible Asset (including, without
limitation, the Breakage Fee for such Eligible Asset then payable pursuant to
Section 2.14), (ii) the Capital of such Eligible Asset, (iii) the accrued
Collection Agent Fee payable with respect to such Eligible Asset and (iv) the
aggregate amount of other amounts owed hereunder by the Seller to the Owner of
such Eligible Asset. Any amounts set aside pursuant to the first sentence of
this Section 2.07 and not required to be deposited to the Agent's Account
pursuant to the preceding sentence shall be paid to the Seller by the Collection
Agent; provided, however, that if amounts are set aside pursuant to the first
sentence of this Section 2.07 on any Provisional Liquidation Day which is
subsequently determined not to be a Liquidation Day, such amounts shall be
applied pursuant to the first sentence of Section 2.06 on the day of such
subsequent determination. Upon receipt of funds deposited to the Agent's Account
pursuant to the second sentence of this Section 2.07, the Agent shall distribute
them (i) to the Owner of such Eligible Asset (a) in payment of the accrued Yield
for such Eligible Asset, (b) in reduction (to zero) of the Capital of such
Eligible Asset and (c) in payment of any other amounts owed by the Seller
hereunder to such Owner and (ii) to the Collection Agent in payment of the
accrued Collection Agent Fee payable with respect to such Eligible Asset. If
there shall be insufficient funds on deposit for the Agent to distribute funds
in payment in full of the aforementioned amounts, the Agent shall distribute
funds, first, in payment of the accrued Yield for such Eligible Asset (but, in
the case of the Breakage Fee for such Eligible Asset, only to the extent the
Agent shall elect to pay such Breakage Fee from Collections attributable to such
Eligible Asset under this Section 2.07 rather than from other funds pursuant to
Section 2.14), second, in reduction of Capital of such Eligible Asset, third, in
payment of other amounts payable to such Owner, and fourth, in payment of the
accrued Collection Agent Fee payable with respect to such Eligible Asset.
SECTION 2.08. General Settlement Procedures. If on any day the
Outstanding Balance of a Pool Receivable is either (a) reduced as a result of
any defective, rejected or returned merchandise, insurance or services, any cash
discount, or any adjustment by the Seller or any of its Affiliates, or (b)
reduced or cancelled as a result of a setoff in respect of any claim by the
Obligor thereof against the Seller or any of its Affiliates (whether such claim
arises out of the same or a related transaction or an unrelated transaction),
the Seller shall be deemed to have
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<PAGE> 23
received on such day a Collection of such Receivable in the amount of such
reduction or cancellation. If on any day any of the representations or
warranties in Section 4.01(g) is no longer true with respect to a Pool
Receivable, the Seller shall be deemed to have received on such day a Collection
in full of such Pool Receivable. Except as stated in the preceding sentences of
this Section 2.08 or as otherwise required by law or the underlying Contract,
all Collections received from an Obligor of any Receivable shall be applied to
Receivables then outstanding of such Obligor in the order of the age of such
Receivables, starting with the oldest such Receivable, except if payment is
designated by such Obligor for application to specific Receivables. Prior to the
twelfth Business Day following each Accounting Period, the Collection Agent
shall prepare and forward to the Agent for each Owner of an Eligible Asset an
Investor Report, relating to each Eligible Asset, as of the close of business of
the Collection Agent on the last day of the immediately preceding Accounting
Period. On or prior to the day the Collection Agent is required to make a
deposit with respect to a Settlement Period pursuant to Section 2.06 or 2.07,
the Seller will advise the Agent of each Liquidation Day and each Provisional
Liquidation Day occurring during such Settlement Period and of the allocation of
the amount of such deposit to each outstanding Eligible Asset; provided,
however, that, if the Seller is not the Collection Agent, the Seller shall
advise the Collection Agent of the occurrence of each such Liquidation Day and
each Provisional Liquidation Day occurring during such Settlement Period on or
prior to such day.
SECTION 2.09. Payments and Computations, Etc. All amounts to
be paid or deposited by the Seller hereunder shall be paid or deposited in
accordance with the terms hereof no later than 11:00 A.M. (New York City time)
on the day when due in lawful money of the United States of America in same day
funds to the Agent's Account. The Seller shall, to the extent permitted by law,
pay to the Agent interest on all amounts not paid or deposited when due
hereunder at 2% per annum above the Alternate Base Rate in effect from time to
time, payable on demand, provided, however, that such interest rate shall not at
any time exceed the maximum rate permitted by applicable law. Such interest
shall be retained by the Agent except to the extent that such failure to make a
timely payment or deposit has continued beyond the date for distribution by the
Agent of such overdue amount to an Owner of an Eligible Asset, in which case
such interest accruing after such date shall be for the account of, and
distributed by the Agent to, the Owners ratably in accordance with their
respective interests in such overdue amount. All computations of interest and
all computations of Yield, Liquidation Yield and fees hereunder shall be made on
the basis of a year of 360 days for the actual number of days (including the
first but excluding the last day) elapsed except that (i) computations of the
MTN Fixed Rate and Yield computed by reference to the MTN Fixed Rate shall be
made on the basis of a 360-day year consisting of twelve 30-day months and (ii)
computations of any MTN Floating Rate and Yield computed by reference to any MTN
Floating Rate shall be made on the basis for the computation of interest
applicable to the Medium Term Notes with reference to which such MTN Floating
Rate is determined hereunder.
SECTION 2.10. Dividing or Combining of Eligible Assets. The
Seller may, on notice received by the Agent not later than 11:00 A.M. (New York
City time) three Business Days before the last day of any Fixed Period for any
then existing Eligible Asset ("Existing Eligible Asset"), divide such Existing
Eligible Asset on such last day into two or more new Eligible Assets, each such
new Eligible Asset having Capital as designated in such notice and all such new
Eligible Assets collectively having aggregate Capital equal to the Capital of
such Existing Eligible Asset. The Seller may, on notice received by the Agent
not later than 11:00 A.M. (New York City time) three Business Days before the
last day of any Fixed Periods ending on the same day for two or more Existing
Eligible Assets owned by the same Owner or the date of any proposed Purchase (if
the last day of such Fixed Period is the date of such proposed Purchase), either
(i) combine such Existing Eligible Assets or (ii)
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<PAGE> 24
combine such Existing Eligible Asset or Eligible Assets, if owned by the
Investor, and such proposed Eligible Asset to be purchased, on such last day
into one new Eligible Asset, such new Eligible Asset having Capital equal to the
aggregate Capital of such Existing Eligible Assets, or such Existing Eligible
Asset or Eligible Assets and such proposed Eligible Asset, as the case may be.
On and after any division or combination of Eligible Assets as described above,
each of the new Eligible Assets resulting from such division, or the new
Eligible Asset resulting from such combination, as the case may be, shall be a
separate Eligible Asset having Capital as set forth above, and shall take the
place of such Existing Eligible Asset or Eligible Assets or proposed Eligible
Asset, as the case may be, in each case under and for all purposes of this
Agreement, and the Agent shall annotate the Certificate accordingly.
SECTION 2.11. Fees. (a) The Seller shall pay, from the
Effective Date until the later of the Facility Termination Date or the date on
which all Capital of all Eligible Assets is reduced to zero, the following fees:
(i) to the Agent an administration fee (the
"Administration Fee") referred to and in the amount specified
in the Fee Letter, and
(ii) to the Agent for the account of the Investor the
Investor investment fee (the "Investor Investment Fee"),
referred to and in the amount specified in the Fee Letter.
The Administration Fee is payable in arrears monthly on the last day of each
month during the term of this Agreement and on the later of the Facility
Termination Date or the date on which all Capital of all Eligible Assets is
reduced to zero. The Investor Investment Fee is payable in arrears annually on
the last Business Day of November of each year and on the later of the Facility
Termination Date or the date on which all Capital of all Eligible Assets is
reduced to zero.
(b) Each Owner shall pay to the Collection Agent a collection
fee (the "Collection Agent Fee") of 1/4 of 1% per annum on the average daily
amount of Capital of each Eligible Asset owned by such Owner, from the date
thereof until the later of the Facility Termination Date or the date on which
such Capital is reduced to zero, payable on the last day of each Settlement
Period for such Eligible Asset; provided, however, that, upon three Business
Days' notice to the Agent, the Collection Agent may (if not the Seller or any of
its Affiliates) elect to be paid, as such fee, another percentage per annum on
the average daily amount of Capital of each such Eligible Asset, but in no event
in excess of 110% of the costs and expenses referred to in Section 6.02(b); and
provided, further, that such fee shall be payable only from Collections pursuant
to, and subject to the priority of payment set forth in, Sections 2.06 and 2.07.
(c) The Seller shall also pay to the Agent for the account of
each Indemnified Party, from time to time on demand by the Agent, the Capital
Adequacy Fee for such Indemnified Party as specified by the Agent.
SECTION 2.12. Increased Costs. If, due to either (i) any
change in Regulation D of the Board of Governors of the Federal Reserve System
(to the extent any cost incurred pursuant to such regulation is not included in
the calculation of Adjusted LIBO Rate), (ii) the introduction of or any change
in or in the interpretation of any law or regulation or (iii) the compliance
with any guideline or request from any central bank or other governmental
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authority (whether or not having the force of law), there shall be any increase
in the cost to (or, in the case of Regulation D of the Board of Governors of the
Federal Reserve System, there shall be imposed a cost on) any Indemnified Party
of agreeing to make or making the Purchases or purchases of interests therein or
maintaining Eligible Assets hereunder or interests therein hereunder or under
the Participant Agreement, or, in the case of any Indemnified Party which is a
Participant, under any agreement entered into by such Participant with respect
to this Agreement or the Participant Agreement, then the Seller shall from time
to time, upon demand, and delivery to the Seller of the certificate referred to
in the last sentence of this Section 2.12, by such Indemnified Party (or by the
Agent for the account of such Indemnified Party) (with a copy of such demand and
certificate to the Agent), pay to the Agent for the account of such Indemnified
Party additional amounts sufficient to compensate such Indemnified Party for
such increased or imposed cost. Each Indemnified Party party hereto agrees to
use its best efforts promptly to notify the Seller of any event referred to in
clause (i), (ii) or (iii) above, provided that the failure to give such notice
shall not affect the rights of any Indemnified Party under this Section 2.12. A
certificate in reasonable detail as to the basis for and the amount of such
increased cost, submitted to the Seller and the Agent by such Indemnified Party
(or by the Agent for the account of such Indemnified Party) shall be conclusive
and binding for all purposes, absent manifest error. Amounts required to be paid
by the Seller pursuant to this Section 2.12 shall be paid in addition to, and
without duplication of, any amounts required to be paid pursuant to Section
2.11(c).
SECTION 2.13. Extension of Expiry Date. On or after the date
30 days prior to the Expiry Date then in effect, but prior to the date 20 days
prior to such Expiry Date, the Seller may, at its option, deliver to the Agent a
signed copy of an extension request (an "Extension Request") in the form of
Exhibit F annexed hereto requesting an extension of the Expiry Date for a period
of 364 days (each an "Extension Period"). On or before the date which occurs 10
days after the date on which the Agent shall have received an Extension Request,
the Agent may, in its sole discretion, elect to extend the Expiry Date for the
Extension Period. If the Agent does so elect to extend the Expiry Date for an
Extension Period, the Expiry Date will be extended for such Extension Period. If
the Agent has not replied in writing to the Seller by the date 10 days after the
date on which the Agent shall have received an Extension Request, the Agent
shall be deemed not to have consented to the extension of the Expiry Date and
the Expiry Date then in effect shall remain in effect and shall not be extended.
SECTION 2.14. Breakage Fee and Indemnity. If any Liquidation
Day, or the Termination Date, for any Eligible Asset shall occur during any
Fixed Period (computed, for purposes of this Section 2.14, without regard to
clause (iv) of the definition of "Fixed Period" contained in Section 1.01) for
such Eligible Asset and the Investor Rate for such Fixed Period for such
Eligible Asset shall be the MTN Fixed Rate or the MTN Floating Rate for such
Fixed Period, the Seller hereby agrees as follows:
(a) The Seller shall, if "F" (as defined below) shall
be greater than "R" (as defined below), pay to the Owner a fee
(the "Breakage Fee" for such Eligible Asset) to be computed
cumulatively as of each Fee Determination Date for such
Eligible Asset as follows:
[C x (F-R)] x [1 - (1 + R/f)-n]
[ f ] [ R/f ]
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where:
C = the amount by which Capital of such Eligible
Asset is reduced on such Fee Determination
Date.
F = if the Investor Rate for such Fixed Period
shall be the MTN Fixed Rate, the MTN Fixed
Rate for such Eligible Asset for such Fixed
Period; and if the Investor Rate for such
Fixed Period shall be the MTN Floating Rate,
the MTN Floating Rate for such Eligible
Asset in effect on such Fee Determination
Date for such Eligible Asset.
R = the highest rate of interest (which will be
a fixed interest rate if the MTN Fixed Rate
shall apply for such Fixed Period, and which
will be a floating interest rate, based on
the same "Interest Rate Base" (as identified
in the related Notice of Purchase and/or
Investor Rate) and in effect on such Fee
Determination Date, if the MTN Floating Rate
shall apply for such Fixed Period) at which
the Agent on behalf of the Owner shall be
permitted under the Owner's credit and
investment policy to reinvest on such Fee
Determination Date the amount of "C" above;
provided, however, that "R" shall not be
less than the yield to maturity of U.S.
Treasury notes trading closest to par value
and maturing within three months of the last
day of such Fixed Period.
f = the frequency per year (maximum amount of
times per year) that Yield for such Eligible
Asset for such Fixed Period shall be
payable.
n = the number of originally scheduled
Settlement Periods (in whole or in part)
remaining in such Fixed Period from such Fee
Determination Date to the last day of such
Fixed Period.
The portion of the Breakage Fee for such Eligible Asset computed as of
each Fee Determination Date for such Eligible Asset shall be payable by
the Seller within three Business Days after such Fee Determination
Date.
(b) The Seller shall, in addition to paying the Breakage Fee
for such Eligible Asset for such Fixed Period, indemnify and hold
harmless the Owner of such Eligible Asset for all losses, costs,
liabilities and expenses which such Owner may incur as a result of the
occurrence of such Liquidation Day or Termination Date and for which
such Owner is not compensated by the payment of such Breakage Fee.
ARTICLE III
CONDITIONS TO PURCHASES
SECTION 3.01. Conditions Precedent to Initial Purchase. This
Amended and Restated Trade Receivables Purchase and Sale Agreement shall become
effective upon, and only upon, the Agent's receipt of (i) counterparts of this
Agreement executed by the Seller, the Collection Agent, the Investor and the
Agent, (ii) payment of the "Administrative Fee" and the
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"Investor Investment Fee" under and as defined in the Original Seller Agreement,
accrued to and including the Effective Date (as defined below), and (iii) the
following, each (unless otherwise indicated) dated, or dated as of or effective
as of, February 12, 1997 (such date being the "Effective Date"), in form and
substance satisfactory to the Agent:
(a) The Certificate, executed by the Seller;
(b) The Contribution and Sale Agreement, duly executed by Dial
and the Seller, together with:
(i) Proper financing statements (Form UCC-1) naming
Dial, as seller, the Seller, as purchaser, and the Agent, as
assignee, to be filed within 10 days following the Effective
Date, or other similar instruments or documents, as may be
necessary or, in the opinion of the Agent, desirable under the
UCC of all appropriate jurisdictions or any comparable law to
perfect the Seller's interests created or purported to be
created by the Contribution and Sale Agreement;
(ii) Acknowledgment copies or stamped receipt copies
of proper Financing Statements (Form UCC-3), if any, necessary
to release all security interests and similar rights of any
Person in the Receivables, Related Security, Collections or
Contracts previously granted by Dial;
(iii) Completed requests for information, dated a
date reasonably near to the Effective Date, listing all
effective financing statements which name Dial (under its
present name and any previous names) as debtor or seller and
which are filed in the jurisdictions in which filings were
made pursuant to subsection (c)(i) or (c)(ii) above, together
with copies of such financing statements (none of which,
except those filed pursuant to subsection (c)(i) above and
except those filed pursuant to the Original Seller Agreement,
shall cover any Receivables, Related Security, Collections or
Contracts); and
(iv) The Consent and Agreement with respect hereto
and to the Certificate, the Participant Agreement and the
"Certificate" thereunder, duly executed by Dial.
(c) A copy of the resolutions adopted by either the Board of
Directors, or in the case of Dial, the Executive Committee of the Board
of Directors of (i) Dial approving this Agreement, the Contribution and
Sale Agreement and the other Purchase Documents and other documents to
be delivered by it hereunder and the transactions contemplated hereby
and (ii) the Seller approving this Agreement, the Certificate and the
other Purchase Documents and other documents to be delivered by it
hereunder and the transactions contemplated hereby, in each case
certified by its Secretary or Assistant Secretary;
(d) A certificate of the Secretary or Assistant Secretary of
(i) Dial, certifying the names and true signatures of the officers
authorized on its behalf to sign this Agreement, the Contribution and
Sale Agreement and the other Purchase Documents and the other documents
to be delivered by it hereunder and thereunder and (ii) the Seller
certifying the names and true signatures of the officers authorized on
its behalf to
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sign this Agreement, the Certificate and the other Purchase Documents
and other documents to be delivered by it hereunder and thereunder (on
which certificates the Agent and each Owner may conclusively rely until
such time as the Agent shall receive from Dial or the Seller, as the
case may be, a revised certificate meeting the requirements of this
subsection (d));
(e) A copy of the charter of Dial and the Seller, in each case
certified to be a true and correct copy by the Secretary of State of
its state of incorporation;
(f) A copy of the by-laws of Dial and the Seller, in each case
certified to be a true and correct copy by its Secretary or Assistant
Secretary;
(g) Acknowledgment copies of proper Financing Statements
naming the Seller as debtor and Citicorp, as Agent, as secured party,
with respect to Receivables sold and to be sold by the Seller and duly
filed under the UCC of the State of Arizona;
(h) Acknowledgment copies of proper financing statement
releases, if any, necessary to release all security interests and other
rights of any Person in the Receivables, Contracts or Related Security
previously granted by the Seller;
(i) UCC Search Report dated a date reasonably near to the
Effective Date, certified by the Secretary of State of Arizona by a
search service acceptable to the Agent, together with copies of all
financing statements on file with the office of such Secretary of State
(none of which shall cover any Receivables, Contracts or Related
Security);
(j) Undated copies of Lock-Box Notices to the Lock-Box Banks,
executed by the Seller;
(k) The Fee Letter, executed by the Seller;
(l) (i) A favorable opinion of William A. Arbitman, Associate
General Counsel of Dial, in substantially the form of Exhibit E-1
hereto and (ii) a favorable opinion of Brown & Bain, special Arizona
counsel to Dial, in substantially the form of Exhibit E-2 hereto, and,
in each case, as to such other matters as the Agent may reasonably
request;
(m) A favorable opinion of Shearman & Sterling, counsel for
the Agent, as the Agent may reasonably request; and
(n) The Assignment and Assumption, duly executed by Dial and
the Seller and consented to by the Investor, Citibank, Citicorp and the
Agent.
SECTION 3.02. Conditions Precedent to All Purchases and
Reinvestments. Each Purchase hereunder and the right of the Collection Agent to
reinvest in Pool Receivables those Collections attributable to an Eligible Asset
pursuant to Sections 2.06 or 2.07 shall be subject to the conditions precedent
that (a) with respect to any such Purchase, on or prior to the date of such
Purchase, the Collection Agent shall have delivered to the Agent, in form and
substance satisfactory to the Agent, a completed Investor Report, dated within
30 days prior to the date of such Purchase, together with a listing by Obligor
of all Pool Receivables and such
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additional information as may be reasonably requested by the Agent, and (b) on
the date of such Purchase or reinvestment the following statements shall be true
(and the Seller by accepting the amount of such Purchase or by receiving the
proceeds of such reinvestment shall be deemed to have certified that):
(i) The representations and warranties contained in Section
4.01 hereof and in the Contribution and Sale Agreement are correct on
and as of such day as though made on and as of such date,
(ii) No event has occurred and is continuing, or would result
from such Purchase or reinvestment, which constitutes an Event of
Investment Ineligibility or would constitute an Event of Investment
Ineligibility but for the requirement that notice be given or time
elapse or both,
(iii) The Agent shall not have delivered to the Seller a
notice that the Investor shall not make any further Purchases hereunder
and/or that the Collection Agent shall not reinvest in any Pool
Receivables on behalf of the Investor, and
(iv) On such date, all of Dial's long-term public senior debt
securities are rated (A) at least BBB- by Standard & Poor's Ratings
Group and (B) if such a rating has been issued by Moody's Investors
Service and is then in effect, at least Baa3 by Moody's Investors
Service,
and (c) the Agent shall have received such other approvals, opinions or
documents as the Agent may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Seller.
The Seller represents and warrants as follows:
(a) The Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified to do business, and is in good
standing, in every jurisdiction where the nature of its business
requires it to be so qualified except where the failure to so qualify
would not have a material adverse effect on the business of the Seller.
All the issued and outstanding shares of stock of the Seller are owned
by Dial free and clear of any Adverse Claim.
(b) The execution, delivery and performance by the Seller of
this Agreement, the Certificate and all Purchase Documents and other
instruments and documents to be delivered by it hereunder, and the
transactions contemplated hereby and thereby, and the Seller's use of
the proceeds of Purchases, are within the Seller's corporate powers,
have been duly authorized by all necessary corporate action, do not
contravene (i) the Seller's charter or by-laws or (ii) law or any
contractual restriction binding on or affecting the Seller, and do not
result in or require the creation of any Adverse Claim (other than
pursuant hereto) upon or with respect to any of its
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properties; and no transaction contemplated hereby requires compliance
with any bulk sales act or similar law.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by the
Seller of this Agreement, the Certificate or any other Purchase
Document or other document or instrument to be delivered hereunder,
except for the filing of the Financing Statements referred to in
Sections 3.01(b) and (g), all of which shall have been duly made and
shall be in full force and effect.
(d) This Agreement constitutes, and the Certificate and each
other Purchase Document to be delivered by the Seller when delivered
hereunder shall constitute, the legal, valid and binding obligations of
the Seller enforceable against the Seller in accordance with their
respective terms, subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally.
(e) There are no actions, suits or proceedings pending, or to
the knowledge of the Seller threatened, against or affecting the Seller
or any subsidiary, or the property of the Seller or of any subsidiary,
in any court, or before any arbitrator of any kind, or before or by any
governmental body, which might reasonably be expected to materially
adversely affect the financial condition of the Seller or the Seller
and its consolidated subsidiaries taken as a whole or materially
adversely affect the ability of the Seller to perform its obligations
under this Agreement or the Certificate or any other Purchase Document,
or which purports to affect the legality, validity or enforceability of
any Purchase Document; neither the Seller nor any subsidiary is in
default with respect to any order of any court, arbitrator or
governmental body except for defaults with respect to orders of
governmental agencies which defaults are not material to the business
or operations of the Seller or any subsidiary.
(f) No proceeds of any Purchase will be used by the Seller to
acquire any security in any transaction which is subject to Sections 13
and 14 of the Securities Exchange Act of 1934.
(g) Each Pool Receivable is (i) together with the Contract
related thereto owned by the Seller free and clear of any Adverse Claim
except as provided for herein and (ii) an Eligible Receivable or a
Government Receivable; upon each Purchase or reinvestment, the Owner
making such Purchase or reinvestment will acquire a valid and perfected
first priority undivided percentage ownership interest to the extent of
the pertinent Eligible Asset in each Pool Receivable then existing or
thereafter arising and in the Related Security and Collections with
respect thereto free and clear of any Adverse Claim except as provided
hereunder; and no effective financing statement or other instrument
similar in effect covering any Pool Receivable or the Related Security
or Collections with respect thereto is on file in any recording office
except such as may be filed in favor of Citicorp, as Agent, in
accordance with this Agreement (or the Original Seller Agreement) or
the Participant Agreement.
(h) The pro-forma balance sheet of the Seller as at February
12, 1997, copies of which have been furnished to the Agent and the
Investor fairly present the
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financial condition of the Seller as at such date, all in accordance
with generally accepted accounting principles consistently applied, and
as of the Effective Date there has been no material adverse change in
such condition.
(i) Each Investor Report (if prepared by Dial, the Seller or
any Affiliate thereof, or to the extent that information contained
therein is supplied by Dial, the Seller or any Affiliate thereof),
information, exhibit, financial statement, document, book, record or
report furnished at any time by the Seller to the Agent or any Owner in
connection with this Agreement is accurate in all material respects as
of its date or (except as otherwise disclosed to the Agent or such
Owner, as the case may be, at such time) as of the date so furnished,
and no such document contains any material misstatement of fact or
omits to state a material fact or any fact necessary to make the
statements contained therein not materially misleading.
(j) The chief place of business and chief executive office of
the Seller and the offices where the Seller keeps all its books,
records and documents evidencing Pool Receivables or the related
Contracts are located at the addresses specified for the Seller in
Schedule I hereto (or at such other locations, notified to the Agent in
accordance with Section 5.01(f), in jurisdictions where all action
required by Section 6.05 has been taken and completed).
(k) The names and addresses of all the Lock-Box Banks,
together with the account numbers of the lock-box or other accounts of
the Seller or Dial at such Lock-Box Banks, are specified for the Seller
and Dial, respectively, in Schedule II hereto (or at such other
Lock-Box Banks and/or with such other lock-box or other accounts as
have been notified to the Agent in accordance with Section 5.03(d)).
(l) Each purchase of an Eligible Asset hereunder, and each
reinvestment of Collections in Pool Receivables made hereunder, will
constitute (i) a "current transaction" within the meaning of Section
3(a)(3) of the Securities Act of 1933, as amended, and (ii) a purchase
or other acquisition of notes, drafts, acceptances, open accounts
receivable or other obligations representing part or all of the sales
price of merchandise, insurance or services within the meaning of
Section 3(c)(5) of the Investment Company Act of 1940, as amended.
(m) The Seller has no subsidiaries and does not own or hold,
directly or indirectly, any capital stock or equity security of, or any
equity interest in, any other Person and has conducted no other
business except for the execution and delivery of the Contribution and
Sale Agreement, the Assignment and Assumption and this Agreement and
the Participant Agreement and the acquisition of Receivables and sales
of interests therein contemplated thereunder and hereunder, and such
other activities as are incidental to the foregoing.
(n) The Contribution and Sale Agreement and the Assignment and
Assumption are the only agreements pursuant to which the Seller
purchases Receivables from Dial and each Receivable in which an
interest is sold hereunder has been purchased under the Contribution
and Sale Agreement or the Assignment and Assumption. The Seller has
given the Agent true, correct and complete copies of the Contribution
and Sale Agreement and the Assignment and Assumption, which agreements
are in full force and effect, and there are no written or oral
understandings
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which would vary, waive or otherwise modify the terms thereof except
those which have been approved in writing by the Agent.
(o) The Seller is not a party to any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to
any charter or corporate restriction that could reasonably be expected
to have, and no provision of applicable law or governmental regulation
could reasonably be expected to have, a material adverse effect on the
condition (financial or otherwise), business, operations, properties or
prospects of the Seller, or may reasonably be expected to have such an
effect on the ability of the Seller to carry out its obligations
hereunder or under the Contribution and Sale Agreement, and (ii)
neither the Seller nor, to the best of the knowledge of the Seller, any
other party is in default under or with respect to the Contribution and
Sale Agreement or any other contract, agreement, lease or other
instrument to which the Seller is a party and which is material to the
Seller's condition (financial or otherwise), business, operations,
properties or prospects, and neither the Seller nor any such other
party has delivered or received any notice of default thereunder.
(p) The Seller has advised its independent certified public
accountants that the Agent and the Owners have been authorized to
review and discuss with such accountants, upon the written request of
the Agent, any and all financial statements and other information that
they may have reasonably requested with respect to the Seller and has
directed such accountants to comply with any reasonable request of the
Agent for such information.
(q) The Seller has no tradenames, fictitious names, assumed
names or "doing business as" names.
(r) The Seller is operated as an entity separate from Dial and
each other member of the Parent Group and, towards such end, the
Seller:
(i) has its own board of directors the composition of
which is not identical to that of the Board of Directors of
any member of the Parent Group, even though some if not all of
the Seller's directors serve as directors of various members
of the Parent Group;
(ii) has at least one officer who is responsible for
the day-to-day management of its affairs;
(iii) has separate and clearly delineated office
space evidenced by a written lease or sub-lease;
(iv) maintains books and records of account
(including financial records) which are separate from each
other member of the Parent Group and maintains its assets in a
manner which facilitates their identification and segregation
from those of any other member of the Parent Group;
(v) has a separate telephone number which will be
answered only in its own name and has all office furniture,
fixtures and equipment necessary to operate its business which
furniture, fixtures and equipment are either owned by the
Seller or leased pursuant to written leases or otherwise
subject to access
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through written servicing arrangements;
(vi) conducts all intercompany transactions with all
members of the Parent Group on a separate and independent
basis;
(vii) has not guaranteed any obligations of any
member of the Parent Group, and has not held itself out as
responsible for debts of any such Person or for the decisions
or actions with respect to the business and affairs of any
such Person;
(viii) has not permitted the commingling or pooling
of its funds or other assets with the funds or assets of any
member of the Parent Group;
(ix) has separate deposit and other bank accounts in
its own name (or in the name of the Agent) to which no member
of the Parent Group (other than the Collection Agent) has
access and does not at any time pool any of its funds with
those of the Parent Group;
(x) pays its own operating expenses and liabilities
from its own funds;
(xi) has agreed with other members of the Parent
Group to reimburse such members for shared corporate operating
services and expenses, including legal and auditing expenses,
accounting and payroll services, and the participation, if
any, of the Seller's employees in the pension plans of the
Parent Group) on a basis reasonably related to actual use or
the value of services rendered, except that expenses of Dial
which relate to its duties as Collection Agent shall be
reimbursed through payment of the Collection Agent Fee;
(xii) conducts all of its business (whether in
writing or orally) solely in its own name and, in the case of
written correspondence, under its own letterhead; and
(xiii) practices and adheres to corporate formalities
such as complying with its certificate of incorporation and
bylaws, the holding of regularly scheduled board of director
meetings and the keeping of corporate minutes to reflect the
same.
(s) The Seller has been adequately capitalized in light of its
business and, at the time of each Purchase hereunder, (i) is not
"insolvent" (as such term is defined in the United States Bankruptcy
Code), (ii) is able to pay its debts as they mature and (ii) does not
have unreasonably small capital for the business in which it is
engaged.
ARTICLE V
GENERAL COVENANTS OF THE SELLER
SECTION 5.01. Affirmative Covenants of the Seller. Until the
later of the Facility Termination Date and the date upon which no Capital for
any Eligible Asset shall be
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existing, the Seller will, unless the Agent shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material respects
with all applicable laws, rules, regulations and orders with respect to
it, its business and properties and all Pool Receivables and related
Contracts.
(b) Preservation of Corporate Existence. Preserve and maintain
its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in
good standing as a foreign corporation in each jurisdiction where the
failure to preserve and maintain such existence, rights, franchises,
privileges and qualification would materially adversely affect the
interests of the Owners or the Agent hereunder or in the Pool
Receivables, or the ability of the Seller or the Collection Agent to
perform their respective obligations hereunder or under any other
Purchase Document or any Contract.
(c) Audits. (i) At any time and from time to time during
regular business hours, permit the Agent, or its agents or
representatives, (A) to examine and make copies of and abstracts from
all books, records and documents (including, without limitation,
computer tapes and disks) in the possession or under the control of the
Seller or Dial relating to Pool Receivables, including, without
limitation, the related Contracts, and (B) to visit the offices and
properties of the Seller or Dial for the purpose of examining such
materials described in clause (A) above, and to discuss matters
relating to Pool Receivables or the Seller's or Dial's performance
hereunder with any of the officers or employees of the Seller or Dial
having knowledge of such matters.
(ii) Within 120 days after the end of each fiscal year of the
Seller, cause its independent auditors to perform, at the Seller's
expense, an audit (in a scope and form reasonably requested by the
Agent) of the records in respect of the Pool Receivables and
Collections thereof and the performance by the Seller of its
obligations, covenants and duties under this Agreement and the other
Purchase Documents.
(d) Keeping of Records and Books of Account. Maintain and
implement or cause to be maintained and implemented, administrative and
operating procedures (including, without limitation, an ability to
recreate records evidencing Pool Receivables in the event of the
destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Pool Receivables (including,
without limitation, records adequate to permit the daily identification
of each new Pool Receivable and all Collections of and adjustments to
each existing Pool Receivable).
(e) Performance and Compliance with Receivables and Contracts.
At its expense, timely and fully perform and comply with all material
provisions, covenants and other promises required to be observed by it
under the Contracts related to the Pool Receivables.
(f) Location of Records. Keep its chief place of business and
chief executive office, and the offices where it keeps its records
concerning the Pool Receivables and all Contracts related thereto (and
all original documents relating thereto), at the address(es) of the
Seller referred to in Section 4.01(j) or, upon 30 days'
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prior written notice to the Agent, at such other locations in a
jurisdiction where all action required by Section 6.05 shall have been
taken and completed.
(g) Credit and Collection Policies. Comply in all material
respects with the Credit and Collection Policy in regard to each Pool
Receivable and the related Contract.
(h) Collections. Instruct all Obligors to cause all
Collections to be deposited directly to a Lock-Box Account or paid to
the Seller, and if the Seller shall receive any Collections (including
without limitation Collections deemed to have been received pursuant to
Section 2.08 or Section 10.02), deposit, or cause to be deposited, such
Collections directly to a Lock-Box Account within one Business Day
following its receipt (or deemed receipt) thereof.
(i) Separate Identity. Take all actions reasonably required to
maintain itself as an entity separate from the members of the Parent
Group, including such actions as are necessary to ensure that the
representations and warranties contained in Section 4.01(r) remain true
and correct at all times.
(j) Purchase of Pool Receivables from Dial. With respect to
each Pool Receivable outstanding from time to time pay to Dial (in
accordance with the Contribution and Sale Agreement or the Assignment
and Assumption) an amount which constitutes fair consideration and
approximates fair market value for such Pool Receivable and in a sale
the terms and conditions of which (including, without limitation, the
purchase price thereof) reasonably approximate an arm's-length
transaction between unaffiliated parties.
(k) Nature of Business and Permitted Transactions. Engage
solely in the following businesses and transactions, directly or
indirectly: (i) purchasing Receivables and Related Security from Dial
and selling interests in such Receivables and Related Security to the
Owners hereunder and under the Participant Agreement and the other
transactions permitted or contemplated hereby and thereby and (ii)
taking actions, and engaging in the transactions, necessary in
connection with any Permitted Transaction.
(l) Receivables Contribution and Sale Agreement. At its
expense, timely and fully perform and comply in all material respects
with all provisions, covenants and other promises required to be
observed by it under the Contribution and Sale Agreement, maintain the
Contribution and Sale Agreement in full force and effect, enforce the
Contribution and Sale Agreement in accordance with its terms, take all
such action to such end as may be from time to time reasonably
requested by the Agent, and make to any party to the Contribution and
Sale Agreement such demands and requests for information and reports or
for action as the Seller is entitled to make thereunder and as may be
from time to time reasonably requested by the Agent.
(m) Compliance with Charter and Bylaws. Without limiting the
generality of Section 5.01(i) above, maintain in place all policies and
procedures, and take and continue to take, all actions described in and
forming the basis of Section 4.01(r), and comply with, and cause
compliance with, the provisions of its certificate of incorporation and
bylaws delivered to the Agent pursuant to Section 3.01 as the same may,
from time to time, be amended, modified or otherwise supplemented with
the
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prior written consent of the Agent.
(n) Assignment of Lock-Box Accounts. Within 30 days of the
Effective Date, obtain the written consent (dated the date set forth
therein) of each Lock-Box Bank (as defined in the Original Seller
Agreement) to the assignment by Dial to the Seller of Dial's rights and
obligations with respect to the Lock-Box Accounts (as defined in the
Original Seller Agreement) maintained with such Lock-Box Banks and the
related Lock-Box Agreements (as defined in the Original Seller
Agreement).
SECTION 5.02. Reporting Requirements of the Seller. Until the
later of the Facility Termination Date and the date upon which no Capital for
any Eligible Asset shall be existing, the Seller will, unless the Agent shall
otherwise consent in writing, furnish to the Agent:
(a) as soon as available and in any event within 90 days after
the end of each of the first three quarters of each fiscal year of the
Seller, a consolidated balance sheet of the Seller and its consolidated
subsidiaries as of the end of such quarter, and consolidated statements
of income and retained earnings and of cash flows of the Seller and its
consolidated subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, certified
by the chief financial officer or chief accounting officer of the
Seller;
(b) as soon as available and in any event within 120 days
after the end of each fiscal year of the Seller, a consolidated balance
sheet of the Seller and its consolidated subsidiaries as of the end of
such year and the related consolidated statements of income and
retained earnings and of cash flows of the Seller and its consolidated
subsidiaries for such year, reported on by nationally recognized
independent public accountants acceptable to the Agent;
(c) promptly after the sending or filing thereof, copies of
all reports and registration statements which the Seller files with the
Securities and Exchange Commission or any national securities exchange
other than registration statements relating to employee benefit plans
and to registrations of securities for selling security holders;
(d) promptly after the filing or receiving thereof, copies of
all reports and notices with respect to any Reportable Event defined in
Title IV of ERISA which the Seller or any subsidiary files under ERISA
with the Internal Revenue Service or the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or which the Seller or any
subsidiary receives from such Corporation;
(e) as soon as possible and in any event within five days
after the occurrence of each Event of Investment Ineligibility or each
event which, with the giving of notice or lapse of time or both, would
constitute an Event of Investment Ineligibility, the statement of the
chief financial officer or chief accounting officer of the Seller
setting forth details of such Event of Investment Ineligibility or
event and the action which the Seller proposes to take with respect
thereto;
(f) promptly and in any event within five Business Days after
the Seller's receipt of delivery thereof, copies of all notices,
requests, reports, certificates, and
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other information and documents delivered or received by the Seller
from time to time under or in connection with the Contribution and Sale
Agreement; and
(g) promptly, from time to time as the Agent may reasonably
request, such other information, documents, records or reports
respecting the Receivables or the conditions or operations, financial
or otherwise, of the Seller or Dial or any subsidiary of Dial as the
Agent may from time to time request in order to protect any Owner's or
the Agent's interests under or contemplated by this Agreement or the
Certificate or any other Purchase Document.
SECTION 5.03. Negative Covenants of the Seller. Until the
later of the Facility Termination Date and the date upon which no Capital for
any Eligible Asset shall be existing, the Seller will not, without the written
consent of the Agent:
(a) Sales, Liens, Etc. Except as otherwise provided herein or
pursuant to the Participant Agreement, sell, assign (by operation of
law or otherwise) or otherwise dispose of, or create or suffer to exist
any Adverse Claim, upon or with respect to, any Pool Receivable or
Related Security or the Seller's undivided interest therein or any
related Contract, or upon or with respect to any lock-box or other
account to which any Collections of any Pool Receivable are sent, or
assign any right to receive income in respect thereof.
(b) Extension or Amendment of Receivables. Except as otherwise
permitted in Section 6.02, extend, amend or otherwise modify the terms
of any Pool Receivable, or amend, modify or waive any term or condition
of any Contract related thereto.
(c) Change in Business or Credit and Collection Policy. Make
any change in the character of its business or in its Credit and
Collection Policy, which change would, in either case, impair in any
material respect the collectibility of any Pool Receivable.
(d) Change in Payment Instructions to Obligors. Add or
terminate any bank as a Lock-Box Bank or any lock-box or other account
as a Lock-Box Account from those listed for the Seller or Dial in
Schedule II hereto or make any change in its instructions to Obligors
regarding payments to be made to the Seller or payments to be made to
any Lock-Box Bank or Lock-Box Account, unless the Agent shall have
received notice of such addition, termination or change and undated
executed copies of Lock-Box Notices to each new Lock-Box Bank or with
respect to each new Lock-Box Account, as applicable.
(e) Deposits to Lock-Box Accounts. Deposit or otherwise
credit, or cause or permit to be so deposited or credited, to any
Lock-Box Account cash or cash proceeds other than Collections of Pool
Receivables except for immaterial amounts the deposit of which is
beyond the control of the Seller.
(f) Change in Corporate Name. Make any change to its corporate
name, identity or structure, or use any tradenames, fictitious names,
assumed names or "doing business as" names, unless within 30 days after
the effective date of such change or use, the Seller delivers to the
Agent (i) notice of such change or use and such proper Financing
Statements or amendments to Financing Statements executed by the Seller
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which the Agent may request to reflect such change or use, and (ii) in
the case of any such change, undated copies of new Lock-Box Notices, in
each case executed by the Seller to reflect such change, together with
such other documents and instruments that the Agent may request in
connection therewith.
(g) Mergers, Etc. Merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of
its assets (whether now owned or hereafter acquired) to, any Person,
except that the Seller may merge or consolidate with or into any other
Person provided that (i) immediately after giving effect to such merger
or consolidation, no Event of Investment Ineligibility or event which,
with the giving of notice or lapse of time, or both, would constitute
an Event of Investment Ineligibility, shall occur and be continuing and
(ii) if the Seller is not the surviving corporation, the corporation
into which the Seller shall be merged or consolidated or which is
otherwise formed pursuant to such merger or consolidation shall assume
the Seller's obligations and grants of interests under the Purchase
Documents and other documents delivered by the Seller hereunder in a
manner satisfactory to the Agent.
(h) Subsidiaries. Establish or acquire any subsidiaries.
(i) Capital Stock. Issue to, or permit to be transferred to,
any Person (other than Dial) any shares of the Seller's capital stock.
(j) Receivables Contribution and Sale Agreement. (i) Cancel or
terminate the Contribution and Sale Agreement or consent to or accept
any cancellation or termination thereof, (ii) amend or otherwise modify
any term or condition of the Contribution and Sale Agreement or give
any consent, waiver or approval thereunder, (iii) waive any default
under or breach of the Contribution and Sale Agreement or (iv) take any
other action under the Contribution and Wale Agreement not required by
the terms thereof that would impair the value of any Collateral or the
rights or interests of the Seller thereunder or of the Agent or any
Owner or Indemnified Party hereunder or thereunder.
(k) Amendment to Certificate of Incorporation. Amend, modify,
or otherwise make any change to its certificate of incorporation which
change requires the consent of 100% of the directors pursuant to the
terms therefor which change in any way would otherwise nullify or
circumvent the limitations on its business activities, the nature of
its separate existence from its affiliates and the requisite directors'
consents for taking certain actions.
(l) Transactions with Shareholders and Affiliates. Enter into
or permit to exist any transaction (including, without limitation, the
purchase, sale, lease or exchange of any property or the rendering of
any service) with Dial or with any other Affiliate of the Seller, other
than as necessary in connection with any Permitted Transactions and on
terms that are fair and reasonable in the circumstances and that
reasonably approximate an arm's length transaction between unaffiliated
parties.
(m) Debt. Create, incur, assume or suffer to exist any Debt,
other than (i) Debt (if any) arising hereunder, (ii) the obligation to
pay the purchase price under the Contribution and Sale Agreement and
(iii) Debt evidenced by the Subordinated Note.
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(n) Permitted Investments. Make any loans to, advances to,
investments in or otherwise acquire any capital stock or equity
security of, or any equity interest in, any other Person.
(o) Restricted Payments. Make any cash payments to, or
otherwise transfer any funds to, any of its Affiliates, except for (i)
payments of the purchase price under the Contribution and Sale
Agreement and the Assignment and Assumption; (ii) repayments of amounts
owed under the Subordinated Note; (iii) payments owed for shared
operating expenses or allocated tax liabilities which are not in
violation of the representations and warranties set forth in Section
4.01(r); and (iv) dividends which are declared by the Seller's board of
directors in accordance with all formalities of corporate law.
(p) Limited Business. Conduct any business with any Person, or
enter into any transactions with Affiliates or other Persons, except
those that are specifically contemplated under the Contribution and
Sale Agreement, the Assignment and Assumption and this Agreement and to
the extent consistent with the representations and warranties set forth
in Section 4.01(r).
(q) Contribution and Sale Agreement; Assignment and
Assumption. Amend, waive, modify or otherwise terminate any terms or
provisions of the Contribution and Sale Agreement or the Assignment and
Assumption, which right to amend, modify, waive or terminate has been
assigned to the Agent for the benefit of the Owners and the other
Indemnified Parties pursuant to Section 11.01.
ARTICLE VI
ADMINISTRATION AND COLLECTION
SECTION 6.01. Designation of Collection Agent. The servicing,
administering and collection of the Pool Receivables shall be conducted by such
Person (the "Collection Agent") so designated from time to time in accordance
with this Section 6.01. Until the Agent gives notice to the Seller of a
designation of a new Collection Agent, Dial is hereby designated as, and hereby
agrees to perform the duties and obligations of, the Collection Agent pursuant
to the terms hereof. If an event has occurred and is continuing which
constitutes an Event of Investment Ineligibility or would constitute an Event of
Investment Ineligibility but for the requirement that notice be given or time
elapse or both, or if at any time the Agent is reasonably insecure as to the
ability of the Collection Agent to perform under this Agreement or reasonably
dissatisfied with the collection performance of the Pool Receivables, or at any
time after the Termination Date, the Agent may designate as Collection Agent any
Person (including itself) to succeed Dial or any successor Collection Agent, on
the condition in each case that any such Person so designated shall agree to
perform the duties and obligations of the Collection Agent pursuant to the terms
hereof. The Collection Agent may, with the prior consent of the Agent,
subcontract with any other Person for servicing, administering or collecting the
Pool Receivables, provided that the Collection Agent shall remain liable for the
performance of the duties and obligations of the Collection Agent pursuant to
the terms hereof.
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SECTION 6.02. Duties of Collection Agent. (a) The Collection
Agent shall take or cause to be taken all such actions as may be necessary or
advisable to collect each Pool Receivable from time to time, all in accordance
with applicable laws, rules and regulations, with reasonable care and diligence,
and in accordance with the applicable Credit and Collection Policy. Each of the
Seller, the Investor and the Agent hereby appoints as its agent the Collection
Agent, from time to time designated pursuant to Section 6.01, to enforce its
respective rights and interests in and under the Pool Receivables, the Related
Security and the Contracts. The Collection Agent shall set aside and hold in
trust for the account of the Seller and each Owner their respective allocable
shares of the Collections of Pool Receivables in accordance with Sections 2.06
and 2.07 but shall not be required (unless otherwise requested by the Agent) to
segregate the funds constituting such portion of such Collections prior to the
remittance thereof in accordance with said Sections. In addition to the
foregoing, the Collection Agent shall be required to set aside all other
Collections of Pool Receivables for the benefit of the Seller, and nothing in
this Section 6.02(a) shall be deemed to relax the requirements elsewhere in this
Agreement that the Seller maintain its bank accounts separate from those of its
Affiliates. The Seller shall have the right, at any time, to demand the
immediate segregation of its funds from those of the Parent Group to such other
accounts which the Agent has approved in writing. The Collection Agent shall (i)
not deposit the Seller's funds in its own bank accounts or those of the Seller's
other Affiliates without properly evidencing such investments by written
instruments payable to the Seller; (ii) ensure that any of the Seller's funds
deposited by it will be readily identifiable at all times from the funds of the
other members of the Parent Group so as to facilitate the prompt and separate
identification of the Seller's assets and (iii) account to the Seller for any
funds not so properly evidenced or identified. If instructed by the Agent, the
Collection Agent shall segregate and deposit with a bank (which may be Citibank)
designated by the Agent such allocable share of Collections of Pool Receivables,
set aside for each Owner, on the first Business Day following receipt by the
Collection Agent of such Collections. Provided no Event of Investment
Ineligibility or Event of Purchase Ineligibility shall have occurred and be
continuing, the Collection Agent (to the extent that Dial is the Collection
Agent) may, in accordance with the Credit and Collection Policy, extend the
maturity or adjust the Outstanding Balance of any Defaulted Receivable as the
Seller may determine to be appropriate to maximize Collections thereof. The
Seller shall deliver to the Collection Agent, and the Collection Agent shall
hold in trust for the Seller and each Owner in accordance with their respective
interests, all documents, instruments and records (including, without
limitation, computer tapes or disks) which evidence or relate to Pool
Receivables.
(b) The Collection Agent shall as soon as practicable
following receipt turn over to the Seller (i) that portion of Collections of
Pool Receivables representing the Seller's undivided interest therein, less, in
the event the Seller is not the Collection Agent, all reasonable and appropriate
out-of-pocket costs and expenses of such Collection Agent of servicing,
collecting and administering the Pool Receivables to the extent not covered by
the Collection Agent Fee received by it and (ii) the Collections of any
Receivable which is not a Pool Receivable. The Collection Agent shall as soon as
practicable upon demand deliver to the Seller all documents, instruments and
records in its possession which evidence or relate to Receivables of the Seller
other than Pool Receivables, and copies of documents, instruments and records in
its possession which evidence or relate to Pool Receivables. The Collection
Agent's authorization under this Agreement shall terminate, after the Facility
Termination Date, upon receipt by each Owner of an Eligible Asset of an amount
equal to the Capital plus accrued Yield for such Eligible Asset plus all other
amounts owed to the Agent, each Owner and the Seller and (unless otherwise
agreed by the Agent and the Collection Agent) the
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Collection Agent under this Agreement.
SECTION 6.03. Rights of the Agent. (a) At any time (i) if the
Agent is reasonably insecure as to the ability of the Collection Agent to
perform under this Agreement or reasonably dissatisfied with the collection
performance of the Pool Receivables, (ii) after the occurrence and during the
continuance of an Event of Investment Ineligibility or an event that would
constitute an Event of Investment Ineligibility but for the requirement that
notice be given or time elapse or both or (iii) after the Termination Date, the
Agent is hereby authorized to date, and to deliver to the Lock-Box Banks, the
Lock-Box Notices delivered hereunder. The Seller hereby, when the Agent shall
deliver the Lock-Box Notices to the Lock-Box Banks, transfers to the Agent the
exclusive ownership and control of the lock-box accounts to which the Obligors
of Pool Receivables shall make payments, and shall take any further action that
the Agent may reasonably request to effect such transfer. In case any authorized
signatory of the Seller whose signature shall appear on any Lock-Box Notice
shall cease to have such authority before the delivery of such Lock-Box Notice,
such signature shall nevertheless be valid and sufficient for all purposes as if
such authority had remained in force at the time of such delivery. Further, the
Agent may notify at any time and at the Seller's expense the Obligors of Pool
Receivables, or any of them, of the ownership of Eligible Assets by the Owners.
(b) At any time following the designation of a Collection
Agent other than Dial or any of its Affiliates pursuant to Section 6.01:
(i) The Agent may direct the Obligors of Pool
Receivables, or any of them, that payment of all amounts
payable under any Pool Receivable be made directly to the
Agent or its designee.
(ii) The Seller shall, at the Agent's request and at
the Seller's expense, give notice of such ownership to each
said Obligor and direct that payments be made directly to the
Agent or its designee.
(iii) The Seller shall, at the Agent's request, (A)
assemble all of the documents, instruments and other records
(including, without limitation, computer tapes and disks)
which evidence the Pool Receivables, and the related Contracts
and Related Security, or which are otherwise necessary or
desirable to collect such Pool Receivables, and shall make the
same available to the Agent at a place selected by the Agent
or its designee, and (B) segregate all cash, checks and other
instruments received by it from time to time constituting
Collections of Pool Receivables in a manner acceptable to the
Agent and shall promptly upon receipt, remit all such cash,
checks and instruments, duly endorsed or with duly executed
instruments of transfer, to the Agent or its designee.
(iv) The Agent may take any and all steps in the
Seller's name and on behalf of the Seller and the Owners
necessary or desirable, in the determination of the Agent, to
collect all amounts due under any and all Pool Receivables,
including, without limitation, endorsing the Seller's name on
checks and other instruments representing Collections and
enforcing such Pool Receivables and the Related Contracts.
SECTION 6.04. Responsibilities of the Seller. Anything herein
to the contrary
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notwithstanding:
(a) The Seller shall perform all of its obligations under the
Contribution and Sale Agreement related to the Pool Receivables to the
same extent as if Eligible Assets had not been sold hereunder and the
exercise by the Agent of its rights hereunder shall not relieve Seller
from such obligations or its obligations with respect to Pool
Receivables; and
(b) Neither the Agent nor the Owners shall have any obligation
or liability with respect to any Pool Receivables or related Contracts
or the Contribution and Sale Agreement, nor shall any of them be
obligated to perform any of the obligations of Dial or the Seller
thereunder.
SECTION 6.05. Further Action Evidencing Purchases. The Seller
agrees that from time to time, at its expense, it will promptly execute and
deliver all further instruments and documents, and take all further action that
the Agent may reasonably request in order to perfect, protect or more fully
evidence the Eligible Assets purchased by the Owners hereunder, or to enable any
of them or the Agent to exercise or enforce any of their respective rights
hereunder or under the Certificate. Without limiting the generality of the
foregoing, the Seller will upon the request of the Agent: (i) execute and file
such financing or continuation statements, or amendments thereto or assignments
thereof, and such other instruments or notices, as may be necessary or
appropriate; (ii) mark conspicuously each invoice evidencing each Pool
Receivable and the related Contract with a legend, acceptable to the Agent,
evidencing that such Eligible Assets have been sold in accordance with this
Agreement; and (iii) mark its master data processing records evidencing such
Pool Receivables and related Contracts with such legend. The Seller hereby
authorizes the Agent to file one or more financing or continuation statements,
and amendments thereto and assignments thereof, relative to all or any of the
Pool Receivables and the Related Security now existing or hereafter arising
without the signature of the Seller where permitted by law. If the Seller fails
to perform any of its agreements or obligations under this Agreement, the Agent
may (but shall not be required to) itself perform, or cause performance of, such
agreement or obligation, and the expenses of the Agent incurred in connection
therewith shall be payable by the Seller as provided in Section 10.01 or Section
12.06, as applicable.
ARTICLE VII
EVENTS OF INVESTMENT INELIGIBILITY
SECTION 7.01. Events of Investment Ineligibility. If any of
the following events ("Events of Investment Ineligibility") shall occur and be
continuing:
(a) The Collection Agent (if Dial or any of its Affiliates)
(i) shall fail to perform or observe any term, covenant or agreement
hereunder (other than as referred to in clause (ii) of this Section
7.01(a)) and such failure shall remain unremedied for three Business
Days after written notice thereof shall have been given by the Agent to
such Collection Agent or (ii) shall fail to make any payment or deposit
to be made by it hereunder when due; or
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(b) The Seller shall fail to perform or observe any term,
covenant or agreement contained in Section 5.03(e) or Section 6.03(a);
or
(c) Any representation or warranty made or deemed to be made
by the Seller or Dial (in its individual capacity or as the Collection
Agent) (or any of their respective officers) under or in connection
with this Agreement or any other Purchase Document or any Investor
Report or the Receivables Activity Report or other information or
report delivered pursuant hereto shall prove to have been false or
incorrect in any material respect when made or deemed made; or
(d) The Seller or Dial shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement or any
other Purchase Document on its part to be performed or observed and any
such failure shall remain unremedied for ten Business Days after
written notice thereof shall have been given by the Agent to the Seller
or Dial, as the case may be; or
(e) The Seller or Dial shall fail to pay any Debt of the
Seller or Dial in an aggregate principal amount outstanding in excess
of $15,000,000, or any interest or premium thereon, when due (whether
by scheduled maturity, required prepayment, acceleration, demand or
otherwise) and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to
such Debt; or any other default under any agreement or instrument
relating to any such Debt, or any other event, shall occur and shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such
Debt; or any such Debt shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(f) Any Purchase or any reinvestment pursuant to Section 2.06
shall for any reason, except to the extent permitted by the terms
hereof, cease to create, or any Eligible Asset shall for any reason
cease to be, a valid and perfected first priority undivided percentage
ownership interest to the extent of the pertinent Eligible Asset in
each applicable Pool Receivable and the Related Security and
Collections with respect thereto or the Certificate shall for any
reason cease to evidence in the Owner of such Eligible Asset legal and
equitable title to, and ownership of, an undivided percentage ownership
interest in Pool Receivables and Related Security to the extent of such
Eligible Asset; or
(g) (i) The Seller or Dial shall generally not pay its debts
as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or
against the Seller or Dial seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or
its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order
for relief or the appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its property and, if
instituted against the Seller or Dial, either such proceeding shall not
be stayed or dismissed for 45 days or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for
relief against it or the appointment of a receiver, trustee, custodian
or other similar official for it or for
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any substantial part of its property) shall occur; or (ii) the Seller
or Dial shall take any corporate action to authorize any of the actions
set forth in clause (i) above in this subsection (g); or
(h) (i) The Default Ratio as at the last day of any Accounting
Period of the Seller shall exceed 1.0%, or (ii) the Delinquency Ratio
as at the last day of any Accounting Period of the Seller shall exceed
2.0%, or (iii) the Loss-to-Liquidation Ratio as at the last day of any
Accounting Period of the Seller shall exceed 1.0% or (iv) the product
of 1.5 times the Disputed Item Ratio as at the last day of any
Accounting Period of the Seller shall exceed 16.0%; or
(i) The Net Receivables Pool Balance shall be less than 102%
of the sum of the aggregate outstanding Capital and the aggregate
outstanding "Capital", respectively, plus the aggregate Loss Reserve
and the aggregate "Loss Reserve", respectively, plus the aggregate
Yield Reserve and the aggregate "Yield Reserve", respectively, plus the
aggregate Collection Agent Fee Reserve and the aggregate "Collection
Agent Fee Reserve", respectively, in each case for all Eligible Assets
and all "Eligible Assets" under the Participant Agreement; or
(j) There shall have been any material adverse change in the
financial condition or operations of Dial since August 15, 1996 or on a
pro forma basis (after giving effect to the Distribution on a pro forma
basis as at and for the period ending December 30, 1995) since December
30, 1995, or there shall have occurred any event which materially
adversely affects the collectibility of the Pool Receivables, or there
shall have occurred any other event which materially adversely affects
the ability of the Seller or Dial to collect Pool Receivables or the
ability of the Seller or Dial to perform hereunder or under any other
Purchase Document; or
(k) Dial's long-term public senior debt securities shall be
rated (i) lower than BBB- by Standard & Poor's Ratings Group and (ii)
if such a rating has been issued by Moody's Investors Service and is
then in effect, lower than Baa3 by Moody's Investors Service; or
(l) Any provision of the Contribution and Sale Agreement or
the Assignment and Assumption shall for any reason cease to be valid
and binding on Dial or the Seller, or Dial or the Seller shall so state
in writing; or
(m) Any purchase of a Receivable under the Contribution and
Sale Agreement shall for any reason, except to the extent permitted by
the terms hereof, cease to create a valid and perfected first priority
ownership interest as against Dial in each Pool Receivable and the
Related Security and Collections with respect thereto, free and clear
of any Adverse Claims (except to the extent contemplated hereunder or
under the Participant Agreement) in favor of the Seller;
then, and in any such event, the Agent shall, at the request, or may with the
consent, of the Investor, by notice to the Seller declare the Facility
Termination Date to have occurred, except that, in the case of any event
described above in clause (i) of subsection (g) or described above in subsection
(f) or (k), the Facility Termination Date shall be deemed to have occurred
automatically upon the occurrence of such event. Upon any such termination of
the Facility, the Agent and the Owners shall have, in addition to all other
rights and remedies under this
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Agreement or otherwise, all other rights and remedies provided under the UCC of
the applicable jurisdiction and other applicable laws, which rights shall be
cumulative. Without limiting the foregoing or the general applicability of
Article IX hereof, any Owner may elect to assign any Eligible Asset owned by
such Owner to an Assignee following the occurrence of any Event of Investment
Ineligibility.
ARTICLE VIII
THE AGENT
SECTION 8.01. Authorization and Action. The Investor hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the other Purchase Documents as
are delegated to the Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto.
SECTION 8.02. Agent's Reliance, Etc. Neither the Agent nor any
of its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them as Agent under or in connection with
this Agreement or any other Purchase Document (including, without limitation,
the Agent's servicing, administering or collecting Pool Receivables as
Collection Agent pursuant to Section 6.01), except for its or their own gross
negligence or willful misconduct. Without limiting the foregoing, the Agent: (i)
may consult with legal counsel (including counsel for the Seller or any of its
Affiliates), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (ii)
makes no warranty or representation to any Owner and shall not be responsible to
any Owner for any statements, warranties or representations made in or in
connection with this Agreement or any other Purchase Document or other
instrument or document furnished pursuant hereto; (iii) shall not have any duty
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement or any other Purchase Document
or other instrument or document furnished pursuant hereto on the part of the
Seller or to inspect the property (including the books and records) of the
Seller; (iv) shall not be responsible to any Owner for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, the Certificate or any other Purchase Document or other instrument or
document furnished pursuant hereto or the perfection, priority or value of any
ownership interest created or purported to be created hereunder; and (v) shall
incur no liability under or in respect of this Agreement or any other Purchase
Document or other instrument or document furnished pursuant hereto by acting
upon any notice (including notice by telephone), consent, certificate or other
instrument or writing (which may be by telex) believed by it to be genuine and
signed or sent by the proper party or parties.
SECTION 8.03. Citicorp and Affiliates. With respect to any
Eligible Asset owned by Citicorp, Citicorp shall have the same rights and powers
under this Agreement as would any Owner and may exercise the same as though it
were not the Agent. Citicorp and its Affiliates may generally engage in any kind
of business with the Seller or any Obligor, any of
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their respective Affiliates and any Person who may do business with or own
securities of the Seller or any Obligor or any of their respective Affiliates,
all as if Citicorp were not the Agent and without any duty to account therefor
to the Owners.
SECTION 8.04. Investor's Purchase Decision. The Investor
acknowledges that it has, independently and without reliance upon the Agent, any
of its Affiliates or any other Owner and based on such documents and information
as it has deemed appropriate, made its own evaluation and decision to enter into
this Agreement and, if it so determines, to purchase an undivided ownership
interest in Pool Receivables hereunder. Each Owner also acknowledges that it
will, independently and without reliance upon the Agent, any of its Affiliates
or any other Owner and based on such documents and information as it shall deem
appropriate at the time, continue to make its own decisions in taking or not
taking action under this Agreement.
ARTICLE IX
ASSIGNMENT OF ELIGIBLE ASSETS
SECTION 9.01. Assignment of Eligible Assets. The Investor may
assign to any Assignee, and any such or other Assignee may assign to any other
Assignee, any Eligible Asset and, upon any such assignment, the Assignee shall
become the Owner of such Eligible Asset. Such assignments shall be upon such
terms and conditions as the assignor and the Assignee of such Eligible Asset may
mutually agree, the parties thereto shall deliver to the Agent an Assignment,
duly executed by such parties, assigning such Eligible Asset to the Assignee,
and such assignor shall promptly execute and deliver all further instruments and
documents, and take all further action, that the Assignee may reasonably
request, in order to perfect, protect or more fully evidence the Assignee's
right, title and interest in and to such Eligible Asset, and to enable the
Assignee to exercise or enforce any rights hereunder or under the Certificate.
The Agent shall provide notice to the Seller of any assignment of an Eligible
Asset hereunder.
SECTION 9.02. Assignments. By executing and delivering an
Assignment, the Owner assignor thereunder and the Assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment, such assigning Owner makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Purchase Document or other instrument or document
furnished pursuant hereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the Certificate or any
other Purchase Document or other instrument or document furnished pursuant
hereto or the perfection, priority or value of any ownership interest created or
purported to be created hereunder; (ii) such assigning Owner makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Dial or the Seller or the performance or observance by
Dial or the Seller of any of their respective obligations under this Agreement,
the Certificate or any other Purchase Document or other instrument or document
furnished pursuant hereto; (iii) such Assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.01 and in Section 3.01 of the Contribution and Sale
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
to purchase such Eligible Asset; (iv) such Assignee
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will, independently and without reliance upon the Agent, any of its Affiliates,
such assigning Owner or any other Owner 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 action under this Agreement and the
other Purchase Documents; (v) such Assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement and the other Purchase Documents as are delegated to the Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto; (vi) such Assignee appoints as its agent the Collection Agent from time
to time designated pursuant to Section 6.01 to enforce its respective rights and
interests in and under the Pool Receivables, the Related Security and the
related Contracts; and (vii) such Assignee agrees that it will not institute
against the Investor any proceeding of the type referred to in Section 7.01(g)
so long as any Commercial Paper Notes or Medium Term Notes issued by the
Investor shall be outstanding or there shall not have elapsed one year plus one
day since the last day on which any such Commercial Paper Notes or Medium Term
Notes shall have been outstanding.
SECTION 9.03. Authorization of Agent. The Agent shall annotate
the Certificate to reflect any assignments made pursuant to Section 9.01 or
otherwise.
ARTICLE X
INDEMNIFICATION
SECTION 10.01. Indemnities by the Seller. Without limiting any
other rights which any Indemnified Party may have hereunder or under the
Contribution and Sale Agreement or under applicable law, the Seller hereby
agrees to indemnify each Indemnified Party from and against any and all damages,
losses, claims, liabilities and related costs and expenses, including reasonable
attorneys' fees and disbursements (all of the foregoing being collectively
referred to as "Indemnified Amounts") awarded against or incurred by any of them
arising out of or as a result of this Agreement (including, without limitation,
the Original Seller Agreement) or any other Purchase Document, the use of
proceeds of Purchases or the ownership of or interest in Eligible Assets or in
respect of any Receivable or Related Security or any Contract, excluding,
however, (i) Indemnified Amounts to the extent resulting from gross negligence
or willful misconduct on the part of such Indemnified Party or any Person which
the Agent appoints as Collection Agent other than the Seller or any Affiliate of
the Seller or (ii) recourse (except as otherwise specifically provided in this
Agreement) for uncollectible Receivables or (iii) any income taxes incurred by
any of them arising out of or as a result of this Agreement or the ownership of
Eligible Assets or in respect of any Receivable or Related Security or any
Contract. Without limiting the foregoing, the Seller shall pay on demand to any
Indemnified Party any and all amounts necessary to indemnify such Indemnified
Party for Indemnified Amounts relating to or resulting from:
(i) the creation of an undivided percentage ownership interest
in any Receivable which is not at the date of the creation of such
interest an Eligible Receivable or which thereafter ceases to be an
Eligible Receivable or which is on such date or thereafter becomes a
Disputed Item which is an Eligible Receivable;
(ii) reliance on any representation or warranty made by the
Seller (or any of its officers) under or in connection with this
Agreement (including, without limitation, the Original Seller
Agreement), any other Purchase Document, any Investor Report or any
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other information or report delivered by Dial or the Seller pursuant
hereto, which shall have been false or incorrect in any material
respect when made or deemed made;
(iii) the failure by Dial or the Seller to comply with any
applicable law, rule or regulation with respect to any Pool Receivable
or the related Contract, or the nonconformity of any Pool Receivable or
the related Contract with any such applicable law, rule or regulation;
(iv) the failure to vest continuously in the Owner of an
Eligible Asset an undivided percentage ownership interest, to the
extent of such Eligible Asset, in the Receivables in, or purporting to
be in, the Receivables Pool, free and clear of any Adverse Claim; or
the failure of the Seller to have obtained a perfected interest in the
Pool Receivables, Related Security and Collections with respect thereto
transferred or purported to be transferred to the Seller under the
Contribution and Sale Agreement, free and clear of any Adverse Claim;
(v) the failure by Dial or the Seller to file, or any delay in
filing, financing statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other applicable laws
with respect to any Receivables in, or purporting to be in, the
Receivables Pool, whether at the time of any Purchase or reinvestment
or at any subsequent time;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment
of any Receivable in, or purporting to be in, the Receivables Pool
(including, without limitation, a defense based on such Receivable or
the related Contract not being a legal, valid and binding obligation of
such Obligor enforceable against it in accordance with its terms), or
any other claim resulting from the sale of the merchandise or services
related to such Receivable or the furnishing or failure to furnish such
merchandise or services;
(vii) any failure of the Seller or Dial, as Collection Agent
or otherwise, to perform its duties or obligations in accordance with
the provisions of Article VI or under any Contract or Purchase
Document, as applicable;
(viii) any products liability claim arising out of or in
connection with merchandise, insurance or services which are the
subject of any Contract;
(ix) any investigation, litigation or proceeding related to
this Agreement or any other Purchase Document or the use of proceeds of
Purchases or the ownership of Eligible Assets or in respect of any
Receivable or Related Security or any Contract; or
(x) the commingling of Collections of Pool Receivables at any
time with any other funds.
SECTION 10.02. Repurchase of Certain Receivables. (a) The
Seller shall, upon not less than five Business Days' notice from the Agent,
repurchase (for cash at the repurchase price specified in Section 10.02(b), on
the date specified in such notice) the interest created by each Eligible Asset
in any and all Pool Receivables which are Disputed Items, whether now or in the
future.
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(b) The repurchase price for any interest in any Pool
Receivable to be repurchased pursuant to subsection (a) of this Section 10.02
shall be an amount equal to the percentage ownership interest (as of the date of
such repurchase) created by the relevant Eligible Asset in the Outstanding
Balance of such Pool Receivable. The proceeds of such repurchase shall be deemed
to be a Collection of such Pool Receivable attributable to such Eligible Asset,
and the amount of such Collection shall be paid by the Seller to the Agent's
Account to be applied as provided in Section 2.06 or 2.07, as applicable, at the
time of repurchase. Any such repurchase shall be made without recourse or
warranty, express or implied.
ARTICLE XI
GRANT OF SECURITY INTEREST
SECTION 11.01. Grant of Security Interest. The Seller hereby
assigns and pledges to the Agent for the benefit of itself, the Investor, the
other Owners and each other Indemnified Party from time to time, and hereby
grants to the Agent for the benefit of itself, the Investor, the other Owners
and each other Indemnified Party from time to time, a security interest in and
to, all of the Seller's right, title and interest in and to the following
(collectively the "Collateral"):
(a) all Pool Receivables now existing and hereafter arising
and Related Security with respect thereto; provided, however, that it
is understood that the Seller has sold to the Agent for the account of
the Owners, pursuant to Article II, all of the Seller's right, title or
interest in or to each Eligible Asset;
(b) all present and future Lock-Box Accounts, and all present
and future other deposit accounts (general or special) with Lock-Box
Banks and any other financial institutions to the extent Collections
from Pool Receivables are from time to time deposited therein;
(c) the Contribution and Sale Agreement and the Assignment and
Assumption;
(d) all rights to receive moneys due and to become due under
or pursuant to the Contribution and Sale Agreement and the Assignment
and Assumption;
(e) all rights to receive proceeds of any indemnity, warranty
or guaranty with respect to the Contribution and Sale Agreement and the
Assignment and Assumption;
(f) claims for damages arising out of or for breach of or
default under the Contribution and Sale Agreement and the Assignment
and Assumption;
(g) the right to perform under the Contribution and Sale
Agreement and the Assignment and Assumption and to compel performance
and otherwise exercise all remedies thereunder; and
(h) all proceeds of any and all of the foregoing Collateral
(including, without
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limitation, proceeds which constitute property of the types described
in clauses (a) through (g) of this Section 11.01) and all Collections,
it being understood that the Seller has no right, title or interest in
or to any Collections or other proceeds attributable to any Eligible
Asset except to the extent covered by the right of the Seller to
receive Collections, if any, attributable to any Eligible Asset after
the aggregate outstanding Capital of all Eligible Assets shall have
been reduced to zero and all accrued and unpaid Yield and Collection
Agent Fee, and all other amounts owing to the Owners hereunder, shall
have been paid in full).
SECTION 11.02. Security for Obligations. The assignment,
pledge and security interest granted under this Article XI secures the payment
of all obligations of the Seller now or hereafter existing from time to time
under this Agreement and the Fee Letter and otherwise in connection with this
Agreement, whether for Collections received or deemed to have been received or
otherwise payable by the Seller, either individually or as Collection Agent,
repurchases of interests in Pool Receivables, interest, fees, costs, expenses,
taxes, indemnification or otherwise (all such obligations being the
"Obligations").
SECTION 11.03. Seller Remains Liable. Anything herein to the
contrary notwithstanding, (a) the Seller shall remain liable under the
Contribution and Sale Agreement and the Assignment and Assumption to the extent
set forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by the
Agent of any of the rights hereunder shall not release the Seller from any of
its duties or obligations under the Contribution and Sale Agreement and the
Assignment and Assumption, and (c) neither the Agent nor the Investor nor any
other Indemnified Party shall have any obligation or liability under the
Contribution and Sale Agreement or the Assignment and Assumption by reason of
this Article XI, nor shall the Agent or the Investor or any other Indemnified
Party be obligated to perform any of the obligations or duties of the Seller
thereunder.
SECTION 11.04. Further Assurances. (a) The Seller agrees that
from time to time, at the expense of the Seller, the Seller will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Agent may reasonably
request, in order to perfect and protect the assignment and security interest
granted or purported to be granted hereby or to enable the Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, the Seller will: (i) execute
and file such financing or continuation statements, or amendments thereto, and
such other instruments or notices, as may be necessary or desirable, or as the
Agent may reasonably request, in order to perfect and preserve the assignment
and security interest granted or purported to be granted hereby; and (ii) mark
conspicuously each copy of each chattel paper which evidences any Collateral
and, at the request of the Agent, each of its records pertaining to the
Collateral with a legend, in form and substance satisfactory to the Agent,
indicating that such chattel paper or Collateral is subject to the assignment
and security interest granted pursuant hereto.
(b) The Seller hereby authorizes the Agent to file one or more
financing or continuation statements, and amendments thereto, relating to all or
any part of the Collateral without the signature of the Seller where permitted
by law. A photocopy or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.
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SECTION 11.05. Payments With Respect to Collateral. (a) The
Seller agrees, and has effectively so instructed each other party to the
Contribution and Sale Agreement and the Assignment and Assumption, that upon the
occurrence of an Event of Investment Ineligibility or event which, with the
giving of notice or lapse of time, or both, would constitute an Event of
Investment Ineligibility, all payments due or to become due to it under or in
connection with the Contribution and Sale Agreement and the Assignment and
Assumption shall be made directly to the Agent by direct deposit to the Agent's
Account specified in the Consent and Agreement. If the Seller receives any such
payments, within two Business Days following its receipt thereof, it will
deposit such payments to the appropriate Agent's Account.
(b) Except as set forth in Section 11.09, all moneys received
or collected pursuant to subsection (a) above shall be applied to the payment of
any Obligations payable, and remaining unpaid, by the Seller at the time of such
receipt or collection, and all remaining moneys shall be released by the Agent
or, pursuant to Section 6.02(b), the Collection Agent, as applicable, to the
Seller or at its order.
SECTION 11.06. Agent Appointed Attorney-in-Fact. The Seller
hereby appoints the Agent the Seller's attorney-in-fact, with full authority in
the place and stead of the Seller and in the name of the Seller or otherwise,
from time to time in the Agent's discretion to take any action and to execute
any instrument which the Agent may deem necessary or advisable to accomplish the
purposes of the assignment, grant and security interest granted hereunder,
including, without limitation:
(a) to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in connection with the Collateral,
(b) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper in connection therewith, and
(c) to file any claims or take any action or institute any
proceedings which the Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce compliance
with the terms and conditions of the Contribution and Sale Agreement or
the Assignment and Assumption or the rights of the Agent with respect
to any of the Collateral.
SECTION 11.07. Agent May Perform. If the Seller fails to
perform any agreement contained herein, the Agent may itself perform, or cause
performance of, such agreement, and the expenses of the Agent incurred in
connection therewith shall be payable by the Seller under Section 12.06(a).
SECTION 11.08. The Agent's Duties. The powers conferred on the
Agent hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the safe
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
any parties or any other rights pertaining to any Collateral. The Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which it accords its own
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property.
SECTION 11.09. Remedies. If any Event of Investment
Ineligibility shall have occurred and be continuing:
(a) The Agent may exercise any and all rights and remedies of
the Seller in respect of the Collateral.
(b) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on
default under the UCC in effect in the State of New York (whether or
not the UCC applies to the affected Collateral).
(c) All payments received by the Seller in respect of the
Collateral shall be received in trust for the benefit of the Agent,
shall be segregated from other funds of the Seller and shall be
forthwith paid over to the Agent in the same form as so received (with
any necessary indorsement).
(d) All payments made in respect of the Collateral, and all
cash proceeds in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral, received by the
Agent may, in the discretion of the Agent, be held by the Agent as
collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Agent pursuant to Section
12.06(a)) in whole or in part by the Agent for the Owners or the
applicable Indemnified Parties against, all or any part of the
Obligations in such order as the Agent shall elect. Any surplus of such
payments or cash proceeds held by the Agent and remaining after payment
in full of all the Obligations shall be paid over to the Seller or to
whomsoever may be lawfully entitled to receive such surplus.
ARTICLE XI
MISCELLANEOUS
SECTION 12.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Seller or the
Collection Agent therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Agent and the Investor and, in the case of
any amendment, the Seller and the Collection Agent, and then such amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 12.02. Notices, Etc. All notices and other
communications provided for hereunder shall, unless otherwise stated herein, be
in writing (including telefax communication) and mailed or telefaxed or
delivered, as to each party hereto, at its address set forth under its name on
the signature pages hereof or at such other address as shall be designated by
such party in a written notice to the other parties hereto. All such notices and
communications shall be effective, in the case of notice by mail, when deposited
in the mails, and, in the case of notice by telefax, when telefaxed, in each
case addressed as aforesaid, except that notices and communications to the Agent
pursuant to Article II shall not be effective until received.
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SECTION 12.03. No Waiver; Remedies. No failure on the part of
any Owner or the Agent to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
SECTION 12.04. Binding Effect; Assignability. This Agreement
shall be binding upon and inure to the benefit of the Seller, the Collection
Agent, the Agent and each Owner and their respective successors and assigns;
provided, however, that neither the Seller nor the Collection Agent may assign
its rights or obligations hereunder or any interest herein without the prior
written consent of the Agent. This Agreement shall create and constitute the
continuing obligations of the parties hereto in accordance with its terms, and
shall remain in full force and effect until such time, after the Facility
Termination Date, as no Capital of any Eligible Asset shall be outstanding;
provided, however, that rights and remedies with respect to any breach of any
representation and warranty made by the Seller pursuant to Article IV and the
indemnification provisions of Article X and Section 12.06 shall be continuing
and shall survive any termination of this Agreement.
SECTION 12.05. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York, except
to the extent that perfection or the effect of non-perfection of the interests
of the Owners in the Receivables, or remedies hereunder, in respect thereof, are
governed by the laws of a jurisdiction other than the State of New York.
SECTION 12.06. Costs, Expenses and Taxes. (a) In addition to
the rights of indemnification granted to the Indemnified Parties under Article X
hereof, the Seller agrees to pay on demand all costs and expenses in connection
with the preparation, execution, delivery and administration (including periodic
auditing) of this Agreement, the Certificate and the other Purchase Documents
and other documents to be delivered hereunder, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel for the Owner and the
Agent with respect thereto and with respect to advising such Owner and the Agent
as to their respective rights and remedies under this Agreement, and all costs
and expenses, if any (including reasonable counsel fees and expenses) of such
Owner and the Agent, in connection with the enforcement against the Seller or
Dial (whether through negotiations, legal or bankruptcy proceedings or
otherwise) of this Agreement, the Certificate and the other Purchase Documents
and the other documents to be delivered hereunder by the Seller and Dial,
respectively.
(b) In addition, the Seller shall pay any and all commissions
of placement agents and dealers in respect of Commercial Paper Notes, or Medium
Term Notes, or both, of any Owner issued to fund the Purchase or maintenance of
any Eligible Asset and any and all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing and
recording of this Agreement, the Certificate or the other documents to be
delivered hereunder, and agrees to indemnify each Owner and the Agent against
any liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees.
(c) In addition, the Seller shall pay on demand all other
costs, expenses and taxes (excluding income taxes) incurred by the Owner or any
general or limited partner or
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shareholder of the Owner ("Other Costs"), including, without limitation, the
cost of auditing the Owner's books by certified public accountants, the cost of
rating the Owner's Commercial Paper Notes or Medium Term Notes, or both, by
independent financial rating agencies, the issuance fee in respect of the
Owner's Medium Term Notes charged by and payable to the Agent, the cost of
issuing the Owner's Commercial Paper Notes or Medium Term Notes, or both, the
taxes (excluding income taxes) resulting from the Owner's operations, and the
reasonable fees and out-of-pocket expenses of counsel for the Owner or any
counsel for any general or limited partner or shareholder of the Owner with
respect to (i) advising the Owner or any general or limited partner or
shareholder of the Owner as to its rights and remedies under this Agreement,
(ii) the enforcement (whether through negotiations, legal proceedings or
otherwise) of this Agreement, the Certificate and the other documents to be
delivered hereunder, (iii) advising the Owner or any general or limited partner
or shareholder of the Owner as to matters relating to the Owner's operations, or
(iv) advising the Owner or any general or limited partner or shareholder of the
Owner as to the issuance of the Owner's Commercial Paper Notes or Medium Term
Notes, or both, and acting in connection with such issuance; provided, however,
that if the Owner enters into agreements for the purchase of interests in
receivables from one or more other Persons ("Other Sellers"), the Seller and
such Other Sellers shall each be liable for such Other Costs ratably in
accordance with the usage under the respective facilities of the Owner to
purchase receivables or interests therein from the Seller and each Other Seller;
and provided, further, that if such Other Costs are attributable to the Seller
and not attributable to any Other Seller, the Seller shall be solely liable for
such Other Costs. Any party claiming payment for any amount under this Section
12.06(c) shall provide to the Seller such information as the Seller may
reasonably request as to the basis for the calculation by such party of any such
amount.
(d) The Seller agrees to indemnify and hold harmless each of
the Indemnified Parties and their respective officers, directors, employees and
agents from and against any and all claims, damages, liabilities and expenses
(including, without limitation, reasonable fees and disbursements of counsel) to
which any Indemnified Party may become subject or liable or which may be
incurred by or asserted against any Indemnified Party, in each case in
connection with or arising out of or by reason of any investigation, litigation
or proceeding arising out of, related to or in connection with any acquisition
or proposed acquisition by the Seller or Dial or any of their respective
Affiliates of all or any of the portion of the stock or substantially all the
assets of any Person, whether or not an Indemnified Party is a party thereto.
SECTION 12.07. No Proceedings. The Seller and the Agent each
hereby agrees that it will not institute against the Investor any proceeding of
the type referred to in clause (i) of Section 7.01(g) so long as any Commercial
Paper Notes or Medium Term Notes issued by the Investor shall be outstanding or
there shall not have elapsed one year plus one day since the last day on which
any such Commercial Paper Notes or Medium Term Notes shall have been
outstanding.
SECTION 12.08. Confidentiality. Except to the extent otherwise
required by applicable law, each of the Seller and the Collection Agent agrees
to maintain, and cause the maintenance of, the confidentiality of this Agreement
and the other Purchase Documents (and all drafts thereof) in communications with
third parties and otherwise; provided, however, that the Agreement may be
disclosed to third parties to the extent such disclosure is (i) required in
connection with a sale of securities of the Seller or Dial, (ii) made solely to
persons who are legal counsel for the purchaser or underwriter of such
securities, (iii) limited in scope to the
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provisions of Articles V, VII, X and, to the extent defined terms are used in
Articles V, VII and X, such terms defined in Article I of this Agreement and
(iv) made pursuant to a written agreement of confidentiality in form and
substance reasonably satisfactory to the Agent; provided, further, however, that
this Agreement and the other Purchase Documents may be disclosed to the Seller's
legal counsel pursuant to an agreement of the type referred to in clause (iv),
above; and provided, further, however, that the Seller and Dial shall have no
obligation of confidentiality in respect of any information which may be
generally available to the public or becomes available to the public through no
fault of the Seller or Dial. Each of the Agent and each Owner agrees to use
reasonable efforts to keep in confidence all financial data and other
information identified by the Seller or Dial as confidential relative to the
affairs of Dial and its subsidiaries heretofore or hereafter furnished to it
under this Agreement; provided that the requirements of this sentence shall not
apply to any such information that is made available to the public by the Seller
or Dial or any other Person, and provided further that this sentence shall not
prohibit any disclosure (a) required by applicable laws or regulations or
pursuant to subpoena or other legal process, (b) to government regulators,
auditors, accountants, legal counsel and other professional consultants and
advisors, (c) to actual or prospective assignees or participants, or (d) as may
otherwise be reasonably necessary or appropriate in connection with the
transactions set forth herein or the enforcement thereof or any dispute or
litigation in connection therewith.
SECTION 12.09. Execution in Counterparts; Etc. This Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement or any other Purchase Document by telecopier shall be effective as
delivery of a manually executed counterpart of this Agreement or such Purchase
Document. In case any provision in or obligation under this Agreement or the
Certificate shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
SELLER: DIAL RECEIVABLES CORPORATION
By:___________________
Title:
1850 N. Central Avenue
19th Floor
Phoenix, Arizona 85077
Attention:
Telefax No.: (602) 207-
COLLECTION AGENT: THE DIAL CORPORATION
By:___________________
Title:
1850 N. Central Avenue
Phoenix, Arizona 85077
Attention: Senior Vice President - Finance and
Chief Financial Officer
Telefax No.: (602) 207-2071
INVESTOR: CIESCO L.P.
By: Citicorp North America, Inc., as Attorney-in-
Fact
By:______________________
Managing Director
450 Mamaroneck Avenue
Harrison, New York 10528
Attention: President
Telefax No.: (914) 899-7015
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<PAGE> 57
AGENT: CITICORP NORTH AMERICA, INC.,
as Agent
By:_________________________
Managing Director
450 Mamaroneck Avenue
Harrison, New York 10528
Attention: Corporate Asset Funding Department
Telefax No.: (914) 899-7015
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<PAGE> 1
EXHIBIT 10.3
TRADEMARK LICENSE AGREEMENT
THIS AGREEMENT is entered into on this 1st day of July, 1995 between THE
DIAL CORP ("Dial"), a Delaware corporation, with its principal offices at 1850
North Central Avenue, Phoenix, Arizona, and CONAGRA, INC. ("ConAgra"), a
Delaware corporation, with its principal offices at One ConAgra Drive, Omaha,
Nebraska.
WITNESSETH
WHEREAS, ConAgra entered into a licensing agreement with Armour-Dial, Inc.,
Dial's predecessor-in-interest, on or about December 18, 1983 ("1983 LICENSING
AGREEMENT"); and
WHEREAS, in that 1983 LICENSING AGREEMENT, ConAgra granted Dial limited
rights to use the trademarks ARMOUR, STAR, ARMOUR STAR, ARMOUR'S, ARMOUR (Logo
type design), and BANNER on certain shelf-stable products specified in Exhibit B
to the 1983 LICENSING AGREEMENT; and
WHEREAS, ConAgra filed suit against Dial for breach of contract and
trademark infringement, Case No. 8:CV 93-00339 in the United States District
Court for the District of Nebraska which suit was dismissed without prejudice in
contemplation of execution of this AGREEMENT; and
WHEREAS the parties desire to enter into this Agreement to set forth their
rights and obligations with respect to the TRADEMARKS (as hereinafter defined),
cancelling and superseding the 1983 LICENSE AGREEMENT.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements hereinafter contained, it is agreed as follows:
DEFINITIONS
a. NET SALES: In this Agreement, the term NET SALES shall mean the
number obtained by subtracting cash discounts and product returns and
allowances (excluding trade allowances) from Dial's gross sales of
SHELF-STABLE PRODUCTS (as hereinafter defined).
b. ROYALTY: In this Agreement, the term ROYALTY shall refer to the
amount owed to ConAgra by Dial, as calculated according to Section 2 below.
c. SHELF-STABLE PRODUCTS:
<PAGE> 2
(i) Subject to the provisions hereinbelow, in this Agreement, the
term "SHELF-STABLE PRODUCTS" shall mean any and all food products sold under or
in connection with the TRADEMARKS which under normal conditions do not need to
be refrigerated, cooled, or frozen while being transported, inventoried,
warehoused, stored, distributed and/or sold.
(ii) The term SHELF-STABLE PRODUCTS shall not include any of the
food products sold under or in connection with the TRADEMARKS as of the date of
this Agreement that need to be refrigerated, cooled, or frozen to be
transported, inventoried, warehoused, stored, distributed and/or sold (a list of
all such products is set forth in Schedule C.1 hereto and includes a product
description for each complete with the respective SKU or UPC for each)
regardless of whether future technological developments make it possible to
transport, inventory, warehouse, store, distribute and/or sell these products
without being refrigerated, cooled, or frozen.
(iii) The term SHELF-STABLE PRODUCTS shall also exclude products
commonly referred to as "Fresh", such as fruit and vegetables.
(iv) The term SHELF-STABLE PRODUCTS includes all processed meat
products which fall within Paragraph c.(i) above excepting, however, the
particular dry sausage products sold by ConAgra or its affiliates under or in
connection with the TRADEMARKS as of the date of this Agreement (a list of all
such products is set forth in Schedule C.2 hereto and includes a product
description for each complete with the respective SKU or UPC for each). The
parties understand and agree that the dry sausage products set forth in Schedule
C.2 are not licensed to Dial, but that all other processed meat products which
fit the definition of SHELF-STABLE PRODUCTS herein (for example meat sticks and
jerky snacks) are licensed hereunder to Dial.
d. TERRITORY: In this Agreement, the term TERRITORY shall refer to
the United States of America.
e. TRADEMARKS: In this Agreement, the term TRADEMARKS shall mean the
trademarks and/or trade names ARMOUR, STAR, ARMOUR STAR, ARMOUR'S, ARMOUR
(logotype design), and BANNER. The term TRADEMARKS shall also include trademarks
incorporating any of the foregoing (e.g., ARMOUR FARMS and CAPTAIN ARMOUR) but
only if ConAgra, in the exercise of its discretion, specifically approves of
those new trademarks in writing.
<PAGE> 3
1. GRANT OF LICENSE
Upon the terns and conditions hereinafter set forth, ConAgra hereby grants
to Dial and Dial hereby accepts from ConAgra the sole and exclusive right to
use, in any lawful manner whatsoever, the TRADEMARKS but solely in connection
with the SHELF-STABLE PRODUCTS in the TERRITORY.
The parties agree and understand that, except as provided in this
Agreement, ConAgra reserves all rights with respect to the TRADEMARKS not
expressly granted herein, including but not limited to the exclusive right to
utilize and/or license the TRADEMARKS in connection with the manufacture and/or
sale of any product that is not a SHELF-STABLE PRODUCT.
Nothing herein shall he construed as granting to Dial any right to use the
TRADEMARKS for restaurant services. The foregoing shall not be construed to
limit in any manner, Dial's channels of distribution of SHELF-STABLE PRODUCTS.
2. ROYALTIES
In consideration of the rights granted herein to Dial, Dial shall pay to
ConAgra the following sums as ROYALTY:
(a) The sum of five hundred thousand dollars ($500,000.00) which
shall be payable as follows: (i) one hundred twenty-five thousand dollars
($125,000.00) upon the execution of this Agreement and (ii) fifteen (15) equal
quarterly installments of twenty-five thousand dollars ($25,000.00) each,
payable as follows: July 1, 1995; October 1, 1995; January 1, 1996; April 1,
1996; July 1, 1996; October 1, 1996; January 1, 1997; April 1, 1997; July 1,
1997; October 1, 1997; and January 1, 1998; April 1, 1998; July 1, 1998; October
1, 1998; January 1, 1999.
(b) In addition to the amounts to be paid under Paragraph 2(a)
above, during the period commencing effective January 1, 1995 through December
31, 1998, Dial shall pay to ConAgra a percentage royalty based upon annual NET
SALES of SHELF-STABLE PRODUCTS sold as follows:
<PAGE> 4
<TABLE>
<CAPTION>
For Annual NET SALES of The Percentage of
SHELF-STABLE PRODUCTS of: Annual NET SALES is:
------------------------- --------------------
<S> <C> <C>
0 - $200,000,000 0%
$200,000,001-$300,000,000 .5%
$300,000,001-$500,000,000 1 %
Over $500,000,001 1.5%
</TABLE>
For example, if, for the period ending December 31, 1996, Dial's annual NET
SALES are $275,000,000, Dial's percentage royalty under Section 2(b) would be
$375,000. Another example would be if Dial's annual NET SALES are $325,000,000,
Dial's percentage royalty under Section 2(b) would be $750,000.
(c) In addition to the amounts to be paid under Paragraph 2(a)
above, for all calendar year periods from and after January 1, 1999, during the
term of this Agreement, Dial shall pay to ConAgra the greater of (i) two hundred
fifty thousand dollars ($250,000.00) annually; or a percentage royalty based
upon annual NET SALES of SHELF-STABLE PRODUCTS as follows:
<TABLE>
<CAPTION>
For Annual NET SALES of The Percentage of
SHELF-STABLE PRODUCTS of: Annual NET SALES is:
------------------------- --------------------
<S> <C> <C>
0 - $200,000,000 0%
$200,000,001-$300,000,000 .7%
Over $300,000,001 1.25%
</TABLE>
In no event shall annual royalties under Section 2(c) exceed two million
dollars ($2,000,000).
(d) All sums due pursuant to Paragraphs 2(b) and (c) above shall be
paid on or before May 1 of each year for the previous calendar year. Along with
said payment, Dial shall provide ConAgra with a final statement, certified as
complete and accurate, of annual NET SALES with respect to the prior calendar
year.
3. ASSIGNMENT
(a) Except as otherwise provided herein, and so long as ConAgra does
nothing to conflict with or restrict the licensed rights granted to Dial herein,
ConAgra may sell, assign, license, encumber or otherwise transfer ("Assign" or
"Assignment") this Agreement and the TRADEMARKS without restriction, provided
that, with respect to an Assignment of this Agreement, the assignee assumes, in
writing, the terms and conditions of this Agreement and all duties and
obligations of the licensor hereunder.
<PAGE> 5
(1) Dial shall have a right of first refusal to purchase the
rights to the TRADEMARKS and associated goodwill if, and only if, ConAgra is
assigning the rights to only the TRADEMARKS and associated goodwill, and the
assignment is not part of a merger, sale, or other transaction in which assets
other than the TRADEMARKS and associated goodwill are also being transferred.
Prior to assigning the TRADEMARKS and associated goodwill (if ConAgra is only
assigning the TRADEMARKS and associated goodwill and no other assets as noted
above), ConAgra will first offer to sell the TRADEMARKS and associated goodwill
to Dial upon the same terms and conditions as ConAgra had proposed with the
third party. Dial will have twenty (20) days from its receipt of the written
offer to accept such offer. If Dial does not accept such offer, ConAgra may
thereafter assign the TRADEMARKS and associated goodwill to the third party.
(2) Dial shall not have a right of first refusal to purchase
the rights to the TRADEMARKS and associated goodwill if ConAgra is assigning the
rights to the TRADEMARKS and associated goodwill as part of a merger, sale of
assets, or any other transaction in which assets other than the TRADEMARKS and
associated goodwill are also being transferred.
(b) Except in connection with the sale or transfer of Dial's entire
Armour business, Dial may not assign, by operation of law or otherwise, any of
its rights, duties or obligations under this Agreement to any party (such third
party is hereinafter referred to as an "Assignee"), without the prior written
consent of ConAgra, which consent will not be unreasonably withheld. Any such
Assignee must assume all of the terms, covenants and conditions of this
Agreement and all of the duties and obligations of the licensee hereunder.
(c) In determining the reasonableness of withholding consent to an
Assignment, the parties agree that it shall not be deemed unreasonable for
ConAgra to consider (i) whether the Assignee (or its affiliates) competes with
the business of ConAgra, and (ii) the financial solvency of the Assignee. The
consent of ConAgra to an Assignment shall not constitute a consent to any
subsequent Assignment by Dial or to any subsequent successive Assignment by the
Assignee.
(d) Any Assignment in violation of this Agreement shall be void and
a material breach of this Agreement.
4. BOOKS AND RECORDS
Dial covenants to keep and maintain accurate books and records of
transactions affecting the SHELF-STABLE PRODUCTS and the ROYALTY relating
thereto. Books and records for each year shall be retained for a total of three
years following the close of each such year. ConAgra shall have reasonable
access to the books and records of accounts of those transactions involving the
sales of the SHELF-STABLE PRODUCTS in order to determine and/or clarify the
amount of sales and the ROYALTY due ConAgra. If after such analysis it is
determined that Dial has understated the ROYALTY due ConAgra, then Dial shall
<PAGE> 6
pay the shortage within ten (10) business days following receipt of written
notice and supporting substantiation of the understated ROYALTY. ConAgra agrees
that it will not seek access to Dial's books and records more than one time each
in any twelve (12) month period and then only during regular business hours at
the location at which such books and records are regularly or actually
maintained.
5. RELATIONSHIP BETWEEN PARTIES
Nothing contained in this Agreement shall be construed to place the parties
in the relationship of legal representatives, partners, joint venturers, agents
or fiduciaries, and no party shall take any action nor incur any debts,
obligations or liabilities in the name of the other.
6. INDEMNIFICATION AND LIMITATION OF LIABILITY
(a) Dial agrees to indemnify and hold ConAgra and ConAgra's
officers, directors, employees, shareholders, affiliates and agents harmless
from any claim, suit, loss, damage, demand or expense, or cause of action or
claim of any third party (collectively, a "Claim"), arising from or relating to
(i) the inaccuracy or breach, as applicable, of any representation, covenant or
warranty made by Dial in this Agreement or (ii) Dial's manufacture, production,
distribution, sale, marketing and/or advertising of the SHELF-STABLE PRODUCTS or
use of the TRADEMARKS.
(b) ConAgra agrees to indemnify and hold Dial and Dial's officers,
directors, employees, shareholders, affiliates and agents harmless from any
claim, suit, loss, damage, demand or expense, or cause of action or claim of any
third party (collectively, a "Claim"), arising from or relating to (i) the
inaccuracy or breach, as applicable, of any representation, covenant or warranty
made by ConAgra in this Agreement or (ii) ConAgra's use of the TRADEMARKS in
connection with products or services other than the SHELF-STABLE PRODUCTS.
7. THE TRADEMARKS: OWNERSHIP, USE, INFRINGEMENT
(a) Subject to Section 7(b) below, ConAgra shall retain the full and
complete ownership of the TRADEMARKS, including all goodwill associated
therewith, subject only to the specific rights granted to Dial pursuant to this
Agreement. All goodwill arising from Dial's use of the TRADEMARKS will inure
solely to the benefit of ConAgra. Dial shall cooperate if ConAgra registers,
files or prosecutes, at ConAgra's expense, any application that ConAgra may
desire to file for TRADEMARKS, and, for that purpose, Dial shall supply ConAgra
with such samples, containers, labels and similar materials as may be reasonably
requested by ConAgra.
(b) If Dial incorporates new terms or matter (collectively
hereinafter "NEW MATTER") with any of the TRADEMARKS to create new
<PAGE> 7
trademarks that receive ConAgra's approval for Dial's use under this Agreement,
then at the time of ConAgra's approval, Dial and ConAgra shall agree in writing
as to the ownership rights of the NEW MATTER. The parties understand that the
intent of this paragraph is to recognize Dial's ownership interest in and to NEW
MATTER which is developed independently of ConAgra while ensuring that as
between Dial and ConAgra, ConAgra retains the full, complete, sole and exclusive
ownership interest in and to the TRADEMARKS.
(c) The SHELF-STABLE PRODUCTS shall be sold on an exclusive basis by
Dial within the TERRITORY and may bear the TRADEMARKS as they exist as of the
date of this Agreement or as they may from time to time be changed, modified or
altered by ConAgra during the term of this Agreement. Nothing set forth herein
shall limit or affect the right of ConAgra to modify or change the TRADEMARKS;
however, ConAgra agrees that Dial's form and manner of use of the TRADEMARKS as
of the date of this Agreement or as may be approved by ConAgra from time to
time, may continue.
(d) Each party shall promptly notify the other party in writing of
any known or suspected infringements, imitations, or unauthorized uses of the
TRADEMARKS by third parties. ConAgra in the first instance shall have the right
and discretion to institute actions against third parties for infringement of
the TRADEMARKS. ConAgra shall have the right to control any such action
instituted by it, including employment of counsel selected by ConAgra. Dial
shall cooperate with ConAgra, at ConAgra's expense, in connection with any such
action instituted by ConAgra. ConAgra may not, without Dial's written consent,
enter into any settlement agreement, stipulated judgment or the like that would
restrict or limit in any manner the rights granted to Dial in this Agreement.
If any such litigation instituted by ConAgra for infringement of the
TRADEMARKS does not relate to allegedly infringing use in respect of
SHELF-STABLE PRODUCTS, then ConAgra shall bear all expenses of such litigation
and shall be entitled to all monetary recoveries, if any, as a result of such
action. If any such litigation instituted by ConAgra for infringement of the
TRADEMARKS does relate to an allegedly infringing use in respect of SHELF-STABLE
PRODUCTS, then ConAgra shall give Dial the opportunity to pay one-half of all
expenses of such litigation, including attorney's fees, and to be entitled
thereby to receive one-half of all monetary recoveries, if any, as a result of
such action.
If ConAgra declines to institute an action against a third party for
infringement of the TRADEMARKS with respect to the SHELF-STABLE PRODUCTS, then
Dial shall have the right and discretion to bring such an action. Dial shall
bear all expenses of such litigation and shall be entitled to all monetary
recoveries, if any, as a result of such action.
8. REPRESENTATIONS AND COVENANTS OF DIAL
<PAGE> 8
(a) Subject to the provisions of Section 7, Dial recognizes
ConAgra's exclusive right, title and interest in the TRADEMARKS and agrees that
it will not, at any time, do or cause to be done any act or thing impairing or
tending to impair any part of ConAgra's right, title and interest therein, and
agrees that it will not directly or indirectly, during the term of this
Agreement or thereafter, attack or contest ConAgra's title to, or its rights to
use, said TRADEMARKS consistent with the terms of this Agreement, nor will it
seek to register the TRADEMARKS in the TERRITORY.
(b) Dial agrees that it will not use said TRADEMARKS in the
TERRITORY except in connection with the SHELF-STABLE PRODUCTS manufactured and
marketed pursuant to this Agreement and only in accordance with the terms and
provisions hereof. In this connection, Dial shall cause to appear on all
containers, packaging, labels, advertising and promotional material used in
connection with the SHELF-STABLE PRODUCTS, such legends, markings and notices as
may reasonably be required by ConAgra or as may be required by applicable laws.
(For example, Dial shall place a proper notice as required by applicable law
immediately following the mark indicating that the mark is registered in the
U.S. Patent and Trademark Office. Proper notice shall consist of "(R)" or
"Registered U.S. Patent and TRADEMARKS Office" or "Reg. U.S. Pat. & TM Off."
Whenever using marks that are not registered with the U.S. Patent and Trademark
Office, Dial shall use in association therewith a "TM" or other accepted
designation or statement of trademark or service mark status.)
9. REPRESENTATIONS AND COVENANTS OF CONAGRA
(a) ConAgra represents that (i) it has the right to enter into this
Agreement, (ii) to the best of its knowledge, the TRADEMARKS are owned by
ConAgra free from liens and encumbrances, (iii) no other rights, licenses or
authorizations to use said TRADEMARKS, within the TERRITORY, in connection with
SHELF-STABLE PRODUCTS have been granted by it to any third party, and (iv) there
is no claim by any third party to the right to use the TRADEMARKS which
conflicts with the rights granted Dial hereunder.
(b) ConAgra warrants that during the term of this Agreement it will
not (i) grant to any third party any license, sublicense, right or privilege
with respect to the TRADEMARKS which conflicts with the rights granted in this
Agreement, or (ii) use for itself or its own account, the TRADEMARKS in respect
of SHELF-STABLE PRODUCTS in the TERRITORY. Nothing herein shall be construed as
in any way restricting or limiting ConAgra from producing and/or marketing
competitive SHELF-STABLE PRODUCTS under any trademark other than the TRADEMARKS.
10. REQUIRED APPROVALS
(a) Product Approvals. Prior to (i) manufacturing a new SHELF-STABLE
PRODUCT for general distribution and sale or (ii) making a material
<PAGE> 9
change to the Finished Product Specifications (as said capitalized term is
described hereinbelow) of any SHELF-STABLE PRODUCT previously approved by
ConAgra, Dial shall obtain the approval of ConAgra, which approval shall not be
unreasonably withheld, in accordance with the provisions set forth herein.
Contemporaneously herewith, Dial has furnished to ConAgra a copy of all Finished
Product Specifications for the SHELF-STABLE PRODUCTS sold as of the date of the
execution of this License Agreement (a list of all such products is set forth in
Schedule 10(a) hereto and includes a product description for each complete with
the respective SKU or UPC for each), all of which are hereby approved. In order
to obtain approval for modifications to the foregoing or for new SHELF-STABLE
PRODUCTS, Dial shall deliver a written description of the finished product
including the Finished Product Specifications in the format substantially
identical to the Exhibit D product specifications used in connection with the
1983 LICENSING AGREEMENT and, as appropriate, a written specification of any
proposed change in the said specifications for such product to ConAgra, along
with a specific request for approval (together, the "Product Request"). If
requested by ConAgra, Dial shall also provide a product sample. Product Requests
shall be delivered in accordance with the terms of Section 10(e) below, and may
be mailed using first class, registered, certified or overnight mail service. If
delivered by first class mail, receipt by ConAgra shall be presumed on the fifth
business day following posting.
If within fifteen (15) days from the date ConAgra receives such
Product Request it does not approve the Product Request in writing, it shall be
presumptively deemed that ConAgra has approved the Product Request. Any
objection by ConAgra to a Product Request shall be in writing, sent to Dial
within fifteen (15) days from the date ConAgra receives such Product Request and
shall include the reason(s) for ConAgra's objection, and shall include, as
appropriate, suggestions for modifications or changes which, if adopted, would
render the proposed product acceptable to ConAgra. When time is of the essence
and Dial so notes on the Product Request, then ConAgra's suggestions for
modification or changes may be deemed approval of a modified or changed version
or form of product that is consistent with the suggestions made by ConAgra.
Otherwise each version or form of product shall be resubmitted as a new Product
Request pursuant to the provisions of this Section 10(a), and, in no event shall
Dial offer a product for sale or distribution unless it has received the prior
written approval of ConAgra or ConAgra has failed to object within the time
frame described in this Section 10(a) with respect to that particular version or
form of product.
Notwithstanding the foregoing, ConAgra recognizes that by the very
nature of the mass production process there may be a variance in weight, quality
and quantity, etc. reasonably occurring in the mass production of the new or
modified product, and so long as these variances, or other variances caused by
Dial, are minor and do not adversely affect the overall quality of the product,
and so long as there are no material changes made to the approved products, they
shall not require the further acceptance or approval of ConAgra.
<PAGE> 10
(b) Packaging and Advertising Approvals. ConAgra shall have the
right to approve, which approval shall not be unreasonably withheld, the labels,
packaging, advertising and promotional materials of Dial relating to the
SHELF-STABLE PRODUCTS and TRADEMARKS licensed hereunder. ConAgra is aware of
such labels, packaging, advertising and promotional materials used by Dial at
the execution of this License Agreement and such are hereby deemed approved. All
future labels, packaging, advertising or promotional materials which constitute
a material departure from those used at execution of this License Agreement,
shall be submitted to ConAgra for approval prior to use thereof as set forth
herein. Prior to the use of (i) any packaging, or labels with respect to a new
or modified product ("Packaging"), (ii) any new consumer or trade advertisement
with respect to the SHELF-STABLE PRODUCTS (collectively referred to as
"Advertisements") or (iii) any material change or modification to previously
approved Packaging or Advertisements, Dial shall obtain the approval of ConAgra
as set forth herein. In order to obtain such approval, Dial shall submit a
sample of such Packaging or Advertisements, along with a specific request for
approval (together, the "P&A Request"). P&A Requests shall be delivered in
accordance with the terms of Section 10(e) below, and may be mailed using first
class, registered, certified or overnight mail service. If delivered by first
class mail, receipt by ConAgra shall be presumed on the fifth business day
following posting.
If within fifteen (15) days from the date ConAgra receives such P&A
Request ConAgra does not approve the P&A Request in writing, it shall be
presumptively deemed that ConAgra has approved the Packaging and Advertisements.
Any objection by ConAgra to a P&A Request shall be in writing, sent to Dial
within fifteen (15) days from the date ConAgra receives such P&A Request, and
the written objection shall contain, among other things, the reason for such
objection and shall include, as appropriate, suggestions for modifications or
changes which if implemented would then meet with its approval. When time is of
the essence for Dial, and Dial so notes on the P&A Request, then ConAgra's
suggestions for modifications or changes may be deemed approval of a modified or
changed version or form of Packaging or Advertisements that is consistent with
the suggestions made by ConAgra. Otherwise, each version or form of Packaging or
Advertisements shall be resubmitted as a new P&A Request pursuant to the
provisions of this Section 10(b), and Dial shall not use or distribute any
Packaging or Advertisements for SHELF-STABLE PRODUCTS unless it has received
prior written approval from ConAgra or ConAgra has failed to object within the
time frame described in this Section 10(b) with respect to that particular
version or form of Packaging or Advertisement.
Notwithstanding the foregoing, ConAgra recognizes that because of
the inherent nature of the SHELF-STABLE PRODUCTS certain minor aspects of the
Packaging or Advertisements may from time to time be at variances with the
original Packaging or Advertisements as approved; i.e., the photograph of the
product contained within the package, and statements of changed ingredients,
size
<PAGE> 11
and weight approved or deemed approved pursuant to this Agreement, and such
minor variations shall not require the prior approval of ConAgra in each
instance. Further, once any Packaging or Advertisements has been approved, so
long as there are no material changes made to the approved materials, they shall
not require the further acceptance or approval of ConAgra.
(c) The approval process set forth above shall not create any duty
or responsibility of ConAgra with respect to a SHELF-STABLE PRODUCT or its
manufacture, sale, distribution, promotion or advertising and shall not in any
way limit or restrict the rights of ConAgra under this Agreement.
(d) In addition to reasonable quality standards established by
ConAgra, Dial shall, at a minimum, comply with all applicable governmental laws
and regulations and obtain all government license or approvals pertaining to the
advertising, sale, packaging, distribution or manufacturing of the SHELF-STABLE
PRODUCTS.
(e) Unless Dial is otherwise directed by ConAgra in writing, all
notices, samples, and requests for approval provided by Dial to ConAgra pursuant
to this Section 10 shall be delivered to the Vice-President of Marketing of
Armour Swift-Eckrich Processed Meats Co., 2001 Butterfield Road, Downers Grove,
Illinois 60515-1049. Written approval from ConAgra shall be signed by, and Dial
may not rely on approval from any official other than, the Vice-President of
Marketing or his/her designated successor or his/her superior.
(f) Failure of ConAgra to object to a breach by Dial of any
provision contained in this Section 10 shall not act in any way to estop or
prevent subsequent enforcement by ConAgra of such provision, nor shall such
failure to object be deemed a waiver of any subsequent breach.
11. TERM
Subject to the termination provisions set out below and unless the parties
agree in writing otherwise to a shorter term, the rights and obligations set out
in this Agreement shall extend in perpetuity, provided, however, that Dial may
terminate this Agreement at any time effective one hundred eighty (180) days
after giving ConAgra written notice of such termination.
12. DEFAULT
In the event of any material default by any party in the performance of any
of the terms and conditions of this Agreement, ConAgra or Dial, as the case may
be, may terminate this Agreement or seek other appropriate relief, including
damages, on (i) ten (10) days advance written notice (weekends and holidays
excluded) if the default is the failure to make the payments set forth in
Section 2 hereof and (ii) thirty (30) days advance written notice for all other
breaches, subject however to the right of the Party against whom the default is
claimed to cure any default
<PAGE> 12
within such ten (10) day and thirty (30) day periods, respectively, in which
event this Agreement shall remain in full force and effect. If any default
(other than a monetary default pursuant to clause (i) hereof) requires more than
thirty (30) days to cure, such party may take additional time to cure such
default and no default shall be claimed or taken hereunder during such period,
provided that such party is at all times during such additional period acting
with the utmost urgency and is exercising its best efforts to cure any such
default. The parties hereby agree that time is of the essence with respect to
the foregoing sentence.
13. RIGHTS UPON TERMINATION
Upon the termination of this Agreement, unless otherwise provided herein,
any and all rights of Dial to use the TRADEMARKS shall automatically cease. Dial
shall promptly cease all use of the TRADEMARKS and manufacturing and marketing
of the SHELF-STABLE PRODUCTS, and will not adopt or use any word or mark which
is confusingly similar to the TRADEMARKS, except that it shall have six (6)
months from the date of termination to use existing inventory of packaging
materials for the SHELF-STABLE PRODUCTS (providing such existing inventory of
packaging materials complies with the terms of this Agreement) and shall have
twelve (12) months from the date of termination to sell out existing finished
goods inventory of SHELF-STABLE PRODUCTS (providing such existing finished goods
inventory complies with the terms of this Agreement). If, at any time during
said twelve (12) month period, Dial is willing to sell all, or substantially
all, of the remaining inventory of the SHELF-STABLE PRODUCTS to a single
purchaser or group of related purchasers, Dial shall advise ConAgra of the
identity of the prospective purchasers and the price and terms of the proposed
sale, and ConAgra shall have the right of first refusal to buy the remaining
inventory at that price and on those terms. Nothing herein set forth shall be
deemed to affect the right of ConAgra to the ROYALTY as provided in Section 2
hereof. Any ROYALTY earned, but unpaid, at the end of fifteen (15) months after
termination, shall be paid to ConAgra within thirty (30) days thereafter.
Notwithstanding anything to the contrary provided herein, the provisions of
Section 6 (Indemnification) shall survive the termination of this Agreement.
14. AMENDMENTS
This Agreement may not be amended or modified except in a writing signed by
the party against whom enforcement of such change is sought.
15. NOTICE
All notices required or permitted to be given by this Agreement shall be in
writing and sent by registered or certified mail, return receipt requested, and
shall be addressed to the party to whom it is to be served at the address of
such Parties stated below. If either party changes his address, a written notice
thereof shall be given to the other party in accordance with this Section.
<PAGE> 13
If to Dial: The Dial Corp
1850 North Central Avenue
Phoenix, AZ 85077
Attn: Vice President - Foods
copy to: The Dial Corp
1850 North Central Avenue
Phoenix, AZ 85077
Attn: Trademark Counsel
If to ConAgra ConAgra, Inc.
One ConAgra Drive
Omaha, Nebraska 68102
Attention: Controller
Copy to: John P. Passarelli
McGrath, North, Mullin & Kratz, P.C.
1400 One Central Park Plaza
Omaha, Nebraska 68102
16. CHOICE OF LAW
This Agreement shall be deemed to have been made and shall be interpreted,
and the rights and liabilities of the parties hereto determined, in accordance
with the laws of the State of Nebraska applicable to agreements made and to be
performed solely in such State.
17. DISPUTE RESOLUTION
Any and all disputes related to or arising out of the provisions of
Paragraph 10 of this Agreement relating to approval of product reformulations,
new products and Packaging or Advertising will be resolved by submission to
binding arbitration pursuant to the then existing rules and regulations of the
American Arbitration Association ("AAA") Commercial Arbitration Rules or, if the
parties agree, to such other alternative dispute resolution organization as the
parties shall agree. The arbitration shall take place in Phoenix, Arizona, if
ConAgra initiates the arbitration process, and it shall take place in Omaha,
Nebraska, if Dial initiates the arbitration process. The aggrieved party will
initiate arbitration by sending written notice of an intention to arbitrate by
registered or certified mail to the other party and to A-AA (or other
alternative dispute resolution organization). The notice must contain a
description of the dispute, the amount involved, and the remedy sought.
<PAGE> 14
The arbitration shall be conducted by a three (3) person panel, with
ConAgra and Dial each selecting one (1) member of the panel, and the third
member selected by such two panel members (such two panel members hereafter
referred to as "the Affiliate Panel Members"), unless either Dial or ConAgra
desires the parties' joint direct selection of the third panel member.
If either Dial or ConAgra desires the parties' joint direct selection of
the third panel member, the parties' direct selection of the third arbitrator
shall be in accord with Rule 13 of the AAA Commercial Arbitration Rules as
amended and effective on November 1, 1993 (set forth in its entirety in Schedule
17) hereto, subject only to the following exception: in the event the parties
fail to agree on any of the persons named on the lists submitted by the AAA, or
if acceptable arbitrators are unable to act, or if for any other reason
appointment cannot be made from the submitted lists in timely manner as
specified in this Section 17, the last sentence of Rule 13 shall be disregarded
by the parties, and the third arbitration panel member shall be selected by the
Affiliate Panel Members.
ConAgra and Dial shall select their respective arbitrators within fifteen
(15) days of receipt by a party of the written notice to arbitrate. The third
arbitrator shall be selected if by the Affiliate Panel Members without the
parties having invoked the Rule 13 selection process, within ten (10) days
following selection of the Affiliate Panel Members; or, if jointly selected
directly by the parties pursuant to the Rule 13 selection process, within
twenty-five (25) days following receipt by a party of the written notice to
arbitrate (or within such additional time thereafter as both parties mutually
agree to allow for completion of the Rule 13 selection process). At the
expiration of the given twenty-five (25) day period, if the Rule 13 selection
process is not complete and the parties do not mutually agree to the additional
time needed to complete the Rule 13 selection process, then the Affiliate Panel
Members shall select the third arbitrator within ten (10) days thereafter. The
arbitration shall commence within sixty (60) days of the selection of the
arbitration panel and the decision of the arbitration panel shall be delivered,
in writing, within thirty (30) days from the commencement of the arbitration
proceedings.
The arbitration panel shall have the right to assess penalties against a
party that delays the arbitration, grant equitable relief and assess damages
against any party. The award of the arbitration panel may be entered in any
court of applicable jurisdiction and shall be a final and binding judgment.
The arbitration panel shall have the right to require the party that does
not prevail to pay all of the reasonable costs of the arbitration and all
reasonable attorney fees and costs of the other party.
18. CONFIDENTIALITY
In connection with the parties performances hereunder, each party to this
Agreement may be required to disclose to the other party documentation or other
<PAGE> 15
business information (hereinafter "Information") which the disclosing party
considers confidential. Such Information may include, but not be limited to
information related to product development and formulation, product
introductions, production information, financial information, accounting
information, marketing information, reports, forecasts, predictions or
projections relating to the foregoing or other business information. This
includes the information required to be disclosed by Dial to ConAgra pursuant to
Section 10 hereof. It is specifically understood and agreed that all Information
shall be considered confidential whether it has been developed internally and
maintained as confidential information by the disclosing party, or whether it
has been received by the disclosing party subject to a continuing obligation to
maintain the confidentiality of the Information, or for other reasons. With
respect to Information provided under this Agreement, the party to whom the
Information is disclosed, its employees, and employees of its affiliated
companies, shall:
(a) hold the Information in confidence and protect it in accordance
with the security regulations by which it protects its own proprietary or
confidential information which it does not wish to disclose;
(b) restrict disclosure of the Information solely to those persons
who have a need to know such Information solely for the purposes intended under
this Agreement and who have been informed of their obligations not to disclose
it to any other party;
(c) use the Information only in connection with the performance of
its obligations and responsibilities and enforcement of its rights herein,
except as otherwise may be agreed upon in writing.
The party to whom Information is disclosed shall have no obligation to
preserve the confidential nature of any Information which:
(aa) was previously known to it free of any obligation to keep it
confidential; or
(bb) is disclosed to third parties by the disclosing party without
restriction, or
(cc) is or becomes publicly available by other than unauthorized
disclosure; or
(dd) is independently developed by it as can be substantiated in
writing; or
(ee) is legally required to be disclosed; provided however, that prior to
making any disclosure required by law, the party under compulsion to make the
disclosure must first provide the other party with the earliest possible notice
of
<PAGE> 16
such required disclosure to allow such party the opportunity to secure
appropriate protective measures.
19. GENERAL CONDITIONS
(a) This Agreement constitutes the entire agreement between the
parties with respect to the TRADEMARKS and cancels and supersedes the 1983
LICENSE AGREEMENT. Each party has been represented by counsel of its own
choosing in connection with the negotiation of this Agreement. No
representation, warranty or promise pertaining to this Agreement or transaction
has been made by or shall be binding upon either of the parties, except as
expressly stated in this Agreement.
(b) This Agreement shall inure to the benefit of and shall bind the
respective parties, their permitted successors and assigns, and their parents,
subsidiaries and affiliates.
(c) If any portion of this Agreement shall be held to be
unenforceable or illegal, such portion of this Agreement shall be deemed
cancelled, but such cancellation shall not affect any of the other terms,
conditions or provisions of this Agreement.
(d) The failure of either party to require the performance of any
term of this Agreement or the waiver by either party of any breach under this
Agreement shall not prevent subsequent enforcement of such term, nor be deemed a
waiver of any subsequent breach.
(e) The section headings within this Agreement are for convenience
only and shall not be deemed to affect in any way the language of the provisions
to which they refer.
(f) The language in this Agreement shall in all cases be construed
as a whole, according to its fair meaning, and not strictly for or against any
of the parties.
<PAGE> 17
IN WITNESS WHEREOF, the parties have executed, in duplicate, this Agreement
in one or more counterparts which, taken together, shall constitute one
Agreement, and shall be effective as of January 1, 1995.
THE DIAL CORP
By: _______________________
__________________________
Attest
Title: _______________________
CONAGRA, INC.
By: _______________________
__________________________
Attest
Title: _______________________
<PAGE> 18
SCHEDULE C.1
Schedule of Armour products sold as of the date of this Agreement that need to
be refrigerated, cooled or frozen.
<PAGE> 19
<TABLE>
<CAPTION>
SCHEDULE C.1 (CONT.)
<S> <C>
- --------------------------------------------------------------------------
Armour Skls Deli Breast 5010030101
- --------------------------------------------------------------------------
Armour Skls Smoked Deli Breast 5010030200
- --------------------------------------------------------------------------
Arm 1877 Deli Honey Ham 5010033340
- --------------------------------------------------------------------------
Armour 1877 Deli Virginia Ham 5010033350
- --------------------------------------------------------------------------
Armour Deli Beef Bologna 5010032668
- --------------------------------------------------------------------------
Deli Pepperoni Bulk 10# 5010030310
- --------------------------------------------------------------------------
Armour Novara Hard Salami 2 pc. 5010041398
- --------------------------------------------------------------------------
Pizza Sliced Pepperoni 3 oz. 5010000685
- --------------------------------------------------------------------------
Pillow Pack Pepperoni 5010030575
- --------------------------------------------------------------------------
Star 2/4 Wa Boneless Ham 8 pc. 5010034515
- --------------------------------------------------------------------------
Star 5/8 Wa Bnls Ham 4 pc. 5010034516
- --------------------------------------------------------------------------
KK HF Ham 28% Wa 95%Ln2-4# 8p 5010035415
- --------------------------------------------------------------------------
Low Salt Bnls Ham 1.5-2 5010035215
- --------------------------------------------------------------------------
Armour Low Salt Smoked Ham 5010035216
- --------------------------------------------------------------------------
18-1 Wa Chopped Ham 4149974194
- --------------------------------------------------------------------------
2pc Armour Deli Ham W/A 5010024007
- --------------------------------------------------------------------------
4x4 Deli Cooked Ham W/A 5010031028
- --------------------------------------------------------------------------
4x6 Deli Cooked Ham W/A 5010031026
- -------------------------------------------------------------------------
Armour Cooked Ham 4x6 2 pc. 5010031029
- --------------------------------------------------------------------------
4x6 Deli Ham Jreck Sub 5010032435
- --------------------------------------------------------------------------
4x6 Deli Cooked Ham 35% H&W 5010034597
- --------------------------------------------------------------------------
4x6 Deli Cooked Ham 35% H&W 5010039363
- --------------------------------------------------------------------------
Deli Chopped Ham W/A 2 pc. 5010035080
- --------------------------------------------------------------------------
Armour Chopped Ham W/A 35% 5010045213
- --------------------------------------------------------------------------
Deli Express Chopped Ham 5010063521
- --------------------------------------------------------------------------
Armour 4x4 Spiced Lunchmeat 5010035038
- --------------------------------------------------------------------------
Armour Star Large Bologna w/chkn 5010032653
- --------------------------------------------------------------------------
Armour Star Meat Bologna w/chkn 5010036235
- --------------------------------------------------------------------------
Armour Jumbo Cooked Salami 5010030088
- --------------------------------------------------------------------------
Armour Star Cooked Salami 5010030323
- --------------------------------------------------------------------------
Armour Deli Meat Bologna 5010032669
- --------------------------------------------------------------------------
Armour Deli Cooked Salami 5010032670
- --------------------------------------------------------------------------
1877 Meat Summer Sausage 3# 5010000672
- --------------------------------------------------------------------------
Muenchner Meat Sum Sge 2# 5010037173
- --------------------------------------------------------------------------
1877 Meat Summer Sge 2.25# 5010037483
- --------------------------------------------------------------------------
Armour Hick Smkd Sum Sausage 5010038451
- --------------------------------------------------------------------------
Armour Hick Smkd Sum Sausage 5010038495
- --------------------------------------------------------------------------
1877 Meat Summer Sge 2.15# 5010039192
- --------------------------------------------------------------------------
1877 Meat Summer Sge 2.15# 5010039193
- --------------------------------------------------------------------------
1877 Meat Summer Sge 1.5# 5010039194
- --------------------------------------------------------------------------
Armour Deli Hky Smkd Sum Saus 5010039200
- --------------------------------------------------------------------------
Meat Summer Sausage 5010037483
- --------------------------------------------------------------------------
</TABLE>
<PAGE> 20
SCHEDULE C.1 (CONT.)
<TABLE>
<CAPTION>
ARMOUR HOMESTYLE FOODS
- --------------------------------------------------------------------------
UNIVERSAL PRC
PRODUCT CODE PRODUCT SIZE BAS
------------ ------- ---- ---
<S> <C> <C> <C>
HOMESTYLE BULK PACK
50100-45788 CHICKEN FRIED PATTIE 4.00 OZ 1/15 LB LB
50100-33543 BEEF PATTIES 4.00 OZ 60/4 OZ LB
50100-33535 BEEF PATTIES 3.00 OZ 80/3 OZ LB
50100-40441 BEEF NUGGETS .5 OZ 1/10 LB LB
50100-33880 BEEF FINGERS 1.00 OZ 160/1 OZ LB
50100-34921 PORK PATTIES 4.00 OZ 60/4 OZ LB
50100-34938 PORK PATTIES 3.00 OZ 80/3 OZ LB
50100-31880 VEAL PATTIES 4.00 OZ 60/4 OZ LB
50100-31878 VEAL PATTIES 3.00 OZ 80/3 OZ LB
50100-31877 VEAL PATTIES 2.67 OZ 90/2.67 OZ LB
50100-33353 CHUCKWAGON PATTIES 4.00 OZ 60/4 OZ LB
50100-33579 PREMIUM CHICKEN PATTIES 60/4 OZ LB
50100-33576 CHICKEN PATTIES 4.00 OZ 60/4 OZ LB
50100-33280 ARM CORN DOG 60/2.67 OZ 60/2.67 OZ LB
50100-40483 MINI TURKEY CORNDOGS W/INSR 1/10 LBS LB
50100-40461 PREMIUM CKN STRIPS 1.00 OZ 1/10 LB LB
50100-40400 4/2.5 LB PREM CKN NUGGETS 4/2.50 BAG LB
50100-34930 4/2.5 LB CHICKEN NUGGETS 4/2.50 BAG LB
50100-35659 SALISBURY STEAK 75/3.2 OZ 75/3.20 LB LB
50100-33733 MEATBALLS 1.0 OZ 160/1 OZ LB
50100-41115 BEEF PIZZA PATTIE 2.67 OZ 60/2.67 LB LB
50100-30640 BEEF & BACON PATTIE 2.67 OZ 90/2.67 OZ LB
</TABLE>
<PAGE> 21
SCHEDULE C.1 (CONT.)
<TABLE>
<CAPTION>
ARMOUR HOMESTYLE FOODS
- ------------------------------------------------------------------------------
UNIVERSAL
PRODUCT CODE PRODUCT SIZE PRC BAS
------------ ------- ---- -------
<S> <C> <C> <C>
HOMESTYLE FAMILY PACK TRAYS
50100-34693 6/3# CHICKEN FRIED PATTY 6/3 LB LB
50100-34887 6/3# CHICKEN FRIED FINGERS 6/3 LB LB
50100-34497 RETAIL FAM PACK BRD PORK PT 6/3 LB LB
50100-34469 3# BRD VEAL PATTIES 6/3 LB LB
50100-34580 6/3# PREM CHICK PATTIES 6/3 LB LB
50100-34465 RETAIL FAM PACK CHICKEN NUG 6/2.50 LB LB
50100-21789 HOMESTYLE HASHBROWNS 12/45 OZ LB
RETAIL PREWRAPPED TRAYS:
50100-31692 12/1 LB CFB PAT 12/1 LB LB
50100-33886 CF BF FINGER PATTIE 160 1Z 12/1 LB LB
50100-31497 CKD BRD PORK PATTY 4/4OZ 12/1 LB LB
50100-69496 CKD BRD VEAL PATTY 3OZ TP 12/12 OZ LB
50100-31493 CKD BF CHKWGN PATTIE 48/4OZ 12/1 LB LB
50100-31694 CORN DOGS - TRAY PACKED 1 L 12/1 CSE LB
50100-33580 *BRD CHIK PTY 12/10 12/1 LB LB
50100-69465 12/12Z *CKD CHICKEN NUGGET 12/12 OZ LB
RETAIL BAGGED PRODUCTS:
50100-33724 12 20 OZ MEATBALLS 12/20 OZ LB
50100-33726 *MT BALLS .52 RETAIL 2/5 LB LB
50100-41340 *CKD MEATBALLS 6/5# 6/5 LB LB
</TABLE>
<PAGE> 22
<TABLE>
<CAPTION>
SCHEDULE C.1 (CONT.)
- --------------------------------------------------------------------------
UNIVERSAL
PRODUCT CODE PRODUCT SIZE PRC BAS
------------ ------- ---- -------
BACON AND SALT MEATS
--------------------
<S> <C> <C> <C>
50100-30146 40% LOW SALT BACON 16/12 OZ LB
50100-30151 LOWER SALT L-BOARD BACON 16/12 OZ LB
50100-32109 24-1LB ARM LOW SALT BACON 24/1 LB LB
50100-30017 STAR SLCD BACON, 24/10 24/1 LB LB
50100-30280 12/1 ARM MAPLE BAC-TUK 12/1 LBS LB
50100-30290 16/12 ARM MAPLE BAC-TUK 16/12 OZ LB
50100-30001 *L BOARD SL BCN24/16 24/1 LB LB
50100-30025 STAR 12/2 VP THICK SL BACO 12/2 LB LB
50100-37211 STAR 32/12Z SLICED BCN 32/12 OZ LB
50100-30004 *SLI BCN L-BOARD 32/12 Z 32/12 OZ LB
50100-37210 16/12 CNTR CUT PAN SIZE BCN 16/12 OZ LB
50100-24033 32/12 ARM MELD SWT BAC-TUK 32/12 OZ LB
50100-24032 24/1 ARM MELD SWT BAC-TUK 24/1 LBS LB
50100-24035 32/12 ARM MELD L.S. BAC-TUK 32/12 OZ LB
50100-24034 24/1 ARM MELD L.S. BAC-TUK 24/1 LBS LB
NEW! NEW! NEW! NEW!
----------------------
50100-36675 1# COLUMBIAN BACON 24/1 LB LB
50100-37798 32/12Z VP COLUMBIA SLICD BC 32/12 OZ LB
SMOKED MEATS
GOLDEN STAR BONELESS HAMS:
--------------------------
50100-33663 ARM G.S. NJ HAM 9-11 2 PC BOX LB
50100-33683 ARM G.S. D-SHPD NJ HAM 8-10 2 PC BOX LB
50100-00760 1# GS HAM SLICES 12/1 12/1 LB LB
50100-00761 GS HAM SLICES 2# 6/2 LB LB
50100-00764 GS HAM STEAK 24/6Z 24/6 OZ LB
LOWER SALT BONELESS HAMS:
-------------------------
50100-35215 LOW SALT BNLS HAM 1.5-2 8P 8/1.75 PC LB
'1877' BONELESS HAMS:
---------------------
50100-38692 1877 MINI-HALF HAM (2-2.5) 12/2.25 LB LB
50100-38689 1877 MINI-WHOLE HAM (4-5#) 6/4.50 LB LB
50100-38691 1877 SLICE HALF HAM 2-4 8 P 8/3.50 LB LB
50100-38616 1877 HONEY CURED HALF HAM, 8 PC 8/3.50 PC LB
50100-38615 1877 HONEY CURED WHL HAM 5-7 4/7 LB LB
50100-38684 1877 1/ 2 BONELESS HAM 4# AVG. 8/3.50 PC LB
50100-38683 1877 WHOLE HAM, 6-8#, 4 PCS 4/7 PC LB
50100-38688 ARM 1877 H/A HAM FLAT 8-10 2/9.05 LBS LB
</TABLE>
<PAGE> 23
<TABLE>
<CAPTION>
SCHEDULE C.1 (CONT.)
- --------------------------------------------------------------------------
UNIVERSAL
PRODUCT CODE PRODUCT SIZE PRC BAS
------------ ------- ---- -------
<S> <C> <C> <C>
1877 SMOKED TURKEY BREAST:
NOTE: THE FOLLOWING TWO
REQUIRE A MINIMUM LEADTI
TWO WEEKS ON ALL ORDERS
-----------------------
50100-14690 1877 MINI WHOLE TKY 4-4.5 LB 4/4.50 PC LB
ARMOUR HAMS:
-----------------------------------
50100-56106 HELOS 35% WHL HAM 6/5 LBS LB
50100-56107 HELOS 35% HLF HAM 12/2.50 LBS LB
50100-56108 KN KIST 35% HLF HAM 12/2.50 LBS LB
50100-56109 KN KIST 35% WHL HAM 6/6 LBS LB
HOT DOGS
RETAIL PACKAGED VP:
-------------------
50100-00605 PREMIUM JUMBO MEAT H.D. 24/ 24/1 LB LB
50100-00602 PREM MEAT HOT DOG 24/1 24/1 LB LB
50100-00633 PREM BUNSIZE MEAT H.D. 12/1 12/1 LBS LB
50100-00601 PREM MEAT HOT DOG 32/12 32/12 OZ LB
50100-00606 PREM JUMBO BEEF HOT DOG 24/ 24/1 LBS LB
50100-00604 PREM BEEF HOT DOG 24/1 24/1 LB LB
50100-00634 PREM BUNSIZE BF H.D. 12/1 12/1 LBS LB
50100-00603 PREM BEEF HOT DOG 32/12 32/12 OZ LB
50100-32183 PREM TKY FRANKS 32/12 32/12 OZ LB
50100-78212 ARMOUR LESS SALT BEEF FRANK 12/16 OZ LB
50100-78213 ARMOUR LESS SALT MEAT FRANK 12/16 OZ LB
50100-00626 PREM MEAT H.D. COLORED 32/1 32/12 OZ LB
50100-30997 PREM MEAT HOT DOG 16/12 16/12 OZ LB
50100-30998 PREM BEEF HOT DOG 16/12 16/12 OZ LB
50100-35627 PREM JUMBO MEAT HOT DOG 12/ 12/1 LB LB
50100-35628 PREM JUMBO BEEF HOT DOG 12/ 12/1 LB LB
</TABLE>
<PAGE> 24
<TABLE>
<CAPTION>
SCHEDULE C.1 (CONT.)
- --------------------------------------------------------------------------
UNIVERSAL
PRODUCT CODE PRODUCT SIZE PRC BAS
------------ ------- ---- -------
<S> <C> <C> <C>
BULK PACKED (FROZEN):
---------------------
50100-34954 ARMOUR MEAT FRANK 6 10/1 -CN 1/10 LB LB
50100-31232 ARMOUR MEAT FRANK 6 8-1-CN 1/10 LB LB
50100-31218 ARMOUR MEAT FRANK 6 5/1 1/10 LB LB
50100-31214 ARMOUR MEAT FRANK 6 6/1 1/10 LB LB
50100-31217 ARMOUR MEAT FRANK 6 4/1 1/10 LB LB
50100-31220 ARMOUR MEAT FRANK 10 5/1 1/10 LB LB
50100-36079 ARMOUR BEEF FRANK 6 10/1 1/10 LB LB
50100-31234 ARMOUR BEEF FRANK 6 8-1-CN 1/10 LB LB
50100-36075 ARMOUR BEEF FRANK 6 5/1 1/10 LB LB
50100-36073 ARMOUR BEEF FRANK 6 4/1 1/10 LB LB
50100-31226 HOTDOG ROTO GRILL 6 5/1 1/10 LB LB
SMOKED SAUSAGE PRODUCTS
-----------------------
50100-00888 ARMOUR 1877 SMOKEE LINKS 10 16/10 OZ LB
50100-30556 * POLISH GRILL 6 6/1 1/10 LB LB
50100-32037 * POLISH 6 4/1 1/10 LB LB
50100-00778 ARM SMOKED SSGE 12/1 # 12/16 OZ LB
50100-00777 ARM POLSKA KLBSA EH 12/1 # 12/16 OZ LB
50100-00773 ARM SMOKED SSGE 8/3 # 8/3 LB LB
50100-00774 ARM POLSKA KIELBASA 8/3 # 8/3 LB LB
50100-52007 POLSKA KIELBASA LINK 12/1 # 12/1 LBS LB
50100-52006 SMK SAUSAGE LINK 12/1 # 12/1 LBS LB
50100-52003 HOT & SPICY SMK SGE 12/1 12/1 LBS LB
50100-52002 ITALIAN LINK SGE 12/1 # 12/1 LBS LB
50100-52005 POLSKA KIELBASA LINK 6/3 # 6/3 LBS LB
50100-52004 SMK SAUSAGE LINK 6/3 # 6/3 LBS LB
50100-52009 HOT & SPICY SMK SGE 6/3 # 6/3 LBS LB
50100-32023 * KULBASSY 6 4/1 1/10 LB LB
50100-36650 ROTO GRILL SMO SAUS 6 5/1 1/10 LB LB
50100-22451 16/12 ARM SMK SGE 16/12 OZ LB
50100-22452 16/12 ARM POLSKA KEILBASA 16/12 OZ LB
50100-32546 16/12 ARM HOT SGE LINK 16/12 OZ LB
</TABLE>
<PAGE> 25
SCHEDULE C.1 (CONT.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNIVERSAL
PRODUCT CODE PRODUCT SIZE PRC BAS
- ------------ -------------------------- ----------- -------
<S> <C> <C> <C>
4 X 6 LUNCHMEAT
--------------------------
50100-00337 COOKED HAM 12/10 OZ CS
50100-00338 ARM LOW SALT HAM 4X6 12/10 OZ CS
50100-00339 ARM HONEY HAM 4X6 12/10 OZ CS
50100-78006 12/1 ARM CKD HAM 4X6 12/1 LBS CS
50100-78002 12/1 ARM CR TURKEY 4X6 12/1 LBS CS
50100-78004 12/1 ARM SMK TURKEY 4X6 12/1 LBS CS
50100-00436 12/1 ARM CHOP HAM 4X6 12/1 LB CS
ARMOUR LUNCHMAKERS
--------------------------
50100-24026 12/3.7 ARM TKY LNCHMKR 12/3.70 OZ CS
50100-24027 12/3.7 ARM BOLO LNCHMKR 12/3.70 OZ CS
50100-24028 12/3.7 ARM HAM LNCHMKR 12/3.70 OZ CS
50100-24029 12/3.7 ARM CKN LNCHMKRS 12/3.70 OZ CS
</TABLE>
<PAGE> 26
SCHEDULE C.1 (CONT.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNIVERSAL
PRODUCT CODE PRODUCT SIZE PRC BAS
- ------------ ---------------------------- ------------ -------
<S> <C> <C> <C>
FLEX PACK:
----------------------------
50100-00461 16 OZ STAR BOLOGNA 12/1 LBS CS
50100-00460 12 OZ STAR BOLOGNA 12/12 OZ CS
50100-00470 12 OZ STAR THICK BOLOGNA 12/12 OZ CS
50100-00455 #12/12 OZ SLI GARL BOLO FLE 12/12 OZ CS
50100-00465 12 OZ STAR BEEF BOLOGNA 12/12 OZ CS
50100-00445 12 OZ STAR SALAMI 12/12 OZ CS
50100-00432 12 OZ STAR SLCD SPI LCH LOA 12/12 OZ CS
50100-00535 12 OZ STAR SLCD CKD HAM 12/12 OZ CS
</TABLE>
<PAGE> 27
SCHEDULE C.1 (CONT.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNIVERSAL
PRODUCT CODE PRODUCT SIZE PRC BAS
- ------------ ---------------------------- ----------- -------
<S> <C> <C> <C>
GOLDEN STAR CANNED HAMS:
----------------------------
50100-35710 GOLDEN STAR CANNED HAM 1.5# 12/1.50 LBS LB
50100-00720 GOLDEN STAR CANNED HAM 3# 12/3 LBS LB
50100-35720 GOLDEN STAR CANNED HAM 6/3# 6/3 LB LB
50100-00730 GOLDEN STAR CANNED HAM 5# 6/5 LBS LB
STAR P.S. CANNED HAMS:
----------------------------
50100-34715 STAR CANNED HAM, 12/1.5# 12/1.50 LB LB
50100-00725 STAR CANNED HAMS, 12/3# 12/3 LB LB
50100-34725 STAR ZIP TOP CANNED HAM 6/3 6/3 LB LB
50100-00745 STAR CANNED HAM 6/5# 6/5 LB LB
50100-34417 STAR CANNED HAM 6/8# 6/8 LB LB
CHOPPED HAM:
----------------------------
50100-34042 * CHOPPED CANNED HAM 18/2# 18/2 LB LB
$50100-35083 STAR CHOPPED CANNED HAM 6/8 6/8 LB LB
SPICED LUNCHEON MEAT:
----------------------------
50100-34149 * SPICED LNCH MT 18/2 18/2 LB LB
$50100-34243 STAR SKELETAL CND LUNCHMT 9/ 9/6 LB LB
</TABLE>
<PAGE> 28
SCHEDULE C.1 (CONT.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNIVERSAL
PRODUCT CODE PRODUCT SIZE PRC BAS
- ------------ ---------------------------- ---------- -------
<S> <C> <C> <C>
COOK-IN-BAG PRODUCTS
HAM ITEMS N/DIMEN: 4X6X12.
---------------------------
50100-31533 4X6 DELI CKD HAM N/A 1/13 LB LB
50100-31026 4X6 DELI CKD HAM N/A 4/13 LB LB
50100-47535 9/5# ARM DELI HAM N/A 9/5 LBS LB
50100-39363 4X6 DELI CKD HAM, 35% H&H 1/13 LB LB
50100-34597 4X6 DELI CKD HAM 35% H&H 4/13 LB LB
50100-35080 DELI CHPD HAM WA 2 PC 2/12.50 LB LB
ITEMS BELOW N/DIMEN: 4.5X4.
---------------------------
50100-31028 4X4 DELI CKD HAM W/A 2/10 LB LB
50100-35035 ARM 4X4 CHPD HAM W/A 1/10 LB LB
50100-35036 ARM 4X4 CHPD HAM W/A 5/10 LB LB
50100-45213 ARM CHP HAM W/A 35% 8/5 LBS LB
50100-35038 ARM 4X4 SPICED LCHN MT 1/10 LB LB
OTHER DELI SAUSAGE ITEMS
DELI LOAVES:
---------------------------
50100-34189 1 PC ARMOUR DELI OLD FASH RN 1 PC BOX LB
OTHER SAUSAGE:
---------------------------
50100-32669 ARMR DELI MEAT BOLO 2/9 LB LB
50100-32668 ARMR DELI BEEF BOLO 2/9 LB LB
50100-32670 ARMOUR DELI CKD SALAMI 2/9 LB LB
50100-34014 2 1/2 PC ARMR DELI N/C BRAU 2/1.50 PC LB
50100-30088 ARM # JUMBO CKD SALAMI 2/14 LB LB
OTHER FROZEN ITEMS:
LIVER ITEMS:
---------------------------
50100-32190 BIVAC BEEF LIVER 30# 1/30 LB LB
</TABLE>
<PAGE> 29
SCHEDULE C.1 (CONT.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNIVERSAL
PRODUCT CODE PRODUCT SIZE PRC BAS
- ------------ --------------------------- ---------- -------
<S> <C> <C> <C>
100% GROUND BEEF - RETAIL P
---------------------------
50100-17781 *GR BF PTY 4/1 12/1.5 12/1.50 LB LB
50100-17740 *GR BEEF PTY 4/1 6-3# 6/3 LB LB
CANADIAN BACON & SMO MT SPE
---------------------------
50100-35458 I PC STAR STICK CAN BON7-6# 1/7.50 LB LB
50100-35461 *FC CANADIAN BCN 2PC 2/7.50 LB LB
50100-35470 *FC CANADIAN BCN 4PC 4/7.50 LB LB
50100-35421 *RND CANAD BCN CHUNK 1/5 LB LB
50100-35420 CANADIAN BCN CC CHNK 1/15 LB LB
50100-35368 *SHNGLD CANAD BCN 5Z 16/5 OZ LB
PLS ORDER IN INCREMENTS OF
--------------------------
50100-35322 1877CAN BCN10-12ZCTR 1/5 LBS LB
50100-35326 1877 CND BCN CTR CHK 1/10 LB LB
50100-35387 1877 CNDAN BCN CENTER 1/15 LB LB
50100-35380 SLI CANAD BCN 16/5Z 16/5 OZ LB
50100-35881 CAMPFIRE SLICED CANADIAN BC 15/1 LB LB
50100-36175 CMPFRE CAND BCN 32/5 32/5 OZ. LB
50100-39349 VB SMK BUTTS 3C# 1/30 LB LB
50100-35354 STAR DELITES 11/2-3# 10/3 LB LB
</TABLE>
<PAGE> 30
SCHEDULE C.1 (CONT.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNIVERSAL
PRODUCT CODE PRODUCT SIZE PRC BAS
- ------------ ----------------------- --------- -------
<S> <C> <C> <C>
CURED SALTED MEATS:
-------------------
50100-30604 COV BELLY CHNK 1/ 2-1 21/.75 LB LB
50100-30687 DS FATBACK 3/ 4-1.5 1/1.10 LB LB
50100-30608 DS FATBACK CHNK 1/ 2-1 1/.75 LB LB
50100-30679 COV BELCHNK .75-1.5 1/1.10 LB LB
</TABLE>
<PAGE> 31
SCHEDULE C.1 (CONT.)
TRAY PACK PRODUCTS
- --------------------------------------------------------------------------------
UNIVERSAL
<TABLE>
<CAPTION>
PRODUCT CODE PRODUCT SIZE PRC BAS
- ------------ ---------------------------- --------- -------
<S> <C> <C> <C>
1 LB. TRAYS
TIER I
----------------------------
50100-45625 CKN FRD PATTIES 1# 12/1 LB LB
TIER II
----------------------------
50100-31692 12/1 LB CFB PAT 12/1 LB LB
50100-31497 CKD BRD PORK PATTY 4/4OZ. 12/1 LB LB
50100-31493 CKD BF CHKWGN PATTIE 48/4OZ 12/1 LB LB
50100-33886 CF BF FINGER PATTIE 160 OZ 12/1 LB LB
TIER III
----------------------------
50100-33580 *BRD CHIX PTY 12/1# 12/1 LB LB
50100-24009 12/1# PREH CKN NUGGETS 12/1 LBS LB
50100-24011 12/1# BRD VEAL PAT 12/1 LBS LB
50100-69465 12/12Z *CKD CHICKEN NUGGET 12/12 OZ LB
50100-69496 CKD BRD VEAL PATTY 3OZ TP 12/12 OZ LB
2 LB. TRAYS
TIER I
----------------------------
50100-24015 CKN FRD PATTY-2# 10/2 LB LB
50100-24022 BREADED CKN NUG-2# 10/2 LB LB
50100-24023 BREADED CKN PAT-2# 10/2 LB LB
TIER II
----------------------------
50100-24020 BREADED BF PTTY-2# 10/2 LB LB
50100-24021 CHUCKWAGON PTTY-2# 10/2 LB LB
50100-24024 BREADED PK PAT-2# 10/2 LB LB
50100-24019 CHKN FR FNGR SHPD PATS 10/2 LB LB
</TABLE>
<PAGE> 32
SCHEDULE C.1 (CONT.)
TRAY PACK PRODUCTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNIVERSAL
PRODUCT CODE PRODUCT SIZE PRC BAS
- ------------ --------------------------- --------- -------
<S> <C> <C> <C>
2 LB. TRAYS
TIER III
---------------------------
50100-24010 10/2# PREM CKN NUGGETS 10/2 LBS LB
50100-24018 10/2# PREM CHICK PATTIES 10/2 LB LB
50100-24017 PREM VEAL PTTY-2# 10/2 LB LB
3 LB. TRAYS-NON PRINTED FIL
TIER II
---------------------------
50100-34497 RETAIL FAM PACK BRD PORK PT 6/3 LB LB
50100-34693 6/3# CHICKEN FRIED PATTY 6/3 LB LB
50100-34887 6/3# CHICKEN FRIED FINGERS 6/3 LB LB
TIER III
---------------------------
50100-34580 6/3# PREM CHICK PATTIES 6/3 LB LB
50100-34465 RETAIL FAM PACK CHICKEN NUG 6/2.50 LB LB
50100-34469 3# BRD VEAL PATTIES 6/3 LB LB
20 OUNCE BAGS
---------------------------
50100-33724 12 20 OZ MEATBALLS 12/20 OZ LB
50100-56203 12/2OZ ITALIAN MEATBALL 12/20 OZ LB
50100-78012 ARM CKN NUGTS 12/20OZ 12/20 OZ LB
50100-78013 ARM CKN FINGERS 12/20OZ 12/20 OZ LB
</TABLE>
<PAGE> 33
SCHEDULE C.1 (CONT.)
BULK PRODUCTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNIVERSAL
PRODUCT CODE PRODUCT SIZE PRC BAS
- ------------ ----------------------------- ---------- -------
<S> <C> <C> <C>
TIER I - BULK PRODUCTS
-----------------------------
50100-45788 CHICKEN FRIED PATTIE 4.00 OZ 1/15 LB LB
50100-33576 CHICKEN PATTIES 4.00 OZ 60/4 OZ LB
50100-34930 4/2.5 LB CHICKEN NUGGETS 4/2.50 BAG LB
TIER II - BULK PRODUCTS
-----------------------------
50100-33535 BEEF PATTIES 3.00 OZ 80/3 OZ LB
50100-33543 BEEF PATTIES 4.00 OZ 60/4 OZ LB
50100-34938 PORK PATTIES 3.00 OZ 60/3 OZ LB
50100-34921 PORK PATTIES 4.00 OZ 60/4 OZ LB
50100-33353 CHUCKWAGON PATTIES 4.00 OZ 60/4 OZ LB
50100-33880 BEEF FINGERS 1.00 OZ 160/1 OZ LB
50100-30640 BEEF & BACON PATTIE 2.67 OZ 90/2.67 OZ LB
TIER III - BULK PRODUCTS
-----------------------------
50100-33579 PREMIUM CHICKEN PATTIES 60/4 OZ LB
50100-40400 4/2.5 LB PREM CKN NUGGETS 4/2.50 BAG LB
50100-40461 PREMIUM CKN STRIPS 1.00 OZ 1/10 LB LB
50100-31877 VEAL PATTIES 2.67 OZ 90/2.67 OZ LB
50100-31878 VEAL PATTIES 3.00 OZ 80/3 OZ LB
50100-31880 VEAL PATTIES 4.00 OZ 60/4 OZ LB
SPECIALTY ITEMS
-----------------------------
50100-33746 .5Z SUPR MT PTY BALL 14% TV 320/.50 OZ LB
50100-33726 *MT BALLS .5Z RETAIL 2/5 LB LB
50100-33733 MEATBALLS 1.0 OZ 160/1 OZ LB
50100-56131 2/5# ITALIAN MEATBALL 2/5 LBS LB
50100-35659 SALISBURY STEAK 75/3.2 OZ 75/3.20 LB LB
50100-41115 BEEF PIZZA PATTIE 2.67 OZ 60/2.67 LB LB
50100-33280 ARM CORN DOG 60/2.67 OZ 60/2.67 OZ LB
50100-31694 CORN DOGS - TRAY PACKED 1 L 12/1 CSE LB
50100-40483 MINI TURKEY CORNDOGS W/INSR 1/10 LBS LB
50100-21789 HOMESTYLE HAMBURGERS 12/45 OZ LB
50100-41340 *CKD MEATBALLS 6/5# 6/5 LB LB
50100-30672 2.0OZ SUPR BF PTY 14% TVP 164/2 OZ LB
</TABLE>
<PAGE> 34
SCH. C.2. (CONT.)
ARMOUR DRY SAUSAGE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNIVERSAL
PRODUCT CODE PRODUCT SIZE PRC BAS
- ------------ ---------------------------- ---------- -------
<S> <C> <C> <C>
CONSUMER PACK DRY SAUSAGE
----------------------------
50100-00685 PIZZA SLICED PEPPERONI 3OZ 16/3 OZ CS
50100-30296 PILLOW PACK PEPPERONI 6 OZ 12/6 OZ CS
50100-33327 PILLOW PACK PEPPERONI 8 OZ 12/8 OZ CS
50100-30575 PILLOW PACK PEPPERONI 3 LB 4/3 PC LB
50100-33328 MIDGET STICK PEPPERONI 5 OZ 16/5 OZ CS
50100-30468 MIDGET STICK PEPPERONI 5 OZ 32/5 OZ CS
50100-30321 ARMOUR PEPPERONI 12/12 OZ 12/12 OZ CS
SALAMI - STICK
----------------------------
50100-00629 1877 HARD SALAMI 18/1 3/ 4# 18/1.75 LB CS
50100-37458 DELI 1877 HD SAL HF 4 PC 4/3 LB LB
50100-37452 1877 HARD SALAMI 2PC 2/6 LBS LB
50100-37451 DELI 1877 HD SAL 6PC 6 PC BOX LB
50100-30780 DELI SAL ITALN 8/2# 8/2 LBS CS
50100-30190 DELI LASTELLA HD SAL 2PC 2/5.50 LB LB
50100-32833 DELI LASUPREMA SAL 6PC 6/5.50 PC LB
50100-31854 DELI HD SAL FN GRD 6PC 6/5.50 LB LB
50100-41398 ARM NOVARA HARD SALAMI 2 PC 2/6 LB LB
50100-30299 DELI NOVARA GENOA SAL 2/6 LB LB
50100-30303 DELI NOVARA GENOA SAL HF 4P 4/2.75 LB LB
50100-30302 DELI NOVARA GENOA SAL 6PC 6/5.50 LB LB
PEPPERONI - BULK SLICED, STIC
----------------------------
50100-30557 CASERTA SLICED PEPPERONI 3/3.40 LB LB
50100-30558 ARMOUR STAR SLI PEP 16/18 1/10 LB CS
50100-30310 DELI PEPPERONI BULK 10# 1/10 LB CS
50100-37591 SLICED PEPPERONI 14/16 CT 1/25 LB LB
50100-37590 SLICED PEPPERONI 18 CT 1/25 LB CS
50100-30538 DELI SANDWICH PEPPERONI 2/3.50 LB LB
</TABLE>
<PAGE> 35
SCH. C.2. (CONT.)
ARMOUR SEMI-DRY SAUSAGE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNIVERSAL
PRODUCT CODE PRODUCT SIZE PRC BAS
- ------------ ----------------------------- ----------- -------
<S> <C> <C> <C>
BEEF SUMMER SAUSAGE
-----------------------------
50100-78000 1877 BEEF SUMMER SGE 8OZ 24/8 OZ CS
50100-00662 1877 BEEF SUMMER SGE 12OZ 16/12 OZ CS
50100-78001 ARM 1877 BIG BF SUM SGE 24O 12/24 OZ CS
50100-64023 1877 BEEF SUMMER SGE 2.25# 12/2.25 LBS CS
50100-00663 1877 BEEF SUMMER SGE 3.00# 6/3 LB CS
MEAT SUMMER SAUSAGE
-----------------------------
50100-33376 1877 MEAT SUMMER SGE 24/8 OZ 24/8 OZ CS
50100-00673 1877 MEAT SUMMER SGE 12 OZ 16/12 OZ CS
50100-00671 1877 MEAT SUMMER SGE 1.00# 12/1 LB CS
50100-39195 1877 MEAT SUMMER SGE 1.5# 12/1.50 LB CS
50100-64024 1877 MEAT SUMMER SGE 2.25# 12/2.25 LBS CS
50100-39193 1877 MEAT SUMMER SGE 2.15# 16/2.15 LB CS
50100-00672 1877 MEAT SUMMER SGE 3.00# 6/3 LB CS
50100-37473 ARMOUR THURINGER SSGE 20 OZ 12/20 OZ CS
SUMMER SAUSAGE DISPLAYS
-----------------------------
50100-64019 1877 MEAT SSGE DISPLAY 1.5# 20/1.50 LBS CS
50100-64020 1877 BEEF SSGE DISPLAY 1.5# 20/1.50 LBS CS
50100-39189 1877 MEAT SSGE DISPLAY 8 OZ 64/8 OZ CS
50100-42200 ARM 1877 BF SUM SGE DISP 64/8 OZ CS
50100-39191 1877 BEEF SUMMER SGE 12OZ 42/12 OZ CS
50100-39188 1877 MEAT SSGE DISPLAY 12 OZ 42/12 OZ CS
NAPC - SUBJ TO AVAILABILITY
-----------------------------
50100-37496 NAPC MEAT SMR SGE 1.00# 1/32 LB LB
50100-37497 NAPC BEEF SMR SGE 1.00# 1/36 LB LB
50100-37480 NAPC MEAT SMR SGE 2.25# 1/32 LB LB
50100-37498 NAPC BEEF SMR SGE 3.00# 1/43 LB LB
50100-37499 NAPC MEAT SMR SGE 3.00# 1/43 LB LB
</TABLE>
<PAGE> 36
<TABLE>
<CAPTION>
PRODUCT DESCRIPTION SKU/UPC
------------------- -------
<S> <C>
Vienna Sausage
- --------------
Canned Vienna Sausage in 925: 925-01; 931; 931-01; 7942;
Barbecue Sauce 936; 936-01; 937; 937-01; 939;
Canned Vienna Sausage in 939-01; 927; 8068; 7717; 7717-01
Beef Stock -03; 7718; 7718-01, -02, -04, -05;
Canned Smoked Vienna Sausage in Beef Stock 7839; 7851; 7851-01; 7941
Canned Chicken Vienna Sausage
in Beef Stock
Canned Corn Beef 1165; 7755; 7755-02
Canned Roast Beef 1181; 7756; 7756-02
Sloppy Joe Sauce 724
- ----------------
Canned Sloppy Joes in Barbecue
Sauce with Ground Pork
Canned Sloppy Joes in Barbecue
Sauce with Ground Beef
Canned Chicken Flavored Bouillon 979; 978; 7840
Cubes
Canned Beef Flavor Bouillon Cubes
Canned BANNER Brand Sausage Meat 954; 2049; 2007
Canned Brains in Milk Gravy
Canned Beef Tripe 3393
Potted Meat
- -----------
Canned Deviled Ham 946; 950; 955; 7713; 7713-01, -04,
Canned Deviled TREET Meat -05; 7772; 7772-01; 7850; 7850-01
Spread
Canned Potted Meat Food
Product
Chili
- -----
Canned Chili 723; 724; 726; 1435
Canned Chili with Beans 1463; 1465; 1470; 1474;
Canned Texas Brand Chili 1488; 7911; 7912; 7780
Canned Texas Brand Chili with Beans
</TABLE>
<PAGE> 37
SCHEDULE 10(a) (CONT.)
<TABLE>
<S> <C>
Sliced Dried Beef
- -----------------
Canned Sliced Dried Beef 1678; 1679; 1686; 1687
Canned Sliced Dried Beef in a Pouch 8217-05
Hash 1923; 1926; 1928;
- ----
Canned Corned Beef Hash 7777; 7777-01
Canned Roast Beef Hash
Canned Beef Tamales with Sauce
TREET
- -----
Canned TREET (Pork and Beef 1323; 1363; 1373; 1383;
Product) 1385; 1405; 1539; 1596
Canned Chopped Beef 7724; 7782; 7782-01
Canned Chopped Ham
Canned Beef Stew 3385; 3374; 3372; 7910
Canned Lunch Tongue
Pizza 389; 407
- -----
Canned Pizza Topping
Dry Pizza Mix
P.P. Chili/P.P. Stew
- --------------------
P.P. Chili/P.P. Stew Pallet 8030
Rev. Chili/Rev. Stew Pallet 8031
Rev. Chili Pallet 8036
P.P. Chili/Rev. Stew Pallet 8081
P.P. Chili/P.P. Stew Pallet 8082
Rev. Stew Pallet 8083
Rev. Chili/Rev. Hash/Rev. Stew 8106
Pallet
P.P. Chili Pallet 8045
P.P. Stew Pallet 8046
Rev. Chili/Rev. Stew Pallet 8121
ARMOUR Lite Products
- --------------------
ARMOUR Premium Lite Chili with
Beans
ARMOUR Premium Lite Corned
Beef Hash
ARMOUR Lite Vienna Sausage 933
ARMOUR Lite Chicken Vienna
Sausage
</TABLE>
<PAGE> 38
SCHEDULE 10(a) (CONT.)
<TABLE>
<CAPTION>
<S> <C>
Beef Stick (Big Ones) 646; 647
Hot Dog Chili 723
Meatless Sloppy Joe Sauce
TREET 50% Less Fat 1373
Turkey Loaf 1385
Vienna Sausage (Snack Kit) 927, 8068
Western Style Chili (with Beans) 726
Packaging: Micro Cups (E.G. Beef
Stew and Chili)
</TABLE>
Institutional Products
- ----------------------
Hearty Beef Stew
Chili Con Carne with Beans
Chili Con Carne No Beans
Corned Beef Hash
Chili Hot Dog Sauce with Meat
Cubed Beef in Broth
Sloppy Joe Barbecue Sauce with Beef
<PAGE> 39
SCHEDULE 17
RULE 13 of the AAA Commercial Rule of Arbitration
as Amended and Effective on November 1, 1993
If the parties have not appointed an arbitrator and have not provided
any other method of appointment, the arbitrator shall be appointed in the
following manner: immediately after the filing of the demand or submission, the
AAA shall send simultaneously to each party to the dispute an identical list of
names of persons chosen from the panel.
Each party to the dispute shall have ten days from the transmittal date
in which to strike names objected to, number the remaining names in order of
preference, and return the list to the AAA. In a single-arbitrator case, each
party may strike three names on a peremptory basis. In a multiarbitrator case,
each party may strike five names on a peremptory basis. If a party does not
return the list within the time specified, all persons named therein shall be
deemed acceptable. From among the persons who have been approved on both lists,
and in accordance with the designated order of mutual preference, the AAA shall
invite the acceptance of an arbitrator to serve. If the parties fail to agree on
any of the persons named, or if acceptable arbitrators are unable to act, or if
for any other reason the appointment cannot be made from the submitted lists,
the AAA shall have the power to make the appointment from among other members of
the panel without the submission of additional lists.
<PAGE> 40
SCHEDULE C.2
Schedule of Armour dry sausage products sold as of the date of this Agreement.
The parties understand and agree that the products scheduled herein are sold
exclusively by ConAgra and that such products are not licensed to Dial, but that
all other processed meat products which fit the definition of SHELF-STABLE
PRODUCTS set forth in this License Agreement (for example meat sticks and jerky
snacks) are licensed hereunder to Dial.
<PAGE> 1
EXHIBIT 10.4
LICENSE AGREEMENT
THIS AGREEMENT is dated, for reference purposes only, the 18th day of
December, 1983, and is entered into by and between ARMOUR INTERNATIONAL COMPANY,
an Arizona corporation ("Licensor") and CAG SUBSIDIARY, INC., a Delaware
corporation ("Licensee").
AGREEMENT:
In consideration of the mutual promises herein contained and other good
and valuable consideration, the parties agree as follows:
1. Grant. During the term and subject to all of the provisions of this
Agreement, Licensor hereby grants to Licensee the right to use the trademarks
described and set forth in Exhibit A hereof (the "Trademarks") in the Territory,
hereinafter defined, only in connection with the products described in Exhibit B
hereof (the "Products") which are manufactured by or for Licensee. The license
so granted shall be non-exclusive and shall be subject to the exclusions and
exceptions set forth in Exhibit D hereto. Where required Licensor shall cause
its related companies (Exhibit C) to grant to Licensee a license under the same
terms and conditions as contained herein.
2. Territory. Licensee may use the Trademarks in the territory
described on Exhibit E attached hereto and by this reference incorporated
herein.
3. Applicable Laws. Licensee shall operate its facilities in strict
compliance with all applicable laws, ordinances, regulations and other
requirements of any federal, state, county, municipal or other government and
will obtain all necessary permits, licenses or other consents for operation of
Licensee's business.
4. Conduct. Licensee shall refrain from committing any act of pursuing
any course of conduct which tends to bring Licensor, the Trademarks or the
Products into disrepute.
<PAGE> 2
5. Title. Licensee hereby acknowledges that Licensor is the sole owner
of the Trademarks in the Territory and all the goodwill relating thereto, that
the same, at all times hereunder, shall be and remain the sole and exclusive
property of Licensor and that Licensee, by reason of this Agreement, has not
acquired any right, title, interest, or claim of ownership therein, except for
the license granted herein. The use by Licensee of the Trademarks and any and
all goodwill arising from such use, shall inure solely to the benefit of
Licensor and shall be deemed to be solely the property of Licensor in the event
that this Agreement shall hereafter be terminated for any reason; and upon any
termination of this Agreement, any and all rights in and to any of the foregoing
granted to Licensee hereunder shall automatically terminate.
6. Quality. Licensee understands and hereby acknowledges that uniform
and high standards of quality of the Products are necessary in the Territory in
order to maintain the public image and widespread consumer acceptance of the
Products and Trademarks. Licensor shall have the right to approve the finished
product specifications governing the quality of all Products. In addition to
reasonable changes in the specification which Licensor may make from time to
time, Licensee may also from time to time suggest finished product
specifications for variations of existing Products or alter specifications for
existing Products and, upon Licensor's approval, which shall not be unreasonably
withheld, Licensee shall adopt or change such specifications. Any such finished
product specifications submitted for approval shall be deemed approved hereunder
if the same are not disapproved in writing within fifteen (15) days after
receipt by Licensor. Licensee agrees that all Products shall comply with the
finished product specifications. Licensee shall not sell any products other than
those products set forth in Exhibit B under or in connection with the Trademarks
in the Territory.
7. Inspection. Licensor during regular business shall have the right to
send a qualified representative to plants where Products are manufactured in
order to determine that approved specifications for Products are being complied
with. Licensor recognizes
-2-
<PAGE> 3
that inspection of such plants provides access to the equipment, manufacturing
process and formulations used by Licensee in the production of Products
("Information") and in order to preserve the confidentially of such Information,
Licensor agrees that the representative designated to inspect Licensee's plants
shall be a person employed by Licensor whose primary responsibility and
expertise is quality control, and that the inspection will be made only to
determine that approved specifications for Products are being complied with and
for no other purpose. Information of Licensee, including the quality control
data on Products is to be considered as confidential property of Licensee, and
shall not be transmitted to third parties without the written consent of
Licensee. This commitment by Licensor shall not include Information which is in
the public domain or which was already known to Licensor.
8. Analysis. Licensee agrees to furnish, as often as may be reasonably
requested by Licensor, samples of Licensee's production of Products for analysis
by Licensor in order to verify that the Licensor's requirements and standards
are being complied with.
9. Unacceptable Goods. Upon receipt of a written report from Licensor
showing that any samples do not conform to Licensor's standards and
specifications, Licensee agrees to act promptly to correct its methods of
production as quickly as possible to meet Licensor's standards and
specifications or to demonstrate that its Products do in fact conform. Licensee
also agrees not to sell any Products which are "unacceptable" as defined by
Licensor's said standards and specifications.
10. Labels. Licensor shall have the right to approve the labels,
packaging, advertising and promotional materials of Licensee relating to the
Products and the Trademarks licensed hereunder. Licensor is aware of such
labels, packaging, advertising and promotional materials currently being used by
Licensee for its Products, and such are hereby deemed approved. All future
labels, packaging, advertising or promotional materials which constitute a
material departure from those currently used, or which raise a
-3-
<PAGE> 4
question concerning the public image or consumer acceptance of the Trademarks or
the Products, shall be submitted to Licensor for approval prior to use thereof.
If Licensor does not disapprove or offer changes or revisions, in writing,
within ten (10) days after such material is submitted to Licensor, Licensee may
assume the material has been approved for use.
11. Indemnification. Licensee shall hold Licensor harmless from and
indemnify and defend Licensor and Licensor's parent, subsidiaries, affiliates,
employees, agents and assigns against any suits, actions, claims, losses,
demands, damages, liabilities, costs and expenses of every kind (including
product liabilities), including costs and attorneys' fees for defending same,
which may arise or result from the conduct of Licensee's business. Licensor
shall hold Licensee harmless from and indemnify and defend Licensee and
Licensee's parent, subsidiaries, affiliates, employees, agents and assigns
against any suits, actions, claims, losses, demands, damages, liabilities, costs
and expenses of every kind (including product liabilities), including costs and
attorneys' fees for defending same, which may arise or result from Licensor's
sale of products under the Trademarks.
12. Guaranty. In furtherance of the foregoing covenants to hold
harmless and fully indemnify, but without in any way limiting the same, The
Greyhound Corporation, an Arizona corporation, and ConAgra, Inc., a Delaware
corporation, by execution of this Agreement at the place below provided, hereby
guarantee the performance of said covenants by their respective subsidiaries,
Licensee and Licensor.
13. Maintenance and Registration.
(a) During the period starting with the date of this Agreement and
ending December 31, 1988, Licensor shall maintain the Trademarks in conformance
with the terms and conditions of the Option Agreement dated as of December 18,
1983 between The Greyhound Corporation, Armour and Company, Armour International
Company (the Licensor herein) and ConAgra, Inc.
-4-
<PAGE> 5
(b) After December 31, 1988, Licensor shall maintain the
Trademarks in such countries that it deems necessary after consulting with
Licensee. If requested by Licensee, Licensor shall, at Licensee's expense, file
applications to register and maintain one or more of the Trademarks in
additional countries, and Licensee will cooperate with Licensor by providing
information requested by Licensor and executing all documents deemed necessary
by Licensor to record Licensee as a user of the Trademarks in those countries
requesting said registration.
14. Infringement. Licensee shall give prompt notice to Licensor of any
infringements or possible infringements of the Trademarks or publication or
registration of a trademark which it believes is confusingly similar to one or
more of the Trademarks in the Territory. Licensor, in its sole discretion,
giving reasonable consideration to Licensee's request, will decide whether or
not to institute any legal action against said users brought to its attention by
Licensee. In any legal action taken by Licensor against any party alleged to be
infringing any of the Trademarks, Licensee will execute all documents and do all
acts deemed necessary by Licensor in the prosecution of any said action.
Licensee shall have no right to file any legal action concerning the
registrations of any of the Trademarks.
15. Term. The term of this Agreement shall be for a period of twenty
(20) years from the date hereof, subject, however, to earlier termination as
hereafter provided. At the end of the initial twenty (20) year term, and, at the
end of the first renewal term of twenty (20) years, if applicable, this
Agreement, at the option of the Licensee, may be renewed for an additional
twenty (20) year period, provided that Licensee has complied with the terms of
this Agreement.
16. Deficiencies. If Licensee, after being notified by Licensor in
writing of deficiencies in any Product which is unacceptable by Licensor's
standards and specifications in contravention of Paragraph 9, shall sell or
offer for sale the said
-5-
<PAGE> 6
unacceptable Product, Licensor may terminate this Agreement as to said Product
immediately by written notice to Licensee.
17. Default. In the event that Licensee shall breach any other
provision of this Agreement or fail to perform any other of its obligations as
set forth in this Agreement and such breach or failure to perform shall continue
for a period of thirty (30) days after written notice from the Licensor setting
forth the nature of the breach or the failure to perform and the manner in which
it may be remedied, then Licensor, at its option, may terminate this Agreement
without further notice.
18. Termination by Licensee. Licensee may terminate this Agreement at
any time by giving Licensor written notice thereof.
19. Obligations after Termination. Upon termination of this Agreement,
either by expiration of the term or for any other reason, all of Licensee's
rights and privileges hereunder shall forthwith cease immediately. Thereupon,
Licensee shall forthwith cease operating or using, or permitting to be used or
operated in the Territory, whether directly or indirectly: (a) the Trademarks,
and (b) all advertising and promotional materials, labels and signs bearing the
Trademarks. Licensee, after termination of this Agreement, will not adopt or use
in the Territory any trademark, service mark, or trade name confusingly similar
to any of Licensor's trademarks. Nor shall Licensee thereafter hold forth,
declare or in any way suggest in the Territory that Licensee has any connection
whatsoever with the Licensor or any of its products or trademarks.
20. Assignment by Licensee. It is agreed that this Agreement is entered
into because of Licensor's reliance upon the knowledge, experience, skill and
integrity of Licensee and its stockholders and that this Agreement is personal
to Licensee. Neither this Agreement nor any rights hereunder granted to Licensee
and/or any duties to be performed by Licensee hereunder may be assigned,
transferred, hypothecated, sublicensed, encumbered or otherwise disposed of
without first obtaining the consent in writing of Licensor, which shall act in
good faith in considering any request for consent.
-6-
<PAGE> 7
Any transaction that results in the change of ownership of over twenty-five
percent (25%) of the capital stock of Licensee shall be deemed an assignment or
transfer hereunder. In the event Licensor shall consent to a transfer of this
Agreement as above provided, this Agreement as a legal instrument shall not be
transferred, but in lieu thereof a new License Agreement, on reasonable terms,
shall be entered into between Licensor and any successor of Licensee.
21. Assignment by Licensor. During the period starting with the date of
this Agreement and ending December 31, 1988, Licensor may not assign this
Agreement to any third party. Thereafter, Licensor reserves the right to assign
same to any third party whether or not affiliated with Licensor.
22. Corporate Name. Licensee may use the mark ARMOUR as part of its
corporate name in the Territory, provided that any use of the same on any
packaging or labels for consumer goods or any advertising will only be as a
company name and will be no more prominent than the immediate surrounding words.
23. Miscellaneous.
(a) This Agreement shall be construed and interpreted under
the laws of the State of Nebraska.
(b) All notices which are required or may be given pursuant to
the terms of this Agreement shall be in writing and shall be sufficient in all
respects if given in writing and delivered personally or mailed by Registered,
Certified or Express mail, postage prepaid, as follows:
If to Licensor: Armour International Company
Greyhound Tower
Phoenix, AZ 85077
-7-
<PAGE> 8
If to Licensee: CAG Subsidiary, Inc.
ConAgra Center
One Central Park Plaza
Omaha, Nebraska 68102
or at such other address as any party hereto shall have designated by notice in
writing to the other parties hereto.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
CAG SUBSIDIARY, INC.
By___________________________________
Title________________________________
_______________________________
Attest
ARMOUR INTERNATIONAL COMPANY
By___________________________________
Title________________________________
_______________________________
Attest
CONAGRA, INC.
By___________________________________
Title________________________________
_______________________________
Attest
THE GREYHOUND CORPORATION
By___________________________________
Title________________________________
_______________________________
Attest
-8-
<PAGE> 9
EXHIBIT "A"
ARMOUR
STAR
ARMOUR STAR
ARMOUR'S
ARMOUR (logotype design)
BANNER
VERIBEST
KENT
TARGET
EXETER
A-1
<PAGE> 10
EXHIBIT "B"
The products referred to in Section 1 hereof shall be all food products except
the following:
Canned Vienna Sausage in Barbecue Sauce
Canned Vienna Sausage in Beef Stock
Canned Smoked Vienna Sausage in Beef Stock
Canned Chicken Vienna Sausage in Beef Stock
Canned Corned Beef
Canned Roast Beef
Canned Sloppy Joes in Barbecue Sauce with Ground Pork
Canned Sloppy Joes in Barbecue Sauce with Ground Beef
Canned Chicken Flavored Bouillon Cubes
Canned Beef Flavored Bouillon Cubes
Canned Deviled Ham
Canned Deviled TREET Meat Spread
Canned Chili
Canned Chili with Beans
Canned Texas Brand Chili
Canned Texas Brand Chili with Beans
Canned Sliced Dried Beef
Canned Corned Beef Hash
Canned Roast Beef Hash
Canned Beef Tamales with Sauce
Canned TREET (Pork and Beef Product)
Canned Potted Meat Food Product
Canned Beef Tripe
Canned Beef Stew
Canned Chopped Beef
Canned Chopped Ham
Canned BANNER Brand Sausage Meat
Canned Brains in Milk Gravy
Canned Lunch Tongue
Canned Pizza Topping
Dry Pizza Mix
Sliced Dried Beef in a Pouch
B-1
<PAGE> 11
EXHIBIT "C"
ARMOUR FOODS (BENELUX) N.V.,
a Belgian corporation
Korte Klarenstraat 9/A
2000 Antwerpen, Belgium
ARMOUR FOODS (CANADA) LIMITED,
a corporation of Ontario
2399 Cawthra Road
Mississauga, Ontario, Canada L5A 2W9
ARMOUR FOODS (DEUTSCHLAND) GMBH,
a corporation of Germany
Frankenstrasse 29
2000 Hamburg 1, Deutschland
ARMOUR FOODS (ITALIA) S.P.A.,
a corporation of Italy
Via XX Settembre 3/14B
Genoa, Italy
ARMOUR FOODS (U.K.) LIMITED,
a corporation of the United Kingdom
G.P.O. Box 250
193 St. John Street
London, EC1P, 1EN, England
ARMOUR PANAMA, S.A.
a corporation of Panama
Apartado 90
Panama
Republic de Panama
C-1
<PAGE> 12
EXHIBIT "D"
EXCLUSIONS AND EXCEPTIONS
1. The license granted in Section 1 hereof shall not include the right to
export to or sell processed or canned meats or meat-containing products
under the Trademarks in the Republic of the Philippines.
2. The license granted in Section 1 hereof shall not include the right to
export to or sell canned meats, canned fish, canned poultry, canned
vegetables or canned fruit under the Trademarks in the United Kingdom
of Great Britain and Northern Ireland.
3. Canned meats may be sold by Licensee under the Trademarks in countries
of the Caribbean. The trademarks KENT, TARGET and EXETER shall be used
only on canned meats sold in countries of the Caribbean.
D-1
<PAGE> 13
EXHIBIT "E"
All countries of the world, except the United
States, but subject to the exclusions set forth
in Exhibit D.
E-1
<PAGE> 14
FIRST AMENDMENT TO LICENSE AGREEMENT
This FIRST AMENDMENT TO LICENSE AGREEMENT, signed in duplicate, is made
this 1st day of July, 1995 to amend EXHIBIT "B" of that certain License
Agreement dated December 18, 1983 by and between ARMOUR INTERNATIONAL COMPANY
("Licensor"), an Arizona corporation with its principal offices at 1850 North
Central Avenue, Phoenix, Arizona, and CAG SUBSIDIARY, INC., now known as
CONAGRA, INC. ("Licensee"), a Delaware corporation, with its principal offices
at One ConAgra Drive, Omaha, Nebraska, hereinafter said License Agreement
referred to as the "Armour Foreign License Agreement".
In consideration of the TRADEMARK LICENSE AGREEMENT entered into
between Licensee and Licensor's affiliate, The Dial Corp, with an effective date
of January 1, 1995, applicable within the territory of the United States, and
covering shelf-stable products, Licensor and Licensee agree to amend, and hereby
amend, the Armour Foreign License Agreement as set forth below:
1. EXHIBIT "B" is cancelled and the attached exhibit titled
AMENDED EXHIBIT "B" is hereby substituted in its place.
2. This amendment is deemed effective January 1, 1995.
3. All other terms and conditions of the Armour Foreign License
Agreement remain in full force and effect.
LICENSOR LICENSEE
ARMOUR INTERNATIONAL COMPANY CONAGRA, INC.
By: By:
--------------------------- --------------------------
(signature) (signature)
Andrew S. Patti Michael J. Trautschold
--------------------------- --------------------------
(print name) (print name)
Corporate Vice President,
Pres. & Chief Exec. Officer Marketing Services
--------------------------- --------------------------
(title) (title)
<PAGE> 15
Amended 7/1/95
AMENDED EXHIBIT "B"
The products referred to in Section 1 hereof shall be all food products except
SHELF-STABLE PRODUCTS as defined hereinbelow:
(i) Subject to the provisions hereinbelow, in this AMENDED
EXHIBIT B the term "SHELF-STABLE PRODUCTS" shall mean any and all food products
sold under or in connection with the Trademarks which under normal conditions do
not need to be refrigerated, cooled, or frozen while being transported,
inventoried, warehoused, stored, distributed and/or sold.
(ii) The term SHELF-STABLE PRODUCTS shall not include any of
the food products sold under or in connection with the Trademarks as of the
effective date of this amendment that need to be refrigerated, cooled, or frozen
to be transported, inventoried, warehoused, stored, distributed and/or sold (a
list of all such products is set forth in Schedule C.1 hereto and includes a
product description for each complete with the respective SKU or UPC for each)
regardless of whether future technological developments make it possible to
transport, inventory, warehouse, store, distribute and/or sell these products
without being refrigerated, cooled, or frozen.
(iii) The term SHELF-STABLE PRODUCTS shall also exclude
products commonly referred to as "Fresh", such as fruit and vegetables.
(iv) The term SHELF-STABLE PRODUCTS includes all processed
meat products which fall within Paragraph (i) above excepting, however, the
particular dry sausage products sold by Licensee or its affiliates under or in
connection with the Trademarks as of the effective date of this amendment (a
list of all such products is set forth in Schedule C.2 hereto and includes a
product description for each complete with the respective SKU or UPC for each).
The parties understand and agree that the dry sausage products set forth in
Schedule C.2 are not covered under the definition of SHELF-STABLE PRODUCTS
herein, but that all other processed meat products which fit the definition of
SHELF-STABLE PRODUCTS herein (for example meat sticks and jerky snacks) are so
covered.
<PAGE> 16
SCHEDULE C.1
TO AMENDED EXHIBIT "B"
OF AMENDMENT TO LICENSE AGREEMENT
Schedule of Armour products sold as of the date of this amendment that need to
be refrigerated, cooled, or frozen.
<PAGE> 17
SCH. C.1 (CONT.)
- ------------------------------------------------------- ------------------------
Armour Skls Deli Breast 5010030101
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Armour Skls Smoked Deli Breast 5010030200
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Arm 1877 Deli Honey Ham 5010033340
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Armour 1877 Deli Virginia Ham 5010033350
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Armour Deli Beef Bologna 5010032668
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Deli Pepperoni Bulk 10# 5010030310
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Armour Novara Hard Salami 2 pc. 5010041398
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Pizza Sliced Pepperoni 3 oz. 5010000685
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Pillow Pack Pepperoni 5010030575
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Star 2/4 Wa Boneless Ham 8 pc. 5010034515
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Star 5/8 Wa Bnls Ham 4 pc. 5010034516
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
KK Hf Ham 28% WA 95% Ln2-4 #8p 5010035415
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Low Salt Bnls Ham 1.5-2 5010035215
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Armour Low Salt Smoked Ham 5010035216
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
18-1 Wa Chopped Ham 4149974194
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
2pc Armour Deli Ham W/A 5010024007
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
4x4 Deli Cooked Ham W/A 5010031028
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
4x6 Deli Cooked Ham W/A 5010031026
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Armour Cooked Ham 4x6 2 pc. 5010031029
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
4x6 Deli Ham Jreck Sub 5010032435
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
4x6 Deli Cooked Ham 35% H&W 5010034597
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
4x6 Deli Cooked Ham 35% H&W 5010039363
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Deli Chopped Ham W/A 2 pc. 5010035080
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Armour Chopped Ham W/A 35% 5010045213
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Deli Express Chopped Ham 5010063521
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Armour 4x4 Spiced Lunchmeat 5010035038
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Armour Star Large Bologna w/chkn 5010032653
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Armour Star Meat Bologna w/chkn 5010036235
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Armour Jumbo Cooked Salami 5010030088
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Armour Star Cooked Salami 5010030323
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Armour Deli Meat Bologna 5010032669
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Armour Deli Cooked Salami 5010032670
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
1877 Meat Summer Sausage 3# 5010000672
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Muenchner Meat Sum Sge 2# 5010037173
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
1877 Meat Summer Sge 2.25# 5010037483
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Armour Hick Smkd Sum Sausage 5010038451
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Armour Hick Smkd Sum Sausage 5010038495
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
1877 Meat Summer Sge 2.15# 5010039192
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
1877 Meat Summer Sge 2.15# 5010039193
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
1877 Meat Summer Sge 1.5# 5010039194
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Armour Deli Hky Smkd Sum Saus 5010039200
- ------------------------------------------------------- ------------------------
- ------------------------------------------------------- ------------------------
Meat Summer Sausage 5010037483
- ------------------------------------------------------- ------------------------
2
<PAGE> 18
SCH. C.1 (CONT.)
<TABLE>
<CAPTION>
ARMOUR HOMESTYLE FOODS
- ------------------- -------------------------------------------- ----------------- -------
UNIVERSAL
PRODUCT PRODUCT SIZE PRC
CODE BAS
- ------------------- -------------------------------------------- ----------------- -------
HOMESTLYE BULK PACK
----------------------------
<S> <C> <C> <C>
50100-45788 CHICKEN FRIED PATTIE 4.00 OZ 1/15 LB LB
50100-33543 BEEF PATTIES 4.00 OZ 60/4 OZ LB
50100-33535 BEEF PATTIES 3.00 OZ 80/3 OZ LB
50100-43441 BEEF NUGGETS .5 OZ 1/10 LB LB
50100-33880 BEEF FINGERS 1.00 OZ 160/1 OZ LB
50100-34921 PORK PATTIES 4.00 OZ 60/4 OZ LB
50100-34938 PORK PATTIES 3.00 OZ 80/3 OZ LB
50100-31880 VEAL PATTIES 4.00 OZ 60/4 OZ LB
50100-31878 VEAL PATTIES 3.00 OZ 80/3 OZ LB
50100-31877 VEAL PATTIES 2.67 OZ 90/2.67 OZ LB
50100-33353 CHUCKWAGON PATTIES 4.00 OZ 60/4 OZ LB
50100-33579 PREMIUM CHICKEN PATTIES 60/4 OZ LB
50100-33576 CHICKEN PATTIES 4.00 OZ 60/4 OZ LB
50100-33280 ARM CORN DOG 60/2.67 OZ 60/2.67 OZ LB
50100-40483 MINI TURKEY CORNDOGS W/ITSR 1/10 LBS LB
50100-40461 PREMIUM CKN STRIPS 1.00 OZ 1/10 LB LB
50100-40400 4/2.5 LB PREM CKN NUGGETS 4/2.50 BAG LB
50100-34930 4/2.5 LB CHICKEN NUGGETS 4/2.50 BAG LB
50100-35659 SALISBURY STEAK 75/3.2 OZ 75/3.20 LB LB
50100-33733 MEATBALLS 1.0 OZ 160/1 OZ LB
50100-41115 BEEF PIZZA PATTIE 2.67 OZ 60/2.67 LB LB
50100-30640 BEEF & BACON PATTIE 2.67 OZ 90/2.67 OZ LB
</TABLE>
3
<PAGE> 19
SCH. C.1 (CONT.)
ARMOUR HOMESTYLE FOODS
<TABLE>
<CAPTION>
- ------------------- -------------------------------------------- ----------------- -------
UNIVERSAL
PRODUCT PRODUCT SIZE PRC
CODE BAS
- ------------------- -------------------------------------------- ----------------- -------
<S> <C> <C> <C>
HOMESTYLE FAMILY PACK TRAYS
----------------------------
50100-34693 6/3# CHICKEN FRIED PATTY 6/3 LB LB
50100-34887 6/3# CHICKEN FRIED FINGERS 6/3 LB LB
50100-34497 RETAIL FAM PACK BRD PORT PT 6/3 LB LB
50100-34469 3# GRD VEAL PATTIES 6/3 LB LB
50100-34580 6/3# PREM CHICK PATTIES 6/3 LB LB
50100-34465 RETAIL FAM PACK CHICKEN NUG 6/2.50 LB LB
50100-21789 HOMESTYLE HASHBROWNS 12/45 OZ LB
RETAIL PREWRAPPED TRAYS
----------------------------
50100-31692 12/1 LB CFB PAT 12/1 LB LB
50100-33886 CF BF FINGER PATTIE 160 OZ 1Z 12/1 LB LB
50100-31497 CKD BRD PORK PATTY 4/4OZ 12/1 LB LB
50100-69496 CKD BRD VEAL PATTY 3OZ TP 12/12 OZ LB
50100-31493 CKD BF CHKWGN PATTIE 48/4OZ 12/1 LB LB
50100-31694 CORN DOGS - TRAY PACKED 1 L 12/1 CSE LB
50100-33580 *BRD CHIX PTY 12/1# 12/1 LB LB
50100-69465 12/12Z KC*D CHICKEN NUGGET 12/12 OZ LB
RETAIL BAGGED PRODUCTS:
----------------------------
50100-33724 12 20 OZ MEATBALLS 12/20 OZ LB
50100-33726 *MT BALLS .52 RETAIL 2/5 LB LB
50100-41340 *CKD MEATBALLS 6/5* 6/5 LB LB
</TABLE>
4
<PAGE> 20
SCH. C.1 (CONT.)
** PAGE CAPTION #1**
** PAGE CAPTION #2**
** PAGE CAPTION #3**
<TABLE>
<CAPTION>
- ------------------- ----------------------------------------------- ----------------- ------
UNIVERSAL
PRODUCT PRODUCT SIZE PRC
CODE BAS
- ------------------- ----------------------------------------------- ----------------- ------
<S> <C> <C> <C>
BACON AND SALT MEATS
----------------------------
50100-30146 40% LOW SALT BACON 16/12 OZ LB
50100-30151 LOWER SALT L-BOARD BACON 16/12 OZ LB
50100-32109 24-1 LB ARM LOW SALT BACON 24/1 LB LB
50100-30017 STAR SLCD BACON, 24/1# 24/1 LB LB
50100-30280 12/1 ARM MAPLE BAC-TUK 12/1 LBS LB
50100-30290 16/12 ARM MAPLE BAC-TUK 16/12 OZ LB
50100-30001 *L BOARD SL BCN 24/16 24/1 LB LB
50100-30025 STAR 12/2# 4P THICK SL BACON 12/2 LB LB
50100-37211 STAR 32/12Z SLICED BCN 32/12 OZ LB
50100-30004 *SLI BCN L-BOARD 32/12 Z 32/12 OZ LB
50100-37210 16/12 CNTR CUT PAN SIZE BCN 16/12 OZ LB
50100-24033 32/12 ARM MELDSWT BAC/TUX 32/12 OZ LB
50100-24032 24/1 ARM MELD SWT BAC-TUK 24/1 LBS LB
50100-24035 32/12 ARM MELD L.S. BAC TUK 32/12 OZ LB
50100-24034 24/1 ARM MELD L.S. BAC TUK 24/1 LBS LB
NEW! NEW! NEW! NEW!
----------------------------
50100-36675 1# COLUMBIAN BACON 24/1 LB LB
50100-37798 32/12Z YP COLUMBIA SLICD BC 32/12 OZ LB
SMOKED MEATS
GOLDEN STAR BONELESS HAMS:
----------------------------
50100-33663 ARM G.S. NJ HAM 9-11 2 PC BOX LB
50100-33683 ARM G.S. O-SHPD NJ HAM 8-10 2 PC BOX LB
50100-00760 1# GS HAM SLICES 12/1# 12/1 LB LB
50100-00761 GS HAM SLICES 2# 6/2 LB LB
50100-00764 GS HAM STEAK 24/6Z 24/6 OZ LB
LOWER SALT BONELESS HAMS:
----------------------------
50100-35215 LOW SALT BNLS HAM 1.5-2 8P 8/1.75 PC LB
'1877' BONELESS HAMS:
----------------------------
50100-38692 1877 MINI-HALF HAM (2-2.5) 12/2.25 LB LB
50100-38689 1877 MINI-WHOLE HAM (4-5#) 6/4.50 LB LB
50100-38691 1877 SLICE HALF HAM 2-40 8P 8/3.50 LB LB
50100-38616 1877 HNY CRD HALF HAM, 8 PC 8/3.50 PC LB
50100-38615 1877 HONEY CURED WHL HAMS 5-7 4/7 LB LB
50100-38684 1877 -1/2 BONLESS HAM 4# AVG 8/3.50 PC LB
50100-38683 1877 WHOLE HAM, 6-8#, 4 PCS 4/7 PC LB
50100-38688 ARM 1877 W/A HAM FLAT 8-10 2/9.05 LBS LB
</TABLE>
5
<PAGE> 21
SCH. C.1 (CONT.)
** PAGE CAPTION #1**
** PAGE CAPTION #2**
** PAGE CAPTION #3**
<TABLE>
<CAPTION>
- ------------------- -------------------------------------------- ----------------- -------
UNIVERSAL
PRODUCT PRODUCT SIZE PRC
CODE BAS
- ------------------- -------------------------------------------- ----------------- -------
<S> <C> <C> <C>
1877 SMOKED TURKEY BREAST:
** NOTE: THE FOLLOWING THO?
REQUIRE A MINIMUM LEAD TIME OF TWO
WEEKS ON ALL ORDERS.
50100-14690 1877 MINI WHOLE TKY 4-4.5LB 4/4.50 PC LB
ARMOUR HAMS:
----------------------------
50100-56106 HELOS 35% WHL HAM 6/5 LBS LB
50100-56107 HELOS 35% HLF HAM 12/2.50 LBS LB
50100-56108 KN KIST 35% HLF HAM 12/2.50 LBS LB
50100-56109 KN KIST 35% WHL HAM 6/6 LBS LB
HOT DOGS
RETAIL PACKAGED VP:
----------------------------
50100-00605 PREMIUM JUMBO MEAT H.D. 24 24/1 LB LB
50100-00602 PREM MEAT HOT DOG 24/1 24/1 LB LB
50100-00633 PREM BUNSIZE MEAT H.D. 12/1 12/1 LBS LB
50100-00601 PREM MEAT HOT DOG 32/12 32/12 OZ LB
50100-00606 PREM JUMBO BEEF HOT DOG 24/ 24/1 LBS LB
50100-00604 PREM BEEF HOT DOG 24/1 24/1 LB LB
50100-00634 PREM BUNSIZE BF H.D. 12/1 12/1 LBS LB
50100-00603 PREM BEEF HOT DOG 32/12 32/12 OZ LB
50100-32183 PREM TKY FRANKS 32/12 32/12 OZ LB
50100-78212 ARMOUR LESS SALT BEEF FRANK 12/16 OZ LB
50100-78213 ARMOUR LESS SALT MEAT FRANK 12/16 OZ LB
50100-00626 PREM MEAT H.D. COLORED 32/1 32/12 OZ LB
50100-30997 PREM MEAT HOT DOG 16/12 16/12 OZ LB
50100-30998 PREM BEEF HOT DOG 16/12 16/12 OZ LB
50100-35627 PREM JUMBO MEAT HOT DOG 12/1 12/1 LB LB
50100-35628 PREM JUMBO BEEF HOT DOG 12/1 12/1 LB LB
</TABLE>
6
<PAGE> 22
SCH. C.1 (CONT.)
** PAGE CAPTION #1**
** PAGE CAPTION #2**
** PAGE CAPTION #3**
<TABLE>
<CAPTION>
- ------------------- -------------------------------------------- ----------------- -------
UNIVERSAL
PRODUCT PRODUCT SIZE PRC
CODE BAS
- ------------------- -------------------------------------------- ----------------- -------
<S> <C> <C> <C>
BULK PACKED (FROZEN)
----------------------------
50100-34954 ARM MEAT FRANK 6 10/1-CN 1/10 LB LB
50100-31232 ARM MEAT FRANK 6 8-1-CN 1/10 LB LB
50100-31218 ARM MEAT FRANK 6 5/1 1/10 LB LB
50100-31214 ARM MEAT FRANK 6 6/1 1/10 LB LB
50100-31217 ARM MEAT FRANK 6 4/1 1/10 LB LB
50100-31220 ARM MEAT FRANK 10 5/1 1/10 LB LB
50100-36079 ARM BEEF FRANK 6 10/1 1/10 LB LB
50100-31234 ARM BEEF FRANK 6 8-1-CN 1/10 LB LB
50100-36075 ARM BEEF FRANK 6 5/1 1/10 LB LB
50100-36073 ARM BEEF FRANK 6 4/1 1/10 LB LB
50100-31226 HOT DOG ROTO GRILL 6 5/1 1/10 LB LB
SMOKED SAUSAGE PRODUCTS
----------------------------
50100-00888 ARMOUR 1877 SMOKEE LINKS 10 16/10 0Z LB
50100-30556 * POLISH GRILL 6 6/1 1/10 LB LB
50100-32037 * POLISH 6 4/1 1/10 LB LB
50100-00778 ARM SMOKED SSGE 12/1# 12/16 OZ LB
50100-00777 ARM POLSKA KLBSA 12/1# 12/16 OZ LB
50100-00773 ARM SMOKED SSGE 8/3# 8/3 LB LB
50100-00774 ARM POLSKA KIELBASA 8/3# 8/3 LB LB
50100-52007 POLSKA KIELBASA LINK 12/1# 12/1 LBS LB
50100-52006 SMK SAUSAGE LINK 12/1# 12/1 LBS LB
50100-52003 HOT & SPICY SMK SGE 12/1 12/1 LBS LB
50100-52002 ITALIAN LINK SGE 12/1# 12/1 LBS LB
50100-52005 POLSKA KIELBASA LINK 6/3# 6/3 LBS LB
50100-52004 SMK SAUSAGE LINK 6/3# 6/3 LBS LB
50100-52009 HOT & SPICY SMK SSG 6/3# 6/3 LBS LB
50100-32023 * KULBASSY 6 4/1 1/10 LB LB
50100-36650 ROTO GRILL SMO SAUS 6 5/1 1/10 LB LB
50100-22451 16/12 ARM SMK SGE 16/12 OZ LB
50100-22452 16/12 POLSKA KEILBASA 16/12 OZ LB
50100-32546 16/12 ARM HOT SGE LINK 16/12 OZ LB
</TABLE>
7
<PAGE> 23
SCH. C.1 (CONT.)
** PAGE CAPTION #1**
** PAGE CAPTION #2**
** PAGE CAPTION #3**
<TABLE>
<CAPTION>
- ------------------- -------------------------------------------- ----------------- -------
UNIVERSAL
PRODUCT PRODUCT SIZE PRC
CODE BAS
- ------------------- -------------------------------------------- ----------------- -------
<S> <C> <C> <C>
4 X 6 LUNCHMEAT
----------------------------
50100-00337 COOKED HAM 12/10 OZ CS
50100-00338 ARM LCH SALT HAM 4X6 12/10 OZ CS
50100-00339 ARM HONEY HAM 4X6 12/10 OZ CS
50100-78006 12/1 ARM CKD HAM 4X6 12/1 LBS CS
50100-78002 12/1 ARM CR TURKEY 4X6 12/1 LBS CS
50100-78004 12/1 ARM SMK TURKEY 4X6 12/1 LBS CS
50100-00436 12/1 ARM CHOP HAM 4X6 12/1 LBS CS
ARMOUR LUNCHMAKERS
----------------------------
50100-24026 12/3.7 ARM TKY LNCHMKR 12/3.70 OZ CS
50100-24027 12/3.7 ARM BOLO LNCHMKR 12/3.70 OZ CS
50100-24028 12/3.7 ARM HAM LNCHMKR 12/3.70 OZ CS
50100-24029 12/3.7 ARM CKN LNCHMKRS 12/3.70 OZ CS
</TABLE>
8
<PAGE> 24
SCH. C.1 (CONT.)
** PAGE CAPTION #1**
** PAGE CAPTION #2**
** PAGE CAPTION #3**
<TABLE>
<CAPTION>
- ------------------- -------------------------------------------- ----------------- -------
UNIVERSAL
PRODUCT PRODUCT SIZE PRC
CODE BAS
- ------------------- -------------------------------------------- ----------------- -------
<S> <C> <C> <C>
FLEX PACK:
----------------------------
50100-00461 16 OZ STAR BOLOGNA 12/1 LBS CS
50100-00460 12 OZ STAR BOLOGNA 12/12 OZ CS
50100-00470 12 OZ STAR THICK BOLOGNA 12/12 OZ CS
50100-00455 *12/12 OZ SLI GARL BOLO FLE 12/12 OZ CS
50100-00465 12 OZ STAR BEEF BOLOGNA 12/12 OZ CS
50100-00445 12 OZ STAR SALAMI 12/12 OZ CS
50100-00432 12 OZ STAR SLCD SPI LCH LOA 12/12 OZ CS
50100-00535 12 OZ STAR SLCD CKD HAM 12/12 OZ CS
</TABLE>
9
<PAGE> 25
SCH. C.1 (CONT.)
** PAGE CAPTION #1**
** PAGE CAPTION #2**
** PAGE CAPTION #3**
<TABLE>
<CAPTION>
- ------------------- -------------------------------------------- ----------------- -------
UNIVERSAL
PRODUCT PRODUCT SIZE PRC
CODE BAS
- ------------------- -------------------------------------------- ----------------- -------
<S> <C> <C> <C>
GOLDEN STAR CANNED HAMS:
----------------------------
50100-35710 GOLDEN STAR CANNED HAM 1.5# 12/1.50 LBS LB
50100-00720 GOLDEN STAR CANNED HAM 3# 12/3 LBS LB
50100-35720 GOLDEN STAR CANNED HAM 6/3# 6/3 LB LB
50100-00730 GOLDEN STAR CANNED HAM 5# 6/5 LBS LB
STAR P.S. CANNED HAMS:
----------------------------
50100-34715 STAR CANNED HAMS, 12/1.5# 12/1.50 LB LB
50100-00725 STAR CANNED HAMS, 12/3# 12/3 LB LB
50100-34725 STAR ZIP TOP CANNED HAM 6/3 6/3 LB LB
50100-00745 STAR CANNED HAM 6/5# 6/5 LB LB
50100-34417 STAR CANNED HAM 6/8# 6/8 LB LB
CHOPPED HAM:
----------------------------
50100-34042 * CHOPPED CANNED HAM 18/2# 18/2 LB LB
50100-35083 STAR CHOPPED CANNED HAM 6/8 6/8 LB LB
SPICED LUNCHEON MEAT:
----------------------------
50100-34149 * SPICED LNCH MT 18/2 18/2 LB LB
50100-34243 STAR SKELETAL CND LUNCHMT 9/ 9/6 LB LB
</TABLE>
10
<PAGE> 26
SCH. C.1 (CONT.)
** PAGE CAPTION #1**
** PAGE CAPTION #2**
** PAGE CAPTION #3**
<TABLE>
<CAPTION>
- ------------------- -------------------------------------------- ----------------- -------
UNIVERSAL
PRODUCT PRODUCT SIZE PRC
CODE BAS
- ------------------- -------------------------------------------- ----------------- -------
<S> <C> <C> <C>
COOK-IN-BAG PRODUCTS:
HAM ITEMS W/DIMEN: 4X6X12
----------------------------
50100-31533 4X6 DELI CKD HAM W/A 1/13 LB LB
50100-31026 4X6 DELI CKD HAM W/A 4/13 LB LB
50100-47535 9/5# ARM DELI HAM W/A 9/5 LBS LB
50100-39363 4X6 DELI CKD HAM 35% H&W 1/13 LB LB
50100-34597 4X6 DELI CKD HAM 35% H&W 4/13 LB LB
50100-35080 DELI CHPD HAM HA 2PC 2/12.50 LB LB
ITEMS BELOW W/DIMEN: 4.5X4:
----------------------------
50100-31028 4X4 DELI CKD HAM W/A 2/10 LB LB
50100-35035 ARM 4X4 CHPD HAM W/A 1/10 LB LB
50100-35036 ARM 4X4 CHPD HAM W/A 5/10 LB LB
50100-45213 ARM CHP HAM W/A 35% 8/5 LB LB
50100-35038 ARM 4X4 SPICED LCHN MT 1/10 LB LB
OTHER DELI SAUSAGE ITEMS
DELI LOAVES:
----------------------------
50100-34189 1 PC ARMOUR DELI OLD FASH RN 1 PC BOX LB
OTHER SAUSAGE:
----------------------------
50100-32669 ARMR DELI MEAT BOLO 2/9 LB LB
50100-32668 ARMR DELI BEEF BOLO 2/9 LB LB
50100-32670 ARMOUR DELI CKD SALAMI 2/9 LB LB
50100-34014 2 1/2 PC ARMR DELI N/C BRAU 2/1.50 PC LB
50100-30088 ARM - JUMBO CKD SALAMI 2/14 LB LB
OTHER FROZEN ITEMS:
LIVER ITEMS:
----------------------------
50100-32190 BIVAC BEEF LIVER 30# 1/30 LB LB
</TABLE>
11
<PAGE> 27
SCH. C.1 (CONT.)
** PAGE CAPTION #1**
** PAGE CAPTION #2**
** PAGE CAPTION #3**
<TABLE>
<CAPTION>
- ------------------- -------------------------------------------- ----------------- -------
UNIVERSAL
PRODUCT PRODUCT SIZE PRC
CODE BAS
- ------------------- -------------------------------------------- ----------------- -------
<S> <C> <C> <C>
100% GROUND BEEF - RETAIL P
----------------------------
50100-17781 *GR BF PTY4/1 12/1.5 12/1.50 LB LB
50100-17740 *GR BEEF PTY 4/1 6-3# 6/3 LB LB
CANADIAN BACON & SMO MT SPE
----------------------------
50100-35458 I PC STAR STICK CAN BCN 7-6# 1/7.50 LB LB
50100-35461 *FC CANADIAN BCN 2PC 2/7.50 LB LB
50100-35470 *FC CANADIAN BCN 4PC 4/7.50 LB LB
50100-35421 *RND CANAD BCN CHUNK 1/5 LB LB
50100-35420 CANADIAN BCN CC CHNK 1/15 LB LB
50100-35368 *SHNGLD CANAD BCN 5Z 16/5 OZ LB
PLS ORDER IN INCREMENTS OF
----------------------------
50100-35322 1877 CAN BCN10-12ZCTR 1/5 LBS LB
50100-35326 1877 CND BCN CTR CHK 1/10 LB LB
50100-35387 1877 CNDAN BCN CENTER 1/15 LB LB
50100-35380 SLI CANAD BCN 16/5Z 16/5 OZ LB
50100-35881 CAMPFIRE SLICED CANADIAN BC 15/1 LB LB
50100-36175 CMPFRE CAND BCN 32/5 32/5 OZ LB
50100-39349 VB SMK BUTTS 30# 1/30 LB LB
50100-35354 STAR DELITES 11/2-3# 10/3 LB LB
</TABLE>
12
<PAGE> 28
SCH. C.1 (CONT.)
** PAGE CAPTION #1**
** PAGE CAPTION #2**
** PAGE CAPTION #3**
<TABLE>
<CAPTION>
- ------------------- -------------------------------------------- ----------------- -------
UNIVERSAL
PRODUCT PRODUCT SIZE PRC
CODE BAS
- ------------------- -------------------------------------------- ----------------- -------
<S> <C> <C> <C>
CURED SALTED MEATS:
----------------------------
50100-30604 COV BELLY CHNK 1/2-1 21/.75 LB LB
50100-30687 DS FATBACK 3/4-1.5 1/1.10 LB LB
50100-30608 DS FATBACK CHNK 1/2-1 1/.75 LB LB
50100-30679 COV BELCHNK .75-1.5 1/1.10 LB LB
</TABLE>
13
<PAGE> 29
SCH. C.1 (CONT.)
TRAY PACK PRODUCTS
<TABLE>
<CAPTION>
- ------------------- -------------------------------------------- ----------------- -------
UNIVERSAL
PRODUCT PRODUCT SIZE PRC
CODE BAS
- ------------------- -------------------------------------------- ----------------- -------
<S> <C> <C> <C>
1 LB. TRAYS
TIER I
----------------------------
50100-45625 CKN FRD PATTIES 1# 12/1 LB LB
TIER II
----------------------------
50100-31692 12/1 LB CFB PAT 12/1 LB LB
50100-31497 CKD BRO PORK PATTY 4/4OZ 12/1 LB LB
50100-31493 CKD BF CHKHGN PATTIE 48/4OZ 12/1 LB LB
50100-33886 CF BF FINGER PATTIE 160 OZ 12/1 LB LB
TIER III
----------------------------
50100-33580 *BRD CHIX PTY 12/1# 12/1 LB LB
50100-24009 12/1# PREM CKN NUGGETS 12/1 LBS LB
50100-24011 12/1# BRD VEAL PAT 12/1 LBS LB
50100-69465 12/12Z *CKD CHICKEN NUGGET 12/12 OZ LB
50100-69496 CKD BRD VEAL PATTY 30Z TP 12/12 OZ LB
2 LB. TRAYS
TIER I
----------------------------
50100-24015 CKN FRD PATTY-2# 10/2 LB LB
50100-24022 BREADED CKN NUG-2# 10/2 LB LB
50100-24023 BREADED CKN PAT-2# 10/2 LB LB
TIER II
----------------------------
50100-24020 BREADED BF PTTY-2# 10/2 LB LB
50100-24021 CHUCKWAGON PTTY-2# 10/2 LB LB
50100-24024 BREADED PK PAT-2# 10/2 LB LB
50100-24019 CHKN FR FNGR SMPD PATS 10/2 LB LB
</TABLE>
14
<PAGE> 30
SCH. C.1 (CONT.)
TRAY PACK PRODUCTS
<TABLE>
<CAPTION>
- ------------------- -------------------------------------------- ----------------- -------
UNIVERSAL
PRODUCT PRODUCT SIZE PRC
CODE BAS
- ------------------- -------------------------------------------- ----------------- -------
<S> <C> <C> <C>
2 LB. TRAYS
TIER III
----------------------------
50100-24010 10/2# PREM CKN NUGGETS 10/2 LBS LB
50100-24018 10/2# PREM CHICK PATTIES 10/2 LB LB
50100-24017 PREM VEAL PTTY-2# 10/2 LB LB
3 LB. TRAYS-NON PRINTED FIL
TIER II
----------------------------
50100-34497 RETAIL FAM PACK BRD PORK PT 6/3 LB LB
50100-34693 6/3# CHICKEN FRIED PATTY 6/3 LB LB
50100-34887 6/3# CHICKEN FRIED FINGERS 6/3 LB LB
TIER III
----------------------------
50100-34580 6/3# PREM CHICK PATTIES 6/3 LB LB
50100-34465 RETAIL FAM PACK CHICKEN NUG 6/2.50 LB LB
50100-34469 3# BRD VEAL PATTIES 6/3 LB LB
20 OUNCE BAGS
----------------------------
50100-33724 12 20 OZ MEATBALLS 12/20 OZ LB
50100-56203 12/2OZ ITALIAN MEATBALL 12/20 OZ LB
50100-78012 ARM CKN NUGTS 12/20OZ 12/20 OZ LB
50100-78013 ARM CKN FINGERS 12/20OZ 12/20 OZ LB
</TABLE>
15
<PAGE> 31
SCH. C.1 (CONT.)
BULK PRODUCTS
<TABLE>
<CAPTION>
- ------------------- -------------------------------------------- ----------------- -------
UNIVERSAL
PRODUCT PRODUCT SIZE PRC
CODE BAS
- ------------------- -------------------------------------------- ----------------- -------
<S> <C> <C> <C>
TIER I - BULK PRODUCTS
----------------------------
50100-45788 CHICKEN FRIED PATTIE 4.00 O 1/15 LB LB
50100-33576 CHICKEN PATTIES 4.00 OZ 60/4 OZ LB
50100-34930 4/2.5 LB CHICKEN NUGGETS 4/2.50 BAG LB
TIER II - BULK PRODUCTS
----------------------------
50100-33535 BEEF PATTIES 3.00 OZ 80/3 OZ LB
50100-33643 BEEF PATTIES 4.00 OZ 60/4 OZ LB
50100-34938 PORK PATTIES 3.00 OZ 80/3 OZ LB
50100-34921 PORK PATTIES 4.00 OZ 60/4 OZ LB
50100-33353 CHUCKWAGON PATTIES 4.00 OZ 60/4 OZ LB
50100-33880 BEEF FINGERS 1.00 OZ 160/1 OZ LB
50100-30640 BEEF 1 BACON PATTIE 2.67 OZ 90/2.67 OZ LB
TIER III - BULK PRODUCTS
----------------------------
50100-33579 PREMIUM CHICKEN PATTIES 60/4 OZ LB
50100-40400 4/2.5 LB PREM CKN NUGGETS 4/2.50 BAG LB
50100-40461 PREMIUM CKN STRIPS 1.00 OZ 1/10 LB LB
50100-31877 VEAL PATTIES 2.67 OZ 90/2.67 OZ LB
50100-31878 VEAL PATTIES 3.00 OZ 80/3 OZ LB
50100-31880 VEAL PATTIES 4.00 OZ 60/4 OZ LB
SPECIALTY ITEMS
----------------------------
50100-33746 .5Z SUPR MT PTY BALL 14% TV 320/.50 OZ LB
50100-33726 *MT BALLS .5Z RETAIL 2/5 LB LB
50100-33733 MEATBALLS 1.0 OZ 160/1 OZ LB
50100-56131 2/5# ITALIAN MEATBALL 2/5 LBS LB
50100-35659 SALISBURY STEAK 76/3.2OZ 75/3.20 LB LB
50100-41115 BEEF PIZZA PATTIE 2.67 OZ 60/2.67 LB LB
50100-33280 ARM CORN DOG 60/2.67 OZ 60/2.67 OZ LB
50100-31694 CORN DOGS - TRAY PACKED 1 L 12/1 CSE LB
50100-40483 MINI TURKEY CORNDOGS H/INSR 1/10 LBS LB
50100-21789 HOMESTYLE HASHBROWNS 12/45 OZ LB
50100-41340 *CKD MEATBALLS 6/5# 6/5 LB LB
50100-30672 2.0OZ SUPR BF PTY 14% TVP 184/2 OZ LB
</TABLE>
16
<PAGE> 32
SCHEDULE C.2
TO AMENDED EXHIBIT "B"
OF AMENDMENT TO LICENSE AGREEMENT
Schedule of Armour dry sausage products sold as of the date of this amendment.
The parties understand and agree that the products scheduled herein are not
covered under the definition of SHELF-STABLE PRODUCTS set forth in this
amendment, but that all other processed meat products which fit the definition
of SHELF-STABLE PRODUCTS set forth in this amendment (for example meat sticks
and jerky snacks) are so covered.
<PAGE> 33
SCH. C.2 (CONT.)
ARMOUR DRY SAUSAGE
<TABLE>
<CAPTION>
- ------------------- -------------------------------------------- ----------------- -------
UNIVERSAL
PRODUCT PRODUCT SIZE PRC
CODE BAS
- ------------------- -------------------------------------------- ----------------- -------
<S> <C> <C> <C>
CONSUMER PACK DRY SAUSAGE
----------------------------
50100-00685 PIZZA SLICED PEPPERONI 3 OZ 16/3 OZ CS
50100-30296 PILLOW PACK PEPPERONI 6 OZ 12/6 OZ CS
50100-33327 PILLOW PACK PEPPERONI 8 OZ 12/8 OZ CS
50100-30575 PILLOW PACK PEPPERONI 3 LB 4/3 PC LB
50100-33328 MIDGET STICK PEPPERONI 5 OZ 16/5 OZ CS
50100-30468 MIDGET STICK PEPPERONI 5 OZ 32/5 OZ CS
50100-30321 ARMOUR PEPPERONI 12/12 OZ 12/12 OZ CS
SALAMI - STICK
----------------------------
50100-00629 1877 HARD SALAMI 18/1 -3/4 18/1.75 LB CS
50100-37458 DELI 1877 HD SAL HF 4 PC 4/3 LB LB
50100-37452 1877 HARD SALAMI 2 PC 2/6 LBS LB
50100-37451 DELI 1877 HD SAL 6 PC 6 PC BOX LB
50100-30780 DELI SAL ITALN 8/24 8/2 LBS CS
50100-30190 DELI LASTELLA HD SAL 2 PC 2/5.50 LB LB
50100-32833 DELI LASUPEMA SAL 6 PC 6/5.50 LB LB
60100-31854 DELI HD SAL FN GRD 6PC 6/5.50 LB LB
50100-41398 ARM NOVARA HARD SALAMI 2 PC 2/6 LB LB
50100-30299 DELI NOVARA GENOA SAL 2/6 LB LB
50100-30303 DELI NOVARA GENOA SAL HF 4P 4/2.75 LB LB
50100-30302 DELI NOVARA GENOA SAL 6 PC 6/5.50 LB LB
PEPPERONI-BULK SLICED, STOCK
----------------------------
50100-30557 CASERTA SLICED PEPPERONI 3/3.40 LB LB
50100-30558 ARMOUR STAR SLI PEP 16/18 1/10 LB CS
50100-30310 DELI PEPPERONI BULK 10 1/10 LB CS
50100-37591 SLICED PEPPERONI 14/16 CT 1/25 LB LB
50100-37590 SLICED PEPPERONI 18 CT 1/25 LB CB
50100-30538 DELI SANDWICH PEPPERONI 2/3.50 LB LB
</TABLE>
2
<PAGE> 34
SCH. C.2 (CONT.)
ARMOUR SEMI-DRY SAUSAGE
<TABLE>
<CAPTION>
- ------------------- ------------------------------------------------- ----------------- ------
UNIVERSAL
PRODUCT PRODUCT SIZE PRC
CODE BAS
- ------------------- ------------------------------------------------- ----------------- ------
<S> <C> <C> <C>
BEEF SUMMER SAUSAGE
----------------------------
50100-78000 1877 BEEF SUMMER SGE 8 OZ 24/8 OZ CS
50100-00662 1877 BEEF SUMMER SGE 12 OZ 16/12 OR CS
50100-78001 ARM 1877 818 BF SUM SGE 240 12/24 OZ CS
50100-64023 1877 BEEF SUMMER SGE 2.25 # 12/2.25 LBS CS
50100-00663 1877 BEEF SUMMER SGE 3.00 # 1/3 LB CS
MEAT SUMMER SAUSAGE
----------------------------
50100-33376 1877 MEAT SUMMER SGE 24/8 OZ 24/8 OZ CS
50100-00673 1877 MEAT SUMMER SGE 12 OZ 16/12 OZ CS
50100-00671 1877 MEAT SUMMER SGE 1.00# 12/1 LB CS
50100-39195 1877 MEAT SUMMER SGE 1.5# 12/1.50 LB CS
50100-64024 1877 MEAT SUMMER SGE 2.25# 12/2.25 LBS CS
50100-39193 1877 MEAT SUMMER SGE 2.25# 16/2.15 LB CS
50100-00672 1877 MEAT SUMMER SGE 3.00# 6/3 LB CS
50100-37473 ARMOUR THURINGER SGE 20 OZ 12/20 OZ CS
SUMMER SAUSAGE DISPLAYS
----------------------------
50100-64019 1877 MEAT SSGE DISPLAY 1.5# 20/1.50 LBS CS
50100-64020 1877 BEEF SSGE DISPLAY 1.5# 20/1.50 LBS CS
50100-39189 1877 MEAT SSGE DISPLAY 8 OZ 64/8 OZ CS
50100-42200 ARM 1877 BF SUM SGE DISP 64/8 OZ CS
50100-39191 1877 BEEF SUMMER SGE 12 OZ 42/12 OZ CS
50100-39188 1877 MEAT SSGE DISPLAY 12 OZ 42/12 OZ CS
NAPC - SUBJ TO AVAILABILITY
----------------------------
50100-37496 NAPC MEAT SMR SGE 1.00 1/32 LB LB
50100-37497 NAPC BEEF SMR SGE 1.00 1/36 LB LB
50100-37480 NAPC MEAT SMR SGE 2.25 1/32 LB LB
50100-37498 NAPC BEEF SMR SGE 3.00 1/43 LB LB
50100-37849 NAPC MEAT SMR SGE 3.00 1/43 LB LB
</TABLE>
3
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-33659 of The Dial Corporation on Form S-3 of our
report dated February 14, 1997, appearing in the Annual Report on Form 10-K of
The Dial Corporation for the year ended December 28, 1996. We also consent to
the reference to us under the heading "Experts" in the Prospectus, which is part
of such Registration Statement.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Phoenix, Arizona
October 15, 1997
