Document:

Exhibit 10.1

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

 

DATED AS OF SEPTEMBER 27, 2002,

 

 

AMONG

 

 

FLORISTS’ TRANSWORLD DELIVERY, INC.,

 

 

FTD, INC.,

 

 

THE GUARANTORS FROM TIME TO TIME PARTIES HERETO,

 

 

THE LENDERS FROM TIME TO TIME PARTIES HERETO,

 

 

U.S. BANK NATIONAL ASSOCIATION,

as

Syndication Agent

 

 

and

 

 

HARRIS TRUST AND SAVINGS BANK,

as

Administrative Agent

 

 

 

Table of

Contents

 

	

  SECTION

  	

   

  	

  Description

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  SECTION 1.

  	

   

  	

  THE CREDIT

  FACILITIES

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Section 1.1.

  	

   

  	

  Revolving

  Credit Commitments

  	

   

  
	

   

  	

  Section 1.2.

  	

   

  	

  Letters of Credit

  	

   

  
	

   

  	

  Section 1.3.

  	

   

  	

  Applicable

  Interest Rates

  	

   

  
	

   

  	

  Section 1.4.

  	

   

  	

  Minimum

  Borrowing Amounts; Maximum Eurodollar Loans

  	

   

  
	

   

  	

  Section 1.5.

  	

   

  	

  Manner

  of Borrowing Loans and Designating Applicable Interest Rates

  	

   

  
	

   

  	

  Section 1.6.

  	

   

  	

  Swing Loans

  	

   

  
	

   

  	

  Section 1.7.

  	

   

  	

  Interest Periods

  	

   

  
	

   

  	

  Section 1.8.

  	

   

  	

  Maturity of Loans

  	

   

  
	

   

  	

  Section 1.9.

  	

   

  	

  Prepayments

  	

   

  
	

   

  	

  Section 1.10.

  	

   

  	

  Default Rate

  	

   

  
	

   

  	

  Section 1.11.

  	

   

  	

  The Notes

  	

   

  
	

   

  	

  Section 1.12.

  	

   

  	

  Funding Indemnity

  	

   

  
	

   

  	

  Section 1.13.

  	

   

  	

  Commitment

  Terminations

  	

   

  
	

   

  	

  Section 1.14.

  	

   

  	

  Substitution

  of Lenders

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  SECTION 2.

  	

   

  	

  FEES

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Section 2.1.

  	

   

  	

  Fees

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  SECTION 3.

  	

   

  	

  PLACE AND APPLICATION OF PAYMENTS

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Section 3.1.

  	

   

  	

  Place

  and Application of Payments

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  SECTION 4.

  	

   

  	

  THE COLLATERAL AND GUARANTIES

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Section 4.1.

  	

   

  	

  Collateral

  	

   

  
	

   

  	

  Section 4.2.

  	

   

  	

  Liens on Real

  Property

  	

   

  
	

   

  	

  Section 4.3.

  	

   

  	

  Guaranties

  	

   

  
	

   

  	

  Section 4.4.

  	

   

  	

  Further

  Assurances

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  SECTION 5.

  	

   

  	

  DEFINITIONS; INTERPRETATION

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Section 5.1.

  	

   

  	

  Definitions

  	

   

  
	

   

  	

  Section 5.2.

  	

   

  	

  Interpretation

  	

   

  
	

   

  	

  Section 5.3.

  	

   

  	

  Change

  in Accounting Principles

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  SECTION 6.

  	

   

  	

  REPRESENTATIONS AND WARRANTIES

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Section 6.1.

  	

   

  	

  Organization

  and Qualification

  	

   

  
	

   

  	

  Section 6.2.

  	

   

  	

  Subsidiaries

  	

   

  
	

   

  	

  Section 6.3.

  	

   

  	

  Authority

  and Validity of Obligations

  	

   

  
	

   

  	

  Section 6.4.

  	

   

  	

  Use of

  Proceeds; Margin Stock

  	

   

  

 

 

	

   

  	

  Section 6.5.

  	

   

  	

  Financial Reports

  	

   

  
	

   

  	

  Section 6.6.

  	

   

  	

  No

  Material Adverse Change

  	

   

  
	

   

  	

  Section 6.7.

  	

   

  	

  Full Disclosure

  	

   

  
	

   

  	

  Section 6.8.

  	

   

  	

  Trademarks,

  Franchises, and Licenses

  	

   

  
	

   

  	

  Section 6.9.

  	

   

  	

  Governmental

  Authority and Licensing

  	

   

  
	

   

  	

  Section 6.10.

  	

   

  	

  Good Title

  	

   

  
	

   

  	

  Section 6.11.

  	

   

  	

  Litigation

  and Other Controversies

  	

   

  
	

   

  	

  Section 6.12.

  	

   

  	

  Taxes

  	

   

  
	

   

  	

  Section 6.13.

  	

   

  	

  Approvals

  	

   

  
	

   

  	

  Section 6.14.

  	

   

  	

  Affiliate

  Transactions

  	

   

  
	

   

  	

  Section 6.15.

  	

   

  	

  Investment

  Company; Public Utility Holding Company

  	

   

  
	

   

  	

  Section 6.16.

  	

   

  	

  ERISA

  	

   

  
	

   

  	

  Section 6.17.

  	

   

  	

  Compliance with

  Laws

  	

   

  
	

   

  	

  Section 6.18.

  	

   

  	

  Other Agreements

  	

   

  
	

   

  	

  Section 6.19.

  	

   

  	

  Solvency

  	

   

  
	

   

  	

  Section 6.20.

  	

   

  	

  No Default

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  SECTION 7.

  	

   

  	

  CONDITIONS PRECEDENT

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Section 7.1.

  	

   

  	

  All Credit Events

  	

   

  
	

   

  	

  Section 7.2.

  	

   

  	

  Initial Credit Event

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  SECTION 8.

  	

   

  	

  COVENANTS

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Section 8.1.

  	

   

  	

  Maintenance

  of Business

  	

   

  
	

   

  	

  Section 8.2.

  	

   

  	

  Maintenance

  of Properties

  	

   

  
	

   

  	

  Section 8.3.

  	

   

  	

  Taxes and

  Assessments

  	

   

  
	

   

  	

  Section 8.4.

  	

   

  	

  Insurance

  	

   

  
	

   

  	

  Section 8.5.

  	

   

  	

  Financial Reports

  	

   

  
	

   

  	

  Section 8.6.

  	

   

  	

  Inspection

  	

   

  
	

   

  	

  Section 8.7.

  	

   

  	

  Borrowings

  and Guaranties

  	

   

  
	

   

  	

  Section 8.8.

  	

   

  	

  Liens

  	

   

  
	

   

  	

  Section 8.9.

  	

   

  	

  Investments,

  Acquisitions, Loans and Advances

  	

   

  
	

   

  	

  Section 8.10.

  	

   

  	

  Mergers,

  Consolidations and Sales

  	

   

  
	

   

  	

  Section 8.11.

  	

   

  	

  Maintenance

  of Subsidiaries

  	

   

  
	

   

  	

  Section 8.12.

  	

   

  	

  Dividends

  and Certain Other Restricted Payments

  	

   

  
	

   

  	

  Section 8.13.

  	

   

  	

  ERISA

  	

   

  
	

   

  	

  Section 8.14.

  	

   

  	

  Compliance with

  Laws

  	

   

  
	

   

  	

  Section 8.15.

  	

   

  	

  Burdensome

  Contracts With Affiliates

  	

   

  
	

   

  	

  Section 8.16.

  	

   

  	

  No Changes

  in Fiscal Year

  	

   

  
	

   

  	

  Section 8.17.

  	

   

  	

  Formation

  of Subsidiaries

  	

   

  
	

   

  	

  Section 8.18.

  	

   

  	

  Change

  in the Nature of Business

  	

   

  
	

   

  	

  Section 8.19.

  	

   

  	

  Use of Loan

  Proceeds

  	

   

  
	

   

  	

  Section 8.20.

  	

   

  	

  Limitations

  on Subsidiary Distributions and Certain Other Restrictions

  	

   

  
	

   

  	

  Section 8.21.

  	

   

  	

  Subordinated Debt

  	

   

  
	

   

  	

  Section 8.22.

  	

   

  	

  Total

  Funded Debt/EBITDA Ratio

  	

   

  

 

ii

 

	

   

  	

  Section 8.23.

  	

   

  	

  Net Worth

  	

   

  
	

   

  	

  Section 8.24.

  	

   

  	

  Fixed

  Charge Coverage Ratio

  	

   

  
	

   

  	

  Section 8.25.

  	

   

  	

  Interest

  Rate Protection

  	

   

  
	

   

  	

  Section 8.26.

  	

   

  	

  Rentals

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  SECTION 9.

  	

   

  	

  EVENTS OF DEFAULT AND REMEDIES

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Section 9.1.

  	

   

  	

  Events of Default

  	

   

  
	

   

  	

  Section 9.2.

  	

   

  	

  Non-Bankruptcy

  Defaults

  	

   

  
	

   

  	

  Section 9.3.

  	

   

  	

  Bankruptcy

  Defaults

  	

   

  
	

   

  	

  Section 9.4.

  	

   

  	

  Collateral

  for Undrawn Letters of Credit

  	

   

  
	

   

  	

  Section 9.5.

  	

   

  	

  Notice of Default

  	

   

  
	

   

  	

  Section 9.6.

  	

   

  	

  Expenses

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  SECTION 10.

  	

   

  	

  CHANGE IN CIRCUMSTANCES

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Section 10.1.

  	

   

  	

  Change of Law

  	

   

  
	

   

  	

  Section 10.2.

  	

   

  	

  Unavailability

  of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR

  	

   

  
	

   

  	

  Section 10.3.

  	

   

  	

  Increased

  Cost and Reduced Return

  	

   

  
	

   

  	

  Section 10.4.

  	

   

  	

  Lending Offices

  	

   

  
	

   

  	

  Section 10.5.

  	

   

  	

  Discretion

  of Lender as to Manner of Funding

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  SECTION 11.

  	

   

  	

  THE ADMINISTRATIVE AGENT

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Section 11.1.

  	

   

  	

  Appointment

  and Authorization of Administrative Agent

  	

   

  
	

   

  	

  Section 11.2.

  	

   

  	

  Administrative

  Agent and its Affiliates

  	

   

  
	

   

  	

  Section 11.3.

  	

   

  	

  Action

  by Administrative Agent

  	

   

  
	

   

  	

  Section 11.4.

  	

   

  	

  Consultation

  with Experts

  	

   

  
	

   

  	

  Section 11.5.

  	

   

  	

  Liability

  of Administrative Agent; Credit Decision

  	

   

  
	

   

  	

  Section 11.6.

  	

   

  	

  Indemnity

  	

   

  
	

   

  	

  Section 11.7.

  	

   

  	

  Resignation

  of Administrative Agent and Successor Administrative Agent

  	

   

  
	

   

  	

  Section 11.8.

  	

   

  	

  L/C Issuer.

  	

   

  
	

   

  	

  Section 11.9.

  	

   

  	

  Hedging

  Agreements

  	

   

  
	

   

  	

  Section 11.10.

  	

   

  	

  Designation

  of Additional Agents

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  SECTION 12.

  	

   

  	

  THE GUARANTY

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Section 12.1.

  	

   

  	

  The Guaranty

  	

   

  
	

   

  	

  Section 12.2.

  	

   

  	

  Guarantee

  Unconditional

  	

   

  
	

   

  	

  Section 12.3.

  	

   

  	

  Discharge

  Only Upon Payment in Full; Reinstatement in Certain Circumstances

  	

   

  
	

   

  	

  Section 12.4.

  	

   

  	

  Subrogation

  	

   

  
	

   

  	

  Section 12.5.

  	

   

  	

  Waivers

  	

   

  
	

   

  	

  Section 12.6.

  	

   

  	

  Limit on

  Recovery

  	

   

  
	

   

  	

  Section 12.7.

  	

   

  	

  Stay of

  Acceleration

  	

   

  

 

iii

 

	

  SECTION 13.

  	

   

  	

  MISCELLANEOUS

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Section 13.1.

  	

   

  	

  Withholding Taxes

  	

   

  
	

   

  	

  Section 13.2.

  	

   

  	

  No

  Waiver, Cumulative Remedies

  	

   

  
	

   

  	

  Section 13.3.

  	

   

  	

  Non-Business Days

  	

   

  
	

   

  	

  Section 13.4.

  	

   

  	

  Documentary Taxes

  	

   

  
	

   

  	

  Section 13.5.

  	

   

  	

  Survival

  of Representations

  	

   

  
	

   

  	

  Section 13.6.

  	

   

  	

  Survival of

  Indemnities

  	

   

  
	

   

  	

  Section 13.7.

  	

   

  	

  Sharing of

  Set-Off

  	

   

  
	

   

  	

  Section 13.8.

  	

   

  	

  Notices

  	

   

  
	

   

  	

  Section 13.9.

  	

   

  	

  Counterparts

  	

   

  
	

   

  	

  Section 13.10.

  	

   

  	

  Successors

  and Assigns

  	

   

  
	

   

  	

  Section 13.11.

  	

   

  	

  Participants

  	

   

  
	

   

  	

  Section 13.12.

  	

   

  	

  Assignments

  	

   

  
	

   

  	

  Section 13.13.

  	

   

  	

  Amendments

  	

   

  
	

   

  	

  Section 13.14.

  	

   

  	

  Headings

  	

   

  
	

   

  	

  Section 13.15.

  	

   

  	

  Costs

  and Expenses; Indemnification

  	

   

  
	

   

  	

  Section 13.16.

  	

   

  	

  Set-off

  	

   

  
	

   

  	

  Section 13.17.

  	

   

  	

  Entire Agreement

  	

   

  
	

   

  	

  Section 13.18.

  	

   

  	

  Governing Law

  	

   

  
	

   

  	

  Section 13.19.

  	

   

  	

  Severability

  of Provisions

  	

   

  
	

   

  	

  Section 13.20.

  	

   

  	

  Excess Interest

  	

   

  
	

   

  	

  Section 13.21.

  	

   

  	

  Construction

  	

   

  
	

   

  	

  Section 13.22.

  	

   

  	

  Lender’s

  Obligations Several

  	

   

  
	

   

  	

  Section 13.23.

  	

   

  	

  Submission

  to Jurisdiction; Waiver of Jury Trial

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Signature Page

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Exhibit A

  	

  -

  	

  Notice of Payment Request

  	

   

  
	

  Exhibit B

  	

  -

  	

  Notice of Borrowing

  	

   

  
	

  Exhibit C

  	

  -

  	

  Notice of Continuation/Conversion

  	

   

  
	

  Exhibit D-1

  	

  -

  	

  Revolving Note

  	

   

  
	

  Exhibit D-2

  	

  -

  	

  Swing Line Note

  	

   

  
	

  Exhibit E

  	

  -

  	

  Compliance Certificate

  	

   

  
	

  Exhibit F

  	

  -

  	

  Assignment and Acceptance

  	

   

  
	

  Exhibit G

  	

  -

  	

  Additional Guarantor Supplement

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Schedule 1

  	

  -

  	

  Commitments

  	

   

  
	

  Schedule 1.2

  	

  -

  	

  Existing Letters of Credit

  	

   

  
	

  Schedule 6.2

  	

  -

  	

  Subsidiaries

  	

   

  
	

  Schedule 8.7

  	

  -

  	

  Permitted Existing Indebtedness

  	

   

  
	

  Schedule 8.8

  	

  -

  	

  Permitted Existing Liens

  	

   

  
	

  Schedule 8.9

  	

  -

  	

  Permitted Existing Investments

  	

   

  

 

iv

 

AMENDED AND

RESTATED CREDIT AGREEMENT

 

This Amended and Restated Credit Agreement (this “Agreement”) is entered into

as of September 27, 2002, by and among Florists’ Transworld Delivery,

Inc., a Michigan corporation (the “Borrower”), FTD, Inc. (f/k/a

IOS Brands Corporation), a Delaware corporation (the “Parent”), and each of the

Subsidiaries from time to time becoming a party to this Agreement, as

Guarantors, the several financial institutions from time to time party to this

Agreement, as Lenders, and Harris Trust and Savings Bank, as Administrative

Agent as provided herein.  All capitalized

terms used herein without definition shall have the same meanings herein as

such terms are defined in Section 5.1 hereof.

 

R

E C I T A L S

 

A.            The Borrower has requested that the Lenders extend and,

in the case of certain of the Lenders, continue to extend, credit to the

Borrower.

 

B.            The Borrower, the Parent, certain of the Subsidiaries, as

Guarantors, certain of the Lenders and the Administrative Agent are currently

party to that certain Credit Agreement dated as of September 27, 2001 (as

amended, the “Previous Credit Agreement”).  The Borrower hereby requests that certain amendments be made to

the Previous Credit Agreement and, for the sake of clarity and convenience,

that the Previous Credit Agreement be restated as so amended.  This Agreement shall become effective, and

shall amend and restate the Previous Credit Agreement, upon the execution of

this Agreement by the parties signatory hereto and the satisfaction of the

conditions precedent contained in Section 7 hereof; and from and after the

Closing Date, (i) all references made to the Previous Credit Agreement in

the Loan Documents or in any other instrument or document shall, without more,

be deemed to refer to this Amended and Restated Credit Agreement and

(ii) the Previous Credit Agreement shall be deemed amended and restated in

its entirety hereby.

 

C.            The Lenders, upon acceptance of this Agreement in

writing, will lend and, in the case of certain of the Lenders, continue to lend

monies and/or make advances, extensions of credit or other financial

accommodations to, on behalf of or for the benefit of the Borrower pursuant

hereto.

 

Now, Therefore, in consideration of the

recitals set forth above, which by this reference are incorporated into this

Agreement set forth below, and for other good and valuable consideration, the

receipt and sufficiency of which are hereby acknowledged and subject to the

terms and conditions hereof and on the basis of the representations and

warranties herein set forth, the parties hereto hereby agree to the following:

 

SECTION 1.                                                 THE CREDIT FACILITIES.

 

Section 1.1.      Revolving Credit Commitments.  Subject to the terms and conditions hereof,

each Lender, by its acceptance hereof, severally agrees to make a loan or loans

(individually a “Revolving Loan” and collectively the “Revolving Loans”) to the

Borrower from time to time on a revolving basis up to the amount of such

Lender’s Revolving Credit Commitment, subject to 

 

 

any reductions thereof pursuant to the terms hereof,

before the Termination Date.  The sum of

the aggregate principal amount of Revolving Loans, Swing Loans and L/C

Obligations at any time outstanding shall not exceed the Revolving Credit

Commitments in effect at such time. 

Each Borrowing of Revolving Loans shall be made ratably from the Lenders

in proportion to their respective Revolver Percentages.  As provided in Section 1.5(a) hereof,

the Borrower may elect that each Borrowing of Revolving Loans be either Base

Rate Loans or Eurodollar Loans. 

Revolving Loans may be repaid and the principal amount thereof

reborrowed before the Termination Date, subject to the terms and conditions

hereof.

 

Section 1.2.      Letters of Credit.  (a) General Terms.  Subject to the terms and conditions hereof, as part of the

Revolving Credit, the L/C Issuer shall issue standby and commercial letters of

credit (each a “Letter of Credit”) for the Borrower’s account in an

aggregate undrawn face amount up to the amount of the L/C Sublimit, provided

that the aggregate L/C Obligations at any time outstanding shall not exceed the

difference between the Revolving Credit Commitments in effect at such time and

the aggregate principal amount of Revolving Loans and Swing Loans then

outstanding.  Each Letter of Credit

shall be issued by the L/C Issuer, but each Lender shall be obligated to reimburse

the L/C Issuer for such Lender’s Revolver Percentage of the amount of each

drawing thereunder and, accordingly, each Letter of Credit shall constitute

usage of the Revolving Credit Commitment of each Lender pro rata in an amount

equal to its Revolver Percentage of the L/C Obligations then

outstanding.  The Letters of Credit

shall include, without limitation, the letters of credit shown on Schedule 1.2

hereto issued by the Lenders indicated on such Schedule (the “Existing

Letters of Credit”), which, on and after the Closing Date, shall be

deemed Letters of Credit issued hereunder for the purposes of this Agreement

and shall without further action by the Borrower or the issuer of the Existing

Letters of Credit, be regarded as Obligations secured by the Collateral and

otherwise be treated by the parties hereto identically in every respect to

Letters of Credit issued on or after the date of this Agreement.

 

(b)           Applications.  At any time before the Termination Date, the L/C Issuer shall, at

the request of the Borrower and with notice to the Administrative Agent, issue

one or more Letters of Credit  in U.S. Dollars, in a form satisfactory to

the L/C Issuer and otherwise in compliance with the provisions of this

Agreement, with expiration dates no later than the earlier of (i) twelve

(12) months from the date of issuance (or which are cancelable not later than

twelve (12) months from the date of issuance and each renewal) and

(ii) the date which is thirty (30) days prior to the Termination Date, in

an aggregate face amount as set forth above, upon the receipt of an application

duly executed by the Borrower for the relevant Letter of Credit in the form

then customarily prescribed by the L/C Issuer for the Letter of Credit

requested (each an “Application”).  Notwithstanding anything contained in any Application to the

contrary:  (i) the Borrower shall

pay fees in connection with each Letter of Credit as set forth in

Section 2.1 hereof, (ii) except as otherwise provided in Section 1.9

hereof, before the occurrence of a Default or an Event of Default, the L/C

Issuer will not call for the funding by the Borrower of any amount under a

Letter of Credit before being presented with a drawing thereunder, and

(iii) if the L/C Issuer is not timely reimbursed for the amount of any

drawing under a Letter of Credit on the date such drawing is paid, the

Borrower’s obligation to reimburse the L/C Issuer for the amount of such

drawing shall bear interest (which the Borrower hereby promises to pay) from

and after the date such drawing is paid at a rate per annum equal to the sum of

2% plus the Applicable Margin plus the Base Rate from time to time in effect

(computed on the basis of a

 

2

 

year of 365 or 366 days, as the case may be, and

the actual number of days elapsed).  If

the L/C Issuer issues any Letter of Credit with an expiration date that is

automatically extended unless the L/C Issuer gives notice that the expiration

date will not so extend beyond its then scheduled expiration date, the L/C

Issuer will give such notice of non–renewal before the time necessary to

prevent such automatic extension if before such required notice date:  (i) the expiration date of such Letter

of Credit if so extended would be after the Termination Date, (ii) the

Revolving Credit Commitments have been termi­nated, or (iii) a Default or

an Event of Default exists and the Administrative Agent, at the request or with

the consent of the Required Lenders, has given the L/C Issuer instructions not

to so permit the extension of the expiration date of such Letter of

Credit.  The L/C Issuer agrees to issue

amendments to the Letter(s) of Credit increasing the amount, or extending the

expiration date, thereof at the request of the Borrower subject to the conditions

of Section 7 hereof and the other terms of this Section 1.2.

 

(c)           The Reimbursement Obligations.  Subject to Section 1.2(b) hereof, the

obligation of the Borrower to reimburse the L/C Issuer for all drawings under a

Letter of Credit (a “Reimbursement Obligation”) shall be

governed by the Application related to such Letter of Credit, except that such

reimbursement shall be made by no later than 12:00 Noon (Chicago time) on the

date when each drawing is paid if the Borrower has been informed of such drawing

by the L/C Issuer on or before 11:30 a.m. (Chicago time) on the date when

such drawing is paid or, if notice of such drawing is given to the Borrower

after 11:30 a.m. (Chicago time) on the date when such drawing is paid, by

the end of such day, in immediately available funds at the Administrative

Agent’s principal office in Chicago, Illinois or such other office as the

Administrative Agent may designate in writing to the Borrower (who shall

thereafter cause to be distributed to the L/C Issuer such amount(s) in like

funds), provided

that the provisions of this Section 1.2(c) shall not affect any

right or action of the Borrower against the L/C Issuer for any gross negligence

or willful misconduct in making payment under any Letter of Credit.  If the Borrower does not make any such

reimbursement payment on the date due and the Participating Lenders fund their

participations therein in the manner set forth in Section 1.2(d) below,

then all payments thereafter received by the Administrative Agent in discharge of

any of the relevant Reimbursement Obligations shall be distributed in

accordance with Section 1.2(d) below.

 

(d)           The Participating Interests.  Each Lender (other than the Lender then

acting as L/C Issuer in issuing Letters of Credit), by its acceptance hereof,

severally agrees to purchase from the L/C Issuer, and the L/C Issuer hereby

agrees to sell to each such Lender (a “Participating Lender”), an undivided

percentage participating interest (a “Participating Interest”), to the extent

of its Revolver Percentage, in each Letter of Credit issued by, and each

Reimbursement Obligation owed to, the L/C Issuer.  Upon any failure by the Borrower to pay any Reimburse­ment

Obligation at the time required on the date the related drawing is paid, as set

forth in Section 1.2(c) above, or if the L/C Issuer is required at any

time to return to the Borrower or to a trustee, receiver, liquidator, custodian

or other Person any portion of any payment of any Reimbursement Obligation,

each Participating Lender shall, not later than the Business Day it receives a

certificate in the form of Exhibit A hereto from the L/C Issuer (with a

copy to the Administrative Agent) to such effect, if such certificate is

received before 1:00 p.m. (Chicago time), or not later than 1:00 p.m.

(Chicago time) the following Business Day, if such certificate is received

after such time, pay to the Administrative Agent for the account of the L/C

Issuer an amount equal to such Participating Lender’s Revolver Percentage of

such unpaid or recaptured

 

3

 

Reimbursement Obligation together with interest on

such amount accrued from the date the related payment was made by the L/C

Issuer to the date of such payment by such Participating Lender at a rate per

annum equal to:  (i) from the date

the related payment was made by the L/C Issuer to the date 2 Business Days

after payment by such Participating Lender is due hereunder, the Federal Funds

Rate for each such day and (ii) from the date 2 Business Days after

the date such payment is due from such Participating Lender to the date such

payment is made by such Participating Lender, the Base Rate in effect for each

such day.  Each such Participating

Lender shall thereafter be entitled to receive its Revolver Percentage of each

payment received in respect of the relevant Reimbursement Obligation and of

interest paid thereon, with the L/C Issuer retaining its Revolver Percentage as

a Lender hereunder.

 

The several obligations of the Participating Lenders to the L/C Issuer

under this Section 1.2 shall be absolute, irrevocable and unconditional

under any and all circumstances whatsoever and shall not be subject to any set–off,

counterclaim or defense to payment which any Participating Lender may have or

have had against the Borrower, the L/C Issuer, the Administrative Agent, any

Lender or any other Person whatsoever. 

Without limiting the generality of the foregoing, such obligations shall

not be affected by any Default or Event of Default or by any reduction or

termination of any Commitment of any Lender, and each payment by a

Participating Lender under this Section 1.2 shall be made without any

offset, abatement, withholding or reduction whatsoever.

 

(e)           Indemnification.  The Participating Lenders shall, to the extent of their

respective Revolver Percentages, indemnify the L/C Issuer (to the extent not

reimbursed by the Borrower) against any cost, expense (including reasonable

counsel fees and disbursements), claim, demand, action, loss or liability

(except such as result from the L/C Issuer’s gross negligence or willful

misconduct) that the L/C Issuer may suffer or incur in connection with any

Letter of Credit issued by it.  The

obligations of the Participating Lenders under this Section 1.2(e) and all

other parts of this Section 1.2 shall survive termination of this

Agreement and of all Applications, Letters of Credit, and all drafts and other

documents presented in connection with drawings thereunder.

 

Section 1.3.      Applicable Interest Rates.

 

(a)           Base Rate Loans.  Each Base Rate Loan made or maintained by a Lender shall bear

interest during each Interest Period it is outstanding (computed on the basis

of a year of 365 or 366 days, as the case may be, and the actual days elapsed)

on the unpaid principal amount thereof from the date such Loan is advanced,

continued or created by conversion from a Eurodollar Loan until maturity

(whether by acceleration or otherwise) at a rate per annum equal to the sum of

the Applicable Margin plus the Base Rate from time to time in effect, payable

on the last day of its Interest Period and at maturity (whether by acceleration

or otherwise).  The applicable interest

rate for each Base Rate Loan shall change simultaneously with each change in

the Base Rate.

 

“Base

Rate” means for any day the greater of:  (i) the rate of interest announced by the

Administrative Agent from time to time as its prime commercial rate as in

effect on such day, with any change in the Base Rate resulting from a change in

said prime commercial rate to be

 

4

 

effective as of the date of the relevant change in

said prime commercial rate (it being acknowledged and agreed that such rate may

not be the Administrative Agent’s best or lowest rate) and (ii) the sum of

(x) the rate determined by the Administrative Agent to be the average

(rounded upward, if necessary, to the next higher 1/100 of 1%) of the rates per

annum quoted to the Administrative Agent at approximately 10:00 a.m. (Chicago

time) (or as soon thereafter as is practicable) on such day (or, if such day is

not a Business Day, on the immediately preceding Business Day) by two or more

Federal funds brokers selected by the Administrative Agent for sale to the

Administrative Agent at face value of Federal funds in the secondary market in

an amount equal or comparable to the principal amount owed to the

Administrative Agent for which such rate is being determined, plus

(y) 1/2 of 1%.

 

(b)           Eurodollar Loans.  Each Eurodollar Loan made or maintained by a

Lender shall bear interest during each Interest Period it is outstanding

(computed on the basis of a year of 360 days and actual days elapsed) on the

unpaid principal amount thereof from the date such Loan is advanced, continued

or created by conversion from a Base Rate Loan until maturity (whether by

acceleration or otherwise) at a rate per annum equal to the sum of the

Applicable Margin plus the Adjusted LIBOR applicable for such Interest Period,

payable on the last day of the Interest Period and at maturity (whether by

acceleration or otherwise), and, if the applicable Interest Period is longer

than three months, on each day occurring every three months after the

commencement of such Interest Period.

 

“Adjusted

LIBOR” means, for any Borrowing of Eurodollar Loans, a rate

per annum determined in accordance with the following formula:

 

Adjusted

LIBOR   =                                  LIBOR                         

                                           1 -

Eurodollar Reserve Percentage

 

“Eurodollar

Reserve Percentage” means, for any Borrowing of Eurodollar

Loans for any Interest Period, the daily average for the applicable Interest

Period of the maximum rate, expressed as a decimal, at which reserves

(including, without limitation, any supplemental, marginal and emergency

reserves) are imposed during such Interest Period by the Board of Governors of

the Federal Reserve System (or any successor) on “eurocurrency liabilities”,

as defined in such Board’s Regulation D (or in respect of any other

category of liabilities that includes deposits by reference to which the

interest rate on Eurodollar Loans is determined or any category of extensions

of credit or other assets that include loans by non-United States offices of

any Lender to United States residents), subject to any amendments of such

reserve requirement by such Board or its successor, taking into account any

transitional adjustments thereto.  For

purposes of this definition, the Eurodollar Loans shall be deemed to be “eurocurrency

liabilities” as defined in Regulation D without benefit or

credit for any prorations, exemptions or offsets under Regulation D.

 

“LIBOR”

means, for any Interest Period for a Borrowing of Eurodollar Loans,

(a) the LIBOR Index Rate for such Interest Period, if such rate is

available, and (b) if the LIBOR Index Rate cannot be determined, the

arithmetic average of the rates of interest per annum (rounded upwards, if

necessary, to the nearest 1/100 of 1%) at which deposits in U.S. Dollars in

immediately available funds are offered to the Administrative Agent at

11:00 a.m.  (London,

 

5

 

England time) 2 Business Days before the

beginning of such Interest Period by 3 or more major banks in the interbank

eurodollar market selected by the Administrative Agent for delivery on the

first day of and for a period equal to such Interest Period and in an amount

equal or comparable to the principal amount of the Eurodollar Loan scheduled to

be made by the Administrative Agent as part of such Borrowing.

 

“LIBOR

Index Rate” means, for any Interest Period, the rate per

annum (rounded upwards, if necessary, to the next higher one hundred-thousandth

of a percentage point) for deposits in U.S. Dollars for a period equal to such

Interest Period, which appears on the Telerate Page 3750 as of 11:00 a.m.

(London, England time) on the day 2 Business Days before the commencement of

such Interest Period.

 

“Telerate

Page 3750” means the display designated as “Page 3750”

on the Dow Jones Telerate Service (or such other page as may replace Page 3750

on that service or such other service as may be nominated by the British

Bankers’ Association as the information vendor for the purpose of displaying

British Bankers’ Association Interest Settlement Rates for U.S. Dollar

deposits).

 

(c)           Rate Determinations.  The Administrative Agent shall determine each

interest rate applicable to the Loans and the Reimbursement Obligations

hereunder, and its determination thereof shall be conclusive and binding except

in the case of manifest error.

 

Section 1.4.      Minimum Borrowing Amounts; Maximum

Eurodollar Loans. 

Each Borrowing of Base Rate Loans advanced under a Credit shall be in an

amount not less than $1,000,000 or such greater amount which is an integral

multiple of $100,000.  Each Borrowing of

Eurodollar Loans advanced, continued or converted under a Credit shall be in an

amount equal to $2,000,000 or such greater amount which is an integral multiple

of $100,000.  Without the Administrative

Agent’s consent, there shall not be more than 10 Borrowings of Eurodollar Loans

outstanding under a Credit at any one time outstanding.

 

6

 

Section 1.5.      Manner of Borrowing Loans and Designating

Applicable Interest Rates.

 

(a)           Notice to the Administrative Agent.  The Borrower shall give notice to the

Administrative  Agent by no later than 10:00 a.m. (Chicago time):  (i) at least 3 Business Days before the

date on which the Borrower requests the Lenders to advance a Borrowing of

Eurodollar Loans and (ii) on the date the Borrower requests the Lenders to

advance a Borrowing of Base Rate Loans. 

The Loans included in each Borrowing shall bear interest initially at

the type of rate specified in such notice of a new Borrowing.  If no election is made as to the type of

Loan, such notice shall be deemed a request for a Borrowing of Base Rate

Loans.  Thereafter, the Borrower may

from time to time elect to change or continue the type of interest rate borne

by each Borrowing or, subject to Section 1.4’s minimum amount requirement

for each outstanding Borrowing, a portion thereof, as follows:  (i) if such Borrowing is of Eurodollar

Loans, on the last day of the Interest Period applicable thereto, the Borrower

may continue part or all of such Borrowing as Eurodollar Loans or convert part

or all of such Borrowing into Base Rate Loans or (ii) if such Borrowing is

of Base Rate Loans, on any Business Day, the Borrower may convert all or part

of such Borrowing into Eurodollar Loans for an Interest Period or Interest

Periods specified by the Borrower.  The

Borrower shall give all such notices requesting the advance, continuation or

conversion of a Borrowing to the Administrative  Agent by telephone or

telecopy (which notice shall be irrevocable once given and, if by telephone,

shall be promptly confirmed in writing), which notices shall be substantially

in the form attached hereto as Exhibit B (Notice of Borrowing) or

Exhibit C (Notice of Continuation/Conversion), as applicable, or in such

other form acceptable to the Administrative  Agent. 

Notices of the continuation of a Borrowing of Eurodollar Loans for an

additional Interest Period or of the conversion of part or all of a Borrowing

of Base Rate Loans into Eurodollar Loans must be given by no later than

10:00 a.m. (Chicago time) at least 3 Business Days before the date of the

requested continuation or conversion. 

All such notices concerning the advance, continuation or conversion of a

Borrowing shall specify the date of the requested advance, continuation or

conversion of a Borrowing (which shall be a Business Day), the amount of the

requested Borrowing to be advanced, continued or converted, the type of Loans

to comprise such new, continued or converted Borrowing and, if such Borrowing

is to be comprised of Eurodollar Loans, the Interest Period applicable

thereto.  The Borrower agrees that the

Administrative Agent may rely on any such telephonic or telecopy notice given

by any person the Administrative Agent in good faith believes is an Authorized

Representative without the necessity of independent investigation, and in the

event any such notice by telephone conflicts with any written confirmation,

such telephonic notice shall govern if the Administrative Agent has acted in

reliance thereon.

 

(b)           Notice to the Lenders.  The Administrative Agent shall give

telephonic or telecopy notice to each Lender of any notice from the Borrower

received pursuant to Section 1.5(a) above and, if such notice requests the

Lenders to make Eurodollar Loans, the Administrative Agent shall give notice to

the Borrower and each Lender by like means of the interest rate applicable

thereto promptly after the Administrative Agent has made such determination.

 

(c)           Borrower’s Failure to Notify; Automatic Continuations

and Conversions.  Any

outstanding Borrowing of Base Rate Loans shall automatically be continued for

an additional Interest Period on the last day of its then current Interest

Period unless the Borrower has notified the Administrative Agent within the

period required by Section 1.5(a) that the Borrower intends

 

7

 

to convert such Borrowing, subject to Section 7.1

hereof, into a Borrowing of Eurodollar Loans or such Borrowing is prepaid in

accordance with Section 1.9(a).  If the

Borrower fails to give notice pursuant to Section 1.5(a) above of the

continuation or conversion of any outstanding principal amount of a Borrowing

of Eurodollar Loans before the last day of its then current Interest Period

within the period required by Section 1.5(a) or, whether or not such

notice has been given, one or more of the conditions set forth in Section 7.1

for the continuation or conversion of a Borrowing of Eurodollar Loans would not

be satisfied, and such Borrowing is not prepaid in accordance with

Section 1.9(a), such Borrowing shall automatically be converted into a

Borrowing of Base Rate Loans.  In the

event the Borrower fails to give notice pursuant to Section 1.5(a) above

of a Borrowing equal to the amount of a Reimbursement Obligation and has not

notified the Administrative Agent by 1:00 p.m. (Chicago time) on the day

such Reimbursement Obligation becomes due that it intends to repay such

Reimbursement Obligation through funds not borrowed under this Agreement, the

Borrower shall be deemed to have requested a Borrowing of Base Rate Loans under

the Revolving Credit (or, at the option of the Administrative Agent, under the

Swing Line) on such day in the amount of the Reimbursement Obligation then due,

which Borrowing shall be applied to pay the Reimbursement Obligation then due.

 

(d)           Disbursement of Loans.  Not later than 1:00 p.m. (Chicago time)

on the date of any requested advance of a new Borrowing, subject to

Section 7 hereof, each Lender shall make available its Loan comprising

part of such Borrowing in funds immediately available at the principal office

of the Administrative Agent in Chicago, Illinois.  The Administrative Agent shall make the proceeds of each new

Borrowing available to the Borrower at the Administrative Agent’s principal

office in Chicago, Illinois (or by wire transfer of funds pursuant to the

Borrower’s written instructions to the Administrative Agent).

 

(e)           Administrative Agent Reliance on Lender Funding.  Unless the Administrative Agent shall have

been notified by a Lender prior to (or, in the case of a Borrowing of Base Rate

Loans, by 1:00 p.m. (Chicago time) on) the date on which such Lender is

scheduled to make payment to the Administrative Agent of the proceeds of a Loan

(which notice shall be effective upon receipt) that such Lender does not intend

to make such payment, the Administrative Agent may assume that such Lender has

made such payment when due and the Administrative Agent may in reliance upon

such assumption (but shall not be required to) make available to the Borrower

the proceeds of the Loan to be made by such Lender and, if any Lender has not

in fact made such payment to the Administrative Agent, such Lender shall, on

demand, pay to the Administrative Agent the amount made available to the

Borrower attributable to such Lender together with interest thereon in respect

of each day during the period commencing on the date such amount was made

available to the Borrower and ending on (but excluding) the date such Lender

pays such amount to the Administrative Agent at a rate per annum equal to:  (i) from the date the related advance

was made by the Administrative Agent to the date 2 Business Days after payment

by such Lender is due hereunder, the Federal Funds Rate for each such day and

(ii) from the date 2 Business Days after the date such payment is due from

such Lender to the date such payment is made by such Lender, the Base Rate in

effect for each such day.  If such

amount is not received from such Lender by the Administrative Agent immediately

upon demand, the Borrower will, on demand, repay to the Administrative Agent

the proceeds of the Loan attributable to such Lender with interest thereon at a

rate per annum equal to the interest

 

8

 

rate applicable to the relevant Loan, but without such

payment being considered a payment or prepayment of a Loan under Section 1.12

hereof so that the Borrower will have no liability under such Section with

respect to such payment.  Nothing set

forth in this Section 1.5(e) shall relieve any Lender of its obligation to

make payment of the proceeds of a Loan in accordance with the terms of this

Agreement.

 

Section 1.6.      Swing Loans.

 

(a)           Generally.  Subject to all of the terms and conditions hereof, the

Administrative Agent agrees to make loans to the Borrower under the Swing Line

(individually a “Swing Loan” and collectively the “Swing Loans”) which shall

not in the aggregate at any time outstanding exceed the lesser of

(i) $5,000,000 (as the same may be reduced pursuant hereto, the “Swing Line

Commitment”) or (ii) the difference between the Revolving

Credit Commitments in effect at such time and the aggregate amount of all

Revolving Loans and L/C Obligations outstanding at the time of

computation.  The Swing Line Commitment

shall be available to the Borrower and may be availed of by the Borrower from

time to time and Borrowings thereunder may be repaid and used again during the

period ending on the Termination Date; provided that each Swing Loan must be

repaid on the last day of the Interest Period applicable thereto.  Each Swing Loan shall be in a minimum amount

of $100,000 or such greater amount which is an integral multiple of $50,000.

 

(b)           Interest

on Swing Loans.  Each Swing

Loan shall bear interest until maturity (whether by acceleration or otherwise)

at a rate per annum equal to (i) the sum of the Base Rate plus the Applicable

Margin for Base Rate Loans under the Revolving Credit as from time to time in

effect (computed on the basis of a year of 365 or 366 days, as the case may be,

for the actual number of days elapsed) or (ii) if accepted by the Borrower

pursuant to Section 1.6(c) below, the Administrative Agent’s Quoted Rate

(computed on the basis of a year of 360 days for the actual number of days

elapsed).  Interest on each Swing Loan

shall be due and payable on the last day of each Interest Period applicable

thereto.

 

(c)           Requests

for Swing Loans.  The

Borrower shall give the Administrative Agent prior notice (which may be written

or oral) no later than 12:00 Noon (Chicago time) in the case of a Swing

Loan to bear interest at the Administrative Agent’s Quoted Rate and 2:00 p.m.

(Chicago time) in the case of any other Swing Loan in each case on the date

upon which the Borrower requests that such Swing Loan be made, of the amount

and date of such Swing Loan and the Interest Period requested therefor.  Within thirty (30) minutes after

receiving such notice, the Administrative Agent shall in its discretion quote

an interest rate to the Borrower at which the Administrative Agent would be

willing to make such Swing Loan available to the Borrower for the Interest

Period so requested (the rate so quoted for a given Interest Period being

herein referred to as “Administrative Agent’s Quoted Rate”).  The Borrower acknowledges and agrees that

the interest rate quote is given for immediate and irrevocable acceptance, and

if the Borrower does not so immediately accept the Administrative Agent’s

Quoted Rate for the full amount requested by the Borrower for such Swing Loan,

the Administrative Agent’s Quoted Rate shall be deemed immediately withdrawn

and such Swing Loan shall bear interest at the rate per annum determined by

adding the Applicable Margin for Base Rate Loans under the Revolving Credit to

the Base Rate as from time to time in effect. 

Subject to all of the terms and

 

9

 

conditions hereof, the proceeds of such Swing Loan

shall be made available to the Borrower on the date so requested at the

Administrative Agent’s principal office in Chicago, Illinois (or by wire

transfer of funds pursuant to the Borrower’s written instructions to the

Administrative Agent).  Anything

contained in the foregoing to the contrary notwithstanding, (i) the

obligation of the Administrative Agent to make Swing Loans shall be subject to

all of the terms and conditions of this Agreement and (ii) the Administrative

Agent shall not be obligated to make more than one Swing Loan during any one

day.

 

(d)           Refunding Loans.  In its sole and absolute discretion, the Administrative Agent may

at any time, on behalf of the Borrower (which hereby irrevocably authorizes the

Administrative Agent to act on its behalf for such purpose) and with notice to

the Borrower, request each Lender to make a Revolving Loan in the form of a

Base Rate Loan in an amount equal to such Lender’s Revolver Percentage of the

amount of the Swing Loans outstanding on the date such notice is given.  Unless any of the conditions of

Section 7.1 are not fulfilled on such date, each Lender shall make the

proceeds of its requested Revolving Loan available to the Administrative Agent,

in immediately available funds, at the Administrative Agent’s principal office

in Chicago, Illinois, before 12:00 Noon (Chicago time) on the Business Day

following the day such notice is given. 

The proceeds of such Borrowing of Revolving Loans shall be immediately

applied to repay the outstanding Swing Loans.

 

(e)           Participations.  If any Lender refuses or otherwise fails to make a Revolving Loan

when requested by the Administrative Agent pursuant to Section 1.6(d) above

(because the conditions in Section 7.1 are not satisfied or otherwise),

such Lender shall, by the time and in the manner such Revolving Loan was to

have been funded to the Administrative Agent, purchase from the Administrative

Agent an undivided participating interest in the outstanding Swing Loans in an

amount equal to its Revolver Percentage of the aggregate principal amount of

Swing Loans that were to have been repaid with such Revolving Loans.  Each Lender that so purchases a

participation in a Swing Loan shall thereafter be entitled to receive its

Revolver Percentage of each payment of principal received on the Swing Loan and

of interest received thereon accruing from the date such Lender funded to the

Administrative Agent its participation in such Loan.  The several obligations of the Lenders under this Section 1.6(e)

shall be absolute, irrevocable and unconditional under any and all

circumstances whatsoever and shall not be subject to any set–off,

counterclaim or defense to payment which any Lender may have or have had

against the Borrower, any other Lender or any other Person whatever.  Without limiting the generality of the

foregoing, such obligations shall not be affected by any Default or Event of

Default or by any reduction or termination of the Commitments of any Lender,

and each payment made by a Lender under this Section 1.6(e) shall be made

without any offset, abatement, withholding or reduction whatsoever.

 

Section 1.7.      Interest Periods.  As provided in Section 1.5(a) hereof,

at the time of each request to advance, continue, or create by conversion a Borrowing

of Eurodollar Loans or to advance a Borrowing of Swing Loans, the Borrower

shall select an Interest Period applicable to such Loans from among the

available options.  The term “Interest

Period” means the period commencing on the date a Borrowing of Loans

is advanced, continued or created by conversion and ending:  (a) in the case of Base Rate Loans, on

the last day of the calendar quarter (commencing September 30, 2002, and on the

last day of each December, March, June, and 

 

10

 

September thereafter) in which such Borrowing is advanced, continued or

created by conversion (or on the last day of the following calendar quarter if

such Loan is advanced, continued or created by conversion on the last day of a

calendar quarter) and (b) in the case of a Eurodollar Loan, the date that

is one, two, three or six months thereafter and (c) in the case of Swing

Loans, on the date one (1) to five (5) days thereafter as mutually agreed by

the Administrative Agent and the Borrower; provided, however, that:

 

(a)           any Interest Period for a Borrowing

of Revolving Loans or Swing Loans consisting of Base Rate Loans that otherwise

would end after the Termination Date shall end on the Termination Date;

 

(b)           no Interest Period with respect to

any portion of the Revolving Loans or Swing Loans shall extend beyond the

Termination Date;

 

(c)           whenever the last day of any Interest

Period would otherwise be a day that is not a Business Day, the last day of

such Interest Period shall be extended to the next succeeding Business Day, provided

that, if such extension would cause the last day of an Interest Period for a

Borrowing of Eurodollar Loans to occur in the following calendar month, the

last day of such Interest Period shall be the immediately preceding Business

Day; and

 

(d)           for purposes of determining an

Interest Period for a Borrowing of Eurodollar Loans, a month means a period

starting on one day in a calendar month and ending on the numerically

corresponding day in the next calendar month; provided, however, that if

there is no numerically corresponding day in the month in which such an

Interest Period is to end or if such an Interest Period begins on the last

Business Day of a calendar month, then such Interest Period shall end on the

last Business Day of the calendar month in which such Interest Period is to

end.

 

Section 1.8.   Maturity of Loans.

 

(a)           Revolving Loans.  Each Revolving Loan, both for principal and interest, shall

mature and become due and payable by the Borrower on the Termination Date.

 

(b)           Swing Loans.  Each Swing Loan, both for principal and interest, shall mature

and become due and payable by the Borrower on the last day of the Interest

Period applicable thereto.

 

Section 1.9.      Prepayments.

 

(a)           Optional. 

The Borrower shall have the privilege of prepaying without premium or

penalty (except as set forth in Section 1.12 below) and in whole or in

part (but, if in part, then:  (i) if

such Borrowing is of Base Rate Loans, in an amount not less than $500,000, (ii)

if such Borrowing is of Eurodollar Loans, in an amount not less than $500,000,

and (iii) in each case, in an amount such that the minimum amount required for

a Borrowing pursuant to Section 1.4 hereof remains outstanding) any

Borrowing of Eurodollar Loans at any time upon 3 Business

 

11

 

Days prior notice by the Borrower to the

Administrative Agent or, in the case of a Borrowing of Base Rate Loans, notice

delivered by the Borrower to the Administrative Agent no later than 10:00 a.m.

(Chicago time) on the date of prepayment, such prepayment to be made by the

payment of the principal amount to be prepaid and, in the case of any

Eurodollar Loans, accrued interest thereon to the date fixed for prepayment

plus any amounts due the Lenders under Section 1.12 hereof.  Swing Loans bearing interest at

Administrative Agent’s Quoted Rate may only be voluntarily paid on the last day

of the Interest Period then applicable to such Loans.  The Administrative Agent will promptly advise each Lender of any

such prepayment notice it receives from the Borrower.  Any amount of Revolving Loans or Swing Loans paid or prepaid

before the Termination Date may, subject to the terms and conditions of this

Agreement, be borrowed, repaid and borrowed again.

 

(b)           Mandatory.  (i) The Borrower shall, on each date the Revolving Credit

Commitments are reduced pursuant to Section 1.13 hereof, whether as a

result of a receipt of Net Cash Proceeds or otherwise, prepay the Revolving Loans

and Swing Loans and, if necessary, prefund the L/C Obligations by the amount,

if any, necessary to reduce the sum of the aggregate principal amount of

Revolving Loans, Swing Loans and of L/C Obligations then outstanding to the

amount to which the Revolving Credit Commitments have been so reduced.

 

(ii)           Unless the Borrower otherwise

directs, (x) prepayments of Loans under this Section 1.9(b) shall be

applied first to Borrowings of Base Rate Loans until payment in full thereof

with any balance applied to Borrowings of Eurodollar Loans in the order in

which their Interest Periods expire and (y) prepayments of Swing Loans

under this Section 1.9(b) shall be applied to such Loans in the order in

which their Interest Periods expire. 

Each prepayment of Loans under this Section 1.9(b) shall be made by the

payment of the principal amount to be prepaid and, in the case of any

Eurodollar Loans, accrued interest thereon to the date of prepayment together

with any amounts due the Lenders under Section 1.12 hereof.  Each prepayment of the Swing Line and

Revolving Credit under this Section 1.9(b) shall first be applied to the

Swing Loans until payment in full thereof, with any remaining balance applied

to the Revolving Loans until payment in full thereof, and with any remaining

balance held by the Administrative Agent as collateral security for the

Obligations owing with respect to the Letters of Credit.  Each prefunding of L/C Obligations shall be

made in accordance with Section 9.4 hereof.

 

(c)           The Administrative Agent will

promptly advise each Lender of any notice of prepayment it receives from the

Borrower.  Any amount of Revolving Loans

or Swing Loans paid or prepaid before the Termination Date may, subject to the

terms and conditions of this Agreement, be borrowed, repaid and borrowed again.

 

Section 1.10.    Default Rate.  Notwithstanding anything to the contrary

contained in Section 1.3 hereof, while any Event of Default exists or

after acceleration, the Borrower shall pay interest (after as well as before

entry of judgment thereon to the extent permitted by law) on the principal

amount of all Loans owing by it at a rate per annum equal to:

 

(a)           for any Base Rate Loan or any Swing

Loan bearing interest based on the Base Rate, the sum of 2% plus the Applicable

Margin plus the Base Rate from time to

 

12

 

time in effect (computed

on the basis of a year of 365 or 366 days, as the case may be, for the actual

number of days elapsed); and

 

(b)           for any Eurodollar Loan or any Swing

Loan bearing interest at the Administrative Agent’s Quoted Rate, the sum of 2%

plus the rate of interest in effect thereon at the time of such default until

the end of the Interest Period applicable thereto (computed on the basis of a

year of 360 days for the actual number of days elapsed) and, thereafter, at a

rate per annum equal to the sum of 2% plus the Applicable Margin for Base Rate

Loans plus the Base Rate from time to time in effect (computed on the basis of

a year of 365 or 366 days, as the case may be, for the actual number of days

elapsed);

 

provided,

however, that in the absence of acceleration, any adjustments

pursuant to this Section shall be made at the election of the Administrative

Agent, acting at the request or with the consent of the Required Lenders, with written

notice to the Borrower.  While any Event

of Default exists or after acceleration, interest shall be paid on demand of

the Administrative Agent at the request or with the consent of the Required

Lenders.

 

Section 1.11.    The Notes.  (a) The Revolving Loans made to the

Borrower by a Lender shall be evidenced by a single promissory note of the

Borrower issued to such Lender in the form of Exhibit D-1 hereto.  Each such promissory note is hereinafter

referred to as a “Revolving Note” and collectively such promissory notes are

referred to as the “Revolving Notes”.

 

(b)           The Swing Loans made to the Borrower

by the Administrative Agent shall be evidenced by a single promissory note of

the Borrower issued to the Administrative Agent in the form of Exhibit D-2 hereto.  Such promissory note is hereinafter referred

to as the “Swing

Line Note”.

 

(c)           Each Lender shall record on its books

and records or on a schedule to its appropriate Note the amount of each Loan

advanced, continued or converted by it, all payments of principal and interest

and the principal balance from time to time outstanding thereon, the type of

such Loan, and, for any Eurodollar Loan, the Interest Period and the interest

rate applicable thereto.  The record

thereof, whether shown on such books and records of a Lender or on a schedule

to the relevant Note, shall be prima  facie evidence as to all such matters; provided,

however, that the failure of any Lender to record any of the

foregoing or any error in any such record shall not limit or otherwise affect

the obligation of the Borrower to repay all Loans made to it hereunder together

with accrued interest thereon.  At the

request of any Lender and upon such Lender tendering to the Borrower the

appropriate Note to be replaced, the Borrower shall furnish a new Note to such

Lender to replace any outstanding Note, and at such time the first notation

appearing on a schedule on the reverse side of, or attached to, such Note shall

set forth the aggregate unpaid principal amount of all Loans, if any, then outstanding

thereon.

 

Section 1.12.    Funding Indemnity.  If any Lender shall incur any loss, cost or

expense (including, without limitation, any loss of profit, and any loss, cost

or expense incurred by reason of the liquidation or re-employment of deposits or

other funds acquired by such Lender to fund or maintain any Fixed Rate Loan or

the relending or reinvesting of such deposits or amounts paid or prepaid to

such Lender) as a result of:

 

13

 

(a)           any payment, prepayment or conversion

of a Fixed Rate Loan on a date other than the last day of its Interest Period,

 

(b)           any failure (because of a failure to

meet the conditions of Section 7 or otherwise) by the Borrower to borrow

or continue a Fixed Rate Loan, or to convert a Base Rate Loan into a Eurodollar

Loan, on the date specified in a notice given pursuant to Section 1.5(a),

 

(c)           any failure by the Borrower to make

any payment of principal on any Eurodollar Loan when due (whether by

acceleration or otherwise), or

 

(d)           any acceleration of the maturity of a

Fixed Rate Loan as a result of the occurrence of any Event of Default

hereunder,

 

then,

upon the demand of such Lender, the Borrower shall pay to such Lender such

amount as will reimburse such Lender for such loss, cost or expense.  If any Lender makes such a claim for

compensation, it shall provide to the Borrower, with a copy to the

Administrative Agent, a certificate setting forth the amount of such loss, cost

or expense in reasonable detail and the amounts shown on such certificate shall

be conclusive if reasonably determined.

 

Section 1.13.    Commitment Terminations.

 

(a)           Optional Revolving Credit Terminations.  The Borrower shall have the right

at any time and from time to time, upon 5 Business Days’ prior written

notice to the Administrative Agent, to terminate the Revolving Credit

Commitments without premium or penalty and in whole or in part, any partial

termination to be (i) in an amount not less than $5,000,000 or any

multiple of $1,000,000 in excess thereof and (ii) allocated ratably among

the Lenders in proportion to their respective Revolver Percentages, provided

that the Revolving Credit Commitments may not be reduced to an amount less than

the sum of the aggregate principal amount of Revolving Loans, Swing Loans and

of L/C Obligations then outstanding. 

Any termination of the Revolving Credit Commitments below $15,000,000

shall reduce the L/C Sublimit to a like amount.  Any termination of the Revolving Credit Commitments below

$5,000,000 shall reduce the Swing Line Commitment to like amount.  The Administrative Agent shall give prompt

notice to each Lender of any such termination of the Revolving Credit

Commitments.

 

(b)           Mandatory Revolving Credit Terminations.

(i) If, after the Closing Date, the Parent, the Borrower or any Subsidiary

shall at any time or from time to time make or agree to make a Disposition or

shall suffer an Event of Loss resulting in Net Cash Proceeds in excess of

$10,000,000 on a cumulative basis during the term of this Agreement, then

(x) the Borrower shall promptly notify the Administrative Agent of such

proposed Disposition or Event of Loss (including the amount of the estimated

Net Cash Proceeds to be received by the Borrower or such Subsidiary in respect

thereof) and (y) on the Business Day of receipt by the Parent, the

Borrower or such Subsidiary of the Net Cash Proceeds of such Disposition or

Event of Loss, the Revolving Credit Commitments shall ratably terminate by an

amount equal to 100% of the amount of such Net Cash Proceeds in excess of such

minimum amount set forth above, provided  

 

14

 

that in the case of each Disposition and Event of

Loss, if the Borrower states in its notice of such event that the Parent, the

Borrower or the applicable Subsidiary intends to reinvest, within 120 days

of the applicable Disposition or receipt of Net Cash Proceeds from an Event of

Loss, the Net Cash Proceeds thereof in assets similar to the assets which were

subject to such Disposition or Event of Loss, then so long as no Default or

Event of Default then exists, such reduction of the Revolving Credit

Commitments shall not occur under this Section in respect of such Net Cash

Proceeds to the extent such Net Cash Proceeds are actually reinvested in such

similar assets within such 120–day period.  Promptly after the end of such 120-day period, the Borrower shall

notify the Administrative Agent whether the Parent, the Borrower or such

Subsidiary has reinvested such Net Cash Proceeds in such similar assets, and to

the extent such Net Cash Proceeds have not been so reinvested, such reduction

of the Revolving Credit Commitments in the amount of such Net Cash Proceeds not

so reinvested shall occur.  The amount

of any prepayment resulting from such reduction shall first be applied to the

Swing Loans until paid in full and then the Revolving Loans until payment in

full thereof with any remaining balance to be held by the Administrative Agent

as collateral security for the L/C Obligations.

 

(ii)           If, after the Closing Date, the

Parent, the Borrower or any Subsidiary shall issue new equity securities

(whether common or preferred stock or otherwise), other than equity securities

issued in connection with the exercise of employee stock options and capital

stock issued in connection with the sale of an Acquired Business in connection

with a Permitted Acquisition, the Borrower shall promptly notify the

Administrative Agent of the estimated Net Cash Proceeds of such issuance to be

received by or for the account of the Parent, the Borrower or such Subsidiary

in respect thereof.  No later than one

Business Day after receipt by the Parent, the Borrower or such Subsidiary of

Net Cash Proceeds of such issuance, the Revolving Credit Commitments shall

ratably terminate by an aggregate amount equal to 50% of the amount of such Net

Cash Proceeds with any prepayment resulting from such reduction first to be

applied to the Swing Loans until paid in full and then the Revolving Loans

until payment in full thereof with any remaining balance to be held by the

Administrative Agent as collateral security for the L/C Obligations.  The Parent and the Borrower acknowledge that

their performance hereunder shall not limit the rights and remedies of the Lenders

for any breach of any other terms of this Agreement.

 

(iii)          If, after the Closing Date, the

Parent, the Borrower or any Subsidiary shall issue any Indebted­ness for

Borrowed Money, other than Indebtedness for Borrowed Money permitted by

Section 8.7 hereof, the Borrower shall promptly notify the Administrative

Agent of the estimated Net Cash Proceeds of such issuance to be received by or

for the account of the Borrower or such Subsidiary in respect thereof.  No later than one Business Day after receipt

by the Parent, the Borrower or such Subsidiary of Net Cash Proceeds of such

issuance, the Revolving Credit Commitments shall ratably terminate by an

aggregate amount equal to 100% of the amount of such Net Cash Proceeds with any

prepayment resulting therefrom first to be applied to the Swing Loans until

paid in full and then the Revolving Loans until payment in full thereof with

any remaining balance to be held by the Administrative Agent as collateral

security for the L/C Obligations. 

The Parent and the Borrower acknowledge that their performance hereunder

shall not limit the rights and remedies of the Lenders for any breach of

Section 8.7 hereof or any other terms of this Agreement.

 

15

 

(c)           Mandatory Termination Upon a Change of Control.  After the occurrence of a Change of Control,

the Required Lenders may, by written notice to the Borrower at any time on or

before the date occurring 90 days after the date the Borrower notifies the

Lenders of such Change of Control, terminate the remaining Commitments and all

other obligations of the Lenders hereunder on the date stated in such notice

(which may be the date of such notice). 

On the date the Commitments are so terminated, all outstanding

Obligations (including, without limitation, all principal of and accrued

interest on the Notes) shall forthwith be due and payable without further

demand, presentment, protest or notice of any kind and the Borrower shall

immediately pay to the Lenders the full amount then available for drawing under

each Letter of Credit, such amount to be held in the Collateral Account (the

Borrower agreeing to immediately make such payment on the date the Commitments

are so terminated and acknowledging and agreeing that the Lenders would not

have an adequate remedy at law for the failure by the Borrower to honor any

such demand and that the Lenders, and the Administrative Agent on their behalf,

shall have the right to require the Borrower to specifically perform such

undertaking whether or not any drawings or other demands for payment have been

made under any of the Letters of Credit).

 

(d)           Any termination of the Commitments

pursuant to this Section 1.13 may not be reinstated.

 

Section 1.14.    Substitution of Lenders.  Upon the receipt by the Borrower of

(a) a claim from any Lender for compensation under Section 10.3 or

13.1 hereof, or (b) notice by any Lender to the Borrower of any illegality

pursuant to Section 10.1 hereof, or (c) in the event that any Lender

is in default in any material respect with respect to its obligations under the

Loan Documents (any such Lender referred to in clause (a), (b) or (c)

above being hereinafter referred to as an “Affected Lender”), the Borrower may, in

addition to any other rights the Borrower may have hereunder or under

applicable law, require, at its expense, any such Affected Lender to assign, at

par plus accrued interest and fees, without recourse, all of its interest,

rights and obligations hereunder (including all of its Commitments and the

Loans and participation interests in Letters of Credit and other amounts at any

time owing to it hereunder and the other Loan Documents) to a bank or other

institutional lender specified by the Borrower, provided that (i) such

assignment shall not conflict with or violate any law, rule or regulation or

order of any court or other governmental authority, (ii) the Borrower

shall have received the written consent of the Administrative Agent, which

consent shall not be unreasonably withheld, to such assignment, (iii) the

Borrower shall have paid to the Affected Lender all monies (together with,

except in the case of clause (c), above, amounts due such Affected Lender under

Section 1.12 hereof as if the Loans owing to it were prepaid rather than

assigned) other than such principal, interest and fees accrued and owing to it

hereunder, and (iv) the assignment is entered into in accordance with the

other requirements of Section 13.12 hereof.

 

SECTION 2.                                                 FEES.

 

Section 2.1.      Fees.

 

(a)           Revolving Credit Commitment Fee.  The Borrower shall pay to the Administrative

Agent for the ratable account of the Lenders in accordance with their Revolver

Percentages a

 

16

 

commitment fee at the rate per annum equal to the

Applicable Margin (computed on the basis of a year of 360 days and the actual

number of days elapsed) on the average daily Unused Revolving Credit

Commitments.  Such commitment fee shall

be payable quarterly in arrears on the last day of each March, June, September

and December in each year (commencing on September 30, 2002) and on the

Termination Date, unless the Revolving Credit Commitments are terminated in

whole on an earlier date, in which event the commitment fee for the period to

the date of such termination in whole shall be paid on the date of such

termination.

 

(b)           Letter of Credit Fees.  On the date of issuance or extension, or

increase in the amount, of any Letter of Credit pursuant to Section 1.2

hereof, the Borrower shall pay to the L/C Issuer for its own account an

issuance fee equal to 0.125% per annum (computed on the basis of a year of 360

days and the actual number of days elapsed) of the face amount of (or of the

increase in the face amount of) such Letter of Credit.  Quarterly in arrears, on the last day of

each March, June, September and December, commencing on September 30, 2002, the

Borrower shall pay to the Administrative Agent, for the ratable benefit of the

Lenders in accordance with their Revolver Percentages, a letter of credit fee

at a rate per annum equal to (i) the Applicable Margin for Eurodollar

Loans (computed on the basis of a year of 360 days and the actual number of

days elapsed) in effect during each day of such quarter applied to the daily

average face amount of  standby Letters

of Credit outstanding during such quarter, and (ii) 50% of the Applicable

Margin for Eurodollar Loans (computed on the basis of a year of 360 days and

the actual number of days elapsed) in effect during each day of such quarter

applied to the daily average face amount of commercial Letters of Credit

outstanding during such quarter.  In

addition, the Borrower shall pay to the L/C Issuer for its own account the L/C

Issuer’s standard drawing, negotiation, amendment, and other administrative

fees for each Letter of Credit.  Such

standard fees referred to in the preceding sentence may be established by the

L/C Issuer from time to time.

 

(c)           Administrative Agent Fees.  The Borrower shall pay to the Administrative

Agent, for its own use and benefit, the fees agreed to between the

Administrative Agent and the Borrower in a fee letter dated August 7,

2002, or as otherwise agreed to in writing between them.

 

(d)           Audit Fees.  The Borrower shall pay to the Administrative Agent for its own

use and benefit charges for audits of the Collateral performed by the

Administrative Agent or its agents or representatives in such amounts as the

Administrative Agent may from time to time request (the Administrative Agent

acknowledging and agreeing that such charges shall be computed in the same

manner as it at the time customarily uses for the assessment of charges for

similar collateral audits); provided, however, that in the absence of

any Default and Event of Default, the Borrower shall not be required to pay the

Administrative Agent for more than one such audit per calendar year.

 

SECTION 3.                                                 PLACE AND APPLICATION OF

PAYMENTS.

 

Section 3.1.      Place and Application of Payments.  All payments of principal of and interest on

the Loans and the Reimbursement Obligations, and of all other Obligations

payable by the Borrower under this Agreement and the other Loan Documents,

shall be made by the Borrower to the Administrative Agent by no later than

12:00 Noon (Chicago time) on the due date thereof at the office of the

Administrative Agent in Chicago, Illinois (or such other location

 

17

 

as the Administrative Agent may designate to the Borrower) for the

benefit of the Lender or Lenders entitled thereto.  Any payments received after such time shall be deemed to have

been received by the Administrative Agent on the next Business Day.  All such payments shall be made in U.S.

Dollars, in immediately available funds at the place of payment, in each case

without set-off or counterclaim.  The

Administrative Agent will promptly thereafter cause to be distributed like

funds relating to the payment of principal or interest on Loans and on

Reimbursement Obligations in which the Lenders have purchased Participating

Interests ratably to the Lenders and like funds relating to the payment of any

other amount payable to any Lender to such Lender, in each case to be applied

in accordance with the terms of this Agreement.

 

Anything contained herein to the contrary notwithstanding, all payments

and collections received in respect of the Obligations and all proceeds of the

Collateral received, in each instance, by the Administrative Agent or any of

the Lenders after the occurrence and during the continuation of an Event of

Default shall be remitted to the Administrative Agent and distributed as

follows:

 

(a)           first, to the payment of any

outstanding costs and expenses incurred by the Administrative Agent, and any

security trustee therefor, in monitoring, verifying, protecting, preserving or

enforcing the Liens on the Collateral, in protecting, preserving or enforcing

rights under the Loan Documents, and in any event all costs and expenses of a

character which the Borrower has agreed to pay the Administrative Agent under

Section 13.15 hereof (such funds to be retained by the Administrative

Agent for its own account unless it has previously been reimbursed for such

costs and expenses by the Lenders, in which event such amounts shall be

remitted to the Lenders to reimburse them for payments theretofore made to the

Administrative Agent);

 

(b)           second, to the payment of principal

and interest on the Swing Line Note;

 

(c)           third, to the payment of principal

and interest on the Revolving Notes, unpaid Reimbursement Obligations, together

with amounts to be held by the Administrative Agent as collateral security for

any outstanding L/C Obligations (until the Administrative Agent is holding

an amount of cash equal to the then outstanding amount of all such

L/C Obligations), unpaid fees and other Obligations due under the Loan

Documents, the aggregate amount paid to, or held as collateral security for,

the Lenders and, in the case of Hedging Liability, their Affiliates to whom

such Obligations are owed, to be allocated pro rata in accordance with the

aggregate unpaid amounts owing to each; and

 

(d)           fourth, to the Borrower or whoever

else may be lawfully entitled thereto.

 

SECTION 4.                                                 THE COLLATERAL AND GUARANTIES.

 

Section 4.1.      Collateral.  The Obligations shall be secured by

(a) valid, perfected and enforceable Liens on all right, title and

interest of the Parent, the Borrower and each Domestic Subsidiary in all

capital stock and other equity interests held by such Person in each of the

Subsidiaries, whether now owned or hereafter formed or acquired, and all

proceeds thereof, and

 

18

 

(b) valid, perfected (subject to the proviso appearing at the end

of this sentence) and enforceable Liens on all right, title and interest of the

Parent, the Borrower and each Domestic Subsidiary in all personal property,

including all accounts, instruments (including all promissory notes),

documents, chattel paper, general intangibles (including, without limitation,

patents, trademarks, tradenames, copyrights, and other intellectual property

rights), investment property, inventory, equipment, fixtures, deposit accounts,

and real estate, whether now owned or hereafter acquired or arising, and all

proceeds thereof; provided, however, that: 

(i) the Lien of the Administrative Agent on Property subject to a

Capital Lease or conditional sale agreement or subject to a purchase money

lien, in each instance to the extent permitted hereby, shall be subject to the

rights of the lessor or lender thereunder, (ii) until a Default or Event

of Default has occurred and is continuing and thereafter until otherwise

required by the Administrative Agent or the Required Lenders, Liens on deposit

accounts maintained by the Parent, the Borrower and each Domestic Subsidiary

need not be perfected provided that the total amount on deposit at any one time

not so perfected shall not exceed $1,000,000 in the aggregate, (iii) Liens

on more than 65% of the capital stock and other equity interests held by the

Parent or any Domestic Subsidiary in each Foreign Subsidiary, and Liens on any

of the capital stock and other equity interests held by any Foreign Subsidiary

in any other Foreign Subsidiary, need not be granted or perfected to the extent

that such grant or perfection would result in a materially adverse tax

consequences to the Parent, and (iv) until a Default or Event of Default

has occurred and is continuing and thereafter until otherwise required by the

Administrative Agent or the Required Lenders, Liens on vehicles which are

subject to a certificate of title law need not be perfected provided that the

total value of such property at any one time not so perfected shall not exceed

$1,000,000 in the aggregate.  The

Parent, the Borrower and each Subsidiary acknowledge and agree that the Liens

on the Collateral shall be granted to the Administrative Agent for the benefit

of itself, the Lenders and the L/C Issuer and shall be valid and perfected

first priority Liens subject, however, to the proviso appearing at the end of

the immediately preceding sentence, in each case pursuant to one or more

Collateral Documents from such Persons, each in form and substance satisfactory

to the Administrative Agent.  To the

extent that any Collateral is sold or otherwise disposed of as permitted by

Section 8.10 hereof, such Collateral shall be sold or otherwise disposed

of free and clear of the Lien created by the Collateral Documents and the

obligations of this Agreement and the Administrative Agent shall, at the

expense of the Borrower, take such actions as are appropriate and reasonably

requested by the Borrower in connection therewith.

 

Section 4.2.      Liens on Real Property.  In the event that the Parent, the Borrower

or any other Domestic Subsidiary owns or hereafter acquires any real property,

the Borrower shall, or shall cause the Parent or such Domestic Subsidiary to,

execute and deliver to the Administrative Agent (or a security trustee

therefor) a mortgage or deed of trust acceptable in form and substance to the

Administrative Agent for the purpose of granting to the Administrative Agent

for the benefit of itself, the Lenders and the L/C Issuer a Lien on such real

property to secure the Obligations, shall pay all taxes, costs and expenses

incurred by the Administrative Agent in recording such mortgage or deed of

trust, and shall supply to the Administrative Agent at the Borrower’s cost and

expense a survey, environmental report, hazard insurance policy, and a

mortgagee’s policy of title insurance from a title insurer acceptable to the

Administrative Agent insuring the validity of such mortgage or deed of trust

and its status as a first Lien (subject to Liens permitted by this Agreement)

on the real property encumbered thereby and such other

 

19

 

instrument, documents, certificates, and opinions reasonably required

by the Administrative Agent in connection therewith.

 

Section 4.3.      Guaranties.  The payment and performance of the

Obligations shall at all times be guaranteed by the Parent and each direct and

indirect Domestic Subsidiary, whether now owned or hereafter created or

acquired, pursuant to Section 12 of this Agreement.

 

Section 4.4.      Further Assurances.  The Borrower agrees that it shall, and shall

cause the Parent and each of the Domestic Subsidiaries to, from time to time at

the request of the Administrative Agent or the Required Lenders, execute and

deliver such documents and do such acts and things as the Administrative Agent

or the Required Lenders may reasonably request in order to provide for or

perfect or protect such Liens on the Collateral.  In the event the Parent, the Borrower or any Subsidiary forms or

acquires any other Domestic Subsidiary after the date hereof, the Borrower

shall within 30 Business Days of such formation or acquisition cause such

newly formed or acquired Domestic Subsidiary to execute an Additional Guarantor

Supplement in the form attached hereto as Exhibit G and such Collateral

Documents as the Administrative Agent may then require, and the Borrower shall

also deliver to the Administrative Agent, or cause such Subsidiary to deliver

to the Administrative Agent, at the Borrower’s cost and expense, such other

instruments, documents, certificates and opinions reasonably required by the

Administrative Agent in connection therewith. 

If at any time after the Closing Date the Borrower or any Subsidiary

desires to (i) make any investments, loans, advances or dispositions of assets

to Renaissance (other than the repayment of any obligations owing to or from

Renaissance and reflected on the internal accounts of the Borrower and its

Subsidiaries as of the Closing Date), or (ii) merge with or into Renaissance in

a transaction in which Renaissance is a surviving entity, then prior to such

transaction the Borrower will furnish to the Administrative Agent an opinion of

counsel to Renaissance in form and substance satisfactory to the Administrative

Agent regarding the enforceability of Renaissance’s obligations under the Loan

Documents.

 

Section 5.                                                 Definitions;

Interpretation.

 

Section 5.1.      Definitions.  The following terms when used herein shall

have the following meanings:

 

“Acquired

Business” means the entity or assets acquired by the Borrower

or a Subsidiary in an Acquisition, whether before or after the date hereof.

 

“Acquisition”

means any transaction or series of related transactions for the purpose of or

resulting, directly or indirectly, in (a) the acquisition of all or

substantially all of the assets of a Person, or of any business or division of

a Person, (b) the acquisition of in excess of 50% of the capital stock,

partnership interests, membership interests or equity of any Person (other than

a Person that is a Subsidiary), or otherwise causing any Person to become a

Subsidiary, or (c) a merger or consolidation or any other combination with

another Person (other than a Person that is a Subsidiary) provided that the

Borrower or the Subsidiary is the surviving entity.

 

“Adjusted

LIBOR” is defined in Section 1.3(b) hereof.

 

20

 

“Administrative

Agent” means Harris Trust and Savings Bank, and any successor

pursuant to Section 11.7 hereof.

 

“Administrative

Agent’s Quoted Rate” is defined in Section 1.6(c).

 

“Affiliate”

means any Person directly or indirectly controlling or controlled by, or under

direct or indirect common control with, another Person.  A Person shall be deemed to control another

Person for the purposes of this definition if such Person possesses, directly

or indirectly, the power to direct, or cause the direction of, the management

and policies of the other Person, whether through the ownership of voting

securities, common directors, trustees or officers, by contract or otherwise; provided

that, in any event for purposes of this definition, any Person that

owns, directly or indirectly, 5% or more of the securities having the ordinary

voting power for the election of directors or governing body of a corporation

or 5% or more of the partnership or other ownership interest of any other

Person (other than as a limited partner of such other Person) will be deemed to

control such corporation or other Person.

 

“Agreement”

is defined in the preamble hereof.

 

“Applicable

Margin” means, with respect to Loans, Reimbursement

Obligations, and the commitment fees and letter of credit fees payable under

Section 2.1 hereof, from the Closing Date through the first Pricing Date

the rate per annum specified below:

 

	

  Applicable

  Margin for Base Rate Loans under the Revolving Credit and Reimbursement

  Obligations:

  	

  0.0

  	

  %

  
	

   

  	

   

  	

   

  
	

  Applicable

  Margin for Eurodollar Loans under the Revolving Credit:

  	

  2.00

  	

  %

  
	

   

  	

   

  	

   

  
	

  Applicable Margin for

  commitment fee:

  	

  0.40

  	

  %

  

 

; provided,

however, that the Applicable Margin shall be subject to quarterly

adjustments on the first Pricing Date, and thereafter from one Pricing Date to

the next the Applicable Margin means a rate per annum determined in accordance

with the following schedule:

 

21

 

	

  Total Funded Debt/

  EBITDA Ratio for Such

  Pricing Date

  	

   

  	

  Applicable Margin for

  Base Rate Loans under

  Revolving Credit and

  Reimbursement

  Obligations shall be:

  	

   

  	

  Applicable Margin for

  Eurodollar Loans

  under evolving

  Credit shall be:

  	

   

  	

  Applicable Margin for

  Commitment Fee shall

  be:

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Less than or equal to 1.0

  to 1.0

  	

   

  	

  0.00

  	

  %

  	

  1.50

  	

  %

  	

  0.30

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Greater than 1.0 to 1.0 but less than or equal to

  1.5 to 1.0

  	

   

  	

  0.00

  	

  %

  	

  1.75

  	

  %

  	

  0.35

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Greater than 1.5 to 1.0, but less than or equal to

  2.0 to 1.0

  	

   

  	

  0.00

  	

  %

  	

  2.00

  	

  %

  	

  0.40

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Greater than 2.0 to 1.0

  	

   

  	

  0.25

  	

  %

  	

  2.25

  	

  %

  	

  0.45

  	

  %

  

 

For

purposes hereof, the term “Pricing Date” means, for any fiscal

quarter of the Parent ending on or after September 30, 2002, the date on which

the Administrative Agent is in receipt of the Parent’s most recent financial

statements (and, in the case of the year-end financial statements, audit

report) for the fiscal quarter then ended, pursuant to

Section 8.5 hereof.  The

Applicable Margin shall be established based on the Total Funded Debt/EBITDA

Ratio for the most recently completed fiscal quarter and the Applicable Margin

established on a Pricing Date shall remain in effect until the next Pricing

Date.  If the Borrower has not delivered

the financial statements by the date such financial statements (and, in the

case of the year-end financial statements, audit report) are required to be

delivered under Section 8.5 hereof, until such financial statements and

audit report are delivered, the Applicable Margin shall be the highest

Applicable Margin (i.e., the Total Funded Debt/EBITDA Ratio

shall be deemed to be greater than 2.0 to 1.0).  If the Borrower subsequently delivers such financial statements

before the next Pricing Date, the Applicable Margin established by such late

delivered financial statements shall take effect from the date of delivery

until the next Pricing Date.  In all

other circumstances, the Applicable Margin established by such financial statements

shall be in effect from the Pricing Date that occurs immediately after the end

of the fiscal quarter covered by such financial statements until the next

Pricing Date.  Each determination of the

Applicable Margin made by the Administrative Agent in accordance with the

foregoing shall be conclusive and binding on the Borrower and the Lenders

absent manifest error.

 

“Application”

is defined in Section 1.2(b) hereof.

 

“Authorized

Representative” means those persons shown on the list of

officers provided by the Borrower pursuant to Section 7.2 hereof or on any

update of any such list provided by the Borrower to the Administrative Agent,

or any further or different officers of the Borrower so named by any Authorized

Representative of the Borrower in a written notice to the Administrative Agent.

 

“Base

Rate” is defined in Section 1.3(a) hereof.

 

22

 

“Base

Rate Loan” means a Loan bearing interest at a rate specified

in Section 1.3(a) hereof.

 

“Borrower”

is defined in the introductory paragraph of this Agreement.

 

“Borrowing”

means the total of Loans of a single type advanced, continued for an additional

Interest Period, or converted from a different type into such type by the

Lenders under a Credit on a single date and, in the case of Eurodollar Loans,

for a single Interest Period. 

Borrowings of Loans are made and maintained ratably from each of the

Lenders under a Credit according to their Percentages of such Credit.  A Borrowing is “advanced” on the day

Lenders advance funds comprising such Borrowing to the Borrower, is “continued”

on the date a new Interest Period for the same type of Loans commences for such

Borrowing, and is “converted” when such Borrowing is changed from one type of

Loans to the other, all as requested by the Borrower pursuant to

Section 1.5(a) hereof.

 

“Business

Day” means any day (other than a Saturday or Sunday) on which

banks are not authorized or required to close in Chicago, Illinois and, if the

applicable Business Day relates to the advance or continuation of, or conversion

into, or payment of a Eurodollar Loan, on which banks are dealing in U.S.

Dollar deposits in the interbank eurodollar market in London, England.

 

“Capital

Expenditures” means, with respect to any Person for any

period, the aggregate amount of all expenditures (whether paid in cash or

accrued as a liability) by such Person during that period during which, in

accordance with GAAP, are or should be included as “additions to property,

plant or equipment” or similar fixed asset accounts reflected in the statement

of cash flows of such Person, but excluding expenditures made in connection

with the replacement, substitution or restoration of assets to the extent

financed (i) from insurance proceeds (or other similar recoveries) paid on

account of the loss of or damage to the assets being replaced or restored,

(ii) with awards of compensation arising from the taking by eminent domain

or condemnation of the assets being replaced, or (iii) with credits for

trade-ins of existing equipment, fixed assets or improvements.

 

“Capital

Lease” means any lease of Property which in accordance with

GAAP is required to be capitalized on the balance sheet of the lessee.

 

“Capitalized

Lease Obligation” means, for any Person, the amount of the

liability shown on the balance sheet of such Person in respect of a Capital

Lease determined in accordance with GAAP.

 

“CERCLA”

means the Comprehensive Environmental Response, Compensation and Liability Act

of 1980, as amended and in effect from time to time.

 

“Change

of Control” means any of (a) the acquisition by any “person”

or “group”

(as such terms are used in sections 13(d) and 14(d) of the Securities

Exchange Act of 1934, as amended), other than the Current Stockholders or any

of their Affiliates, at any time of beneficial ownership of a majority of the

outstanding capital stock of the Parent on a fully-diluted basis, (b) the

failure of individuals who are members of the board of directors of the Parent

on the

 

23

 

Closing Date (together with any new or replacement

directors whose initial nomination for election was approved by a majority of

the directors or members of the nominating committee therefor who were either

directors or members of such committee on the Closing Date or previously so approved)

to constitute a majority of the board of directors of the Parent, and

(c) the failure of the Parent to own 100% of the outstanding capital stock

of the Borrower on a fully–diluted basis.

 

“Closing

Date” means the date of this Agreement or such later Business

Day upon which each condition described in Section 7.2 shall be satisfied

or waived in a manner acceptable to the Administrative Agent in its discretion.

 

“Code”

means the Internal Revenue Code of 1986, as amended, and any successor statute

thereto.

 

“Collateral”

means all properties, rights, interests and privileges from time to time

subject to the Liens granted to the Administrative Agent, or any security

trustee therefor, by the Collateral Documents.

 

“Collateral

Account” is defined in Section 9.4 hereof.

 

“Collateral

Documents” means the Mortgage, the Pledge Agreement, the

Security Agreement, and all other mortgages, deeds of trust, security

agreements, pledge agreements, assignments, financing statements and other

documents as shall from time to time secure or relate to the Obligations or any

part thereof.

 

“Commitments”

means the Revolving Credit Commitments and the Swing Line Commitment.

 

“Controlled

Group” means all members of a controlled group of

corporations and all trades or businesses (whether or not incorporated) under

common control which, together with the Parent, the Borrower or any other

Subsidiary, as relevant, are treated as a single employer under

Section 414 of the Code.

 

“Credit”

means any of the Revolving Credit or the Swing Line.

 

“Credit

Event” means the advancing of any Loan, the continuation of

or conversion into a Eurodollar Loan, or the issuance of, or extension of the

expiration date or increase in the amount of, any Letter of Credit.

 

“Current

Stockholders” means Perry Principals, L.L.C., Bain Capital, Inc. and

Fleet Growth Resources, Inc. or any Affiliate of any of such entities.

 

“Default”

means any event or condition the occurrence of which would, with the passage of

time or the giving of notice, or both, constitute an Event of Default.

 

“Designating

Lender” is defined in Section 13.12 hereof.

 

24

 

“Disposition”

means the sale, lease, conveyance, or other disposition of Property, other than

sales or other dispositions expressly permitted under Section 8.10(a), (b),

(c), (d), (e), (g) or (h) hereof.

 

“Disqualified

Stock” means any capital stock that, by its terms (or by the

terms of any security into which it is convertible or for which it is

exchangeable), or upon the happening of any event, matures or is mandatorily

redeemable, pursuant to a sinking fund obligation or otherwise, or is

redeemable at the option of the holder thereof, in whole or in part, on or

prior to the Termination Date.

 

“Domestic

Subsidiary” means each Subsidiary which is not a Foreign

Subsidiary.

 

“EBITDA”

means, with reference to any period, Net Income for such period plus

the sum of all amounts deducted in arriving at such Net Income amount in

respect of (a) Interest Expense for such period, (b) foreign,

federal, state and local income taxes for such period, (c) depreciation

expense related to fixed assets and amortization expense including without

limitation with respect to goodwill and other intangible assets for such

period, plus

or minus, as the case may be, extraordinary non-cash losses or

gains and (d) minority interest expense; provided, however, that

EBITDA for the relevant period shall be calculated on a pro forma basis in good

faith by the Parent and established to the reasonable satisfaction of the

Administrative Agent based on financial information provided by the Borrower as

if each Permitted Acquisition which occurred during such period had taken place

on the first day of such period (including adjustments for non-recurring

expenses and income reasonably determined by the Parent in good faith and

established to the reasonable satisfaction of the Administrative Agent).

 

“Eligible

Line of Business” means any business which is engaged in as

of the date of this Agreement by the Parent, the Borrower or any Subsidiary

existing as of the date of this Agreement, any other business activity which is

similar to or represents a reasonable extension of any such business, and any

other business activity approved of by the Administrative Agent.

 

“Environmental

Claim” means any investigation, notice, violation, demand,

allegation, action, suit, injunction, judgment, order, consent decree, penalty,

fine, lien, pro­ceeding or claim (whether administrative, judicial or private

in nature) arising (a) pursuant to, or in connection with an actual or

alleged violation of, any Environmental Law, (b) in connection with any

Hazardous Material, (c) from any abatement, removal, remedial, cor­rective

or response action in connection with a Hazardous Material, Environmental Law

or order of a governmental authority, or (d) from any actual or alleged

damage, injury, threat or harm to health, safety, natural resources or the

environment.

 

“Environmental

Law” means any current or future Legal Requirement pertaining

to (a) the protection of health, safety and the indoor or outdoor

environment, (b) the conservation, management or use of natural resources

and wildlife, (c) the protection or use of surface water or groundwater,

(d) the management, manufacture, possession, presence, use, generation,

transportation, treatment, storage, disposal, release, threatened release,

abatement, removal, remediation or handling of, or exposure to, any Hazardous

Material, or (e) pollution (including

 

25

 

any release to air, land, surface water or

groundwater), and any amendment, rule, regulation, order or directive issued

thereunder.

 

“ERISA”

means the Employee Retirement Income Security Act of 1974, as amended, or any

successor statute thereto.

 

“Eurodollar

Loan” means a Loan bearing interest at the rate specified in

Section 1.3(b) hereof.

 

“Eurodollar

Reserve Percentage” is defined in Section 1.3(b) hereof.

 

“Event

of Default” means any event or condition identified as such

in Section 9.1 hereof.

 

“Event

of Loss” means, with respect to any Property:  (a) any loss, destruction or damage of

such Property or (b) any condemnation, seizure, or taking, by exercise of

the power of eminent domain or otherwise, of such Property, or confiscation of

such Property or the requisition of the use of such Property.

 

“Existing

Letters of Credit” is defined in Section 1.2(a) hereof.

 

“Federal

Funds Rate” means the fluctuating interest rate per annum

described in part (x) of clause (ii) of the definition of Base Rate appearing

in Section 1.3(a) hereof.

 

“First

Supplement to Mortgage” is defined in this Section 5.1

in the definition of Mortgage hereinafter set forth.

 

“Fixed

Charges” means, with reference to any period, the sum of

(a) all scheduled payments of principal on Indebtedness for Borrowed Money

of the Parent and the Subsidiaries paid or required to be paid in cash during

such period, plus (b) foreign, federal, state and local income taxes

of the Parent and the Subsidiaries paid or required to be paid in cash during

such period, plus (c) Interest Expense of the Parent and the

Subsidiaries paid or required to be paid in cash during period, plus

(d) Restricted Payments (other than Restricted Payments of the type

described in clause (z) of the definition of such term) of the Parent and

the Subsidiaries made in cash during such period.

 

“Fixed

Rate Loan” means any Eurodollar Loan and (to the extent

bearing interest with reference to the Administrative Agent’s Quoted Rate) any

Swing Loan.

 

“Foreign

Subsidiary” means each Subsidiary which (a) is organized

under the laws of a jurisdiction other than the United States of America or any

state thereof, (b) conducts substantially all of its business outside of

the United States of America and (c) has substantially all of its assets

outside of the United States of America.

 

“FTD.COM”

means FTD.COM INC., a Delaware corporation.

 

26

 

“GAAP”

means generally accepted accounting principles set forth from time to time in

the opinions and pronouncements of the Accounting Principles Board and the

American Institute of Certified Public Accountants and statements and

pronouncements of the Financial Accounting Standards Board (or agencies with

similar functions of comparable stature and authority within the

U.S. accounting profession), which are applicable to the circumstances as

of the date of determination.

 

“Governance

Agreement” means that certain Governance Agreement dated as

of June 28, 2002 by and among FTD, Inc., Perry Acquisition Partners, L.P.,

Perry Partners, L.P., Perry Partners International, Inc., Perry

Principals Holdings, LLC, Bain Capital Fund IV, L.P., Bain

Capital Fund IV-B, L.P., Information Partners Capital

Fund, L.P., BCIP Associates, BCIP Trust Associates, L.P.,

Randolph Street Partners, Chisholm Partners II L.P., Fleet Equity

Partners VII, L.P, and Fleet Growth Resources III, Inc.

 

“Guarantors”

is defined in Section 12.1 hereof.

 

“Hazardous

Material” means any substance, chemical, compound, product,

solid, gas, liquid, waste, byproduct, pollutant, contaminant or material which

is hazardous or toxic, and includes, without limitation, (a) asbestos,

polychlorinated biphenyls and petroleum (including crude oil or any fraction

thereof) and (b) any material classified or regulated as “hazardous” or

“toxic” or words of like import pursuant to an Environmental Law.

 

“Hazardous

Material Activity” means any activity, event or occurrence

involving a Hazardous Material, including, without limitation, the manufacture,

possession, presence, use, generation, transportation, treatment, storage,

disposal, release, threatened release, abatement, removal, remediation,

handling of or corrective or response action to any Hazardous Material.

 

“Hedging

Agreements” means the agreements from time to time entered

into by the Borrower or any Subsidiary evidencing Hedging Liability or

otherwise setting forth the terms and conditions applicable thereto, including

without limitation such agreements entered into pursuant to Section 8.25

hereof.

 

“Hedging

Liability” means the liability of the Borrower or any

Subsidiary to any of the Lenders, or any Affiliates of such Lenders, in respect

of any interest rate swap agreements, interest rate cap agreements, interest

rate collar agreements, interest rate floor agreements, interest rate exchange

agreements, foreign currency contracts, currency swap contracts, or other

similar interest rate or currency hedging arrangements as the Borrower or such

Subsidiary, as the case may be, may from time to time enter into with any one

or more of the Lenders party to this Agreement or their Affiliates with prior

written notice to the Administrative Agent.

 

“Hostile

Acquisition” means the acquisition of the capital stock or

other equity interests of a Person through a tender offer or similar

solicitation of the owners of such capital stock or other equity interests

which has not been approved (prior to such acquisition) by resolutions of the

Board of Directors of such Person or by similar action if such Person is not a

corporation, and as to which such approval has not been withdrawn.

 

27

 

“Indebtedness

for Borrowed Money” means for any Person (without

duplication) (i) all indebtedness of such Person for borrowed money,

whether current or funded, or secured or unsecured, (ii) all indebtedness

for the deferred purchase price of Property or services, (iii) all

indebtedness created or arising under any conditional sale or other title

retention agreement with respect to Property acquired by such Person (even

though the rights and remedies of the seller or lender under such agreement in

the event of a default are limited to repossession or sale of such Property),

(iv) all indebtedness secured by a purchase money mortgage or other Lien

to secure all or part of the purchase price of Property subject to such

mortgage or Lien, (v) all obligations under leases which shall have been

or must be, in accordance with GAAP, recorded as Capital Leases in respect of

which such Person is liable as lessee, (vi) any liability in respect of

banker’s acceptances or letters of credit, (vii) any indebtedness, whether

or not assumed, secured by Liens on Property acquired by such Person at the

time of acquisition thereof, (viii) all obligations under leases which

are, in accordance with GAAP, recorded as operating leases on the financial

statements of such Person but which are treated as indebtedness under the Code

(including without limitation obligations under so-called “synthetic leases”)

and (ix) all indebtedness referred to in clause (i), (ii), (iii),

(iv), (v), (vi), (vii) or (viii) above which is directly or indirectly

guaranteed by such Person or which such Person has agreed (contingently or

otherwise) to purchase or otherwise acquire or in respect of which any of them

have otherwise assured a creditor against loss, it being understood that the

term “Indebtedness for Borrowed Money” shall not include trade payables arising

in the ordinary course of business.

 

“Intercompany

Agreements” means the Tax Sharing Agreement, dated December

19, 1994 (as heretofore amended, restated, supplemented or otherwise modified

from time to time), between the Borrower, FTD.COM and the Parent, the

Registration Rights Agreement, dated May 19, 1999, between FTD.COM and the

Borrower, the Trademark License Agreement, dated October 1, 1999, between

FTD.COM and the Borrower, the Florists Online Hosting Agreement, dated October

1, 1999, between FTD.COM and the Borrower, and the Commission Agreement, dated

October 1, 1999, between FTD.COM and the Borrower.

 

“Interest

Expense” means, with reference to any period, the sum of all

interest charges (including imputed interest charges with respect to

Capitalized Lease Obligations and all amortization of debt discount and

expense, but excluding that portion of any interest charges the recognition of

which is accelerated into such period solely as a result of a voluntary

prepayment of debt) of the Parent and the Subsidiaries for such period

determined on a consolidated basis in accordance with GAAP.

 

“Interest

Period” is defined in Section 1.7 hereof.

 

“L/C

Issuer” means Harris Trust and Savings Bank and each other

Lender which, at the Borrower’s request and with such Lender’s and the

Administrative Agent’s consent, agrees to issue Letters of Credit pursuant to

Section 1.2 hereof in such capacity as an issuer of Letters of Credit,

and, with respect to a particular Letter of Credit, refers to the Lender which

issued such Letter of Credit.

 

“L/C

Obligations” means the aggregate undrawn face amounts of all

outstanding Letters of Credit and all unpaid Reimbursement Obligations.

 

28

 

“L/C

Sublimit” means $15,000,000, as reduced pursuant to the terms

hereof.

 

“Legal

Requirement” means any treaty, convention, statute, law,

regulation, ordinance, license, permit, governmental approval, injunction,

judgment, order, consent decree or other requirement of any governmental

authority, whether federal, state, or local.

 

“Lenders”

means and includes Harris Trust and Savings Bank and the other financial

institutions from time to time party to this Agreement, including each assignee

Lender pursuant to Section 13.12 hereof.

 

“Lending

Office” is defined in Section 10.4 hereof.

 

“Letter

of Credit” is defined in Section 1.2(a) hereof.

 

“LIBOR”

is defined in Section 1.3(b) hereof.

 

“Lien” means

any mortgage, lien, security interest, pledge, charge or encumbrance of any

kind in respect of any Property, including the interests of a vendor or lessor

under any conditional sale, Capital Lease or other title retention arrangement.

 

“Loan”

means and includes Revolving Loans and Swing Loans, and each of them singly and

the term “type” of Loan refers to its status as a Revolving Loan or Swing Loan,

or, if a Revolving Loan, its status as a Base Rate Loan or Eurodollar Loan or,

if a Swing Loan, its status as a Base Rate Loan or a loan bearing interest

equal to the Administrative Agent’s Quoted Rate.

 

“Loan

Documents” means this Agreement, the Notes, the Applications,

the Collateral Documents, the Hedging Agreements, and each other instrument or

document to be delivered hereunder or thereunder or otherwise in connection

therewith.

 

“Management

Consulting Services Agreement” is defined in Section 8.12

hereof.

 

“Material

Adverse Effect” means (a) a material adverse change in, or

material adverse effect upon, the operations, business, Property, condition

(financial or otherwise) or prospects of the Borrower or of the Borrower, the

Parent and the Subsidiaries taken as a whole, (b) a material impairment of

the ability of the Borrower, the Parent or any Subsidiary to perform its

material obligations under any Loan Document, or (c) a material adverse

effect upon (i) the legality, validity, binding effect or enforceability

against the Borrower, the Parent or any Subsidiary of any Loan Document or the

rights and remedies of the Administrative Agent and the Lenders thereunder or

(ii) the perfection or priority of any material Lien granted under any

Collateral Document.

 

“Moody’s”

means Moody’s Investors Service, Inc.

 

“Mortgage”

means that certain Mortgage and Security Agreement with Assignment of Rents

dated as of September 27, 2001 between the Borrower and the Administrative

Agent relating to the Borrower’s real property located in Downers Grove, Illinois,

as the same may be

 

29

 

amended, modified, supplemented or restated from time

to time, including, without limitation, by that certain First Supplement to

Mortgage and Security Agreement with Assignment of Rents (the “First

Supplement to Mortgage”) dated as of the date hereof.

 

“Net

Cash Proceeds” means, as applicable, (a) with respect to any

Disposition by a Person, cash and cash equivalent proceeds received by or for

such Person’s account, net of (i) reasonable direct costs, fees and expenses

relating to such Disposition and (ii) sale, use or other transactional taxes

paid or payable by such Person as a direct result of such Disposition;

(b) with respect to any Event of Loss of a Person,  cash and cash equivalent proceeds received

by or for such Person’s account (whether as a result of payments made under any

applicable insurance policy therefor or in connection with condemnation

proceedings or otherwise), net of reasonable direct costs, fees and expenses incurred

in connection with the collection of such proceeds, awards or other payments;

and (c) with respect to any offering of equity securities of a Person or

the issuance of any Indebtedness for Borrowed Money by a Person, cash and cash

equivalent proceeds received by or for such Person’s account, net of reasonable

legal, underwriting, and other costs, fees and expenses incurred as a direct

result thereof.

 

“Net

Income” means, with reference to any period, the net income

(or net loss) of the Parent and the Subsidiaries for such period computed on a

consolidated basis in accordance with GAAP; provided that there shall be excluded from

Net Income (a) the net income (or net loss) of any Person accrued prior to

the date it becomes a Subsidiary, or has merged into or consolidated with, the

Parent, the Borrower or another Subsidiary, and (b) the net income (or net

loss) of any Person (other than a Subsidiary) in which the Parent, the Borrower

or any Subsidiary has a equity interest in, except to the extent of the amount

of dividends or other distributions actually paid to the Parent, the Borrower

or any Subsidiary during such period.

 

“Net

Worth” means, for any Person and at any time the same is to

be determined, total shareholder’s equity which would appear on the balance

sheet of such Person in accordance with GAAP.

 

“Notes”

means and includes the Revolving Notes and the Swing Line Note.

 

“Obligations”

means all obligations of the Borrower to pay principal and interest on the

Loans, all Reimbursement Obligations owing under the Applications, all fees and

charges payable hereunder, all Hedging Liability, and all other payment

obligations of the Parent, the Borrower or any Subsidiary arising under or in

relation to any Loan Document, in each case whether now existing or hereafter

arising, due or to become due, direct or indirect, absolute or contingent, and

howsoever evidenced, held or acquired.

 

“Operating

Lease” means any lease of Property other than a Capital

Lease.

 

“Parent”

is defined in the introductory paragraph of this Agreement.

 

“Participating

Interest” is defined in Section 1.2(d) hereof.

 

“Participating

Lender” is defined in Section 1.2(d) hereof.

 

30

 

“PBGC”

means the Pension Benefit Guaranty Corporation or any Person succeeding to any

or all of its functions under ERISA.

 

“Percentage”

means for any Lender its Revolver Percentage.

 

“Permitted

Acquisition” means (a)  any Acquisition consented

to in writing by the Required Lenders, or (b) any other Acquisition with

respect to which all of the following conditions shall have been satisfied:

 

(i)            the Acquired Business is in an

Eligible Line of Business and has its primary operations within the United

States;

 

(ii)           the Acquisition shall not be a

Hostile Acquisition;

 

(iii)          if the Total Consideration for the

Acquired Business is $10,000,000 or more, the financial statements of the

cquired Business shall have been audited by an independent accounting firm of

national or regional repute or otherwise reasonably satisfactory to the

Administrative Agent, or if such financial statements have not been audited by

such an accounting firm, (x) such financial statements shall have been

approved by the Administrative Agent and (y) the Acquired Business has

undergone a successful so-called businessman’s review by an accounting firm

reasonably satisfactory to the Administrative Agent as part of the Parent’s and

the Borrower’s due diligence on the Acquisition, and the Administrative Agent

is satisfied with any other due diligence conducted with respect to the

Acquisition;

 

(iv)          the Total Consideration for the

Acquired Business shall not exceed $20,000,000, and when taken together with

the Total Consideration for all Acquired Businesses acquired during the period

after the Closing Date, shall not exceed $60,000,000;

 

(v)           if the Total Consideration for the

Acquired Business is $10,000,000 or more, the Borrower shall have notified the

Administrative Agent and Lenders not less than 20 days prior to any such

Acquisition and furnished to the Administrative Agent and Lenders at such time

reasonable details as to such Acquisition (including sources and uses of funds

therefor), and 1-year historical financial information and 1-year pro forma

financial forecasts of the Acquired Business on a stand alone basis as well as

of the Parent on a consolidated basis after giving effect to the Acquisition

(with any projected cost savings in such pro forma financial forecasts being

satisfactory to the Administrative Agent) and covenant compliance calculations

reasonably satisfactory to the Administrative Agent, and such historical and

pro forma financial information shows the Total Funded Debt/EBITDA Ratio

(computed on a pro forma basis after giving effect to the Acquisition) to be

0.50 or more below the maximum permitted level pursuant to Section 8.22

hereof after giving effect to such Acquisition;

 

31

 

(vi)          if a new Subsidiary is formed or

acquired as a result of or in connection with the Acquisition, the Borrower

will have complied with the requirements of Sections 4 and 8.17 hereof in

connection therewith;

 

(vii)         after giving effect to the Acquisition,

no Default or Event of Default shall exist, including with respect to the

covenants contained in Sections 8.22, 8.23, 8.24 and 8.26 on a pro forma

basis; and

 

(viii)        after giving effect to such Acquisition

and any Credit Events in connection therewith, the Unused Revolving Credit

Commitments shall be at least $25,000,000.

 

“Permitted

Existing Indebtedness” means the indebtedness of the Parent

and the Subsidiaries identified as such on Schedule 8.7 to this Agreement.

 

“Permitted

Existing Investments” means the investments of the Borrower

and the Subsidiaries identified as such on Schedule 8.9 to this Agreement.

 

“Permitted

Existing Liens” means the Liens on the assets of the Parent

and the Subsidiaries identified as such on Schedule 8.8 to this Agreement.

 

“Person”

means an individual, partnership, corporation, limited liability company,

association, trust, unincorporated organization or any other entity or

organization, including a government or agency or political subdivision

thereof.

 

“Plan”

means any employee pension benefit plan covered by Title IV of ERISA or

subject to the minimum funding standards under Section 412 of the Code

that is either (i) maintained by a member of the Controlled Group for

employees of a member of the Controlled Group or (ii) maintained pursuant

to a collective bargaining agreement or any other arrangement under which more

than one employer makes contributions and to which a member of the Controlled

Group is then making or accruing an obligation to make contributions or has

within the preceding five plan years made contributions.

 

“Pledge

Agreement” means that certain Amended and Restated Pledge

Agreement dated as of the date of this Agreement among the Borrower, the

Parent, the Domestic Subsidiaries and the Administrative Agent, as the same may

be amended, modified, supplemented or restated from time to time.

 

“Premises”

means the real property owned or leased by the Borrower or any Subsidiary,

including without limitation the real property and improvements thereon owned

by the Borrower, or any Subsidiary subject to the Lien of any Collateral

Document.

 

“Property”

means, as to any Person, all types of real, personal, tangible, intangible or

mixed property owned by such Person whether or not included in the most recent

balance sheet of such Person and its subsidiaries under GAAP.

 

32

 

“RCRA” means

the Resource Conservation and Recovery Act of 1976, as amended and in effect

from time to time.

 

“Registration

Agreement” means that certain Registration Agreement dated as

of June 28, 2002 by and among FTD, Inc., Perry Acquisition

Partners, L.P., Perry Partners, L.P., Perry Partners

International, Inc., Perry Principals Holdings, LLC, Bain Capital

Fund IV, L.P., Bain Capital Fund IV-B, L.P., Information

Partners Capital Fund, L.P., BCIP Associates, BCIP Trust

Associates, ̃ L.P., Randolph Street Partners, Chisholm

Partners II L.P., Fleet Equity Partners VII, L.P, and Fleet

Growth Resources III, Inc.

 

“Reimbursement

Obligation” is defined in Section 1.2(c) hereof.

 

“Renaissance”

is defined in Section 4.3 hereof.

 

“Required

Lenders” means, as of the date of determination thereof,

Lenders whose outstanding Loans and interests in Letters of Credit and Unused

Revolving Credit Commitments constitute more than 66-2/3% of the sum of the

total outstanding Loans, interests in Letters of Credit, and Unused Revolving

Credit Commitments of the Lenders.

 

“Restricted

Payments” is defined in Section 8.12 hereof.

 

“Revolver

Percentage” means, for each Lender, the percentage of the

Revolving Credit Commitments represented by such Lender’s Revolving Credit

Commitment or, if the Revolving Credit Commitments have been terminated, the

percentage held by such Lender (including through participation interests in

Reimbursement Obligations) of the aggregate principal amount of all Revolving

Loans and L/C Obligations then outstanding.

 

“Revolving

Credit” means the credit facility for making Revolving Loans

and issuing Letters of Credit described in Sections 1.1 and 1.2 hereof.

 

“Revolving

Credit Commitment” means, as to any Lender, the obligation of

such Lender to make Revolving Loans and to participate in Letters of Credit

issued for the account of the Borrower hereunder in an aggregate principal or

face amount at any one time outstanding not to exceed the amount set forth

opposite such Lender’s name on Schedule 1 attached hereto and made a part

hereof, as the same may be reduced or modified at any time or from time to time

pursuant to the terms hereof.  The

Borrower and the Lenders acknowledge and agree that the Revolving Credit

Commitments of the Lenders aggregate $75,000,000 on the date hereof.

 

“Revolving

Loan” is defined in Section 1.1 hereof and, as so

defined, includes a Base Rate Loan or a Eurodollar Loan, each of which is a “type”

of Revolving Loan hereunder.

 

“Revolving

Note” is defined in Section 1.11 hereof.

 

“S&P”

means Standard & Poor’s Credit Market Services, a division of The

McGraw-Hill Companies, Inc.

 

33

 

“SPV”

is defined in Section 13.12 hereof.

 

“Security

Agreement” means that certain Amended and Restated Security

Agreement dated as of the date of this Agreement among the Borrower, the

Parent, the Domestic Subsidiaries and the Administrative Agent, as the same may

be amended, modified, supplemented or restated from time to time.

 

“Subordinated

Debt” means Indebtedness for Borrowed Money of the Parent,

the Borrower or any Subsidiary owing to any Person on terms and conditions, and

in such amounts, acceptable to the Administrative Agent and which is

subordinated in right of payment to the prior payment in full of the Obligations

pursuant to written subordination provisions approved in writing by the

Administrative Agent.

 

“subsidiary”

means, as to any particular parent corporation or organization, any other

corporation or organization more than 50% of the outstanding Voting Stock of

which is at the time directly or indirectly owned by such parent corporation or

organization or by any one or more other entities which are themselves

subsidiaries of such parent corporation or organization.  The term “Subsidiary” means a direct or indirect

subsidiary of the Parent or of the Borrower or of any of their direct or

indirect Subsidiaries, and the term “Subsidiaries” means all of such entities

collectively, including without limitation the Borrower.

 

“Swing

Line” means the credit facility for making a Swing Loan

described in Section 1.6 hereof.

 

“Swing

Line Note” is defined in Section 1.11 hereof.

 

“Swing

Line Commitment” is defined in Section 1.6(a) hereof.

 

“Swing

Loan” is defined in Section 1.6(a) hereof.

 

“Termination

Date” means December 31, 2005, or such earlier date on

which the Revolving Credit Commitments are terminated in whole pursuant to

Section 1.13, 9.2 or 9.3 hereof.

 

“Total

Consideration” means the total amount (but without

duplication) of (a) cash paid in connection with any Acquisition, plus

(b) indebtedness payable to the seller in connection with such

Acquisition, plus (c) the fair market value of any equity

securities, including any warrants or options therefor, delivered in connection

with any Acquisition, plus (d) the present value of

covenants not to compete entered into in connection with such Acquisition or

other future payments which are required to be made over a period of time and

are not contingent upon the Borrower or any Subsidiary meeting financial performance

objectives (exclusive of salaries paid in the ordinary course of business)

(discounted at the Base Rate), but only to the extent not included in

clause (a), (b) or (c) above, plus (e) the amount of indebtedness

assumed in connection with such Acquisition.

 

34

 

“Total

Funded Debt” means, at any time the same is to be determined,

the aggregate of all Indebtedness for Borrowed Money of the Parent and the

Subsidiaries at such time, including all Indebtedness for Borrowed Money of any

other Person which is directly or indirectly guaranteed by the Parent or any of

the Subsidiaries or which the Parent or any of the Subsidiaries has agreed

(contingently or otherwise) to purchase or otherwise acquire or in respect of

which the Parent or any of the Subsidiaries has otherwise assured a creditor

against loss.

 

“Total

Funded Debt/EBITDA Ratio” means, as of the last day of any

fiscal quarter of the Parent, the ratio of Total Funded Debt as of the last day

of such fiscal quarter to EBITDA of the Parent and the Subsidiaries for the

period of four fiscal quarters then ended.

 

“Unfunded

Vested Liabilities”  means, for any Plan at

any time, the amount (if any) by which the present value of all vested

nonforfeitable accrued benefits under such Plan exceeds the fair market value

of all Plan assets allocable to such benefits, all determined as of the then

most recent valuation date for such Plan, but only to the extent that such

excess represents a potential liability of a member of the Controlled Group to

the PBGC or the Plan under Title IV of ERISA.

 

“U.S.

Dollars” and “$” each means the lawful currency of the

United States of America.

 

“Unused

Revolving Credit Commitments” means, at any time, the

difference between the Revolving Credit Commitments then in effect and the

aggregate outstanding principal amount of Revolving Loans and L/C Obligations, provided

that Swing Loans outstanding from time to time shall be deemed to reduce only

the Unused Revolving Credit Commitment of the Administrative Agent for purposes

of computing the commitment fee under Section 2.1(a) hereof.

 

“Voting

Stock” of any Person means capital stock or other equity

interests of any class or classes (however designated) having ordinary power

for the election of directors or other similar governing body of such Person,

other than stock or other equity interests having such power only by reason of

the happening of a contingency.

 

“Welfare

Plan” means a “welfare plan” as defined in Section 3(1)

of ERISA.

 

“Wholly-owned

Subsidiary” means a Subsidiary of which all of the issued and

outstanding shares of capital stock (other than directors’ qualifying shares as

required by law) or other equity interests are owned by the Parent, the

Borrower and/or one or more Wholly-owned Subsidiaries within the meaning of

this definition.

 

Section 5.2.      Interpretation.  The foregoing definitions are equally

applicable to both the singular and plural forms of the terms defined.  The words “hereof”, “herein”,

and “hereunder”

and words of like import when used in this Agreement shall refer to

this Agreement as a whole and not to any particular provision of this

Agreement.  All references to time of

day herein are references to Chicago, Illinois,  time unless otherwise

specifically provided.  Where the

character or amount of any asset or liability or item of income or expense is

required to be determined or any consolidation or other accounting computation

is required to be made for the purposes of this

 

35

 

Agreement, it shall be done in accordance with GAAP except where such

principles are inconsistent with the specific provisions of this Agreement.

 

Section 5.3.      Change in Accounting Principles.  If, after the date of this Agreement, there

shall occur any change in GAAP from those used in the preparation of the

financial statements referred to in Section 6.5 hereof and such change

shall result in a change in the method of calculation of any financial

covenant, standard or term found in this Agreement, either the Borrower or the

Required Lenders may by notice to the Lenders and the Borrower, respectively,

require that the Lenders and the Borrower negotiate in good faith to amend such

covenants, standards, and term so as equitably to reflect such change in

accounting principles, with the desired result being that the criteria for

evaluating the financial condition of the Parent, the Borrower and the

Subsidiaries shall be the same as if such change had not been made.  No delay by the Borrower or the Required

Lenders in requiring such negotiation shall limit their right to so require

such a negotiation at any time after such a change in accounting

principles.  Until any such covenant,

standard, or term is amended in accordance with this Section 5.3, financial

covenants shall be computed and determined in accordance with GAAP in effect

prior to such change in accounting principles. 

Without limiting the generality of the foregoing, the Borrower shall

neither be deemed to be in compliance with any financial covenant hereunder nor

out of compliance with any financial covenant hereunder if such state of

compliance or noncompliance, as the case may be, would not exist but for the

occurrence of a change in accounting principles after the date hereof.

 

SECTION 6.                                                 REPRESENTATIONS AND WARRANTIES.

 

Each of the Parent and the Borrower represents and warrants to the

Administrative Agent and the Lenders as follows:

 

Section 6.1.      Organization and Qualification.  Each of the Parent and the Borrower is duly

organized, validly existing and in good standing as a corporation  under

the laws of the state of its incorporation, has full and adequate power to own

its Property and conduct its business as now conducted, and is duly licensed or

qualified and in good standing in each jurisdiction in which the nature of the

business conducted by it or the nature of the Property owned or leased by it

requires such licensing or qualifying, except where the failure to do so would

not have a Material Adverse Effect.

 

Section 6.2.      Subsidiaries.  Each Subsidiary is duly organized, validly

existing and in good standing under the laws of the jurisdiction in which it is

incorporated or organized, as the case may be, has full and adequate power to

own its Property and conduct its business as now conducted, and is duly

licensed or qualified and in good standing in each jurisdiction in which the

nature of the business conducted by it or the nature of the Property owned or

leased by it requires such licensing or qualifying, except where the failure to

do so would not have a Material Adverse Effect.  Schedule 6.2 hereto identifies each Subsidiary, the

jurisdiction of its incorporation or organization, as the case may be, the

percentage of issued and outstanding shares of each class of its capital stock

or other equity interests owned by the Parent, the Borrower and the other

Subsidiaries and, if such percentage is not 100% (excluding directors’

qualifying shares as required by law), a description of each class of its

authorized capital stock

 

36

 

and other equity interests and the number of shares of each class

issued and outstanding as of the Closing Date. 

All of the outstanding shares of capital stock and other equity

interests of each Subsidiary are validly issued and outstanding and fully paid

and nonassessable and all such shares and other equity interests indicated on

Schedule 6.2 as owned by the Parent, the Borrower or another Subsidiary

are owned, beneficially and of record, by the Parent, the Borrower or such

Subsidiary free and clear of all Liens other than the Liens granted in favor of

the Administrative Agent pursuant to the Collateral Documents.  There are no outstanding commitments or

other obligations of any Subsidiary to issue, and no options, warrants or other

rights of any Person to acquire, any shares of any class of capital stock or

other equity interests of any Subsidiary.

 

Section 6.3.      Authority and Validity of Obligations.  The Borrower has full right and authority to

enter into this Agreement and the other Loan Documents executed by it, to make

the borrowings herein provided for, to issue its Notes in evidence thereof, to

grant to the Administrative Agent the Liens described in the Collateral

Documents executed by the Borrower, and to perform all of its obligations

hereunder and under the other Loan Documents executed by it.  Each of the Parent and the Domestic

Subsidiaries has full right and authority to enter into the Loan Documents

executed by it, to guarantee the Obligations, to grant to the Administrative

Agent the Liens described in the Collateral Documents executed by such Person,

and to perform all of its obligations under the Loan Documents executed by

it.  The Loan Documents to which the

Parent, the Borrower or any other Subsidiary is a party have been duly

authorized, executed and delivered by such Person and constitute valid and

binding obligations of such Person enforceable against it in accordance with

their terms, except as enforceability may be limited by bankruptcy, insolvency,

fraudulent conveyance or similar laws affecting creditors’ rights generally and

general principles of equity (regardless of whether the application of such

principles is considered in a proceeding in equity or at law); and this

Agreement and the other Loan Documents do not, nor does the performance or

observance by the Parent, the Borrower or any other Subsidiary of any of the

matters and things herein or therein provided for, (a) contravene or

constitute a material default under any provision of law or any judgment,

injunction, order or decree binding upon the Parent, the Borrower or any other

Subsidiary or any provision of the charter, articles or certificate of

incorporation or by-laws, articles of association or operating agreement,

partnership agreement, or other constituent document of the Parent, the

Borrower or any other Subsidiary, (b) contravene or constitute a default

under any covenant, indenture or agreement of or affecting the Parent, the

Borrower or any other Subsidiary or any of their Property, in each case where

such contravention or default, individually or in the aggregate, could

reasonably be expected to have a Material Adverse Effect, or (c) result in

the creation or imposition of any Lien on any Property of the Parent, the Borrower

or any other Subsidiary other than the Liens granted in favor of the

Administrative Agent pursuant to the Collateral Documents.

 

Section 6.4.      Use of Proceeds; Margin Stock.  The Borrower shall use the proceeds of the

Revolving Credit for its general working capital purposes and for such other

legal and proper purposes as are consistent with all applicable laws.  Neither the Parent, the Borrower nor any

Subsidiary is engaged in the business of extending credit for the purpose of

purchasing or carrying margin stock (within the meaning of Regulation U of

the Board of Governors of the Federal Reserve System), and no part of the

proceeds of any Loan or any other extension of

 

37

 

credit made hereunder will be used to purchase or carry any such margin

stock or to extend credit to others for the purpose of purchasing or carrying

any such margin stock.

 

Section 6.5.      Financial Reports.  The consolidated balance sheet of the Parent

and its Subsidiaries as at June 30, 2002 and the related consolidated

statements of income, retained earnings and cash flows of the Parent and its

Subsidiaries for the fiscal year then ended, and accompanying notes thereto,

which financial statements are accompanied by the audit report of KPMG LLP,

independent public accountants, heretofore furnished to the Administrative

Agent and the Lenders, fairly present the consolidated financial condition of

the Parent and its Subsidiaries as at said dates and the consolidated results

of their operations and cash flows for the periods then ended in conformity

with GAAP applied on a consistent basis. 

Neither the Parent, the Borrower nor any other Subsidiary has contingent

liabilities which are material to it other than as indicated on such financial

statements or, with respect to future periods, on the financial statements

furnished pursuant to Section 8.5 hereof.

 

Section 6.6.      No Material Adverse Change.  Since June 30, 2002, there

has been no change in the condition (financial or otherwise) or business prospects

of the Parent, the Borrower or any other Subsidiary which would have or

constitute a Material Adverse Effect.

 

Section 6.7.      Full Disclosure.  The statements and written information

furnished to the Administrative Agent and the Lenders in connection with the

negotiation of this Agreement and the other Loan Documents and the commitments

by the Lenders to provide all or part of the financing contemplated hereby do

not contain any untrue statements of a material fact or omit a material fact

necessary to make the material statements contained herein or therein not

misleading, the Administrative Agent and the Lenders acknowledging that as to

any projections furnished to the Administrative Agent and the Lenders, the

Parent and the Borrower only represent that the same were prepared on the basis

of information and estimates the Parent and the Borrower believed to be

reasonable.

 

Section 6.8.      Trademarks, Franchises, and Licenses.  The Parent, the Borrower, and the

Subsidiaries own, possess, or have the right to use all material patents,

licenses, franchises, trademarks, trade names, copyrights, trade secrets, know

how and confidential commercial and proprietary information necessary to

conduct their businesses as now conducted, without known conflict with any such

patent, license, franchise, trademark, trade name, copyright or other

proprietary right of any other Person.

 

Section 6.9.      Governmental Authority and Licensing.  The Parent, the Borrower, and the

Subsidiaries have received all licenses, permits, and approvals of all Federal,

state, local, and foreign governmental authorities, if any, necessary to

conduct their businesses, in each case where the failure to obtain or maintain

the same could reasonably be expected to have a Material Adverse Effect.  No investigation or proceeding which, if

adversely determined, could reasonably be expected to result in revocation or

denial of any material license, permit, or approval is pending or, to the

knowledge of the Parent or the Borrower, threatened.

 

Section 6.10.    Good Title.  The Parent, the Borrower, and the other

Subsidiaries have good and defensible title (or valid leasehold interests) to

their material assets as reflected on the most

 

38

 

recent consolidated balance sheet of the Parent and the Subsidiaries

furnished to the Administrative Agent and the Lenders (except for sales of

assets in the ordinary course of business), subject to no Liens other than such

thereof as are permitted by Section 8.8 hereof.

 

Section 6.11.    Litigation and Other Controversies.  There is no litigation or governmental

proceeding or labor controversy pending, nor to the knowledge of the Parent or

the Borrower threatened, against the Parent, the Borrower or any Subsidiary

which if adversely determined could reasonably be expected to have a Material

Adverse Effect.

 

Section 6.12.    Taxes.  All material tax returns required to be

filed by the Parent, the Borrower or any other Subsidiary in any jurisdiction

have, in fact, been filed, and all material taxes, assessments, fees and other

governmental charges upon the Parent, the Borrower or any Subsidiary or upon

any of their respective Properties, income or franchises, which are shown to be

due and payable in such returns, have been paid, except such taxes,

assessments, fees and governmental charges, if any, as are being contested in

good faith and by appropriate proceedings which prevent enforcement of the

matter under contest and as to which adequate reserves established in

accordance with GAAP have been provided. The Parent and the Borrower have no

knowledge of any proposed material additional tax assessment against the

Parent, the Borrower or any Subsidiary for which adequate provisions in

accordance with GAAP have not been made on their accounts.  Adequate provisions in accordance with GAAP

for taxes on the books of the Parent, the Borrower and each Subsidiary have

been made for all open years, and for the current fiscal period.

 

Section 6.13.    Approvals.  No authorization, consent, license, or exemption

from, or filing or registration with, any court or governmental department,

agency or instrumentality, nor any approval or consent of the stockholders of

the Parent, the Borrower or any Subsidiary, or any other Person, is or will be

necessary to the valid execution, delivery or performance by the Parent, the

Borrower or any other Subsidiary of any Loan Document, except for such

approvals which (a) have been obtained prior to the date of this Agreement

and remain in full force and effect or (b) the failure of which to obtain

would not have a Material Adverse Effect.

 

Section 6.14.    Affiliate Transactions.  Neither the Parent, the Borrower nor any

Subsidiary is a party to any material contracts or agreements with any of its

Affiliates on terms and conditions which, at the time such contracts or

agreements were entered into, were less favorable to the Borrower or such

Subsidiary than would have been usual and customary in similar contracts or

agreements entered into at such time between Persons not affiliated with each

other, except for the Management Consulting Services Agreement, the

Registration Agreement, the Governance Agreement and the Intercompany

Agreements.  The Intercompany Agreements

previously furnished to the Administrative Agent and the Lenders represent true

and correct copies of all written agreements between the Borrower and FTD.COM

as of the Closing Date.

 

Section 6.15.    Investment Company; Public Utility Holding

Company. 

Neither the Parent, the Borrower nor any Subsidiary is an “investment

company” or a company “controlled” by an “investment company” within the

meaning of the Investment Company Act of 1940, as amended, or a “public utility

holding company” within the meaning of the Public Utility Holding Company Act

of 1935, as amended.

 

39

 

Section 6.16.    ERISA.  The Parent, the Borrower, each Subsidiary,

and each other member of their respective Controlled Group, has fulfilled its

obligations under the minimum funding standards of and is in compliance in all

material respects with ERISA and the Code to the extent applicable to it and

has not incurred any liability to the PBGC or a Plan under Title IV of

ERISA other than a liability to the PBGC for premiums under Section 4007

of ERISA.  Neither the Parent, the

Borrower nor any Subsidiary has any material contingent liabilities with

respect to any post-retirement benefits under a Welfare Plan, other than

liability for continuation coverage described in article 6 of Title I

of ERISA.

 

Section 6.17.    Compliance with Laws.  (a) 

The Parent, the Borrower and the Subsidiaries are in compliance with the

requirements of all federal, state and local laws, rules and regulations

applicable to or pertaining to their Properties or business operations (including,

without limitation, the Occupational Safety and Health Act of 1970, the

Americans with Disabilities Act of 1990, and laws and regulations establishing

quality criteria and standards for air, water, land and toxic or hazardous

wastes and substances), where any such non-compliance, individually or in the

aggregate, could reasonably be expected to have a Material Adverse Effect.  Neither the Parent, nor the Borrower, nor

any Subsidiary has received notice to the effect that its operations are not in

compliance with any of the requirements of applicable federal, state or local

environmental, health, and safety statutes and regulations or is the subject of

any governmental investigation evaluating whether any remedial action is needed

to respond to a release of any toxic or hazardous waste or substance into the

environment, where any such non-compliance or remedial action, individually or

in the aggregate, could reasonably be expected to have a Material Adverse

Effect.

 

(b)           Without limiting the representations

and warranties set forth in Section 6.17(a) above, except for such matters

which could not reasonably be expected to result in a Material Adverse Effect,

the Parent and the Borrower represent and warrant that:  (i)  the Parent, the Borrower and the

Subsidiaries, and each of the Premises, comply in all material respects with

all applicable Environmental Laws; (ii) the Parent, the Borrower and the

Subsidiaries have each obtained all material governmental approvals required

for their operations and each of the Premises by any applicable Environmental

Law; (iii) each of the Parent and the Borrower has no knowledge of any

release, threatened release or disposal of any Hazardous Material at, on, or

about, any of the Premises in any material quantity and, to the knowledge of

each of the Parent and the Borrower, none of the Premises are materially

adversely affected by any release, threatened release or disposal of a

Hazardous Material originating or emanating from any other property;

(iv) to the knowledge of each of the Parent and the Borrower, none of the

Premises contain or have contained any: 

(1) material amounts of asbestos containing building material in

material non–compliance with any Environmental Law, (2) landfills or

dumps, (3) hazardous waste treatment, storage or disposal facility as

defined pursuant to RCRA or any comparable state law, or (4) site on or

nominated for the National Priority List promulgated pursuant to CERCLA or any

state remedial priority list promulgated or published pursuant to any comparable

state law; (v) the Parent, the Borrower and the Subsidiaries have not used

a material quantity of any Hazardous Material and have conducted no Hazardous

Material Activity at any of the Premises except in material compliance with

applicable Environmental Laws; (vi) each of the Parent and the Borrower

has no knowledge of any material liability for response or corrective action,

natural resource damage or other harm pursuant to CERCLA, RCRA or any

comparable

 

40

 

state law; (vii) the Parent, the Borrower and the

Subsidiaries have no notice or knowledge of and are not required to give any

notice of any Environmental Claim involving the Parent,  the Borrower or any Subsidiary or any of the

Premises, and the Parent and the Borrower have no knowledge of any conditions

or occurrences at any of the Premises which could reasonably be anticipated to

form the basis for an Environmental Claim against the Borrower or any

Subsidiary or such Premises; (viii) none of the Premises are subject to

any, and the Parent and the Borrower have no knowledge of any imminent,

restriction on the ownership, occupancy, use or transferability of the Premises

in connection with any (1) Environmental Law or (2) release, threatened

release or disposal of a Hazardous Material; and (ix) the Parent and the

Borrower have no knowledge of any conditions or circumstances at any of the

Premises which pose an unreasonable risk to the environment or the health or

safety of Persons.

 

Section 6.18.    Other Agreements.  Neither the Parent, nor the Borrower, nor

any other Subsidiary is in default under the terms of any covenant, indenture

or agreement of or affecting such Person or any of its Property, which default

if uncured could reasonably be expected to have a Material Adverse Effect.

 

Section

6.19.    Solvency.  The Parent, the Borrower and the

Subsidiaries are, individually and on a consolidated basis, solvent, able to

pay their debts as they become due, and have sufficient capital to carry on

their business and all businesses in which they are about to engage.

 

Section 6.20.    No Default.  No Default or Event of Default

has occurred and is continuing.

 

SECTION 7.                                                 CONDITIONS PRECEDENT.

 

The obligation of each Lender to advance, continue or convert any Loan

(other than the continuation of, or conversion into, a Base Rate Loan) or of

the L/C Issuer to issue, extend the expiration date (including by not giving

notice of non-renewal) of or increase the amount of any Letter of Credit under

this Agreement, shall be subject to the following conditions precedent:

 

Section 7.1.      All Credit Events.  At the time of each Credit Event hereunder:

 

(a)           each of the representations and

warranties set forth herein and in the other Loan Documents shall be and remain

true and correct as of said time, except to the extent the same expressly

relate to an earlier date;

 

b)            each of the Parent, the Borrower and each Subsidiary  shall

be in compliance with all of the terms and conditions hereof and of the other

Loan Documents to which it is a party, and no Default or Event of Default shall

have occurred and be continuing or would occur as a result of such Credit

Event;

 

(c)           in the case of a Borrowing the

Administrative Agent shall have received the notice required by

Section 1.5 hereof, in the case of the issuance of any Letter of Credit

the L/C Issuer shall have received a duly completed Application for such

Letter of Credit together with any fees called for by Section 2.1 hereof,

and, in the case of an

 

41

 

extension or increase in

the amount of a Letter of Credit, a written request therefor in a form

acceptable to the L/C Issuer together with fees called for by

Section 2.1 hereof; and

 

(d)           such Credit Event shall not violate

any order, judgment or decree of any court or other authority or any provision

of law or regulation applicable to the Administrative Agent or any Lender

(including, without limitation, Regulation U of the Board of Governors of

the Federal Reserve System) as then in effect.

 

Each request for a Borrowing hereunder and each request for the

issuance of, increase in the amount of, or extension of the expiration date of,

a Letter of Credit shall be deemed to be a representation and warranty by the

Borrower on the date of such Credit Event as to the facts specified in

subsections (a) through (c), both inclusive, of this Section.

 

Section

7.2.      Initial Credit Event.  Before or concurrently with the initial

Credit Event:

 

(a)           the Administrative Agent shall have

received for each Lender this Agreement duly executed by the Borrower, the

Parent, the other Guarantors and the Lenders;

 

(b)           the Administrative Agent shall have

received for each Lender such Lender’s duly executed Notes of the Borrower

dated the date hereof and otherwise in compliance with the provisions of

Section 1.11 hereof;

 

(c)           the Administrative Agent shall have

received the Security Agreement and Pledge Agreement duly executed by the

Parent, the Borrower and each Domestic Subsidiary, and the First Supplement to

Mortgage duly executed by the Borrower, together with (i) to the extent

not previously provided, original stock certificates or other similar

instruments or securities representing all of the issued and outstanding shares

of capital stock or other equity interests of each Domestic Subsidiary and 65%

of the issued and outstanding shares of capital stock or other equity interests

of each Foreign Subsidiary which is owned by the Parent or a Domestic

Subsidiary as of the Closing Date, (ii) to the extent not previously

provided, stock powers for the Collateral described in the foregoing clause (i)

executed in blank and undated, (iii) necessary UCC financing statements

(or amendments thereto) to be filed against the Parent, the Borrower and each

Domestic Subsidiary, as debtor, in favor of the Administrative Agent, as

secured party, and (iv) amendments to each copyright, trademark or patent

collateral agreement executed in connection with the Previous Credit Agreement;

 

(d)           the Administrative Agent shall have

received evidence of insurance required to be maintained under the Loan

Documents, naming the Administrative Agent as mortgagee and loss payee;

 

(e)           the Administrative Agent shall have

received for each Lender copies of the Parent’s, the Borrower’s and each

Domestic Subsidiary’s articles or certificate of incorporation and bylaws (or

comparable constituent documents) and any amendments thereto, certified in each

instance by its respective Secretary or Assistant Secretary or,

 

42

 

alternatively with

respect to each such entity, a certificate by its respective Secretary or

Assistant Secretary stating no amendments have been made to such documents

since September 27, 2001;

 

(f)            the Administrative Agent shall have

received for each Lender copies of resolutions of the Parent’s, of the

Borrower’s and of each Domestic Subsidiary’s Board of Directors authorizing the

execution, delivery and performance of this Agreement and the other Loan

Documents to which it is a party and the consummation of the transactions

contemplated hereby and thereby, together with specimen signatures of the

persons authorized to execute such documents on the Parent’s, the Borrower’s

and each Domestic Subsidiary’s behalf, all certified in each instance by its

respective Secretary or Assistant Secretary;

 

(g)           the Administrative Agent shall have

received for each Lender copies of the certificates of good standing for the

Parent, the Borrower and each Domestic Subsidiary (dated no earlier than 30

days prior to the date hereof) from the office of the secretary of the state of

its incorporation or organization and of each state in which it is qualified to

do business as a foreign corporation or organization and where failure to so

qualify could reasonably be expected to have a Material Adverse Effect;

 

(h)           the Administrative Agent shall have

received for each Lender a list of the Borrower’s Authorized Representatives;

 

(i)            the Administrative Agent shall have

received for itself and for the Lenders the initial fees called for by Section

2.1 hereof and such other closing or upfront fees as have been agreed upon

between the Administrative Agent and the Borrower;

 

(j)            the Administrative Agent shall have

received a date down of that certain mortgagee’s title insurance policy (or a

prepaid binding commitment therefor) issued on September 28, 2001 by First

American Title Insurance Company in form and substance acceptable to the

Administrative Agent insuring the Lien of the Mortgage to be a valid first

priority lien subject to no defects or objections which are unacceptable to the

Administrative Agent;

 

(k)           the Administrative Agent shall have

received a certificate in form and substance acceptable to the Administrative

Agent stating that no change has been made to the Real Property subject to the

Lien on the Mortgage since September 27, 2001;

 

(l)            the Administrative Agent shall have

received a compliance certificate in the form attached hereto as Exhibit E

for the period ended June 30, 2002, to the extent the same has not already

been provided under the Previous Credit Agreement;

 

(m)          the Administrative Agent shall have

received financing statement, tax and judgment lien search results against the

Property of the Parent, the Borrower and each Domestic Subsidiary evidencing

the absence of Liens on its respective Properties except as permitted by

Section 8.8 hereof;

 

43

 

(n)           the Administrative Agent shall have

received for each Lender the favorable written opinion of counsel to the Parent,

the Borrower and each Domestic Subsidiary, in form and substance satisfactory

to the Administrative Agent; and

 

(o)           the Administrative Agent shall have

received for the account of the Lenders such other agreements, instruments,

documents, certificates, and opinions as the Administrative Agent may

reasonably request.

 

SECTION 8.                                                 COVENANTS.

 

Each of the Borrower and, where and to the extent specifically

indicated, the Parent agrees that, so long as any credit is available to or in

use by the Borrower hereunder, except to the extent compliance in any case or

cases is waived in writing pursuant to the terms of Section 13.13 hereof:

 

Section 8.1.      Maintenance of Business.  Each of the Parent and the Borrower shall,

and shall cause each Subsidiary to, preserve and maintain its existence, except

as otherwise provided in Section 8.10(c) hereof.  The Borrower shall, and shall cause each Subsidiary to, preserve

and keep in force and effect all licenses, permits, franchises, approvals,

patents, trademarks, trade names, copyrights and other proprietary rights

necessary to the proper conduct of its business where the failure to do so

could reasonably be expected to have a Material Adverse Effect.

 

Section 8.2.      Maintenance of Properties.  Each of the Parent and the Borrower shall,

and shall cause each Subsidiary to, maintain, preserve and keep its property,

plant and equipment in good repair, working order and condition (ordinary wear

and tear excepted)  and

shall from time to time make all needful and proper repairs, renewals,

replacements, additions and betterments thereto so that at all times the

efficiency thereof shall be fully preserved and maintained, except to the

extent that, in the reasonable business judgment of such Person, any such

Property is no longer necessary for the proper conduct of the business of such

Person.

 

Section 8.3.      Taxes and Assessments.  Each of the Parent and the Borrower shall

duly pay and discharge, and shall cause each Subsidiary to duly pay and

discharge, all taxes, rates, assessments, fees and governmental charges upon or

against it or its Properties, in each case before the same become delinquent

and before penalties accrue thereon, unless and to the extent that the same are

being contested in good faith and by appropriate proceedings which prevent

enforcement of the matter under contest and adequate reserves are provided

therefor.

 

Section 8.4.      Insurance.  Each of the Parent and the Borrower shall

insure and keep insured, and shall cause each Subsidiary to insure and keep

insured, with good and responsible insurance companies all insurable Property

owned by it which is of a character usually insured by Persons similarly

situated and operating like Properties against loss or damage from such hazards

and risks, and in such amounts, as are insured by Persons similarly situated

and operating like Properties; each of the Parent and the Borrower shall

insure, and shall cause each Subsidiary to insure, such other hazards and risks

(including, without limitation, employers’ and public liability risks) with

good and responsible insurance companies as and to the extent usually insured

by Persons similarly situated and conducting similar businesses.  The Parent and the

 

44

 

Borrower shall in any event maintain, and cause each Domestic

Subsidiary to maintain, insurance on the Collateral to the extent required by

the Collateral Documents.  The Borrower

shall, upon the request of the Administrative Agent, furnish to the

Administrative Agent and the Lenders a certificate setting forth in summary

form the nature and extent of the insurance maintained pursuant to this

Section.

 

Section 8.5.      Financial Reports.

Each of the Parent and the Borrower shall, and shall cause each Subsidiary to,

maintain a standard system of accounting in accordance with GAAP and shall

furnish to the Administrative Agent, each Lender and each of their duly

authorized representatives such information respecting the business and

financial condition of the Parent, the Borrower and each Subsidiary as the

Administrative Agent or such Lender may reasonably request; and without any

request, shall furnish to the Administrative Agent and the Lenders:

 

(a)           as soon as available, and in any

event within 50 days after the last day of each fiscal quarter of the Parent, a

copy of the consolidated and consolidating balance sheet of the Parent and the

Subsidiaries as of the last day of such fiscal quarter and the consolidated and

consolidating statements of income, retained earnings and cash flows of the

Parent and the Subsidiaries for the fiscal quarter and for the fiscal

year-to-date period then ended, each in reasonable detail showing in

comparative form the figures for the corresponding date and period in the

previous fiscal year, prepared by the Parent in accordance with GAAP (subject

to the absence of footnote disclosures and year–end audit adjustments)

and certified by its chief financial officer or treasurer or another officer of

the Parent acceptable to the Administrative Agent;

 

(b)           as soon as available, and in any

event within 105 days after the close of each fiscal year of the Parent, a copy

of the consolidated and consolidating balance sheet of the Parent and the

Subsidiaries as of the last day of the fiscal year then ended and the

consolidated and consolidating statements of income, retained earnings and cash

flows of the Parent and the Subsidiaries for the fiscal year then ended, and

accompanying notes thereto, each in reasonable detail showing in comparative

form the figures for the previous fiscal year, accompanied in the case of the

consolidated financial statements by an unqualified opinion of KPMG LLP or

another firm of independent public accountants of recognized standing, selected

by the Parent and reasonably satisfactory to the Administrative Agent and the

Required Lenders, to the effect that the consolidated financial statements have

been prepared in accordance with GAAP and present fairly in accordance with

GAAP the consolidated financial condition of the Parent and the Subsidiaries as

of the close of such fiscal year and the results of their operations and cash

flows for the fiscal year then ended and that an examination of such accounts

in connection with such financial statements has been made in accordance with

generally accepted auditing standards and, accordingly, such examination

included such tests of the accounting records and such other auditing

procedures as were considered necessary in the circumstances;

 

(c)           within the period provided in

subsection (b) above, the written statement of the accountants who

certified the audit report thereby required that in the course of their audit

they have obtained no knowledge of any Default or Event of Default, or, if

 

45

 

such accountants have

obtained knowledge of any such Default or Event of Default, they shall disclose

in such statement the nature and period of the existence thereof;

 

(d)           promptly after receipt thereof, any

additional written reports, management letters or other detailed information

contained in writing concerning significant aspects of the Parent’s or any

Subsidiary’s operations and financial affairs given to it by its independent

public accountants;

 

(e)           promptly after the sending or filing

thereof, copies of each financial statement, report, notice or proxy statement

sent by the Parent or any Subsidiary to its stockholders or other equity

holders, and copies of each regular, periodic or special report, registration

statement or prospectus (including all Form 10-K, Form 10-Q and Form 8-K

reports) filed by the Parent or any Subsidiary with any securities exchange or

the Securities and Exchange Commission or any successor agency;

 

(f)            as soon as available, and in any

event within 90 days after the commencement of each fiscal year of the

Parent, a copy of the Parent’s and the Borrower’s consolidated business plan

for such fiscal year, such business plan to show the Parent’s and the

Borrower’s projected consolidated revenues, expenses and balance sheet on

quarter-by-quarter basis, such business plan to be in reasonable detail

prepared by the Parent and in form satisfactory to the Administrative Agent and

the Required Lenders (which shall include a summary of all assumptions made in

preparing such business plan);

 

(g)           notice of any Change in Control;

 

(h)           promptly after knowledge thereof

shall have come to the attention of any responsible officer of the Parent or

the Borrower, written notice of any threatened or pending litigation or

governmental proceeding or labor controversy against the Parent or any

Subsidiary which, if adversely determined, could reasonably be expected to have

a Material Adverse Effect; and

 

(i)            promptly after knowledge thereof

shall have come to the attention of any responsible officer of the Parent or

the Borrower, written notice of the occurrence of any Default or Event of

Default hereunder.

 

Each of the financial statements furnished to the

Lenders pursuant to subsections (a) and (b) of this Section 8.5 shall

be accompanied by a written certificate in the form attached hereto as

Exhibit E signed by the chief financial officer or treasurer of the

Parent, or another officer of the Parent acceptable to the Administrative

Agent, to the effect that to the best of such officer’s knowledge and belief no

Default or Event of Default has occurred during the period covered by such

statements or, if any such Default or Event of Default has occurred during such

period, setting forth a description of such Default or Event of Default and

specifying the action, if any, taken by the Parent or any Subsidiary to remedy

the same.  Such certificate shall also

set forth the calculations supporting such statements in respect of

Sections 8.22, 8.23, 8.24 and 8.26 of this Agreement.

 

46

 

Section 8.6.      Inspection.  Each of the Parent and the Borrower shall,

and shall cause each Subsidiary to, permit the Administrative Agent, each

Lender, and each of their duly authorized representatives and agents to visit

and inspect any of its Property, corporate books and financial records, to

examine and make copies of its books of accounts and other financial records,

and to discuss its affairs, finances and accounts with, and to be advised as to

the same by, its officers, employees and independent public accountants (and by

this provision the Parent and the Borrower hereby authorize such accountants to

discuss with the Administrative Agent and such Lenders the finances and affairs

of the Parent, the Borrower and each Subsidiary) at such reasonable times and

intervals as the Administrative Agent or any such Lender may designate upon

reasonable prior notice.

 

Section 8.7.      Borrowings and Guaranties.  Neither the Parent nor the Borrower shall,

nor shall they permit any Subsidiary to, issue, incur, assume, create or have

outstanding any Indebtedness for Borrowed Money, or be or become liable as

endorser, guarantor, surety or otherwise for any debt, obligation or

undertaking of any other Person, or otherwise agree to provide funds for

payment of the obligations of another, or supply funds thereto or invest

therein or otherwise assure a creditor of another against loss, or apply for or

become liable to the issuer of a letter of credit which supports an obligation

of another, or subordinate any claim or demand it may have to the claim or

demand of any other Person; provided, however, that the foregoing

shall not restrict nor operate to prevent:

 

(a)           the Obligations of the Parent, the

Borrower and each Domestic Subsidiary  owing to the Administrative Agent and the

Lenders under the Loan Documents;

 

(b)           purchase money indebtedness and

Capitalized Lease Obligations of the Parent and the Subsidiaries in an amount

not to exceed $5,000,000 in the aggregate at any one time outstanding;

 

(c)           obligations of the Parent, the Borrower

or any Subsidiary arising out of interest rate hedging agreements entered into

with financial institutions in the ordinary course of business (including,

without limitation, Hedging Agreements entered into with the Lenders or their

Affiliates);

 

(d)           endorsement of items for deposit or

collection of commercial paper received in the ordinary course of business;

 

(e)           indebtedness from time to time owing

by the Parent to any Subsidiary or by any Subsidiary to the Parent or any other

Subsidiary;

 

(f)            the guarantee of the Obligations by

the Guarantors in favor of the Administrative Agent and the Lenders pursuant to

Section 12 hereof;

 

(g)           Permitted Existing Indebtedness and

any refinancings, refundings, renewals or extensions thereof (which do not

increase the principal amount thereof);

 

47

 

(h)           indebtedness with respect to surety,

appeal and performance bonds obtained by the Parent, the Borrower or any

Subsidiary in the ordinary course of business;

 

(i)            indebtedness incurred by the Parent,

the Borrower or any Subsidiary to the seller in any Permitted cquisition as

part of the consideration therefor or assumed in connection therewith; provided

that such indebtedness (x) of the Borrower and the Subsidiaries does not exceed

$10,000,000 in aggregate principal amount outstanding at any time, and (y) of

the Parent, the Borrower or any Subsidiary is unsecured and is subordinated to

the Obligations on terms reasonably acceptable to the Administrative Agent;

 

(j)            unsecured indebtedness of the Parent

and the Subsidiaries not otherwise permitted by this Section in an amount not

to exceed $5,000,000 in the aggregate at any one time outstanding, provided

that none of such indebtedness may be Indebtedness for Borrowed Money of the

type described in clause (viii) of the definition of such term in Section 5.1

hereof;

 

(k)           indebtedness consisting of advances

of the type described in Section 8.9(l); and

 

(l)            indebtedness incurred by the Parent

which is unsecured and is subordinated to the Obligations on terms reasonably

acceptable to the Administrative Agent.

 

Section 8.8.      Liens.  Neither the Parent nor the Borrower shall,

nor shall they permit any Subsidiary to, create, incur or permit to exist any

Lien of any kind on any Property owned by any such Person; provided, however, that the

foregoing shall not apply to nor operate to prevent:

 

(a)           Liens arising by statute in

connection with worker’s compensation, unemployment insurance, old age

benefits, social security obligations, taxes, assessments, statutory

obligations, governmental charges (including customs duties) or other similar

charges (other then Liens arising under ERISA), good faith cash deposits in

connection with tenders, contracts or leases to which the Parent, the Borrower

or any Subsidiary is a party or other cash deposits required to be made in the

ordinary course of business, provided in each case that the obligation

is not for borrowed money and that the obligation secured is not overdue or, if

overdue, is being contested in good faith by appropriate proceedings which

prevent enforcement of the matter under contest and adequate reserves have been

established therefor;

 

(b)           mechanics’, workmen’s, materialmen’s,

landlords’, carriers’, or other similar Liens arising in the ordinary course of

business with respect to obligations which are not due or which are being

contested in good faith by appropriate proceedings which prevent enforcement of

the matter under contest;

 

48

 

(c)           judgment liens and judicial

attachment liens not constituting an Event of Default under Section 9.1(g)

hereof and the pledge of assets for the purpose of securing an appeal, stay or

discharge in the course of any legal proceeding, provided that the aggregate

amount of liabilities of the Parent and the Subsidiaries (including the

Borrower) secured by a pledge of assets permitted under this subsection,

including interest and penalties thereon, if any, shall not be in excess of

$1,000,000 at any one time outstanding;

 

(d) (i)  Liens on property of the Parent, the

Borrower or any Subsidiary created solely for the purpose of securing

indebtedness permitted by Section 8.7(b) hereof, representing, or incurred

to finance, refinance or refund the purchase price of Property, provided

that no such Lien shall extend to or cover Property of the Parent, the Borrower

or such Subsidiary other than the respective Property so acquired, and the

principal amount of indebtedness secured by any such Lien shall at no time

exceed the original purchase price of such Property, as reduced by repayments

of principal thereon, and (ii) Liens existing on any Property at the time of

the acquisition thereof by the Parent, the Borrower or any Subsidiary and not

created in contemplation of such acquisition;

 

(e)           any interest or title of a lessor or

sublessor under any operating lease;

 

(f)            easements, rights-of-way,

restrictions and other similar encumbrances against real property incurred in

the ordinary course of business which, in the aggregate, are not substantial in

amount and which do not materially detract from the value of the Property

subject thereto or materially interfere with the ordinary conduct of the

business of the Parent, the Borrower or any Subsidiary;

 

(g)           the Liens granted in favor of the

Administrative Agent pursuant to the Collateral Documents;

 

(h)           Permitted Existing Liens and Liens

securing indebtedness replacing or renewing the indebtedness secured by

Permitted Existing Liens, provided that such Liens encumber the same

Property encumbered by the original Liens and no other Property and the amount

of indebtedness secured thereby does not increase;

 

(i)            leases or subleases on fixed assets

or equipment granted to third Persons not interfering in any material respect

with the business of the Parent or any Subsidiary; and

 

(j)            the interests of lessees in

equipment owned by the Borrower or a Subsidiary and leased pursuant to and in

accordance with the provisions of Section 8.9(k) hereof.

 

Section 8.9.      Investments, Acquisitions, Loans and

Advances.  Neither

the Parent nor the Borrower shall, nor shall it permit any Subsidiary to,

directly or indirectly, make, retain or have outstanding any investments

(whether through purchase of stock or obligations or otherwise) in, or loans or

advances to, any other Person, or acquire all or any substantial part of the

assets or

 

49

 

business of any other Person or division thereof; provided, however, that the

foregoing shall not apply to nor operate to prevent:

 

(a)           investments in direct obligations of

the United States of America or of any agency or instrumentality thereof whose

obligations constitute full faith and credit obligations of the United States

of America, provided

that any such obligations shall mature within one year of the date of issuance

thereof;

 

(b)           investments in commercial paper rated

at least P–1 by Moody’s and at least A–1 by S&P maturing within

one year of the date of issuance thereof;

 

(c)           investments in certificates of deposit

issued by any Lender or by any United States commercial bank having capital and

surplus of not less than $100,000,000 which have a maturity of one year or

less;

 

(d)           investments in repurchase obligations

with a term of not more than 7 days for underlying securities of the types

described in subsection (a) above entered into with any bank meeting the

qualifications specified in subsection (c) above, provided all such

agreements require physical delivery of the securities securing such repurchase

agreement, except those delivered through the Federal Reserve Book Entry

System;

 

(e)           investments in money market funds

that invest solely, and which are restricted by their respective charters to

invest solely, in investments of the type described in the immediately

preceding subsections (a), (b), (c), and (d) above;

 

(f)            Permitted Acquisitions;

 

(g)           Permitted Existing Investments, and

any refinancings, renewals, replacements, modifications, restatements or

extensions thereof, in an amount not greater than the amount thereof on the

Closing Date;

 

(h)           the Parent’s and the Borrower’s

investments from time to time in the Subsidiaries, and investments made from

time to time by a Subsidiary in one or more other Subsidiaries;

 

(i)            intercompany advances made from time

to time among the Parent and its Subsidiaries (including the Borrower) or

between Subsidiaries;

 

(j)            investments consisting of loans or

advances made by the Parent, the Borrower and the Subsidiaries to employees of

the Parent, the Borrower or the Subsidiaries, including without limitation open–ended

loans to cover employees’ income taxes on employee–owned stock of the

Parent and the Subsidiaries, in an aggregate amount during any fiscal year of

the Parent not in excess of $2,000,000;

 

(k)           loans (financing equipment sold by

the Borrower or a Subsidiary) or equipment leases to customers doing business

with the Borrower or its Subsidiaries in an

 

50

 

aggregate principal

amount not to exceed $20,000,000 at any one time (with the principal amount of

such leases to be deemed to be equal to the discounted present value, at a

market rate of interest, of the remaining rental payments plus any residual value of

the leased equipment as shown on the Borrower’s financial statements); provided

that, the Borrower or such Subsidiary has filed appropriate

UCC financing statements to protect its interest in all such financed

equipment; and

 

(l)            other investments, loans, and

advances in addition to those otherwise permitted by this Section in an amount

not to exceed $5,000,000 in the aggregate at any one time outstanding.

 

In

determining the amount of investments, acquisitions, loans, and advances

permitted under this Section, investments and acquisitions shall always be

taken at the original cost thereof (regardless of any subsequent appreciation

or depreciation therein), and loans and advances shall be taken at the

principal amount thereof then remaining unpaid.

 

Section 8.10.    Mergers, Consolidations and Sales.  Neither the Parent nor the Borrower shall,

nor shall it permit any Subsidiary to, be a party to any merger or

consolidation, and neither the Borrower nor any Subsidiary shall sell,

transfer, lease or otherwise dispose of all or any part of its Property,

including without limitation stock of any Subsidiary, and including any

disposition of Property as part of a sale and leaseback transaction, or in any

event sell or discount (with or without recourse) any of its notes or accounts

receivable; provided,

however, that this Section shall not apply to nor operate to

prevent:

 

(a)           the sale or lease of inventory in the

ordinary course of business;

 

(b)           the sale, transfer, lease or other

disposition of Property of the Borrower and any Subsidiary to one another in

the ordinary course of its business;

 

(c)           the merger of any Subsidiary (other

than the Borrower) with and into the Borrower or any Subsidiary provided that,

in the case of any merger involving the Borrower, the Borrower is the

corporation surviving the merger;

 

(d)           the sale of delinquent notes or

accounts receivable in the ordinary course of business for purposes of

collection only (and not for the purpose of any bulk sale or securitization

transaction);

 

(e)           the sale, transfer, or other

disposition of any tangible personal property that, in the reasonable business

judgment of the Borrower or such Subsidiary, has become uneconomical, obsolete,

or worn out, and which is disposed of in the ordinary course of business;

 

(f)            the sale, transfer, lease, or other

disposition of Property of the Borrower or any Subsidiary (including any

disposition of Property as part of a sale and leaseback transaction)

aggregating for the Borrower and the Subsidiaries not more than $10,000,000

during the term of this Agreement;

 

51

 

(g)           transfers resulting from casualty or

condemnation of property or assets;

 

(h)           licenses or sublicenses of

intellectual property and general intangibles and licenses, leases or subleases

of other property in the ordinary course of business which do not materially

interfere with the Borrower’s or the relevant Subsidiary’s business including,

without limitation, those trademarks licensed under the terms of a trademark

license agreement between the Borrower and FTD.COM;

 

(i)            the pledge of Collateral pursuant to

the Collateral Documents and the incurrence of any Lien permitted under Section

8.8 hereof; and

 

(j)            the making of investments permitted

under Section 8.9 hereof.

 

So long as no Default or Event of Default has occurred and is continuing

or would arise as a result thereof, upon the written request of the Borrower,

the Administrative Agent shall release its Lien on any Property sold pursuant

to the foregoing provisions, and such Property shall be sold or otherwise

disposed of free and clear of the Lien created by the Collateral Documents and

the obligations under this Agreement (including, without limitation, the

guaranty in Section 12 hereof), and the Administrative Agent shall, at the

expense of the Borrower, take such actions as are appropriate and reasonably

requested by the Borrower in connection therewith.

 

Section 8.11.    Maintenance of Subsidiaries.  Neither the Parent nor the Borrower shall

assign, sell or transfer, nor shall they permit any Subsidiary to issue,

assign, sell or transfer, any shares of capital stock of a Subsidiary; provided,

however, that the foregoing shall not operate to prevent

(a) Liens on the capital stock of Subsidiaries granted to the

Administrative Agent pursuant to the Collateral Documents, (b) the issuance,

sale and transfer to any person of any shares of capital stock of a Subsidiary

solely for the purpose of qualifying, and to the extent legally necessary to

qualify, such person as a director of such Subsidiary, and (c) any

transaction permitted by Section 8.10(c) or (i) above.

 

Section 8.12.    Dividends and Certain Other Restricted

Payments. 

The Parent shall not, nor shall it permit the Borrower or any Subsidiary

to, (x) declare or pay any dividends on or make any other distributions in

respect of any class or series of its capital stock or other equity interests

or (y) directly or indirectly purchase, redeem, or otherwise acquire or

retire any of its capital stock or other equity interests or any warrants or

options to purchase any such capital stock or equity interests or

(z) directly or indirectly pay management or consulting or similar fees to

its Affiliates (such payments or actions made or taken by any Person,

collectively, “Restricted Payments”); provided, however, that the foregoing

shall not operate to prevent:

 

(a)           the making of dividends or

distributions by any Wholly–owned Subsidiary to its parent corporation;

 

(b)           management fees in an amount not to

exceed $2,000,000 in any one fiscal year pursuant to the Management Consulting

Services Agreement dated December 18, 1994 among the Parent, Perry Principals,

L.L.C., Bain Capital, Inc. and Fleet Growth Resources, Inc. (the “Management

Consulting Services Agreement”), provided, however,

 

52

 

that if the Parent or the

Borrower is prohibited from paying all or any portion of such management fees

in any particular fiscal year, and such prohibition ceases to be applicable for

any reason, then the portion of such management fees which was permitted to be

paid pursuant to this Agreement but which the Parent or the Borrower was

otherwise prohibited from paying may be paid in the immediately following

fiscal year, but not thereafter;

 

(c)           the reimbursement of Perry

Principals, L.L.C., Bain Capital, Inc. and Fleet Growth Resources, Inc. or any

of their respective successors or assigns for their reasonable out–of–pocket

expenses permitted pursuant to the Management Consulting Services Agreement not

to exceed $300,000 in any one fiscal year incurred by them in connection with

performing management services to the Parent, the Borrower and the

Subsidiaries;

 

d)            additional dividends and distributions which do not

exceed, for the period commencing with the Parent’s fiscal year beginning

July 1, 2002, and ending on the last day of the last quarter ending prior

to such Restricted Payment, the sum of (i) fifty percent (50.0%) of Net

Income for such period (or, if Net Income for such period is a deficit, less

100% of such deficit), and (ii) the aggregate Net Cash Proceeds from the

sale or issuance of equity interests (other than Disqualified Stock) of the

Parent for such period;

 

(e)           the repurchase or redemption of

capital stock or options to purchase capital stock of the Parent and the

Subsidiaries held by employees or former employees of the Parent and the

Subsidiaries in an aggregate amount not to exceed (i) in any fiscal year

(w) $5,000,000, plus (x) the proceeds received by the Borrower or the

Parent from the sale of any management or employee capital stock or other rights

during such fiscal year, and (ii) during the term of this Agreement, (y)

$10,000,000, plus (z) the proceeds received by the Borrower or the Parent

from the sale of any management or employee capital stock or other rights

during the term of this Agreement; and

 

(f)            the repurchase or redemption of

capital stock or options to purchase capital stock of the Parent, other than

repurchases or redemptions pursuant to the immediately preceding clause (e), in

an aggregate amount not in excess of $20,000,000 during the term of this

Agreement;

 

provided,

however, that the Restricted Payments described in

clauses (b), (c), (d), (e) and (f) above shall not be permitted if either

an Event of Default or a Default shall have occurred and be continuing at the

date of declaration or payment thereof or would result therefrom.

 

Section 8.13.    ERISA.  Each of the Parent and the Borrower shall,

and shall cause each Subsidiary to, promptly pay and discharge all obligations

and liabilities arising under ERISA of a character which if unpaid or

unperformed could reasonably be expected to result in the imposition of a Lien

against any of its Property.  Each of

the Parent and the Borrower shall, and shall cause each Subsidiary to, promptly

notify the Administrative Agent and each Lender of:  (a) the occurrence of any reportable event (as defined in

ERISA) with respect to a Plan,

 

53

 

(b) receipt of any

notice from the PBGC of its intention to seek termination of any Plan or

appointment of a trustee therefor, (c) its intention to terminate or

withdraw from any Plan, and (d) the occurrence of any event with respect

to any Plan which would result in the incurrence by the Parent, the Borrower or

any Subsidiary or any member of the Controlled Group of any material liability,

fine or penalty, or any material increase in the contingent liability of the

Parent, the Borrower or any Subsidiary or any member of the Controlled Group

with respect to any post-retirement Welfare Plan benefit.

 

Section 8.14.    Compliance with Laws.  (a)  Each of the Parent and the

Borrower shall, and shall cause each Subsidiary to, comply in all respects with

the requirements of all federal, state and local laws, rules, regulations,

ordinances and orders applicable to or pertaining to its Property or business

operations, where any such non-compliance, individually or in the aggregate,

could reasonably be expected to have a Material Adverse Effect or result in a

Lien upon any of its Property.

 

(b)           Without limiting the agreements set

forth in Section 8.14(a) above, each of the Parent and the Borrower shall

at all times, and shall cause each Subsidiary to at all times, do the following

to the extent the failure to do so could reasonably be expected to have a

Material Adverse Effect: 

(i) comply in all material respects with, and maintain each of the

Premises in compliance in all material respects with, all applicable

Environmental Laws; (ii) require that each tenant and subtenant, if any,

of any of the Premises or any part thereof comply in all material respects with

all applicable Environmental Laws; (iii) obtain and maintain in full force

and effect all material governmental approvals required by any applicable

Environmental Law for operations at each of the Premises; (iv) cure any

material violation by it or at any of the Premises of applicable Environmental

Laws; (v) not allow the operation at any of the Premises of any

(1) landfill or dump or (2) hazardous waste treatment, storage, or

disposal facility or solid waste disposal facility as defined pursuant to RCRA

or any comparable state law; (vi) not manufacture, use, generate,

transport, treat, store, release, dispose or handle any Hazardous Material at

any of the Premises except in the ordinary course of its business and in material

compliance with Environmental Law; (vii) within 10 Business Days

notify the Administrative Agent in writing of and provide any reasonably

requested documents upon learning of any of the following in connection with

the Borrower or any Subsidiary or any of the Premises: (1) any material

liability for response or corrective action, natural resource damage or other

harm pursuant to CERCLA, RCRA or any comparable state law; (2) any

material Environmental Claim; (3) any material violation of an Environmental

Law or material release, threatened release or disposal of a Hazardous

Material; (4) any material restriction on the ownership, occupancy, use or

transferability arising pursuant to any (x) release, threatened release or

disposal of a Hazardous Substance or (y) Environmental Law; or (5) any

environmental, natural resource, health or safety condition, which could

reasonably be expected to have a Material Adverse Effect; (viii) conduct

at its expense any investigation, study, sampling, testing, abatement, cleanup,

removal, remediation or other response action necessary to remove, remediate,

clean up or abate any material release, threatened release or disposal of a

Hazardous Material as required by any applicable Environmental Law,

(ix) abide by and observe any material restrictions on the use of the

Premises imposed by any governmental authority as set forth in a deed or other

instrument affecting the Parent’s, the Borrower’s or any Subsidiary’s interest

therein; (x) promptly provide or otherwise make available to the

Administrative Agent any reasonably

 

54

 

requested non-privileged environmental record

concerning the Premises which the Parent, the Borrower or any Subsidiary

possesses or can reasonably obtain; and (xi) perform, satisfy, and

implement any material operation or maintenance actions required by any

Environmental Law, or included in any no further action letter or covenant not

to sue issued by any governmental authority under any Environmental Law.

 

Section 8.15.    Burdensome Contracts With Affiliates.  Neither the Parent nor the Borrower shall,

nor shall it permit any Subsidiary to, enter into any contract, agreement or

business arrangement with any of its Affiliates on terms and conditions which

at the time such contract, agreement or arrangement is entered into, are less

favorable to the Parent, the Borrower or such other Subsidiary than would be

usual and customary in similar contracts, agreements or business arrangements

entered into at such time between Persons not affiliated with each other.

 

Section 8.16.    No Changes in Fiscal Year.  Neither the Parent nor the Borrower shall,

nor shall they permit any Subsidiary to, change its fiscal year from its

present basis.

 

Section 8.17.    Formation of Subsidiaries.

Except for existing Subsidiaries designated on Schedule 6.2  hereto

and Subsidiaries formed or acquired after the date of this Agreement in

connection with a Permitted Acquisition, neither the Parent nor the Borrower

shall, nor shall it permit any Subsidiary to, form or acquire any other

Subsidiaries without the prior written consent of the Required Lenders.  In the event any Subsidiary is formed or

acquired in connection with a Permitted Acquisition, the Borrower shall give

the Administrative Agent and the Lenders prior written notice of any such event

and, immediately after giving effect thereto, Schedule 6.2 of this

Agreement shall be deemed amended to include reference to such Subsidiary.

 

Section 8.18.    Change in the Nature of Business.  Neither the Parent nor the Parent, the

Borrower shall, nor shall it permit any Subsidiary to, engage in any business

or activity if as a result the general nature of the business of the Parent,

the Borrower and the Subsidiaries taken as a whole would be changed in any

material respect from the general nature of the business engaged in by such

entities taken as a whole as of the Closing Date.

 

Section 8.19.    Use of Loan Proceeds.  The Borrower shall use the credit extended

under this Agreement solely for the purposes set forth in, or otherwise

permitted by, Section 6.4 hereof.

 

Section 8.20.    Limitations on Subsidiary Distributions and

Certain Other Restrictions.  Except as provided herein, neither the Parent nor the Borrower

shall, nor shall they permit any Subsidiary to, directly or indirectly to

create or otherwise cause or suffer to exist or become effective any consensual

encumbrance or restriction of any kind on the ability of the Parent or any

Subsidiary to:  (a) guarantee the

Obligations as required by Sections 4 and 12 hereof; (b) in the case

of any Subsidiary (including the Borrower), pay dividends or make any other

distribution on any of such Subsidiary’s capital stock or other equity

interests owned by the Parent, the Borrower or any other Subsidiary; (c) pay

any indebtedness owed to the Parent, the Borrower or any other Subsidiary;

(d) make loans or advances to the Parent, the Borrower or any other

Subsidiary; or (e) transfer any of its Property to the Parent, the

Borrower or any other Subsidiary.

 

55

 

Section 8.21.    Subordinated Debt.  Neither the Parent nor the Borrower shall,

nor shall they permit any Subsidiary to, amend or modify any of the terms or

conditions relating to any Subordinated Debt or make any voluntary prepayment

thereof or effect any voluntary redemption thereof or make any payment on

account of Subordinated Debt which is prohibited under the terms of any

instrument or agreement subordinating the same to the Obligations.

 

Section 8.22.    Total Funded Debt/EBITDA Ratio.  The Parent shall not permit the Total Funded

Debt/EBITDA Ratio as of the last day of any fiscal quarter of the Parent to be

greater than 2.50 to 1.0.

 

Section 8.23.    Net Worth.  The Parent shall, at all times, maintain Net

Worth of the Parent and the Subsidiaries determined on a consolidated basis in

an amount not less than the sum of (a) $90,000,000, plus (b) 50% of Net

Income for each fiscal quarter of the Parent ending on and after

September 30, 2002, for which such Net Income is a positive amount (i.e., there

shall be no reduction to the amount of Net Worth required to be maintained

hereunder for any fiscal year in which Net Income is less than zero) plus

(c) 100% of the Net Cash Proceeds from the Parent’s or any of the Subsidiaries’

issuance of new equity securities pursuant to Section 1.13(b)(ii) hereof.

 

Section 8.24.    Fixed Charge Coverage Ratio.  As of the last day of each fiscal quarter of

the Parent, the Parent shall maintain a ratio of (a) EBITDA less

Capital Expenditures for the four fiscal quarters of the Parent and the

Subsidiaries then ended to (b) Fixed Charges for the same four fiscal

quarters then ended of not less than 2.0 to 1.0.

 

Section 8.25.    Interest Rate Protection.  The Borrower will hedge its interest rate

risk on at least $20,000,000 of the principal amount of the Revolving Loans

outstanding through the use of Hedging Agreements to which it currently is a

party or one or more other interest rate swaps, interest rate caps, interest

rate collars or other recognized interest rate hedging arrangements, with all

of the foregoing to effectively limit the amount of interest that the Borrower

must pay on notional amounts of not less than such portion of the Revolving

Loans to not more than a rate acceptable to the Administrative Agent in its

discretion for a period ending no earlier than one calendar year after the

Closing Date and to be with the Lenders, their respective Affiliates or with

other parties reasonably acceptable to the Administrative Agent.

 

Section 8.26.    Rentals.  Neither the Parent nor the Borrower shall,

nor shall they permit any Subsidiary to, create, incur or suffer to exist

obligations for fixed rentals or other consideration payable under Operating

Leases in excess of $10,000,000 payable during any fiscal year in the aggregate

for the Parent, the Borrower and the Subsidiaries.

 

SECTION 9.                                                 EVENTS OF DEFAULT AND REMEDIES.

 

Section 9.1.      Events of Default.  Any one or more of the following shall constitute an “Event of

Default” hereunder:

 

(a)           default in the payment when due of

all or any part of the principal of or, for a period of three Business Days or

more, any interest on any Note (whether at the stated maturity thereof or at

any other time provided for in this Agreement) or of any

 

56

 

Reimbursement Obligation

or of any fee or other Obligation payable hereunder or under any other Loan

Document;

 

(b)           default in the observance or

performance of any covenant set forth in Sections 8.1, 8.7, 8.8, or 8.9

(subject in each case to the provisions of clause (c) immediately following),

or in Sections 8.5, 8.10, 8.11, 8.12, 8.18, 8.19, 8.20, 8.21, 8.22, 8.23, 8.24,

8.25 or 8.26 hereof or of any provision in any Loan Document dealing with the

use, disposition or remittance of the proceeds of Collateral or requiring the

maintenance of insurance thereon;

 

(c)           default in the observance or

performance of (1) any requirement set forth in the second sentence of Section

8.1 hereof which can be cured after a temporary lapse if such lapse does not

exceed 30 days and would not reasonably be expected to have a Material Adverse

Effect, (2) any violation of Section 8.7 or 8.8 hereof resulting from an

involuntary or immaterial incurrence of indebtedness or of a Lien, as the case

may be, (3) any violation of any of clauses (a), (b), (c), (d), (e), (g), (h),

(i), (k) or (l) of Section 8.9 hereof resulting from an involuntary or

immaterial investment, or (4) any other provision hereof or of any other Loan

Document which, in the case of any of the defaults described in subclauses (1),

(2), (3) or (4) of this clause (c), is not remedied within 30 days after

the earlier of (i) the date on which such failure shall first become known

to any officer of the Parent or the Borrower or (ii) written notice

thereof is given to the Borrower by the Administrative Agent;

 

(d)           any representation or warranty made

herein or in any other Loan Document or in any certificate furnished to the

Administrative Agent or the Lenders pursuant hereto or thereto or in connection

with any transaction contemplated hereby or thereby proves untrue in any

material respect as of the date of the issuance or making or deemed making

thereof;

 

(e)           any event occurs or condition exists

(other than those described in subsections (a) through (d) above) which is

specified as an event of default under any of the other Loan Documents, or any

of the Loan Documents shall for any reason not be or shall cease to be in full

force and effect or is declared to be null and void, or any of the Collateral

Documents shall for any reason fail to create a valid and perfected first

priority Lien in favor of the Administrative Agent in any Collateral purported

to be covered thereby except as expressly permitted by the terms thereof, or

the Parent, the Borrower any other Subsidiary takes any action for the purpose

of terminating, repudiating or rescinding any Loan Document executed by it or

any of its obligations thereunder;

 

(f)            default shall occur under any

Indebtedness for Borrowed Money issued, assumed or guaranteed by the Parent,

the Borrower or any Subsidiary aggregating in excess of $5,000,000, or under

any indenture, agreement or other instrument under which the same may be

issued, and such default shall continue for a period of time sufficient to permit

the acceleration of the maturity of any such Indebtedness for Borrowed Money

(whether or not such maturity is in fact accelerated), or any such Indebtedness

for

 

57

 

Borrowed Money shall not

be paid when due (whether by demand, lapse of time, acceleration or otherwise);

 

(g)           any judgment or judgments, writ or

writs or warrant or warrants of attachment, or any similar process or processes

shall be entered or filed against the Parent, the Borrower or any other

Subsidiary, or against any of its Property, in an aggregate amount in excess of

$2,500,000 in excess of any applicable insurance coverage (provided the insurer

has not contested its liability therefor), and which remains undischarged,

unvacated, unbonded or unstayed for a period of 30 days;

 

(h)           the Parent or the Borrower or any

Subsidiary, or any member of its Controlled Group, shall fail to pay when due

an amount or amounts aggregating in excess of $1,000,000 which it shall have

become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or

notice of intent to terminate a Plan or Plans having aggregate Unfunded Vested

Liabilities in excess of $1,000,000 (collectively, a “Material Plan”) shall be

filed under Title IV of ERISA by the Parent, the Borrower or any

Subsidiary, or any other member of its Controlled Group, any plan administrator

or any combination of the foregoing; or the PBGC shall institute proceedings

under Title IV of ERISA to terminate or to cause a trustee to be appointed

to administer any Material Plan or a proceeding shall be instituted by a

fiduciary of any Material Plan against the Parent, the Borrower or any

Subsidiary, or any member of its Controlled Group, to enforce Section 515

or 4219(c)(5) of ERISA and such proceeding shall not have been dismissed within

30 days thereafter; or a condition shall exist by reason of which the PBGC

would be entitled to obtain a decree adjudicating that any Material Plan must

be terminated;

 

(i)            the Parent, the Borrower or any

other Subsidiary shall (i) have entered involuntarily against it an order

for relief under the United States Bankruptcy Code, as amended, (ii) not

pay, or admit in writing its inability to pay, its debts generally as they

become due, (iii) make an assignment for the benefit of creditors,

(iv) apply for, seek, consent to, or acquiesce in, the appointment of a

receiver, custodian, trustee, examiner, liquidator or similar official for it

or any substantial part of its Property, (v) institute any proceeding

seeking to have entered against it an order for relief under the United States

Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking

dissolution, winding up, liquidation, reorganization, arrangement, adjustment

or composition of it or its debts under any law relating to bankruptcy,

insolvency or reorganization or relief of debtors or fail to file an answer or

other pleading denying the material allegations of any such proceeding filed

against it, (vi) take any corporate action in furtherance of any matter

described in parts (i) through (v) above, or (vii) fail to contest in

good faith any appointment or proceeding described in Section 9.1(j)

hereof; or

 

(j)            a custodian, receiver, trustee,

examiner, liquidator or similar official shall be appointed for the Parent, the

Borrower or any Subsidiary, or any substantial part of any of its Property, or

a proceeding described in Section 9.1(i)(v) shall be instituted against

the Parent, the Borrower or any Subsidiary, and such appointment continues

undischarged or such proceeding continues undismissed or unstayed for a period

of 60 days.

 

58

 

Section 9.2.      Non-Bankruptcy Defaults.  When any Event of Default other than those

described in subsection (i) or (j) of Section 9.1 hereof has occurred

and is continuing, the Administrative Agent shall, by written notice to the

Borrower: (a) if so directed by the Required Lenders, terminate the

remaining Commitments and all other obligations of the Lenders hereunder on the

date stated in such notice (which may be the date thereof); (b) if so

directed by the Required Lenders, declare the principal of and the accrued

interest on all outstanding Notes to be forthwith due and payable and thereupon

all outstanding Notes, including both principal and interest thereon, shall be

and become immediately due and payable together with all other amounts payable

under the Loan Documents without further demand, presentment, protest or notice

of any kind; and (c) if so directed by the Required Lenders, demand that

the Borrower immediately pay to the Administrative Agent the full amount then

available for drawing under each or any Letter of Credit, and the Borrower

agrees to immediately make such payment and acknowledges and agrees that the

Lenders would not have an adequate remedy at law for failure by the Borrower to

honor any such demand and that the Administrative Agent, for the benefit of the

Lenders, shall have the right to require the Borrower to specifically perform

such undertaking whether or not any drawings or other demands for payment have

been made under any Letter of Credit. 

The Administrative Agent, after giving notice to the Borrower pursuant

to Section 9.1(c) or this Section 9.2, shall also promptly send a

copy of such notice to the other Lenders, but the failure to do so shall not

impair or annul the effect of such notice.

 

Section 9.3.      Bankruptcy Defaults.  When any Event of Default described in

subsections (i) or (j) of Section 9.1 hereof has occurred and is

continuing, then all outstanding Notes shall immediately become due and payable

together with all other amounts payable under the Loan Documents without

presentment, demand, protest or notice of any kind, the obligation of the

Lenders to extend further credit pursuant to any of the terms hereof shall

immediately terminate and the Borrower shall immediately pay to the

Administrative Agent the full amount then available for drawing under all

outstanding Letters of Credit, the Borrower acknowledging and agreeing that the

Lenders would not have an adequate remedy at law for failure by the Borrower to

honor any such demand and that the Lenders, and the Administrative Agent on

their behalf, shall have the right to require the Borrower to specifically

perform such undertaking whether or not any draws or other demands for payment

have been made under any of the Letters of Credit.

 

Section 9.4.      Collateral for Undrawn Letters of Credit.  (a) If the prepayment of the amount

available for drawing under any or all outstanding Letters of Credit is required

under Section 1.9(b) or under Section 9.2 or 9.3 above, the Borrower

shall forthwith pay the amount required to be so prepaid, to be held by the

Administrative Agent as provided in subsection (b) below.

 

(b)           All amounts prepaid pursuant to

subsection (a) above shall be held by the Administrative Agent in one or

more separate collateral accounts (each such account, and the credit balances,

properties and any investments from time to time held therein, and any

substitutions for such account, any certificate of deposit or other instrument

evidencing any of the foregoing and all proceeds of and earnings on any of the

foregoing being collectively called the “Collateral Account”) as security for, and

for application by the Administrative Agent (to the extent available) to, the

reimbursement of any payment under any Letter of Credit then or

 

59

 

thereafter made by the Administrative Agent, and to

the payment of the unpaid balance of any Loans and all other Obligations.  The Collateral Account shall be held in the

name of and subject to the exclusive dominion and control of the Administrative

Agent for the benefit of the Administrative Agent, the Lenders and the L/C

Issuer.  If and when requested by the

Borrower, the Administrative Agent shall invest funds held in the Collateral

Account from time to time in direct obligations of, or obligations the

principal of and interest on which are unconditionally guaranteed by, the

United States of America with a remaining maturity of one year or less, provided

that the Administrative Agent is irrevocably authorized to sell investments

held in the Collateral Account when and as required to make payments out of the

Collateral Account for application to amounts due and owing from the Borrower

to the L/C Issuer, the Administrative Agent or the Lenders; provided,

however, that if (i) the Borrower shall have made payment of

all such obligations referred to in subsection (a) above, (ii) all

relevant preference or other disgorgement periods relating to the receipt of

such payments have passed, and (iii) no Letters of Credit, Commitments,

Loans or other Obligations remain outstanding hereunder, then the

Administrative Agent shall promptly release to the Borrower any remaining amounts

held in the Collateral Account.

 

Section 9.5.      Notice of Default.  The Administrative Agent shall give notice

to the Borrower under Section 9.1(c) hereof promptly upon being requested

to do so by any Lender and shall thereupon notify all the Lenders thereof.

 

Section 9.6.      Expenses.  The Borrower agrees to pay to the

Administrative Agent and each Lender, and any other holder of any Note

outstanding hereunder, all expenses reasonably incurred or paid by the

Administrative Agent and such Lender or any such holder, including reasonable

attorneys’ fees (including allocated costs of in–house counsel) and court

costs, in connection with any Default or Event of Default by the Borrower

hereunder or in connection with the enforcement of any of the Loan Documents

(including all such costs and expenses arising in connection with a proceeding

under the United States Bankruptcy Code).

 

SECTION 10.                                           CHANGE IN CIRCUMSTANCES.

 

Section 10.1.    Change of Law.  Notwithstanding any other provisions of this

Agreement or any Note, if at any time any change in applicable law or

regulation or in the interpretation thereof makes it unlawful for any Lender to

make or continue to maintain any Eurodollar Loans or to perform its obligations

as contemplated hereby, such Lender shall promptly give notice thereof to the

Borrower and such Lender’s obligations to make or maintain Eurodollar Loans

under this Agreement shall be suspended until it is no longer unlawful for such

Lender to make or maintain Eurodollar Loans. 

The Borrower shall prepay on demand the outstanding principal amount of

any such affected Eurodollar Loans, together with all interest accrued thereon

and all other amounts then due and payable to such Lender under this Agreement;

provided,

however, subject to all of the terms and conditions of this

Agreement, the Borrower may then elect to borrow the principal amount of the

affected Eurodollar Loans from such Lender by means of Base Rate Loans from

such Lender, which Base Rate Loans shall not be made ratably by the Lenders but

only from such affected Lender.

 

60

 

Section 10.2.    Unavailability of Deposits or Inability to

Ascertain, or Inadequacy of, LIBOR.  If on or prior to the first day of any

Interest Period for any Borrowing of Eurodollar Loans:

 

(a)           the Administrative Agent determines

that deposits in U.S. Dollars (in the applicable amounts) are not being offered

to it in the interbank eurodollar market for such Interest Period, or that by

reason of circumstances affecting the interbank eurodollar market adequate and

reasonable means do not exist for ascertaining the applicable LIBOR, or

 

(b)           the Required Lenders advise the

Administrative Agent that (i) LIBOR as determined by the Administrative Agent

will not adequately and fairly reflect the cost to such Lenders of funding

their Eurodollar Loans for such Interest Period or (ii) that the making or

funding of Eurodollar Loans become impracticable,

 

then

the Administrative Agent shall forthwith give notice thereof to the Borrower

and the Lenders, whereupon until the Administrative Agent notifies the Borrower

that the circumstances giving rise to such suspension no longer exist, the

obligations of the Lenders to make Eurodollar Loans shall be suspended.

 

Section 10.3.    Increased Cost and Reduced Return.  (a) If, on or after the date hereof,

the adoption of any applicable law, rule or regulation, or any change therein,

or any change in the interpretation or administration thereof by any

governmental authority, central bank or comparable agency charged with the

interpretation or administration thereof, or compliance by any Lender (or its

Lending Office) with any request or directive (whether or not having the force

of law) of any such authority, central bank or comparable agency:

 

(i)            shall subject any Lender (or its

Lending Office) to any tax, duty or other charge with respect to its Fixed Rate

Loans, its Notes, its Letter(s) of Credit, or its participation in any thereof,

any Reimbursement Obligations owed to it or its obligation to make Fixed Rate Loans,

issue a Letter of Credit, or to participate therein, or shall change the basis

of taxation of payments to any Lender (or its Lending Office) of the principal

of or interest on its Fixed Rate Loans, Letter(s) of Credit, or participations

therein or any other amounts due under this Agreement or any other Loan

Document in respect of its Fixed Rate Loans, Letter(s) of Credit, any

participation therein, any Reimbursement Obligations owed to it, or its

obligation to make Fixed Rate Loans, or issue a Letter of Credit, or acquire

participations therein (except for changes in the rate of tax on the overall

net income of such Lender or its Lending Office imposed by the jurisdiction in

which such Lender’s principal executive office or Lending Office is located);

or

 

(ii)           shall impose, modify or deem

applicable any reserve, special deposit or similar requirement (including,

without limitation, any such requirement imposed by the Board of Governors of

the Federal Reserve System, but excluding with respect to any Fixed Rate Loans

any such requirement included in an applicable Fixed Rate Reserve Percentage)

against assets of, deposits with or for the account of, or credit extended by,

 

61

 

any Lender (or its

Lending Office) or shall impose on any Lender (or its Lending Office) or on the

interbank market any other condition affecting its Fixed Rate Loans, its Notes,

its Letter(s) of Credit, or its participation in any thereof, any Reimbursement

Obligation owed to it, or its obligation to make Fixed Rate Loans, or to issue

a Letter of Credit, or to participate therein;

 

and

the result of any of the foregoing is to increase the cost to such Lender (or

its Lending Office) of making or maintaining any Fixed Rate Loan, issuing or

maintaining a Letter of Credit, or participating therein, or to reduce the

amount of any sum received or receivable by such Lender (or its Lending Office)

under this Agreement or under any other Loan Document with respect thereto, by

an amount deemed by such Lender to be material, then, within 15 days after

demand by such Lender (with a copy to the Administrative Agent), the Borrower

shall be obligated to pay to such Lender such additional amount or amounts as

will compensate such Lender for such increased cost or reduction.

 

(b)           If, after the date hereof, any Lender

or the Administrative Agent shall have determined that the adoption of any

applicable law, rule or regulation regarding capital adequacy, or any change

therein, or any change in the interpretation or administration thereof by any

governmental authority, central bank or comparable agency charged with the

interpretation or administration thereof, or compliance by any Lender (or its

Lending Office) with any request or directive regarding capital adequacy

(whether or not having the force of law) of any such authority, central bank or

comparable agency, has had the effect of reducing the rate of return on such

Lender’s capital as a consequence of its obligations hereunder to a level below

that which such Lender could have achieved but for such adoption, change or

compliance (taking into consideration such Lender’s policies with respect to

capital adequacy) by an amount deemed by such Lender to be material, then from

time to time, within 15 days after demand by such Lender (with a copy to

the Administrative Agent), the Borrower shall pay to such Lender such

additional amount or amounts as will compensate such Lender for such reduction.

 

(c)           A certificate of a Lender claiming

compensation under this Section 10.3 and setting forth the additional

amount or amounts to be paid to it hereunder shall be conclusive if reasonably

determined.  In determining such amount,

such Lender may use any reasonable averaging and attribution methods.

 

Section 10.4.    Lending Offices.  Each Lender may, at its option, elect to

make its Loans hereunder at the branch, office or affiliate specified on the

appropriate signature page hereof (each a “Lending Office”) for each type of Loan

available hereunder or at such other of its branches, offices or affiliates as

it may from time to time elect and designate in a written notice to the

Borrower and the Administrative Agent. 

To the extent reasonably possible, a Lender shall designate an alternative

branch or funding office with respect to its Eurodollar Loans to reduce any

liability of the Borrower to such Lender under Section 10.3 hereof or to

avoid the unavailability of Eurodollar Loans under Section 10.2 hereof, so

long as such designation is not otherwise disadvantageous to the Lender.

 

Section 10.5.    Discretion of Lender as to Manner of Funding.  Notwithstanding any other provision of this

Agreement, each Lender shall be entitled to fund and maintain its funding of

all

 

62

 

or any part of its Loans

in any manner it sees fit, it being understood, however, that for the purposes

of this Agreement all determinations hereunder, including, without limitation,

under Section 1.12 hereof, with respect to Eurodollar Loans shall be made as if

each Lender had actually funded and maintained each Eurodollar Loan through the

purchase of deposits in the interbank eurodollar market having a maturity

corresponding to such Loan’s Interest Period and bearing an interest rate equal

to LIBOR for such Interest Period.

 

SECTION 11.                                           THE ADMINISTRATIVE AGENT.

 

Section 11.1.    Appointment and Authorization of

Administrative Agent. 

Each Lender hereby appoints Harris Trust and Savings Bank as the

Administrative Agent under the Loan Documents and hereby authorizes the

Administrative Agent to take such action as Administrative Agent on its behalf

and to exercise such powers under the Loan Documents as are delegated to the

Administrative Agent by the terms thereof, together with such powers as are

reasonably incidental thereto.  The

Lenders expressly agree that the Administrative Agent is not acting as a

fiduciary of the Lenders in respect of the Loan Documents, the Borrower or any

Guarantor or otherwise, and nothing herein or in any of the other Loan

Documents shall result in any duties or obligations on the Administrative Agent

or any of the Lenders except as expressly set forth herein.

 

Section 11.2.    Administrative Agent and its Affiliates.  The Administrative Agent shall have the same

rights and powers under this Agreement and the other Loan Documents as any

other Lender and may exercise or refrain from exercising such rights and power

as though it were not the Administrative Agent, and the Administrative Agent

and its affiliates may accept deposits from, lend money to, and generally

engage in any kind of business with the Borrower or any Affiliate of the

Borrower as if it were not the Administrative Agent under the Loan

Documents.  The term “Lender”

as used herein and in all other Loan Documents, unless the context otherwise

clearly requires, includes the Administrative Agent in its individual capacity

as a Lender.  References in

Section 1 hereof to the Administrative Agent’s Loans, or to the amount

owing to the Administrative Agent for which an interest rate is being determined,

refer to the Administrative Agent in its individual capacity as a Lender.

 

Section 11.3.    Action by Administrative Agent.  If the Administrative Agent receives from

the Parent or the Borrower a written notice of an Event of Default pursuant to

Section 8.5(i) hereof, the Administrative Agent shall promptly give each

of the Lenders written notice thereof. 

The obligations of the Administrative Agent under the Loan Documents are

only those expressly set forth therein. 

Without limiting the generality of the foregoing, the Administrative

Agent shall not be required to take any action hereunder with respect to any

Default or Event of Default, except as expressly provided in Sections 9.2

and 9.5.  Unless and until the Required

Lenders give such direction, the Administrative Agent may (but shall not be

obligated to) take or refrain from taking such actions as it deems appropriate

and in the best interest of all the Lenders. 

In no event, however, shall the Administrative Agent be required to take

any action in violation of applicable law or of any provision of any Loan

Document, and the Administrative Agent shall in all cases be fully justified in

failing or refusing to act hereunder or under any other Loan Document unless it

first receives any further assurances of its indemnification from the Lenders

that it may require, including prepayment of any related expenses and any other

protection it

 

63

 

requires against any and all costs, expense and

liability which may be incurred by it by reason of taking or continuing to take

any such action.  The Administrative

Agent shall be entitled to assume that no Default or Event of Default exists

unless notified in writing to the contrary by a Lender or the Parent or the Borrower.  In all cases in which the Loan Documents do

not require the Administrative Agent to take specific action, the

Administrative Agent shall be fully justified in using its discretion in

failing to take or in taking any action thereunder.  Any instructions of the Required Lenders, or of any other group

of Lenders called for under the specific provisions of the Loan Documents,

shall be binding upon all the Lenders and the holders of the Obligations.

 

Section 11.4.    Consultation with Experts.  The Administrative Agent may consult with

legal counsel, independent public accountants and other experts selected by it

and shall not be liable for any action taken or omitted to be taken by it in

good faith in accordance with the advice of such counsel, accountants or

experts.

 

Section 11.5.    Liability of Administrative Agent; Credit

Decision.  Neither

the Administrative Agent nor any of its directors, officers, agents, or

employees shall be liable for any action taken or not taken by it in connection

with the Loan Documents:  (a) with

the consent or at the request of the Required Lenders or (b) in the

absence of its own gross negligence or willful misconduct.  Neither the Administrative Agent nor any of

its directors, officers, agents or employees shall be responsible for or have

any duty to ascertain, inquire into or verify: 

(i) any statement, warranty or representation made in connection

with this Agreement, any other Loan Document or any Credit Event; (ii) the

performance or observance of any of the covenants or agreements of the Parent,

the Borrower or any other Subsidiary contained herein or in any other Loan

Document; (iii) the satisfaction of any condition specified in

Section 7 hereof, except receipt of items required to be delivered to the

Administrative Agent; or (iv) the validity, effectiveness, genuineness,

enforceability, perfection, value, worth or collectibility hereof or of any

other Loan Document or of any other documents or writing furnished in

connection with any Loan Document or of any Collateral; and the Administrative

Agent makes no representation of any kind or character with respect to any such

matter mentioned in this sentence.  The

Administrative Agent may execute any of its duties under any of the Loan

Documents by or through employees, agents, and attorneys–in–fact

and shall not be answerable to the Lenders, the Borrower, or any other Person

for the default or misconduct of any such agents or attorneys–in–fact

selected with reasonable care.  The

Administrative Agent shall not incur any liability by acting in reliance upon

any notice, consent, certificate, other document or statement (whether written

or oral) believed by it to be genuine or to be sent by the proper party or

parties.  In particular and without

limiting any of the foregoing, the Administrative Agent shall have no

responsibility for confirming the accuracy of any compliance certificate or

other document or instrument received by it under the Loan Documents.  The Administrative Agent may treat the payee

of any Note as the holder thereof until written notice of transfer shall have

been filed with the Administrative Agent signed by such payee in form

satisfactory to the Administrative Agent. 

Each Lender acknowledges that it has independently and without reliance

on the Administrative Agent or any other Lender, and based upon such

information, investigations and inquiries as it deems appropriate, made its own

credit analysis and decision to extend credit to the Borrower in the manner set

forth in the Loan Documents.  It shall

be the responsibility of each Lender to keep itself informed as to the

creditworthiness of the Parent, the Borrower and their Subsidiaries, and the

Administrative Agent shall have no liability to any Lender with respect

thereto.

 

64

 

Section 11.6.    Indemnity.  The Lenders shall ratably, in accordance

with their respective Percentages, indemnify and hold the Administrative Agent,

and its directors, officers, employees, agents and representatives harmless

from and against any liabilities, losses, costs or expenses suffered or

incurred by it under any Loan Document or in connection with the transactions

contemplated thereby, regardless of when asserted or arising, except to the

extent they are promptly reimbursed for the same by the Borrower and except to

the extent that any event giving rise to a claim was caused by the gross

negligence or willful misconduct of the party seeking to be indemnified.  The obligations of the Lenders under this

Section shall survive termination of this Agreement.  The Administrative Agent shall be entitled to offset amounts

received for the account of a Lender under this Agreement against unpaid

amounts due from such Lender to the Administrative Agent hereunder (whether as

fundings of participations, indemnities or otherwise), but shall not be

entitled to offset against amounts owed to the Administrative Agent by any

Lender arising outside of this Agreement.

 

Section 11.7.    Resignation of Administrative Agent and

Successor Administrative Agent.  The Administrative Agent may resign at any time by giving written

notice thereof to the Lenders and the Borrower.  Upon any such resignation of the Administrative Agent, the

Required Lenders shall have the right to appoint a successor Administrative

Agent.  If no successor Administrative

Agent shall have been so appointed by the Required Lenders, and shall have

accepted such appointment, within 30 days after the retiring

Administrative Agent’s giving of notice of resignation then the retiring

Administrative Agent may, on behalf of the Lenders, appoint a successor

Administrative Agent, which shall be any Lender hereunder or any commercial

bank organized under the laws of the United States of America or of any State

thereof and having a combined capital and surplus of at least

$200,000,000.  Upon the acceptance of

its appointment as the Administrative Agent hereunder, such successor

Administrative Agent shall thereupon succeed to and become vested with all the

rights and duties of the retiring Administrative Agent under the Loan

Documents, and the retiring Administrative Agent shall be discharged from its

duties and obligations thereunder. 

After any retiring Administrative Agent’s resignation hereunder as

Administrative Agent, the provisions of this Section 11 and all protective

provisions of the other Loan Documents shall inure to its benefit as to any

actions taken or omitted to be taken by it while it was Administrative Agent,

but no successor Administrative Agent 

shall in any event be liable or responsible for any actions of its

predecessor.  If the Administrative

Agent resigns and no successor is appointed, the rights and obligations of such

Administrative Agent shall be automatically assumed by the Required Lenders and

(a) the Borrower shall be directed to make all payments due each Lender

hereunder directly to such Lender and (b) the Administrative Agent’s

rights in the Collateral Documents shall be assigned without representation,

recourse, or warranty to the Lenders as their interests may appear.

 

Section 11.8.    L/C Issuer.  Each L/C Issuer shall act on behalf of

the Lenders with respect to any Letters of Credit issued by it and the

documents associated therewith.  Each

L/C Issuer shall have all of the benefits and immunities (a) provided

to the Administrative Agent in this Section 11 with respect to any acts

taken or omissions suffered by such L/C Issuer in connection with Letters

of Credit issued by it or proposed to be issued by it and the Applications

pertaining to such Letters of Credit as fully as if the term “Administrative

Agent”, as used in this

 

65

 

Section 11, included such L/C Issuer with

respect to such acts or omissions and (b) as additionally provided in this

Agreement with respect to such L/C Issuer.

 

Section 11.9.    Hedging Agreements.  By virtue of a Lender’s execution of this

Agreement or an assignment agreement pursuant to Section 13.12 hereof, as

the case may be, any Affiliate of such Lender with whom the Borrower, or any

Subsidiary has entered into an agreement creating Hedging Liability shall be

deemed a Lender party hereto for purposes of any reference in a Loan Document

to the parties for whom the Administrative Agent is acting, it being understood

and agreed that the rights and benefits of such Affiliate under the Loan

Documents consist exclusively of such Affiliate’s right to share in payments

and collections out of the Collateral and the guaranties as more fully set

forth in other provisions hereof.

 

Section 11.10. Designation of Additional Agents.  The Administrative Agent shall have the

continuing right, for purposes hereof, at any time and from time to time to

designate one or more of the Lenders (and/or its or their Affiliates) as

“syndication agents”, “documentation agents”, “arrangers”, or other

designations for purposes hereto, but such designation shall have no

substantive effect, and such Lenders and their Affiliates shall have no

additional powers, duties, or responsibilities as a result thereof.

 

SECTION 12.                                           THE

GUARANTY.

 

Section 12.1.    The Guaranty.  To induce the Lenders to provide the credits

described herein and in consideration of benefits expected to accrue to the

Borrower by reason of the Commitments and for other good and valuable

consideration, receipt of which is hereby acknowledged, the Parent and each of

its direct and indirect Domestic Subsidiaries (individually each a “Guarantor” and

collectively the “Guarantors”), hereby unconditionally and irrevocably

guarantee jointly and severally to the Administrative Agent, the Lenders, and

each other holder of any of the Obligations or Hedging Liability, (x) the

due and punctual payment of all present and future indebtedness of the Borrower

evidenced by or arising out of the Loan Documents, including, but not limited

to, the due and punctual payment of principal of and interest on the Notes, the

Reimbursement Obligations, and the due and punctual payment of all other

Obligations now or hereafter owed by the Borrower under the Loan Documents as

and when the same shall become due and payable, whether at stated maturity, by

acceleration or otherwise, according to the terms hereof and thereof, and

(y) the due and punctual payment of all present and future Hedging

Liability as and when the same shall become due and payable, whether at its

stated maturity, by acceleration or otherwise, according to the terms thereof, provided

that the Borrower shall not be understood to be a Guarantor of any Obligations

or Hedging Liability with respect to which it is the primary obligor.  In case of failure by the Borrower

punctually to pay any indebtedness or other Obligations guaranteed hereby

(after giving effect to any applicable cure periods), each Guarantor hereby

unconditionally agrees jointly and severally to make such payment or to cause

such payment to be made punctually as and when the same shall become due and

payable, whether at stated maturity, by acceleration or otherwise, and as if

such payment were made by the Borrower.

 

66

 

Section 12.2.    Guarantee Unconditional.  The obligations of each Guarantor as a

guarantor under this Section 12 shall be unconditional and absolute and,

without limiting the generality of the foregoing, shall not be released,

discharged or otherwise affected by:

 

(a)           any extension, renewal, settlement,

compromise, waiver or release in respect of any obligation of the Borrower or

of any other guarantor under this Agreement or any other Loan Document or by

operation of law or otherwise;

 

(b)           any modification or amendment of or

supplement to this Agreement or any other Loan Document;

 

(c)           any change in the corporate

existence, structure or ownership of, or any insolvency, bankruptcy,

reorganization or other similar proceeding affecting, the Borrower, any other

guarantor, or any of their respective assets, or any resulting release or

discharge of any obligation of the Borrower or of any other guarantor contained

in any Loan Document;

 

(d)           the existence of any claim, set–off

or other rights which the Borrower or any other guarantor may have at any time

against the Administrative Agent, any Lender or any other Person, whether or

not arising in connection herewith;

 

(e)           any failure to assert, or any

assertion of, any claim or demand or any exercise of, or failure to exercise,

any rights or remedies against the Borrower, any other guarantor or any other

Person or Property;

 

(f)            any application of any sums by

whomsoever paid or howsoever realized to any obligation of the Borrower,

regardless of what obligations of the Borrower remain unpaid;

 

(g)           any invalidity or unenforceability

relating to or against the Borrower or any other guarantor for any reason of

this Agreement or of any other Loan Document or any provision of applicable law

or regulation purporting to prohibit the payment by the Borrower or any other

guarantor of the principal of or interest on any Note or any Reimbursement

Obligation or any other amount payable under the Loan Documents; or

 

(h)           any other act or omission to act or

delay of any kind by the Administrative Agent, any Lender or any other Person

or any other circumstance whatsoever that might, but for the provisions of this

paragraph, constitute a legal or equitable discharge of the obligations of any

Guarantor under this Section 12.

 

Section 12.3.    Discharge Only Upon Payment in Full;

Reinstatement in Certain Circumstances.  Each Guarantor’s obligations under this

Section 12 shall remain in full force and effect until the Commitments are

terminated, all Letters of Credit have expired, and the principal of and

interest on the Notes and all other amounts payable by the Borrower under this

Agreement and all other Loan Documents shall have been paid in full.  If at any time any payment of the principal

of or interest on any Note or any Reimbursement Obligation or any other amount

 

67

 

payable by the Borrower under the Loan Documents is

rescinded or must be otherwise restored or returned upon the insolvency,

bankruptcy or reorganization of the Borrower or of any guarantor, or otherwise,

each Guarantor’s obligations under this Section 12 with respect to such

payment shall be reinstated at such time as though such payment had become due

but had not been made at such time.

 

Section 12.4.    Subrogation.  Each Guarantor agrees it will not exercise

any rights which it may acquire by way of subrogation by any payment made

hereunder, or otherwise, until all the Obligations shall have been paid in full

subsequent to the termination of all the Commitments and expiration of all

Letters of Credit.  If any amount shall

be paid to a Guarantor on account of such subrogation rights at any time prior

to the later of (x) the payment in full of the Obligations and all other

amounts payable by the Borrower hereunder and the other Loan Documents and (y) the

termination of the Commitments and expiration of all Letters of Credit, such

amount shall be held in trust for the benefit of the Administrative Agent and

the Lenders and shall forthwith be paid to the Administrative Agent for the

benefit of the Lenders or be credited and applied upon the Obligations, whether

matured or unmatured, in accordance with the terms of this Agreement.

 

Section 12.5.    Waivers.  Each Guarantor irrevocably waives acceptance

hereof, presentment, demand, protest and any notice not provided for herein, as

well as any requirement that at any time any action be taken by the

Administrative Agent, any Lender or any other Person against the Borrower,

another guarantor or any other Person.

 

Section 12.6.    Limit on Recovery.  Notwithstanding any other provision hereof,

the right of recovery against each Guarantor under this Section 12 shall

not exceed $1.00 less than the lowest amount which would render such

Guarantor’s obligations under this Section 12 void or voidable under applicable

law, including without limitation fraudulent conveyance law.

 

Section 12.7.    Stay of Acceleration.  If acceleration of the time for payment of

any amount payable by the Borrower under this Agreement or any other Loan

Document is stayed upon the insolvency, bankruptcy or reorganization of the

Borrower, all such amounts otherwise subject to acceleration under the terms of

this Agreement or the other Loan Documents shall nonetheless be payable jointly

and severally by the Guarantors hereunder forthwith on demand by the

Administrative Agent made at the request of the Required Lenders.

 

SECTION 13.                                           MISCELLANEOUS.

 

Section 13.1.    Withholding Taxes.  (a) Payments Free of Withholding.  Except as otherwise required by law and

subject to Section 13.1(b) hereof, each payment by the Borrower or any

Guarantor under this Agreement or the other Loan Documents shall be made

without withholding for or on account of any present or future taxes (other

than overall net income taxes on the recipient) imposed by or within the

jurisdiction in which the Borrower or any Guarantor is domiciled, any

jurisdiction from which the Borrower or any Guarantor makes any payment, or (in

each case) any political subdivision or taxing authority thereof or

therein.  If any such withholding is so

required, the Borrower or any Guarantor shall make the withholding, pay the

amount withheld to the appropriate governmental authority before penalties

attach thereto or

 

68

 

interest accrues thereon and forthwith pay such

additional amount as may be necessary to ensure that the net amount actually

received by each Lender and the Administrative Agent free and clear of such

taxes (including such taxes on such additional amount) is equal to the amount

which that Lender or the Administrative Agent (as the case may be) would have

received had such withholding not been made. 

If the Administrative Agent or any Lender pays any amount in respect of

any such taxes, penalties or interest, the Borrower or any Guarantor shall reimburse

the Administrative Agent or such Lender for that payment on demand in the

currency in which such payment was made. 

If the Borrower or any Guarantor pays any such taxes, penalties or

interest, it shall deliver official tax receipts evidencing that payment or

certified copies thereof to the Lender or Administrative Agent on whose account

such withholding was made (with a copy to the Administrative Agent if not the

recipient of the original) on or before the thirtieth day after payment.

 

(b)           U.S. Withholding Tax Exemptions.  Each Lender that is not a United States

person (as such term is defined in Section 7701(a)(30) of the Code) shall

submit to the Borrower and the Administrative Agent on or before the date the

initial Credit Event is made hereunder or, if later, the date such financial

institution becomes a Lender hereunder, two duly completed and signed copies of

(i) either Form W-8 BEN (relating to such Lender and entitling it to

a complete exemption from withholding under the Code on all amounts to be

received by such Lender, including fees, pursuant to the Loan Documents and the

Obligations) or Form W-8 ECI (relating to all amounts to be received by

such Lender, including fees, pursuant to the Loan Documents and the

Obligations) of the United States Internal Revenue Service or (ii) solely if

such Lender is claiming exemption from United States withholding tax under

Section 871(h) or 881(c) of the Code with respect to payments of

“portfolio interest”, a Form W-8 BEN, or any successor form prescribed by

the Internal Revenue Service, and a certificate representing that such Lender

is not a bank for purposes of Section 881(c) of the Code, is not a 10–percent

shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of

the Borrower and is not a controlled foreign corporation related to the

Borrower (within the meaning of Section 864(d)(4) of the Code).  Thereafter and from time to time, each

Lender shall submit to the Borrower and the Administrative Agent such

additional duly completed and signed copies of one or the other of such Forms

(or such successor forms as shall be adopted from time to time by the relevant

United States taxing authorities) and such other certificates as may be

(i) requested by the Borrower in a written notice, directly or through the

Administrative Agent, to such Lender and (ii) required under then–current

United States law or regulations to avoid or reduce United States withholding

taxes on payments in respect of all amounts to be received by such Lender,

including fees, pursuant to the Loan Documents or the Obligations.  Upon the request of the Borrower or the

Administrative Agent, each Lender that is a United States person (as such term

is defined in Section 7701(a)(30) of the Code) shall submit to the

Borrower and the Administrative Agent a certificate to the effect that it is

such a United States person.

 

(c)           Inability of Lender to Submit Forms.  If any Lender determines, as a result of any

change in applicable law, regulation or treaty, or in any official application or

interpretation thereof, that it is unable to submit to the Borrower or the

Administrative Agent any form or certificate that such Lender is obligated to

submit pursuant to subsection (b) of this Section 13.1 or that such

Lender is required to withdraw or cancel any such form or certificate

previously submitted or any such form or certificate otherwise becomes

ineffective or inaccurate, such

 

69

 

Lender shall promptly notify the Borrower and

Administrative Agent of such fact and the Lender shall to that extent not be

obligated to provide any such form or certificate and will be entitled to

withdraw or cancel any affected form or certificate, as applicable.

 

Section 13.2.    No Waiver, Cumulative Remedies.  No delay or failure on the part of the

Administrative Agent or any Lender or on the part of the holder or holders of

any of the Obligations in the exercise of any power or right under any Loan

Document shall operate as a waiver thereof or as an acquiescence in any

default, nor shall any single or partial exercise of any power or right

preclude any other or further exercise thereof or the exercise of any other

power or right.  The rights and remedies

hereunder of the Administrative Agent, the Lenders and of the holder or holders

of any of the Obligations are cumulative to, and not exclusive of, any rights

or remedies which any of them would otherwise have.

 

Section 13.3.    Non-Business Days.  If any payment hereunder becomes due and

payable on a day which is not a Business Day, the due date of such payment

shall be extended to the next succeeding Business Day on which date such

payment shall be due and payable.  In

the case of any payment of principal falling due on a day which is not a

Business Day, interest on such principal amount shall continue to accrue during

such extension at the rate per annum then in effect, which accrued amount shall

be due and payable on the next scheduled date for the payment of interest.

 

Section 13.4.    Documentary Taxes.  The Borrower agrees to pay on demand any

documentary, stamp or similar taxes payable in respect of this Agreement or any

other Loan Document, including interest and penalties, in the event any such

taxes are assessed, irrespective of when such assessment is made and whether or

not any credit is then in use or available hereunder.

 

Section 13.5.    Survival of Representations.  All representations and warranties made

herein or in any other Loan Document or in certificates given pursuant hereto

or thereto shall survive the execution and delivery of this Agreement and the

other Loan Documents, and shall continue in full force and effect with respect

to the date as of which they were made as long as any credit is in use or

available hereunder.

 

Section 13.6.    Survival of Indemnities.  All indemnities and other provisions

relative to reimbursement to the Lenders of amounts sufficient to protect the

yield of the Lenders with respect to the Loans and Letters of Credit,

including, but not limited to, Sections 1.12, 10.3 and 13.15 hereof, shall

survive the termination of this Agreement and the other Loan Documents and the

payment of the Obligations.

 

Section 13.7.    Sharing of Set-Off.  Each Lender agrees with each other Lender a

party hereto that if such Lender shall receive and retain any payment, whether

by set–off or application of deposit balances or otherwise, on any of the

Loans or Reimbursement Obligations in excess of its ratable share of payments

on all such Obligations then outstanding to the Lenders, then such Lender shall

purchase for cash at face value, but without recourse, ratably from each of the

other Lenders such amount of the Loans or Reimbursement Obligations, or

participations therein, held by each such other Lenders (or interest therein)

as shall be necessary to cause such Lender to

 

70

 

share such excess payment ratably with all the other

Lenders; provided,

however, that if any such purchase is made by any Lender, and if

such excess payment or part thereof is thereafter recovered from such

purchasing Lender, the related purchases from the other Lenders shall be

rescinded ratably and the purchase price restored as to the portion of such

excess payment so recovered, but without interest.  For purposes of this Section, amounts owed to or recovered by the

L/C Issuer in connection with Reimbursement Obligations in which Lenders have

been required to fund their participation shall be treated as amounts owed to

or recovered by the L/C Issuer as a Lender hereunder.

 

Section 13.8.    Notices.  Except as otherwise specified herein, all

notices hereunder and under the other Loan Documents shall be in writing

(including, without limitation, notice by telecopy) and shall be given to the

relevant party at its address or telecopier number set forth below, or such

other address or telecopier number as such party may hereafter specify by

notice to the Administrative Agent and the Borrower given by courier, by United

States certified or registered mail, by telecopy or by other telecommunication device

capable of creating a written record of such notice and its receipt.  Notices under the Loan Documents to the

Lenders and the Administrative Agent shall be addressed to their respective

addresses or telecopier numbers set forth on the signature pages hereof, and to

the Borrower to:

 

Florists’ Transworld

Delivery, Inc.

3113 Woodcreek Drive

Downers Grove, IL  60515

Attention:       Carrie Wolfe

Telephone:     (630) 724-6512

Telecopy:        (630) 724-6245

 

with a copy:

 

Attention:       Jon Burney

Telephone:     (630) 724-6729

Telecopy:        (630) 719-6083

 

Each

such notice, request or other communication shall be effective (i) if

given by telecopier, when such telecopy is transmitted to the telecopier number

specified in this Section or on the signature pages hereof and a confirmation

of such telecopy has been received by the sender, (ii) if given by mail,

5 days after such communication is deposited in the mail, certified or

registered with return receipt requested, addressed as aforesaid or

(iii) if given by any other means, when delivered at the addresses

specified in this Section or on the signature pages hereof; provided

that  any

notice given pursuant to Section 1 hereof shall be effective only upon

receipt.

 

Section 13.9.    Counterparts.  This Agreement may be executed in any number

of counterparts, and by the different parties hereto on separate counterpart

signature pages, and all such counterparts taken together shall be deemed to

constitute one and the same instrument.

 

Section 13.10. Successors and Assigns.  This Agreement shall be binding upon the

Borrower and the Guarantors and their successors and assigns, and shall inure

to the benefit of

 

71

 

the Administrative Agent and each of the Lenders and

the benefit of their respective successors and assigns, including any

subsequent holder of any of the Obligations. 

The Borrower and the Guarantors may not assign any of their rights or

obligations under any Loan Document without the written consent of all of the

Lenders.

 

Section 13.11.

        Participants.  Each Lender shall have the right at its own

cost to grant participations (to be evidenced by one or more agreements or

certificates of participation) in the Loans made and Reimbursement Obligations

and/or Commitments held by such Lender at any time and from time to time to one

or more other Persons; provided that no such participation shall

relieve any Lender of any of its obligations under this Agreement, and, provided,

further that no such participant shall have any rights under this

Agreement except as provided in this Section, and the Administrative Agent

shall have no obligation or responsibility to such participant.  Any agreement pursuant to which such

participation is granted shall provide that the granting Lender shall retain

the sole right and responsibility to enforce the obligations of the Borrower

and the Guarantors under this Agreement and the other Loan Documents including,

without limitation, the right to approve any amendment, modification or waiver

of any provision of the Loan Documents, except that such agreement may provide

that such Lender will not agree to any modification, amendment or waiver of the

Loan Documents that would reduce the amount of or postpone any fixed date for

payment of any Obligation in which such participant has an interest.  Any party to which such a participation has

been granted shall have the benefits of Section 1.12 and Section 10.3

hereof.  The Parent and the Borrower

authorize each Lender to disclose to any participant or prospective participant

under this Section any financial or other information pertaining to the Parent,

the Borrower or any other Subsidiary.

 

Section 13.12. Assignments.  (a) Each Lender shall have the right at

any time, with the prior consent of the Administrative Agent and, so long as no

Event of Default then exists, the Borrower (which consent of the Borrower shall

not be unreasonably withheld) to sell, assign, transfer or negotiate all or any

part of its rights and obligations under the Loan Documents (including, without

limitation, the indebtedness evidenced by the Notes then held by such assigning

Lender, together with an equivalent percentage of its obligation to make Loans

and participate in Letters of Credit) to one or more commercial banks or other

financial institutions or investors, provided that, unless otherwise agreed to

by the Administrative Agent, such assignment shall be of a fixed percentage

(and not by its terms of varying percentage) of the assigning Lender’s rights

and obligations under the Loan Documents; provided, however, that in order to make

any such assignment, (i) unless the assigning Lender is assigning all of

its Commitments, outstanding Loans and interests in Letters of Credit

Obligations, the assigning Lender shall retain at least $5,000,000 in unused

Commitments, outstanding Loans and interests in Letters of Credit,

(ii) the assignee Lender shall have Commitments, outstanding Loans and

interests in Letters of Credit of at least $5,000,000, (iii) each such

assignment shall be evidenced by a written agreement (substantially in the form

attached hereto as Exhibit F or in such other form acceptable to the

Administrative Agent) executed by such assigning Lender, such assignee Lender

or Lenders, the Administrative Agent and, if required as provided above, the

Borrower, which agreement shall specify in each instance the portion of the

Obligations which are to be assigned to the assignee Lender and the portion of

the Commitments of the assigning Lender to be assumed by the assignee Lender,

(iv) the Swing Loans and Swing Line Commitment shall only be assigned (if

at all) in total and (v) the assigning Lender shall pay to the

Administrative

 

72

 

Agent a processing fee of $3,500 and any out–of–pocket

attorneys’ fees and expenses incurred by the Administrative Agent in connection

with any such assignment agreement.  Any

such assignee shall become a Lender for all purposes hereunder to the extent of

the rights and obligations under the Loan Documents it assumes and the

assigning Lender shall be released from its obligations, and will have released

its rights, under the Loan Documents to the extent of such assignment.  The address for notices to such assignee

Lender shall be as specified in the assignment agreement executed by it.  Promptly upon the effectiveness of any such

assignment agreement, the Borrower shall execute and deliver replacement Notes

to the assignee Lender and the assigning Lender in the respective amounts of their

Commitments (or assigned principal amounts, as applicable) after giving effect

to the reduction occasioned by such assignment (all such Notes to constitute “Notes”

for all purposes of the Loan Documents), and the assignee Lender shall

thereafter surrender to the Borrower its old Notes.  The Borrower authorizes each Lender to disclose to any purchaser

or prospective purchaser of an interest in the Loans and interest in Letters of

Credit owed to it or its Commitments under this Section any financial or other

information pertaining to the Borrower or any Subsidiary.

 

(b)           Any Lender may at any time pledge or

grant a security interest in all or any portion of its rights under this

Agreement to secure obligations of such Lender, including any such pledge or

grant to a Federal Reserve Bank, and this Section shall not apply to any such

pledge or grant of a security interest; provided that no such pledge or grant of a

security interest shall release a Lender from any of its obligations hereunder

or substitute any such pledgee or secured party for such Lender as a party

hereto; provided

further, however, that the right of any such pledgee or grantee

(other than any Federal Reserve Bank) to further transfer all or any portion of

the rights pledged or granted to it, whether by means of foreclosure or otherwise,

shall be at all times subject to the terms of this Agreement.

 

(c)           Notwithstanding anything to the

contrary contained herein, any Lender (a “Designating Lender”) may grant to one or

more special purpose funding vehicles (each, an “SPV”), identified as such

in writing from time to time by the Designating Lender to the Administrative

Agent and the Borrower, the option to provide to the Borrower all or any part

of any Revolving Loan that such Designating Lender would otherwise be obligated

to make to the Borrower pursuant to this Agreement; provided that (i) nothing

herein shall constitute a commitment by any SPV to make any Revolving Loan,

(ii) if an SPV elects not to exercise such option or otherwise fails to provide

all or any part of such Revolving Loan, the Designating Lender shall be

obligated to make such Revolving Loan pursuant to the terms hereof, and (iii)

the Designating Lender shall remain liable for any indemnity or any other

payment or performance obligation with respect to its Revolving Credit

Commitment hereunder or with respect to any Revolving Loan made by an SPV

pursuant to an option to make such Revolving Loan granted pursuant hereto. The

making of a Revolving Loan by an SPV hereunder shall utilize the Revolving

Credit Commitment of the Designating Lender to the same extent, and as if, such

Revolving Loan were made by such Designating Lender.

 

(d)           As to any Revolving Loans or portions

thereof made by it, each SPV shall have all the rights that a Lender making

such Revolving Loans or portion thereof would have had under this Agreement; provided,

however, that each SPV shall have granted to its Designating Lender

an irrevocable power of attorney, to deliver and receive all communications and

notices

 

73

 

under this Agreement (and

any  other

Loan Documents) and to exercise on such SPV’s behalf, all of such SPV’s

voting rights under this Agreement. No additional Revolving Credit Note shall

be required to evidence the Revolving Loans or portion thereof made by an SPV;

and the related Designating Lender shall be deemed to hold its Revolving Credit

Note as agent for such SPV to the extent of the Revolving Loans or portions

thereof funded by such SPV. In addition, any payments for the account of any SPV

shall be paid to its Designating Lender as agent for such SPV.

 

(e)           Each party hereto hereby agrees that

no SPV shall be liable for any indemnity or payment under this Agreement for

which a Lender would otherwise be liable, provided that the Designating Lender which

grants options to make Revolving Loans to such SPV shall be liable for such

amounts as set forth in clause (c)(iii), above. In furtherance of the

foregoing, each party hereto hereby agrees (which agreements shall survive the

termination of this Agreement) that, prior to the date that is one year and one

day after the payment in full of all outstanding commercial paper or other

senior indebtedness of any SPV, it will not institute against, or join any

other person in instituting against, such SPV any bankruptcy, reorganization,

arrangement, insolvency or liquidation proceedings under the laws of the United

States or any State thereof.

 

(f)            In addition, notwithstanding

anything to the contrary contained in this Section 13.12 or otherwise in this

Agreement, any SPV may (i) at any time and without paying any processing fee

therefor, assign or participate all or a portion of its interest in any

Revolving Loans to the Designating Lender or to any financial institutions

providing liquidity and/or credit support to or for the account of such SPV to

support the funding or maintenance of Revolving Loans and (ii) disclose on a

confidential basis any non–public information relating to its Revolving

Loans to any rating agency, commercial paper dealer or provider of any surety,

guarantee or credit or liquidity enhancements to such SPV.

 

Section 13.13. Amendments.   Any provision of this Agreement or the other

Loan Documents may be amended or waived if, but only if, such amendment or

waiver is in writing and is signed by (a) the Borrower, (b) the Required

Lenders, and (c) if the rights or duties of the Administrative Agent are

affected thereby, the Administrative Agent; provided that:

 

(i)            no amendment or waiver pursuant to

this Section 13.13 shall (A) increase any Commitment of any Lender

without the consent of such Lender, (B) reduce the amount of or postpone

the date for payment of any principal of or interest on any Loan or of any

Reimbursement Obligation or of any fee payable hereunder without the consent of

the Lender to which such payment is owing or which has committed to make such

Loan or Letter of Credit (or participate therein) hereunder, or (C) amend any

provision of clauses (c), (d), (e) or (f) of Section 13.12 hereof without the

written consent of any Designating Lender affected thereby; and

 

(ii)           no amendment or waiver pursuant to

this Section 13.13 shall, unless signed by each Lender, change the

definitions of Termination Date or Required Lenders, change the provisions of

this Section 13.13, release any material Guarantor or all or any

substantial part of the Collateral (except as otherwise provided for in the

Loan

 

74

 

Documents), or affect the

number of Lenders required to take any action hereunder or under any other Loan

Document.

 

Section 13.14. Headings. Section

headings used in this Agreement are for reference only and shall not affect the

construction of this Agreement.

 

Section 13.15. Costs and Expenses; Indemnification.  (a) The Borrower agrees to pay all

reasonable costs and expenses of the Administrative Agent in connection with

the preparation, negotiation, syndication, and administration of the Loan

Documents, including, without limitation, the reasonable fees and disbursements

of counsel to the Administrative Agent, in connection with the preparation and

execution of the Loan Documents, and any amendment, waiver or consent related

thereto, whether or not the transactions contemplated herein are consummated,

together with any reasonable fees and charges suffered or incurred by the

Administrative Agent in connection with periodic environmental audits, fixed

asset appraisals, title insurance policies, collateral filing fees and lien

searches.  The Borrower further agrees

to indemnify the Administrative Agent, each Lender, and their respective

directors, officers and employees, against all losses, claims, damages,

penalties, judgments, liabilities and expenses (including, without limitation,

all reasonable expenses of litigation or preparation therefor, whether or not

the indemnified Person is a party thereto, or any settlement arrangement

arising from or relating to any such litigation) which any of them may pay or

incur arising out of or relating to any Loan Document or any of the

transactions contemplated thereby or the direct or indirect application or

proposed application of the proceeds of any Loan or Letter of Credit, other

than those which arise from the gross negligence or willful misconduct of the

party claiming indemnification.  The

Borrower, upon demand by the Administrative Agent or a Lender at any time,

shall reimburse the Administrative Agent or such Lender for any legal or other

expenses incurred in connection with investigating or defending against any of

the foregoing (including any settlement costs relating to the foregoing) except

if the same is directly due to the gross negligence or willful misconduct of

the party to be indemnified.  The

obligations of the Borrower under this Section shall survive the termination of

this Agreement.

 

(b)           The Borrower unconditionally agrees

to forever indemnify, defend and hold harmless, and covenants not to sue for

any claim for contribution against, the Administrative Agent and the Lenders

for any damages, costs, loss or expense, including without limitation,

response, remedial or removal costs, arising out of any of the following:  (i) any presence, release, threatened

release or disposal of any hazardous or toxic substance or petroleum by the

Borrower or any Subsidiary or otherwise occurring on or with respect to its

Property (whether owned or leased), (ii) the operation or violation of any

environmental law, whether federal, state, or local, and any regulations

promulgated thereunder, by the Borrower or any Subsidiary or otherwise

occurring on or with respect to its Property (whether owned or leased),

(iii) any claim for personal injury or property damage in connection with

the Borrower or any Subsidiary or otherwise occurring on or with respect to its

Property (whether owned or leased), and (iv) the inaccuracy or breach of

any environmental representation, warranty or covenant by the Borrower or any

Subsidiary made herein or in any other Loan Document evidencing or securing any

Obligations or setting forth terms and conditions applicable thereto or otherwise

relating thereto, except for damages arising from the willful misconduct or

gross negligence of the party claiming indemnification.  This indemnification shall survive the

payment and satisfaction of all

 

75

 

Obligations and the termination of this Agreement, and

shall remain in force beyond the expiration of any applicable statute of

limitations and payment or satisfaction in full of any single claim under this

indemnification.  This indemnification shall

be binding upon the successors and assigns of the Borrower and shall inure to

the benefit of Administrative Agent and the Lenders directors, officers,

employees, agents, and collateral trustees, and their successors and assigns.

 

Section 13.16. Set-off.  In addition to any rights now or hereafter

granted under applicable law and not by way of limitation of any such rights,

upon the occurrence of any Event of Default, each Lender and each subsequent

holder of any Obligation is hereby authorized by the Borrower and each

Guarantor at any time or from time to time, without notice to the Borrower or

such Guarantor or to any other Person, any such notice being hereby expressly

waived, to set-off and to appropriate and to apply any and all deposits

(general or special, including, but not limited to, indebtedness evidenced by

certificates of deposit, whether matured or unmatured, but not including trust

accounts, and in whatever currency denominated) and any other indebtedness at

any time held or owing by that Lender or that subsequent holder to or for the

credit or the account of the Borrower or such Guarantor, whether or not

matured, against and on account of the Obligations of the Borrower or such

Guarantor to that Lender or that subsequent holder under the Loan Documents,

including, but not limited to, all claims of any nature or description arising

out of or connected with the Loan Documents, irrespective of whether or not

(a) that Lender or that subsequent holder shall have made any demand

hereunder or (b) the principal of or the interest on the Loans or Notes

and other amounts due hereunder shall have become due and payable pursuant to

Section 9 and although said obligations and liabilities, or any of them,

may be contingent or unmatured.

 

Section 13.17. Entire Agreement.  The Loan Documents constitute the entire

understanding of the parties thereto with respect to the subject matter thereof

and any prior agreements, whether written or oral, with respect thereto are

superseded hereby.

 

Section 13.18. Governing Law.  This Agreement and the other Loan Documents,

and the rights and duties of the parties hereto, shall be construed and

determined in accordance with the internal laws of the State of Illinois.

 

Section 13.19. Severability of Provisions.  Any provision of any Loan Document which is

unenforceable in any jurisdiction shall, as to such jurisdiction, be

ineffective to the extent of such unenforceability without invalidating the

remaining provisions hereof or affecting the validity or enforceability of such

provision in any other jurisdiction. 

All rights, remedies and powers provided in this Agreement and the other

Loan Documents may be exercised only to the extent that the exercise thereof

does not violate any applicable mandatory provisions of law, and all the

provisions of this Agreement and other Loan Documents are intended to be

subject to all applicable mandatory provisions of law which may be controlling

and to be limited to the extent necessary so that they will not render this

Agreement or the other Loan Documents invalid or unenforceable.

 

Section 13.20. Excess Interest.  Notwithstanding any provision to the

contrary contained herein or in any other Loan Document, no such provision

shall require the payment or permit the

 

76

 

collection of any amount of interest in excess of the

maximum amount of interest permitted by applicable law to be charged for the

use or detention, or the forbearance in the collection, of all or any portion

of the Loans or other obligations outstanding under this Agreement or any other

Loan Document (“Excess Interest”). 

If any Excess Interest is provided for, or is adjudicated to be provided

for, herein or in any other Loan Document, then in such event (a) the

provisions of this Section shall govern and control, (b) neither the

Borrower nor any guarantor or endorser shall be obligated to pay any Excess

Interest, (c) any Excess Interest that the Administrative Agent or any

Lender may have received hereunder shall, at the option of the Administrative

Agent, be (i) applied as a credit against the then outstanding principal

amount of Obligations hereunder and accrued and unpaid interest thereon (not to

exceed the maximum amount permitted by applicable law), (ii) refunded to

the Borrower, or (iii) any combination of the foregoing, (d) the

interest rate payable hereunder or under any other Loan Document shall be

automatically subject to reduction to the maximum lawful contract rate allowed

under applicable usury laws (the “Maximum Rate”), and this Agreement and

the other Loan Documents shall be deemed to have been, and shall be, reformed

and modified to reflect such reduction in the relevant interest rate, and

(e) neither the Borrower nor any guarantor or endorser shall have any action

against the Administrative Agent or any Lender for any damages whatsoever

arising out of the payment or collection of any Excess Interest.  Notwithstanding the foregoing, if for any

period of time interest on any of Borrower’s Obligations is calculated at the

Maximum Rate rather than the applicable rate under this Agreement, and

thereafter such applicable rate becomes less than the Maximum Rate, the rate of

interest payable on the Borrower’s Obligations shall remain at the Maximum Rate

until the Lenders have received the amount of interest which such Lenders would

have received during such period on the Borrower’s Obligations had the rate of

interest not been limited to the Maximum Rate during such period.

 

Section 13.21. Construction.  Nothing contained herein shall be deemed or

construed to permit any act or omission which is prohibited by the terms of any

Collateral Document, the covenants and agreements contained herein being in

addition to and not in substitution for the covenants and agreements contained in

the Collateral Documents.

 

Section 13.22. Lender’s Obligations Several.  The obligations of the Lenders hereunder are

several and not joint.  Nothing

contained in this Agreement and no action taken by the Lenders pursuant hereto

shall be deemed to constitute the Lenders a partnership, association, joint

venture or other entity.

 

Section 13.23. Submission to Jurisdiction; Waiver of Jury

Trial.  The

Borrower and each Guarantor hereby submits to the nonexclusive jurisdiction of

the United States District Court for the Northern District of Illinois and of

any Illinois State court sitting in the City of Chicago for purposes of all

legal proceedings arising out of or relating to this Agreement, the other Loan

Documents or the transactions contemplated hereby or thereby.  The Borrower and each Guarantor irrevocably

waives, to the fullest extent permitted by law, any objection which it may now

or hereafter have to the laying of the venue of any such proceeding brought in

such a court and any claim that any such proceeding brought in such a court has

been brought in an inconvenient forum.  The Borrower, each Guarantor, the

Administrative Agent and each Lender hereby irrevocably waive any and all right

to trial by jury in any legal

 

77

 

proceeding arising out of or

relating to any Loan Document or the transactions contemplated thereby.

 

 

[Signature Pages to Follow]

 

78

 

In Witness Whereof, the parties have

caused this Agreement to be executed and delivered by their duly authorized

officers, all as of the date first above written.

 

	

   

  	

  Borrower

  
	

   

  	

   

  	

   

  
	

   

  	

  Florists’

  Transworld Delivery, Inc.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

  /s/ Carrie A. Wolfe

  	

   

  
	

   

  	

  Name

  	

  Carrie A. Wolfe

  	

   

  
	

   

  	

  Title

  	

  CFO, Treasurer

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Guarantors

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  FTD,

  Inc.,

  
	

   

  	

  as Parent and as a

  Guarantor

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By

  	

  /s/ Carrie A. Wolfe

  	

   

  
	

   

  	

  Name

  	

  Carrie A. Wolfe

  	

   

  
	

   

  	

  Title

  	

  CFO, Treasurer

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Value

  Network Service, Inc.

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By

  	

  /s/ Carrie A. Wolfe

  	

   

  
	

   

  	

  Name

  	

  Carrie A. Wolfe

  	

   

  
	

   

  	

  Title

  	

  CFO, Treasurer

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  FTD

  Holdings, Incorporated

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By

  	

  /s/ Carrie A. Wolfe

  	

   

  
	

   

  	

  Name

  	

  Carrie A. Wolfe

  	

   

  
	

   

  	

  Title

  	

  CFO, Treasurer

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By

  	

  /s/ Jon R. Burney

  	

   

  
	

   

  	

  Name

  	

  Jon R. Burney

  	

   

  
	

   

  	

  Title

  	

  Secretary

  	

   

  
					

 

79

 

	

   

  	

  FTD

  International Corporation

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By

  	

  /s/ Carrie A. Wolfe

  	

   

  
	

   

  	

  Name

  	

  Carrie A. Wolfe

  	

   

  
	

   

  	

  Title

  	

  CFO, Treasurer

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Renaissance

  Greeting Cards, Inc.

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By

  	

  /s/ Carrie A. Wolfe

  	

   

  
	

   

  	

  Name

  	

  Carrie A. Wolfe

  	

   

  
	

   

  	

  Title

  	

  CFO, Treasurer

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  FTD.COM

  INC.

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By

  	

  /s/ Carrie A. Wolfe

  	

   

  
	

   

  	

  Name

  	

  Carrie A. Wolfe

  	

   

  
	

   

  	

  Title

  	

  CFO, Treasurer

  	

   

  
					

 

80

 

	

   

  	

  Lenders

  
	

   

  	

   

  	

   

  
	

   

  	

  Harris

  Trust and Savings Bank, in its

  individual capacity as a Lender and

  as Administrative Agent

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By

  	

  /s/ Kirby M. Law

  	

   

  
	

   

  	

  Name

  	

  Kirby M. Law

  	

   

  
	

   

  	

  Title

  	

  Vice President

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Address:

  
	

   

  	

   

  
	

   

  	

  111 West Monroe Street

  
	

   

  	

  Chicago, Illinois  60603

  
	

   

  	

  Attention:

      Kirby M. Law

  
	

   

  	

  Telecopy:

      (312) 461-5225

  
	

   

  	

  Telephone:

    (312) 461-2735

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  U.S.

  Bank National Association

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By

  	

  /s/ R. Michael Newton

  	

   

  
	

   

  	

  Name

  	

  R. Michael Newton

  	

   

  
	

   

  	

  Title

  	

  Vice President

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Address:

  
	

   

  	

   

  
	

   

  	

  777 East Wisconsin,

  Mail Drop MK-WI-TGCB

  
	

   

  	

  Milwaukee,

  Wisconsin  53202

  
	

   

  	

  Attention:

  	

  Brett Justman

  
	

   

  	

  Telecopy:

  	

  (414) 765-4632

  
	

   

  	

  Telephone:

  	

  (414) 765-6149

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  KeyBank

  National Association

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By

  	

  /s/ David J. Wechter

  	

   

  
	

   

  	

  Name

  	

  David J. Wechter

  	

   

  
	

   

  	

  Title

  	

  Vice President

  	

   

  
									

 

81

 

	

   

  	

  Address:

  
	

   

  	

   

  
	

   

  	

  127 Public Square, NE 6th

  Floor

  
	

   

  	

  Cleveland, Ohio  44114

  
	

   

  	

  Attention:

  	

  David Wechter

  
	

   

  	

  Telecopy:

  	

  (216) 689-4981

  
	

   

  	

  Telephone:

  	

  (216) 689-4442

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Standard

  Federal Bank N.A.

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By

  	

  /s/ Annette Gordon

  	

   

  
	

   

  	

  Name

  	

  Annette Gordon

  	

   

  
	

   

  	

  Title

  	

  First Vice President

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Address:

  
	

   

  	

  2600 West Big Beaver

  Road, 2nd Floor

  
	

   

  	

  Troy, Michigan  48084

  
	

   

  	

  Attention:

  	

  Annette Gordon

  
	

   

  	

  Telecopy:

  	

  (248) 822-5748

  
	

   

  	

  Telephone:

  	

  (248) 822-5705

  
						

 

82

 

EXHIBIT A

 

NOTICE OF

PAYMENT REQUEST

 

 

[Date]

 

 

[Name of Lender]

[Address]

 

Attention:

 

Reference is made to the Amended and Restated Credit Agreement, dated

as of September 27, 2002, among Florists’ Transworld Delivery, Inc., the

Guarantors, the Lenders party thereto, and Harris Trust and Savings Bank, as

Administrative Agent (the “Credit Agreement”).  Capitalized terms used herein and not

defined herein have the meanings assigned to them in the Credit Agreement.  [The Borrower has failed to pay its

Reimbursement Obligation in the amount of

$                  .  Your Revolver Percentage of the unpaid

Reimbursement Obligation is

$                     ]

or

[                                        

has been required to return a payment by the Borrower of a Reimbursement

Obligation in the amount of

$                          .  Your Revolver Percentage of the returned

Reimbursement Obligation is

$                               .]

 

	

   

  	

  Very truly yours,

  
	

   

  	

   

  	

   

  
	

   

  	

  Harris

  Trust and Savings Bank, as L/C

  Issuer

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   

  
	

   

  	

   

  	

  Name

  	

   

  
	

   

  	

   

  	

  Title

  	

   

  

 

 

EXHIBIT B

 

NOTICE OF

BORROWING

 

Date: 

                 ,

     

 

To:                  Harris Trust and

Savings Bank, as Administrative Agent for the Lenders parties to the Amended

and Restated Credit Agreement dated as of September 27, 2002 (as extended,

renewed, amended or restated from time to time, the “Credit Agreement”), among

Florists’ Transworld Delivery, Inc., the Guarantors, certain Lenders which are

signatories thereto, and Harris Trust and Savings Bank, as Administrative Agent

 

Ladies

and Gentlemen:

 

The undersigned, Florists’ Transworld Delivery, Inc. (the “Borrower”),

refers to the Credit Agreement, the terms defined therein being used herein as

therein defined, and hereby gives you notice irrevocably, pursuant to Section 1.5

of the Credit Agreement, of the Borrowing specified below:

 

1.             The Business Day of the proposed Borrowing is

                    ,

    .

 

2.             The aggregate amount of the proposed Borrowing is

$                       .

 

3.             The Borrowing is being advanced under the Revolving

Credit.

 

4.             The Borrowing is to be comprised of

$                       

of [Base Rate] [Eurodollar] Loans.

 

[5.            The duration of the Interest Period

for the Eurodollar Loans included in the Borrowing shall be

                              

months.]

 

The undersigned hereby certifies that the following statements are true

on the date hereof, and will be true on the date of the proposed Borrowing,

before and after giving effect thereto and to the application of the proceeds

therefrom:

 

(a)           the representations and warranties of

the Borrower contained in Section 6 of the Credit Agreement are true and

correct as though made on and as of such date (except to the extent such

representations and warranties relate to an earlier date, in which case they

are true and correct as of such date); and

 

(b)           no Default or Event of Default has

occurred and is continuing or would result from such proposed Borrowing.

 

	

   

  	

  Florists’

  Transworld Delivery, Inc.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   

  
	

   

  	

   

  	

  Name

  	

   

  
	

   

  	

   

  	

  Title

  	

   

  

 

 

EXHIBIT C

 

NOTICE OF

CONTINUATION/CONVERSION

 

Date: 

                  ,

20  

 

To:                  Harris Trust and

Savings Bank, as Administrative Agent for the Lenders parties to the Amended

and Restated Credit Agreement dated as of September 27, 2002 (as extended,

renewed, amended or restated from time to time, the “Credit Agreement”), among

Florists’ Transworld Delivery, Inc., the Guarantors, certain Lenders which are

signatories thereto, and Harris Trust and Savings Bank, as Administrative Agent

 

Ladies

and Gentlemen:

 

The undersigned, Florists’ Transworld Delivery, Inc. (the “Borrower”),

refers to the Credit Agreement, the terms defined therein being used herein as

therein defined, and hereby gives you notice irrevocably, pursuant to

Section 1.5 of the Credit Agreement, of the [conversion] [continuation] of

the Loans specified herein, that:

 

1.             The conversion/continuation Date is

                 ,

     .

 

2.             The aggregate amount of the Revolving  Loans

to be [converted] [continued] is

$                        .

 

3.             The Loans are to be [converted into] [continued as]

[Eurodollar] [Base Rate] Loans.

 

4.             [If applicable:] 

The duration of the Interest Period for the Revolving Loans included in

the [conversion] [continuation] shall be

                  

months.

 

The undersigned hereby certifies that the following statements are true

on the date hereof, and will be true on the proposed conversion/continuation

date, before and after giving effect thereto and to the application of the

proceeds therefrom:

 

(a)           the representations and warranties of

the Borrower contained in Section 6 of the Credit Agreement are true and

correct as though made on and as of such date (except to the extent such

representations and warranties relate to an earlier date, in which case they

are true and correct as of such date); provided, however, that this condition

shall not apply to the conversion of an outstanding Eurodollar Loan to a Base

Rate Loan; and

 

(b)           no Default or Event of Default has

occurred and is continuing, or would result from such proposed [conversion]

[continuation].

 

	

   

  	

  Florists’

  Transworld Delivery, Inc.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   

  
	

   

  	

   

  	

  Name

  	

   

  
	

   

  	

   

  	

  Title

  	

   

  
					

 

 

EXHIBIT D-1

 

REVOLVING NOTE

 

	

  U.S.

  $                       

  	

  September 27, 2002

  

 

For  Value

Received, the undersigned,

Florists’ Transworld Delivery, Inc., a Michigan corporation  (the “Borrower”), hereby promises

to pay to the order of

                                   

(the “Lender”)

on the Termination Date of the hereinafter defined Credit Agreement, at the

principal office of Harris Trust and Savings Bank, as Administrative Agent, in

Chicago, Illinois, in immediately available funds, the principal sum of

                            

Dollars

($                 )

or, if less, the aggregate unpaid principal amount of all Revolving Loans made

by the Lender to the Borrower pursuant to the Credit Agreement, together with

interest on the principal amount of each Revolving Loan from time to time

outstanding hereunder at the rates, and payable in the manner and on the dates,

specified in the Credit Agreement.

 

This Note is one of the Revolving Notes referred to in the Amended and

Restated Credit Agreement dated as of September 27, 2002, among the Borrower,

the Guarantors, Harris Trust and Savings Bank, as Administrative Agent and the

Lenders party thereto (the “Credit Agreement”), and this Note and the

holder hereof are entitled to all the benefits and security  provided for thereby or

referred to therein, to which Credit Agreement reference is hereby made for a

statement thereof.  All defined terms

used in this Note, except terms otherwise defined herein, shall have the same

meaning as in the Credit Agreement. 

This Note shall be governed by and construed in accordance with the

internal laws of the State of Illinois.

 

Voluntary prepayments may be made hereon, certain prepayments are

required to be made hereon, and this Note may be declared due prior to the

expressed maturity hereof, all in the events, on the terms and in the manner as

provided for in the Credit Agreement.

 

The Borrower hereby waives demand, presentment, protest or notice of

any kind hereunder.

 

	

   

  	

  Florists’

  Transworld Delivery, Inc.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   

  
	

   

  	

   

  	

  Name

  	

   

  
	

   

  	

   

  	

  Title

  	

   

  
					

 

 

EXHIBIT D-2

 

SWING LINE NOTE

September 27,  2002

 

For  Value

Received, the undersigned,

Florists’ Transworld Delivery, Inc., a

Michigan corporation (the “Borrower”), hereby promises to pay to the

order of Harris Trust and Savings Bank (the “Lender”) on the Termination Date of the

hereinafter defined Credit Agreement, at the principal office of Harris Trust

and Savings Bank, as Administrative Agent, in Chicago, Illinois, in immediately

available funds, an amount equal to the aggregate unpaid principal amount of

all Swing Loans made by the Lender to the Borrower pursuant to the Credit

Agreement, together with interest on the principal amount of each Swing Loan

from time to time outstanding hereunder at the rates, and payable in the manner

and on the dates, specified in the Credit Agreement.

 

This Note is the Swing Line Note referred to in the Amended and

Restated Credit Agreement dated as of September 27, 2002, among the Borrower,

the Guarantors, Harris Trust and Savings Bank, as Administrative Agent and the

Lenders party thereto (the “Credit Agreement”), and this Note and the

holder hereof are entitled to all the benefits and security provided for

thereby or referred to therein, to which Credit Agreement reference is hereby

made for a statement thereof.  All defined

terms used in this Note, except terms otherwise defined herein, shall have the

same meaning as in the Credit Agreement. 

This Note shall be governed by and construed in accordance with the

internal laws of the State of Illinois.

 

Voluntary prepayments may be made hereon, certain prepayments are

required to be made hereon, and this Note may be declared due prior to the

expressed maturity hereof, all in the events, on the terms and in the manner as

provided for in the Credit Agreement.

 

The Borrower hereby waives demand, presentment, protest or notice of

any kind hereunder.

 

	

   

  	

  Florists’

  Transworld Delivery, Inc.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   

  
	

   

  	

   

  	

  Name

  	

   

  
	

   

  	

   

  	

  Title

  	

   

  
					

 

 

EXHIBIT E

 

FLORISTS’

TRANSWORLD DELIVERY, INC.

 

COMPLIANCE

CERTIFICATE

 

	

  To:

  	

  Harris Trust and

  Savings Bank, as

  Administrative Agent under, and the

  Lenders party to, the Credit Agreement

  described below

  

 

This Compliance Certificate is furnished to the Administrative Agent

and the Lenders pursuant to that certain Amended and Restated Credit Agreement

dated as of September 27, 2002 among Florists’ Transworld Delivery, Inc., FTD,

Inc., the Guarantors party thereto, the Lenders and yourselves, as

Administrative Agent for the Lenders (the “Credit Agreement”).  Unless otherwise defined herein, the terms

used in this Compliance Certificate have the meanings ascribed thereto in the

Credit Agreement.

 

The Undersigned hereby certifies that:

 

1.             I am the duly elected

                        

of Florists’ Transworld Delivery, Inc.;

 

2.             I have reviewed the terms of the Credit Agreement and I

have made, or have caused to be made under my supervision, a detailed review of

the transactions and conditions of the Parent, the Borrower and the

Subsidiaries during the accounting period covered by the attached financial

statements;

 

3.             The examinations described in paragraph 2 did not

disclose, and I have no knowledge of, the existence of any condition or the

occurrence of any event which constitutes a Default or Event of Default during

or at the end of the accounting period covered by the attached financial

statements or as of the date of this Compliance Certificate, except as set

forth below;

 

4.             The financial statements required by Section 8.5 of

the Credit Agreement and being furnished to you concurrently with this

Compliance Certificate are true, correct and complete as of the date and for

the periods covered thereby; and

 

5.             The Schedule I hereto sets forth financial data and

computations evidencing the Borrower’s compliance with certain covenants of the

Credit Agreement, all of which data and computations are, to the best of my

knowledge, true, complete and correct and have been made in accordance with the

relevant Sections of the Credit Agreement.

 

 

Described below are the exceptions, if any, to paragraph 3 by

listing, in detail, the nature of the condition or event, the period during

which it has existed and the action which the Borrower has taken, is taking, or

proposes to take with respect to each such condition or event:

	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  

 

The foregoing certifications, together with the computations set forth

in Schedule I hereto and the financial statements delivered with this

Certificate in support hereof, are made and delivered this

          day of

                            ,

20    .

 

	

   

  	

  Florists’

  Transworld Delivery, Inc.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   

  
	

   

  	

   

  	

  Name

  	

   

  
	

   

  	

   

  	

  Title

  	

   

  
					

 

2

 

SCHEDULE I

 

TO COMPLIANCE

CERTIFICATE

 

FLORISTS’

TRANSWORLD DELIVERY, INC.

 

COMPLIANCE

CALCULATIONS

FOR AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF SEPTEMBER 27, 2002

 

Calculations as of

                ,

20   

 

	

  A.            Total

  Funded Debt to EBITDA (Section 8.22)

  
	

   

  
	

  1.             Total Funded Debt

  	

  $

  	

   

  
	

   

  	

   

  	

   

  
	

  2.             Net Income for past 4 quarters

  	

  $

  	

   

  
	

   

  	

   

  	

   

  
	

  3.             Interest Expense for past 4

  quarters

  	

  $

  	

   

  
	

   

  	

   

  	

   

  
	

  4.             Income taxes for past 4 quarters

  	

  $

  	

   

  
	

   

  	

   

  	

   

  
	

  5.             Depreciation and Amortization

  Expense for past 4 quarters

  	

  $

  	

   

  
	

   

  	

   

  	

   

  
	

  6.             Plus/minus extraordinary non-cash

  losses/gains

  	

  $

  	

   

  
	

   

  	

   

  	

   

  
	

  7.             Other adjustments (see definition

  of EBITDA)

  	

  $

  	

   

  
	

   

  	

   

  	

   

  
	

  8.             Sum of Lines A2, A3, A4, A5, A6

  and A7 (“EBITDA”)

  	

  $

  	

   

  
	

   

  	

   

  	

   

  
	

  9.             Ratio of Line A1 to A8

  	

       : 1.0

  
	

   

  	

   

  
	

  10.           Line A9 ratio must not exceed

  	

  2.50 : 1.0

  
	

   

  	

   

  
	

  11.           The Parent is in compliance (circle

  yes or no)

  	

  yes/no

  
	

   

  	

   

  
	

  B.            Consolidated Net Worth

  (Section 8.23)

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  1.             Consolidated Net Worth

  	

  $

  	

   

  
	

   

  	

   

  	

   

  
	

  2.             Line B1 shall not be less than

  	

  $

  	

   

  
	

   

  	

   

  	

   

  
	

  3.             The Parent is in compliance

  (circle yes or no)

  	

  yes/no

  
	

   

  	

   

  
	

  C.            Fixed Charge Coverage Ratio

  (Section 8.24)

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  1.             EBITDA (Line A8 above), less

  Capital Expenditures

  	

  $

  	

   

  
	

   

  	

   

  	

   

  
	

  2.             Scheduled cash principal payments

  for past 4 quarters

  	

  $

  	

   

  
	

   

  	

   

  	

   

  
	

  3.             Cash income taxes for past 4

  quarters

  	

  $

  	

   

  
	

   

  	

   

  	

   

  
	

  4.             Cash Interest Expense for past 4

  quarters

  	

  $

  	

   

  
	

   

  	

   

  	

   

  
	

  5.             Restricted Payments (excluding

  management fees and related expenses) for past 4 quarters

  	

  $

  	

   

  

 

 

	

  6.             Sum of Lines C2, C3, C4 and C5

  	

  $

  	

   

  
	

   

  	

   

  	

   

  
	

  7.             Ratio of Line C1 to Line C6

  	

       : 1.0

  
	

   

  	

   

  
	

  8.             Line C7 ratio must not be less

  than

  	

  2.0 : 1.0

  
	

   

  	

   

  
	

  9.             The Parent is in compliance

  (circle yes or no)

  	

  yes/no

  
	

   

  	

   

  
	

  D.            Rentals (Section 8.26)

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  1.             Rentals during most recent fiscal

  year

  	

  $

  	

   

  
	

   

  	

   

  	

   

  
	

  2.             Line D1 shall not be more than 

  	

  $

  	

  10,000,000

  
	

   

  	

   

  	

   

  
	

  3.             The Parent is in compliance

  (circle yes or no)

  	

  yes/no

  

 

2

 

EXHIBIT F

 

ASSIGNMENT AND

ACCEPTANCE

 

Dated

                  , 20      

 

Reference is made to the Amended and Restated Credit Agreement dated as

of September 27, 2002 (the “Credit Agreement”) among Florists’

Transworld Delivery, Inc., the Guarantors, the Lenders (each as defined in the

Credit Agreement) and Harris Trust and Savings Bank, as Administrative Agent

for the Lenders (the “Administrative Agent”).  Terms defined in the Credit Agreement are

used herein with the same meaning.

 

                                                                                                       

(the “Assignor”)

and

                                

(the “Assignee”)

agree as follows:

 

1.             The Assignor hereby sells and assigns to the Assignee,

and the Assignee hereby purchases and assumes from the Assignor, a

          % interest in and

to all of the Assignor’s rights and obligations under the Credit Agreement as

of the Effective Date (as defined below), including, without limitation, such

percentage interest in the Assignor’s Commitments as in effect on the Effective

Date and the Loans, if any, owing to the Assignor on the Effective Date and the

Assignor’s Percentage of any outstanding L/C Obligations.

 

2.             The Assignor (i) represents and warrants that as of the

date hereof (A) its Revolving Credit Commitment is

$                        ,

(B) the aggregate outstanding principal amount of Loans made by it under

the Credit Agreement that have not been repaid is

$                  

and a description of the interest rates and interest periods of such Loans is

attached as Annex 1 hereto, and (C) the aggregate principal amount of

Assignor’s Percentage of outstanding L/C Obligations is

$                 ;

(ii) represents and warrants that it is the legal and beneficial owner of

the interest being assigned by it hereunder and that such interest is free and

clear of any adverse claim, lien, or encumbrance of any kind; (iii) makes

no representation or warranty and assumes no responsibility with respect to any

statements, warranties or representations made in or in connection with the

Credit Agreement or the execution, legality, validity, enforceability, genuineness,

sufficiency or value of the Credit Agreement or any other instrument or

document furnished pursuant thereto; and (iv) makes no representation or

warranty and assumes no responsibility with respect to the financial condition

of the Borrower or any Subsidiary or the performance or observance by the

Borrower or any Subsidiary of any of their respective obligations under the

Credit Agreement or any other instrument or document furnished pursuant

thereto.

 

3.             The Assignee (i) confirms that it has received a

copy of the Credit Agreement, together with copies of the most recent financial

statements delivered to the Lenders pursuant to Section 8.5(a) and (b)

thereof and such other documents and information as it has deemed appropriate

to make its own credit analysis and decision to

 

 

enter into this

Assignment and Acceptance; (ii) agrees that it will, independently and

without reliance upon the Administrative Agent, the Assignor or any other

Lender 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 the Credit Agreement; (iii) appoints and authorizes the

Administrative Agent to take such action as Administrative Agent on its behalf

and to exercise such powers under the Credit Agreement and the other Loan

Documents as are delegated to the Administrative Agent by the terms thereof,

together with such powers as are reasonably incidental thereto;

(iv) agrees that it will perform in accordance with their terms all of the

obligations which by the terms of the Credit Agreement are required to be

performed by it as a Lender; and (v) specifies as its lending office (and

address for notices) the offices set forth beneath its name on the signature pages

hereof.

 

4.             As consideration for the assignment and sale

contemplated in Annex 1 hereof, the Assignee shall pay to the Assignor on

the Effective Date in Federal funds the amount agreed upon between the

parties.  It is understood that

commitment and/or letter of credit fees accrued to the Effective Date with

respect to the interest assigned hereby are for the account of the Assignor and

such fees accruing from and including the date hereof are for the account of

the Assignee.  Each of the Assignor and

the Assignee hereby agrees that if it receives any amount under the Credit

Agreement which is for the account of the other party hereto, it shall receive

the same for the account of such other party to the extent of such other

party’s interest therein and shall promptly pay the same to such other party.

 

5.             The effective date for this Assignment and Acceptance

shall be

                ,

20      (the “Effective Date”).  Following the execution of this Assignment

and Acceptance, it will be delivered to the Administrative Agent for acceptance

and recording by the Administrative Agent and, if required, the relevant

Borrower.

 

6.             Upon such acceptance and recording, as of the Effective

Date, (i) the Assignee shall be a party to the Credit Agreement and, to

the extent provided in this Assignment and Acceptance, have the rights and

obligations of a Lender thereunder and (ii) the Assignor shall, to the

extent provided in this Assignment and Acceptance, relinquish its rights and be

released from its obligations under the Credit Agreement.

 

7.             Upon such acceptance and recording, from and after the

Effective Date, the Administrative Agent shall make all payments under the

Credit Agreement in respect of the interest assigned hereby (including, without

limitation, all payments of principal, interest and commitment fees with

respect thereto) to the Assignee.  The

Assignor and Assignee shall make all appropriate adjustments in payments under

the Credit Agreement for periods prior to the Effective Date directly between

themselves.

 

8.             In accordance with Section 13.12 of the Credit

Agreement, the Assignor and the Assignee request and direct that the

Administrative Agent prepare and cause the Borrower to execute and deliver to

the Assignee the relevant Notes payable to the 

 

2

 

Assignee in the amount of

its Commitments and new Notes to the Assignor in the amount of its Commitments

after giving effect to this assignment.

 

9.             This Assignment and Acceptance shall be governed by, and

construed in accordance with, the laws of the State of Illinois.

 

	

   

  	

  [Assignor

  Lender]

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   

  
	

   

  	

   

  	

  Name

  	

   

  
	

   

  	

   

  	

  Title

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  [Assignee Lender]

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   

  
	

   

  	

   

  	

  Name

  	

   

  
	

   

  	

   

  	

  Title

  	

   

  
	

   

  	

   

  
	

   

  	

  Lending office (and

  address for notices):

  
	

   

  	

   

  
	

  Accepted and consented

  this

  	

   

  
	

       

  day of            ,

  2002

  	

   

  
	

   

  	

   

  
	

  Florists’

  Transworld Delivery, Inc.

  	

   

  
	

   

  	

   

  
	

  By

  	

   

  	

   

  	

   

  
	

   

  	

  Name

  	

   

  	

   

  	

   

  
	

   

  	

  Title

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Accepted and consented

  to by the Administrative Agent this

  	

   

  
	

              

  day of

                ,

  2002

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Harris

  Trust and Savings Bank,

  as Administrative Agent

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  By

  	

   

  	

   

  	

   

  
	

   

  	

  Name

  	

   

  	

   

  	

   

  
	

   

  	

  Title

  	

   

  	

   

  	

   

  
											

 

3

 

ANNEX I

 

TO ASSIGNMENT

AND ACCEPTANCE

 

	

  Principal Amount

  	

   

  	

  Type of Loan

  	

   

  	

  Interest Rate

  	

   

  	

  Maturity Date

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  

 

 

EXHIBIT G

 

ADDITIONAL

GUARANTOR SUPPLEMENT

 

 

                         ,

       

 

Harris Trust and Savings

Bank, as

Administrative Agent for the Lenders named in

the Amended and Restated Credit Agreement

dated as of September 27, 2002, among Florists’

Transworld Delivery, Inc., as Borrower, the

Guarantors referred to therein, the Lenders from

time to time party thereto, and the

Administrative Agent (the “Credit Agreement”)

 

Ladies

and Gentlemen:

 

Reference is made to the Credit Agreement described above.  Terms not defined herein which are defined

in the Credit Agreement shall have for the purposes hereof the meaning provided

therein.

 

The undersigned, [name of Subsidiary Guarantor], a [jurisdiction

of incorporation or organization] hereby elects to be a “Guarantor”

for all purposes of the Credit Agreement, effective from the date hereof.  The undersigned confirms that the

representations and warranties set forth in Section 6 of the Credit

Agreement are true and correct as to the undersigned as of the date hereof.

 

Without limiting the generality of the foregoing, the undersigned

hereby agrees to perform all the obligations of a Guarantor under, and to be

bound in all respects by the terms of, the Credit Agreement, including without

limitation Section 12 thereof, to the same extent and with the same force

and effect as if the undersigned were a signatory party thereto.

 

This Agreement shall be construed in accordance with and governed by

the internal laws of the State of Illinois.

 

	

   

  	

  Very truly yours,

  
	

   

  	

   

  
	

   

  	

  [Name of Subsidiary Guarantor]

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   

  
	

   

  	

   

  	

  Name

  	

   

  
	

   

  	

   

  	

  Title

  	

   

  
					

 

 

SCHEDULE 1

 

COMMITMENTS

 

	

  Name of Lender

  	

   

  	

  Revolving Credit

  Commitment

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Harris Trust and Savings Bank

  	

   

  	

  $23,437,500.00

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  U.S. Bank National Association

  	

   

  	

  $18,750,000.00

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  KeyBank National Association

  	

   

  	

  $18,750,000.00

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Standard Federal Bank N.A.

  	

   

  	

  $14,062,500.00

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Total

  	

   

  	

  $75,000,000

  	

   

  

 

 

SCHEDULE 1.2

 

EXISTING LETTERS

OF CREDIT

 

 

See attached schedule

 

 

SCHEDULE 6.2

 

SUBSIDIARIES

 

	

  Name

  	

   

  	

  Jurisdiction of

  Organization

  	

   

  	

  Percentage

  Ownership

  	

   

  	

  Owner

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Florists’

  Transworld Delivery, Inc.

  	

   

  	

  Michigan

  	

   

  	

  100

  	

  %

  	

  FTD, Inc.

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Florists’

  Transworld Delivery Association of Canada Limited

  	

   

  	

  Ontario, Canada

  	

   

  	

  100

  	

  %

  	

  Florists’

  Transworld Delivery, Inc.

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Value

  Network Service, Inc.

  	

   

  	

  Delaware

  	

   

  	

  100

  	

  %

  	

  FTD, Inc.

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  FTD

  Holdings, Incorporated

  	

   

  	

  Delaware

  	

   

  	

  100

  	

  %

  	

  Florists’

  Transworld Delivery, Inc.

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  FTD.COM

  INC.

  	

   

  	

  Delaware

  	

   

  	

  100

  	

  %

  	

  Florists’

  Transworld Delivery, Inc.

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Florists

  Transworld Delivery de Mexico, S. de R.L. de C.V.

  	

   

  	

  Mexico, D.F.

  	

   

  	

  100

  	

  %

  	

  FTD

  International Corporation

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  FTD

  International Corporation

  	

   

  	

  Delaware

  	

   

  	

  100

  	

  %

  	

  FTD, Inc.

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Renaissance

  Greeting Cards, Inc.

  	

   

  	

  Maine

  	

   

  	

  100

  	

  %

  	

  FTD Holdings,

  Incorporated

  	

   

  

 

 

SCHEDULE 8.7

 

PERMITTED

EXISTING INDEBTEDNESS

 

None

 

 

SCHEDULE 8.8

 

PERMITTED

EXISTING LIENS

 

Debtor:  Florists Transworld Delivery, Inc.

 

	

  Jurisdiction

  	

   

  	

  Indices

  	

   

  	

  Date

  	

   

  	

  File No.

  	

   

  	

  Secured Party

  	

   

  	

  Collateral/Comments

  	

   

  
	

  ILLINOIS

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Sec.

  of State

  through 9/5/02

  	

   

  	

  UCC

  	

   

  	

  2/11/99

  2/22/99

  3/23/99

  	

   

  	

  3988170

  3992497

  4009103

  	

   

  	

  Varilease Corporation

  	

   

  	

  Equipment lease

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  UCC

  ASSIGN

  	

   

  	

  5/10/99

  	

   

  	

  4033029

  	

   

  	

  Fleet Business Credit

  Corporation

  	

   

  	

  Assignment of Varilease

  file #4009103

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  UCC

  	

   

  	

  9/02/99

  	

   

  	

  4089328

  	

   

  	

  Dell Financial

  Services, N.A.

  	

   

  	

  Equipment lease

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  UCC

  	

   

  	

  10/04/99

  	

   

  	

  4103200

  	

   

  	

  General Electric

  Capital Corporation

  	

   

  	

  Equipment lease

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  UCC

  	

   

  	

  6/23/00

  7/27/00

  12/08/00

  12/11/00

  12/21/00

  1/24/01

  1/24/01

  4/09/01

  	

   

  	

  4231116

  4244610

  4308647

  4309437

  4314019

  4329137

  4329140

  4367318

  	

   

  	

  Hewlett-Packard Company

  	

   

  	

  Equipment lease

  	

   

  
	

  DuPage

  County

  through 9/3/02

  	

   

  	

  FIXT

  	

   

  	

  11/26/97

  	

   

  	

  R97-182648

  	

   

  	

  The First National Bank

  of Chicago

  	

   

  	

  Fixture Filings

  	

   

  
	

  DuPage

  County

  through 9/3/02

  	

   

  	

  FTL

  STL

  J-LIEN

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  
	

  MICHIGAN

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Sec.

  of State

  through 9/4/02

  	

   

  	

  UCC

  	

   

  	

  1/12/01

  	

   

  	

  20756C

  	

   

  	

  Hewlett-Packard

  Company

  	

   

  	

  Equipment lease

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  UCC

  	

   

  	

  8/1/02

  	

   

  	

  42208C

  	

   

  	

  Hewlett-Packard

  Company

  	

   

  	

  Equipment lease

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Oakland

  County

  through 9/4/02

  	

   

  	

  UCC

  FTL

  STL

  J-LIEN

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  
	

  OHIO

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Sec.

  of State

  through 8/30/02

  	

   

  	

  UCC

  	

   

  	

  12/16/00

  	

   

  	

  AP307591

  	

   

  	

  Hewlett-Packard

  Company

  	

   

  	

  Equipment lease

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  UCC

  	

   

  	

  12/16/00

  	

   

  	

  AP301693

  	

   

  	

  Hewlett-Packard

  Company

  	

   

  	

  Equipment lease

  	

   

  
	

  Butler

  County

  through 9/9/02

  	

   

  	

  UCC

  FTL

  STL

  J-LIEN

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  

 

 

Debtor:  Renaissance Greeting Cards, Inc.

 

	

  Jurisdiction

  	

   

  	

  Indices

  	

   

  	

  Date

  	

   

  	

  File No.

  	

   

  	

  Secured Party

  	

   

  	

  Collateral/Comments

  	

   

  
	

  ILLINOIS

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Sec.

  of State

  through 9/5/02

  	

   

  	

  UCC

  FTL

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  
	

  DuPage

  County

  through 9/3/02

  	

   

  	

  UCC

  FTL

  STL

  J-LIEN

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  
	

  MAINE

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Sec.

  of State

  through 9/4/02

  	

   

  	

  UCC

  FTL

  STL

  J-LIEN

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Cumberland

  County

  through 9/11/02

  	

   

  	

  UCC

  FTL

  STL

  J-LIEN

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  

 

2

 

Debtor:  FTD, Inc. (f/k/a IOS Brands Corporation)

 

	

  Jurisdiction

  	

   

  	

  Indices

  	

   

  	

  Date

  	

   

  	

  File No.

  	

   

  	

  Secured Party

  	

   

  	

  Collateral/Comments

  	

   

  
	

  DELAWARE

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Sec.

  of State

  through 9/5/02

  	

   

  	

  UCC

  FTL

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  
	

  ILLINOIS

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Sec.

  of State

  through 9/5/02

  	

   

  	

  UCC

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  
	

  DuPage

  County

  through 9/3/02

  	

   

  	

  UCC

  FTL

  STL

  J-LIEN

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  

 

3

 

Debtor:  Value Network Service, Inc.

 

	

  Jurisdiction

  	

   

  	

  Indices

  	

   

  	

  Date

  	

   

  	

  File No.

  	

   

  	

  Secured Party

  	

   

  	

  Collateral/Comments

  	

   

  
	

  DELAWARE

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Sec.

  of State

  through 9/5/02

  	

   

  	

  UCC

  FTL

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  ILLINOIS

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Sec.

  of State

  through 9/5/02

  	

   

  	

  UCC

  FTL

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  
	

  DuPage

  County

  through 9/3/02

  	

   

  	

  UCC

  FTL

  STL

  J-LIEN

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  

 

4

 

Debtor:  FTD International Corporation

 

	

  Jurisdiction

  	

   

  	

  Indices

  	

   

  	

  Date

  	

   

  	

  File No.

  	

   

  	

  Secured Party

  	

   

  	

  Collateral/Comments

  	

   

  
	

  DELAWARE

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Sec.

  of State

  through 9/5/02

  	

   

  	

  UCC

  FTL

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  
	

  ILLINOIS

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Sec.

  of State

  through 9/5/02

  	

   

  	

  UCC

  FTL

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  
	

  DuPage County

  through 9/3/02

  	

   

  	

  UCC

  FTL

  STL

  J-LIEN

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  

 

5

 

Debtor:  FTD Holdings, Incorporated

 

	

  Jurisdiction

  	

   

  	

  Indices

  	

   

  	

  Date

  	

   

  	

  File No.

  	

   

  	

  Secured Party

  	

   

  	

  Collateral/Comments

  	

   

  
	

  DELAWARE

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Sec.

  of State

  through 9/5/02

  	

   

  	

  UCC

  FTL

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  
	

  ILLINOIS

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Sec.

  of State

  through 9/5/02

  	

   

  	

  UCC

  FTL

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  
	

  DuPage

  County

  through 9/3/02

  	

   

  	

  UCC

  FTL

  STL

  J-LIEN

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  

 

6

 

Debtor:  FTD.COM, INC.

 

	

  Jurisdiction

  	

   

  	

  Indices

  	

   

  	

  Date

  	

   

  	

  File No.

  	

   

  	

  Secured Party

  	

   

  	

  Collateral/Comments

  	

   

  
	

  DELAWARE

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Sec.

  of State

  through 9/5/02

  	

   

  	

  UCC

  FTL

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  
	

  ILLINOIS

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Sec.

  of State

  through 9/5/02

  	

   

  	

  UCC

  FTL

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  
	

  DuPage

  County

  through 9/3/02

  	

   

  	

  UCC

  FTL

  STL

  J-LIEN

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  No active filings

  	

   

  

 

7

 

SCHEDULE 8.9

 

PERMITTED

EXISTING INVESTMENTS

 

	

  A.

  	

  FTD, INC.

  
	

   

  	

  None

  
	

   

  	

   

  
	

  B.

  	

  Florists’ Transworld

  Delivery, Inc.

  
	

   

  	

  1.

  	

  Holds a 33 1/3% equity

  interest in Interflora, Inc.

  
	

   

  	

  2.

  	

  Officer Note – Tim

  Rasmussen dated June 12, 2001. 

  Principal balance outstanding at September 25, 2002 is $66,000.

  
	

   

  	

  3.

  	

  Officer Note – William

  Van Cleave dated May 17, 2001. 

  Principal balance outstanding at September 25, 2002 is $116,075.

  
	

   

  	

   

  	

   

  
	

  C.

  	

  Florists’ Transworld

  Delivery Association of Canada, LTD.

  
	

   

  	

  None

  
	

   

  	

   

  
	

  D.

  	

  Value Network Service,

  Inc.

  
	

   

  	

  None

  
	

   

  	

   

  
	

  E.

  	

  FTD Holdings,

  Incorporated

  
	

   

  	

  None

  

 

 

	

  F.

  	

  Florists’ Transworld

  Delivery de Mexico, S. de R.L. de C.V.

  
	

   

  	

  None

  
	

   

  	

   

  
	

  G.

  	

  FTD International

  Corporation

  
	

   

  	

  None

  
	

   

  	

   

  
	

  H.

  	

  Renaissance Greeting

  Cards, Inc.

  
	

   

  	

  None

  

 

2Exhibit

10.30

 

LEASE

AMENDMENT III

 

Ward

Hill Realty Associates, LLC, Successors in interest to Evans Enterprises of

South Beach, Landlord and UFP Technologies, Inc. formerly known as United Foam

Plastics, Corporation, Tenant entered into a Lease Agreement on January 15,

1993 for the premises located at 175 Ward Hill Avenue, Haverhill,

Massachusetts.

The

Landlord and Tenant have agreed to extend and make changes in the Original

Lease Agreement as follows:

 

Term:

The

term of the Lease shall be extended for a period of five (5) years beginning on

March 1, 2003 and ending on February 27, 2008.

 

Early Termination:

The

Tenant shall have the right to terminate the Lease at any time after the first

nine (9) months of the Extended Lease term by providing the Landlord with

ninety (90) days advance written notice of the Tenant’s election to terminate

the Lease and paying the Landlord a termination fee of 25 % of the balance of

the outstanding Gross Lease obligation, (the Gross Lease obligation includes

the Base Rent as well as the additional rent),. The early termination fee shall

be payable on or before the effective date of the termination date.

 

Base Rent:

The

Base Rent for the first year extended term shall be $3.75 per square foot,

$182,895. annually, payable in advance monthly the sum $15,241.25 beginning on

March 1, 2003 and ending February 28, 2004.

 

The

Base Rent for the four (4) additional years of the extended term shall be the

Base Rent of the first year of the extended term plus any annual increase in

the Consumer Price Index as described in Exhibit “B” of the Original Lease

Agreement.

 

All

the other terms and conditions of the Original Lease Agreement and its previous

amendments-shal1.remain the same in full force and effect and are hereby

ratified and confirmed.

 

This

   12th   

day of September, 2002.

 

 

	

    /s/  Amy Innareli

  	

   

  	

    /s/  Dick Anagnost

  	

   

  
	

    Witness

  	

    Dick Anagnost
  Managing Member
  Ward Hill Realty Associates, LLC

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  	

    /s/  Ronald J. Lataille

  	

   

  
	

    Witness

  	

    Ronald J. Lataille
  Vice President and CFO UFP
  Technologies, Inc.

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