Exhibit 10.2
INTERCOMPANY SERVICES AGREEMENT
This Intercompany Services Agreement (this "Agreement") is being entered
into as of the ___ day of June, 1999 and is entered into by and between
Florists' Transworld Delivery, Inc., a Michigan corporation ("FTDI"), and
xxx.xxx inc., a Delaware corporation ("xxx.xxx").
RECITALS
A. Historically, FTDI was engaged directly in, among other things, the
business of offering consumers the opportunity to place floral and
specialty gift orders directly with FTDI through its toll free
telephone number (0-000-XXXX-XXX) and its Web site (xxx.xxx.xxx) (the
"Direct Access Business").
B. Recently, FTDI formed xxx.xxx as a subsidiary of FTDI and, pursuant to
the Formation Agreement, dated as of May 19, 1999, between FTDI and
xxx.xxx (the "Formation Agreement"), transferred substantially all of
FTDI's assets, rights and interests relating to the Direct Access
Business to xxx.xxx.
C. In connection with the Direct Access Business, xxx.xxx desires to
obtain various corporate, administrative and other services
("Services") from FTDI, and FTDI desires to provide such Services to
xxx.xxx.
THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
Section 1. Services.
FTDI or, at its option, its subsidiaries (other than xxx.xxx and its
subsidiaries) will, if requested by xxx.xxx, render to xxx.xxx the following
Services in accordance with the terms of this Agreement:
(a) Corporate Services. FTDI will provide, directly or through its
subsidiaries, the services described in Exhibit A hereto, at the cost specified
and on the other terms and conditions set forth in Exhibit A.
(b) Space Sharing. FTDI will, if requested by xxx.xxx, make the office
space set forth in Exhibit B available to xxx.xxx at the cost specified and on
the other terms and conditions set forth in Exhibit B.
(c) In the event that xxx.xxx requests services that exceed the scope or
extent of the Services provided for herein, and if FTDI agrees to provide such
services, FTDI and xxx.xxx will negotiate in good faith the terms and
conditions, including price, under which FTDI will provide such Services;
provided, however, that the terms and conditions, including price, upon which
FTDI will provide those Services to xxx.xxx shall be no less favorable to
xxx.xxx than the terms
and conditions, including price, upon which FTDI provides comparable services to
unaffiliated third parties.
Section 2. Compensation.
xxx.xxx will pay to FTDI when due a fee for each of the Services equal to
the amount described in the appropriate Exhibit hereto relating to such Service,
provided that in the event xxx.xxx terminates any Service in accordance with
Section 3 hereof, the fee for such Service shall cease to accrue on and after
the effective date of such termination. Late payments shall accrue interest at a
rate equal to FTDI's average cost of borrowings at the end of FTDI's most recent
fiscal quarter plus 200 basis points.
Section 3. Term.
(a) The term of this Agreement shall begin on June 1, 1999 (the "Effective
Date") and shall continue for an indefinite period in full force and effect
until it is terminated in accordance with this Section 3.
(b) FTDI will have the right (but not the obligation) to terminate this
Agreement and the rights granted to xxx.xxx hereunder:
(i) if xxx.xxx is in material breach of any of its obligations
hereunder, which breach is not cured within 20 days of receipt of written
notice from FTDI of such breach;
(ii) if xxx.xxx is the subject of a voluntary petition in bankruptcy
or any voluntary proceeding relating to insolvency, receivership,
liquidation or composition for the benefit of creditors, if such petition
or proceeding is not dismissed within 90 days of filing, or becomes the
subject of any involuntary petition in bankruptcy or any involuntary
proceeding relating to insolvency, receivership, liquidation or composition
for the benefit of creditors, if such petition or proceeding is not
dismissed within 90 days of filing;
(iii) if xxx.xxx involuntarily dissolves or is dissolved;
(iv) if xxx.xxx is judicially adjudicated insolvent or generally is
unable to pay its debts as they mature or makes an assignment for the
benefit of its creditors;
(v) upon 180 days written notice to xxx.xxx, following the occurrence
of a distribution of the voting securities of xxx.xxx pursuant to a
dividend intended to be on a tax-free basis under the Internal Revenue Code
of 1986, as amended from time to time; or
(vi) upon 180 days written notice to xxx.xxx, in the event FTDI, FTD
Corporation, a Delaware corporation ("FTDC"), or any subsidiary or parent
of either FTDI or FTDC ceases to own any of the stock of xxx.xxx.
(c) xxx.xxx will have the right (but not the obligation) to terminate this
Agreement and the rights granted to FTDI:
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(i) if FTDI is in material breach of any of its obligations
hereunder, which breach is not cured within 20 days of receipt of written
notice from xxx.xxx of such breach;
(ii) if FTDI is the subject of a voluntary petition in bankruptcy or
any voluntary proceeding relating to insolvency, receivership, liquidation
or composition for the benefit of creditors, if such petition or proceeding
is not dismissed within 90 days of filing, or becomes the subject of any
involuntary petition in bankruptcy or any involuntary proceeding relating
to insolvency, receivership, liquidation or composition for the benefit of
creditors, if such petition or proceeding is not dismissed within 90 days
of filing;
(ii) if FTDI involuntarily dissolves or is dissolved;
(iv) if FTDI is judicially adjudicated insolvent or generally is
unable to pay its debts as they mature or makes an assignment for the
benefit of its creditors; or
(v) upon 180 days written notice to FTDI.
(d) FTDI will have the right (but not the obligation) to terminate this
Agreement and the rights granted to xxx.xxx hereunder, upon 90 days written
notice to xxx.xxx, following the acquisition of the beneficial ownership of at
least 20% (the "Threshold") of the voting power represented by the voting
securities of xxx.xxx, any successor thereto or any Permitted Assignee (as
defined in Section 10(a) of this Agreement) by any person or "group" within the
meaning of Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") or any successor provision to either of
the foregoing, including any group acting for the purpose of acquiring, holding,
voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act or any successor provision thereof (a "group") other than FTDC,
any affiliate of FTDC, FTDI or any affiliate of FTDI. For purposes of this
Agreement, (i) the term "beneficial ownership" shall have the meaning set forth
in Rule 13d-3 of the Exchange Act or any successor provisions thereof, (ii) the
term "voting securities" means the Class A Common Stock, par value $.01 per
share, and Class B Common Stock, par value $.01 per share, of xxx.xxx and any
other securities issued by xxx.xxx having the power to vote generally in the
election of directors of xxx.xxx and (iii) the term "affiliate" means a person
directly or indirectly controlled by, controlling or under common control with
another person. For purposes of this Section 3(d), an acquisition shall not
include (A) the acquisition by a person of voting securities of xxx.xxx pursuant
to an involuntary disposition by FTDI through foreclosure or similar event or
(B) the acquisition by a person of voting securities of xxx.xxx pursuant to a
dividend intended to be on a tax-free basis (a "Tax-Free Spin-Off") under the
Internal Revenue Code of 1986, as amended from time to time, but shall include a
subsequent acquisition of voting securities pursuant to a disposition by the
person that acquired the voting securities in such involuntary disposition or
such Tax-Free Spin-Off. In the event any person acquires beneficial ownership of
voting power in excess of the Threshold as a result of a transaction described
in the immediately preceding sentence, the Threshold with respect to such person
shall be adjusted to an amount equal to the percentage of beneficial ownership
held by such person immediately following such transaction.
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(e) A party may exercise its right to terminate pursuant to this Section 3
by sending appropriate written notice to the other party. No exercise by a party
of its rights under this Section 3 will limit its remedies by reason of the
other party's default, the party's rights to exercise any other rights under
this Section 3, or any of that party's other rights.
Section 4. Records and Accounts.
FTDI will maintain accurate books, records and accounts of all transactions
relating to the Services performed by it pursuant to this Agreement. xxx.xxx
may, at its own expense, examine and copy those books and records as provided in
this Section 4. Such books, records and accounts will be maintained in a manner
that allows xxx.xxx to separate these matters from those relating to FTDI's
other operations. Such books, records and accounts will reflect such information
as would normally be examined by an independent accountant in performing an
audit pursuant to United States generally accepted auditing standards for the
purpose of certifying financial statements, and to permit verification thereof
by governmental agencies. xxx.xxx may make examinations pursuant hereto during
FTDI's usual business hours, and at the place in the continental United States
where FTDI regularly keeps these books and records. xxx.xxx will be required to
notify FTDI at least two business days before the date of planned examination.
If xxx.xxx's examination is not completed within two months from commencement,
FTDI at any time may require xxx.xxx to terminate such examination on seven
days' notice to xxx.xxx, provided that FTDI has cooperated with xxx.xxx in the
examination of such books and records.
Section 5. No Restrictions.
Nothing in this Agreement shall limit or restrict the right of any of
FTDI's directors, officers or employees or any of xxx.xxx's directors, officers
or employees to engage directly or indirectly in the same or similar business
activities or lines of business as FTDI or xxx.xxx, respectively, or limit or
restrict the right of FTDI or xxx.xxx to engage in any other business or to
render or obtain, as the case may be, services of any kind to or from, as the
case may be, any corporation, firm, individual, trust or association.
Section 6. Independent Contractors.
FTDI and xxx.xxx are independent contractors. There is no relationship of
partnership, joint venture, employment, franchise or agency between FTDI and
xxx.xxx. Neither FTDI nor xxx.xxx shall have the power to bind the other or
incur obligations on the other's behalf without the other's prior written
consent. When FTDI's employees act under the terms of this Agreement, they
shall be deemed at all times to be under the supervision and responsibility of
FTDI; and no person employed by FTDI and acting under the terms of this
Agreement shall be deemed to be acting as agent or employee of xxx.xxx or any
customer of xxx.xxx for any purpose whatsoever.
Section 7. Other Agreements.
From time to time, xxx.xxx may find it necessary or desirable either to
enter into agreements covering services of the type contemplated by this
Agreement to be provided by parties other than FTDI or to enter into other
agreements covering functions to be performed by
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FTDI hereunder. Nothing in this Agreement shall be deemed to limit in any way
the right of xxx.xxx to acquire such services from others or to enter into such
other agreements.
Section 8. Confidentiality.
FTDI and xxx.xxx each agree to hold in strict confidence, and to use
reasonable efforts to cause each of their employees and representatives to hold
in strict confidence, all confidential information concerning FTDI or xxx.xxx,
as the case may be, furnished to or obtained by the other party in the course of
performing the obligations provided for under this Agreement except to the
extent that (a) such information has been in the public domain through no fault
of FTDI or xxx.xxx, as the case may be, (b) disclosure or release is compelled
by judicial or administrative process or (c) in the opinion of counsel to FTDI
or xxx.xxx, as the case may be, disclosure or release is necessary pursuant to
requirements of law or the requirements of any governmental entity including,
without limitation, disclosure requirements under the securities laws of the
United States or similar laws of other jurisdictions applicable to FTDI or
xxx.xxx, as the case may be.
Section 9. Dispute Resolution.
(a) In the event that any party to this Agreement has any claim, right or
cause of action against any other party to this Agreement, which the parties
shall be unable to settle by agreement between themselves, such claim, right or
cause of action, to the extent that the relief sought by such party is for
monetary damages or awards, shall be determined by arbitration in accordance
with the provisions of this Section 9.
(b) The party or parties requesting arbitration shall serve upon the other
or others a demand therefor, in writing, specifying the matter to be submitted
to arbitration, and nominating a competent disinterested person to act as an
arbitrator. Within 30 days after receipt of such written demand and nomination,
the other party or parties shall, in writing, nominate a competent disinterested
person, and the two (2) arbitrators so designated shall, within 15 days
thereafter, select a third arbitrator. The three (3) arbitrators shall give
immediate written notice of such selection to the parties and shall fix in said
notice a time and place of the meeting of the arbitrators which shall be as soon
as conveniently possible (but in no event later than 30 days after the
appointment of the third arbitrator), at which time and place the parties to the
controversy shall appear and be heard with respect to the right, claim or cause
of action.
(c) In case the notified party or parties shall fail to make a selection
upon notice within the time period specified, the party asserting such claim
shall appoint an arbitrator on behalf of the notified party. In the event that
the first two (2) arbitrators selected shall fail to agree upon a third
arbitrator within 15 days after their selection, then such arbitrator may, upon
application made by either of the parties to the controversy, be appointed by
any judge of any United States court of record having jurisdiction in the State
of Illinois.
(d) Each party shall present such testimony, examinations and
investigations in accordance with such procedures and regulations as may be
determined by the arbitrators and shall also recommend to the arbitrators a
monetary award to be adopted by the arbitrators as the complete disposition of
such claim, right or cause of action. After hearing the parties in regard to the
matter in dispute, the arbitrators shall adopt as their determination with
respect to such claim,
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right or cause of action, within 45 days of the completion of the examination,
by majority decision signed in writing (together with a brief written statement
of the reasons for adopting such recommendation), one of the recommendations
submitted by the parties to the dispute and shall grant no other relief or
remedy. The decision of said arbitrators, absent fraud, duress or manifest
error, shall be final and binding upon the parties to such controversy and may
be enforced in any court of competent jurisdiction.
(e) The expense and cost of such arbitration shall be borne by the party
or parties whose recommendation was not adopted by the arbitrators. Each party
shall pay the fees and expenses of its own counsel.
(f) Notwithstanding any other provisions of this Section 9, in the event
that a party against whom any claim, right or cause of action is asserted
commences, or has commenced against it, bankruptcy, insolvency or similar
proceedings, the party or parties asserting such claim, right or cause of action
shall have no obligations under this Section 9 and may assert such claim, right
or cause of action in the manner and forum it deems appropriate, subject to
applicable laws. No determination or decision by the arbitrators pursuant to
this Section 9 shall limit or restrict the ability of any party hereto to obtain
or seek in any appropriate forum, any relief or remedy that is not a monetary
award or money damages.
Section 10. Miscellaneous.
(a) Neither party may assign this Agreement, or their respective rights
and obligations hereunder, in whole or in part without the other party's prior
written consent. Any attempt to assign this Agreement without such consent shall
be void and of no effect ab initio. Notwithstanding the immediately preceding
sentence, any party may assign this Agreement or all, but not less than all, of
its rights and obligations hereunder to any entity controlled by it or to any
entity that acquires it by purchase of stock or by merger or otherwise, or by
obtaining all or substantially all of its assets (a "Permitted Assignee"),
provided that any such Permitted Assignee, or any division thereof, thereafter
succeeds to all of the rights and is subject to all of the obligations of the
assignor under this Agreement; provided, however, the provisions of this Section
10(a) shall in no way modify the provisions of Section 3(d).
(b) This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Illinois applicable to agreements made and to
be performed entirely within such State, without regard to the conflicts of law
principles of such State. Each party shall comply in all respects with all laws
and regulations applicable to its activities under this Agreement.
(c) Notwithstanding the provisions of Section 9, each party hereto
irrevocably submits to the exclusive jurisdiction of (a) the courts of the State
of Illinois, DuPage County, or (b) the United States District Court for the
Northern District of Illinois, for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby
or thereby. Each of FTDI and xxx.xxx agrees to commence any such action, suit or
proceeding either in the United States District Court for the Northern District
of Illinois or if such suit, action or other proceeding may not be brought in
such court for jurisdictional reasons, in the courts of the State of Illinois,
DuPage County. Each of FTDI and xxx.xxx further agrees that service of any
process, summons, notice or documents by U.S. registered mail to such party's
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respective address set forth below shall be effective service of process for any
action, suit or proceeding in Illinois with respect to any matters to which it
has submitted to jurisdiction in this Section 10(c). Each of FTDI and xxx.xxx
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby and thereby in (i) the courts of the State of Illinois,
DuPage County, or (ii) the United States District Court for the Northern
District of Illinois, and hereby and thereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
(d) If any provision of this Agreement (or any portion thereof) or the
application of any such provision (or any portion thereof) to any person or
circumstance shall be held invalid, illegal or unenforceable in any respect by a
court of competent jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision hereof (or the remaining portion thereof)
or the application of such provision to any other persons or circumstances.
(e) All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be delivered by hand or sent, postage
prepaid, by registered, certified or express mail or reputable overnight courier
service and shall be deemed given when so delivered by hand, or if mailed, three
days after mailing (one business day in the case of express mail or overnight
courier service), as follows:
(i) if to xxx.xxx,
xxx.xxx inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: President
(ii) if to FTDI,
Florists' Transworld Delivery, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: President
(f) The provisions of Sections 8, 9 and 10 hereof shall survive any
termination of this Agreement.
(g) No failure of either party to exercise or enforce any of its rights
under this Agreement shall act as a waiver of such right.
(h) This Agreement, along with the Exhibits hereto, contains the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter. Neither party shall be liable or bound to any
other party in any manner by any representations, warranties or covenants
relating to such subject matter except as specifically set forth herein.
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(i) This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more such counterparts have been signed by each of the parties and
delivered to each of the other parties.
(j) This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto; provided, however, that as long
as (1) FTDC beneficially owns 25% or more of the voting power represented by the
voting securities of xxx.xxx, and no other Person directly or beneficially owns
a greater percentage of such voting power, or (2) directors, officers or
affiliates of FTDC or its subsidiaries constitute a majority of the members of
xxx.xxx's board of directors, no amendment of this Agreement will be valid
unless it has been approved by at least a majority of the members of xxx.xxx's
board of directors, which majority must include at least one-half of the members
of xxx.xxx's board of directors who are "independent" directors pursuant to the
applicable rules of Nasdaq or any national stock exchange on which xxx.xxx's
equity securities are then traded or listed.
(k) This Agreement is for the sole benefit of the parties hereto and
nothing herein expressed or implied shall give or be construed to give to any
person, other than the parties hereto, any legal or equitable rights hereunder.
(l) The headings contained in this Agreement or in any Exhibit hereto are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All Exhibits annexed hereto or referred to
herein are hereby incorporated in and made a part of this Agreement as if set
forth in full herein. Any capitalized terms used in any Exhibit but not
otherwise defined therein, shall have the meaning as defined in this Agreement.
When a reference is made in this Agreement to a Section or an Exhibit, such
reference shall be to a Section of, or an Exhibit to, this Agreement unless
otherwise indicated.
[The remainder of this page intentionally is left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
xxx.xxx inc.
By:----------------------
Name:
Title:
Florists' Transworld Delivery, Inc.
By:----------------------
Name:
Title:
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EXHIBIT A
CORPORATE SERVICES
At the request of xxx.xxx, FTDI will provide, by itself or through its
subsidiaries, the services described below:
(a) Scope of Services. FTDI will provide xxx.xxx with all services
currently provided by FTDI and its subsidiaries to xxx.xxx (except to the extent
the rights and obligations related to such Services are transferred to xxx.xxx
pursuant to the Formation Agreement), including, without limitation, technical,
human resources, finance, accounting, administrative and legal services, as well
as services required by xxx.xxx by virtue of its status as a registrant under
the federal securities laws.
(b) Description of Services.
(i) Technical Services. FTDI will provide xxx.xxx with access to and
support for all FTDI computer and software systems required to conduct the
Direct Access Business, including, among other things, internal systems,
telecommunications and hardware and software support.
(ii) Human Resources Services. FTDI will, among other things, recruit
for and oversee xxx.xxx's support staff, assist xxx.xxx in its
implementation of employment policies and procedures, ensure the compliance
of all xxx.xxx personnel with all xxx.xxx employment policies and implement
and administer xxx.xxx's employee benefits programs such as xxx.xxx's
medical, dental and life insurance benefit programs.
FTDI also will provide each xxx.xxx employee with fully functional
workstations, including cubes/offices, desks, file cabinets, phones and
personal computers. FTDI will repair, maintain, support and replace these
items as needed.
(iii) Finance Services. FTDI will, among other things, (A) collect,
analyze and report all capital assets transactions and capital and expense
budget information; (B) respond to all financial information requirements
of xxx.xxx, (C) manage all banking activities of xxx.xxx, including cash
receipts and xxx.xxx borrowings and (D) assist in the preparing and filing
of all reports that xxx.xxx must file by virtue of its status as a
registrant under the federal securities laws.
(iv) Accounting Services. FTDI will, among other things, collect,
analyze and report all employee time entry, revenue-generating
transactions, disbursement and expense transactions, payroll activity,
benefits information, accounts payable and accounts receivable.
(v) Administrative Services. FTDI will, among other things, provide
general oversight of xxx.xxx's offices and personnel and will maintain
working relationships with all of xxx.xxx's benefit carriers.
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(vi) Legal Services. FTDI will, among other things, provide xxx.xxx
with legal advice and counsel on general corporate and employment matters.
(c) Quality of Services. FTDI will provide the above services at a quality
level that is at least equal to the quality of services being performed by FTDI
in respect of the Direct Access Business prior to the Effective Date.
(d) Price of Services. For each of the services listed above, xxx.xxx will
pay FTDI an amount equal to (i) the cost of such service that is attributable to
xxx.xxx's usage, including employee salaries and benefits, plus (ii) a general
and administrative charge of 5%. In addition, xxx.xxx will pay FTDI $600 per
month for each xxx.xxx employee for which FTDI provides benefits that include,
among other things, medical, dental and/or life insurance. All costs provided
for in this subsection (d) will be re-evaluated by FTDI quarterly based on a
rolling 12 months of actual FTDI expenses. FTDI will invoice xxx.xxx for such
costs within [15] days of the end of each month for services rendered in such
month and xxx.xxx will pay such invoice within 30 days of receipt.
(e) Access to Services. FTDI will provide xxx.xxx with access, as needed,
to the Mercury Network at the same prices FTDI charges the members of FTD
Association, a Michigan nonprofit corporation ("FTD Association"). FTDI also
will provide xxx.xxx with access to the FTD Clearinghouse for a fee that, so
long as xxx.xxx is receiving the xxx.xxx Commission (as such term is defined in
that certain Commission Agreement, dated as of June ___, 1999, between FTDI and
xxx.xxx), shall be equal to 7% of the sales price of the order cleared through
the FTD Clearinghouse (the "FTD Clearinghouse Fee"). Additionally, FTDI will
provide xxx.xxx with access to its Retrans Service and Cash-Flo Credit Card
Program at the same prices as FTDI charges the members of FTD Association;
provided, however, xxx.xxx will not be required to become a member of FTD
Association to receive such access. FTDI will invoice xxx.xxx for the costs
identified in this subsection (e) in accordance with the same procedures its
uses to invoice the members of FTD Association for such costs.
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EXHIBIT B
SPACE SHARING
(a) License to Use Space. During the term of this Agreement, if requested
by xxx.xxx, FTDI will permit xxx.xxx to use approximately 5,360 square feet of
FTDI's (or any of its subsidiaries') facility, which includes 120,000 square
feet of total usable space (the "FTDI Facility"), for general corporate
purposes, subject to the terms and conditions set forth in this Agreement. The
space to be used by xxx.xxx will be as mutually agreed by the parties from time
to time. xxx.xxx's right to use a portion of FTDI's Facility will terminate on
the earlier of (i) 90 days after xxx.xxx notifies FTDI that xxx.xxx no longer
desires to use any portion of the FTDI Facility, (ii) 90 days after FTDI
notifies xxx.xxx that xxx.xxx may no longer use any portion of the FTDI
Facility, or (iii) the termination date of this Agreement. xxx.xxx will vacate
the FTDI Facility on the termination of xxx.xxx's right to use the FTDI Facility
in either of the manners listed above.
(b) Consideration. So long as xxx.xxx uses any portion of the FTDI
Facility, xxx.xxx will pay to FTDI on the first day of each calendar month an
amount equal to $14.25 per square foot per year, which amount the parties agree
is the prevailing market rate per square foot for similar offices (taking all
relevant factors into account, including location, age of facility and facility
amenities). Payments for any partial calendar month shall be prorated on a per
diem basis.
(c) Operating Expenses. xxx.xxx will pay to FTDI monthly as additional
consideration xxx.xxx's proportionate share, based on the aggregate square
footage occupied by xxx.xxx during the relevant period compared to the aggregate
square footage occupied by FTDI and its subsidiaries (including xxx.xxx and its
subsidiaries) during the relevant period of (i) insurance premiums for the FTDI
Facility in which xxx.xxx occupies space and incurred by FTDI and (ii) Operating
Expenses (as defined below) and taxes for the FTDI Facility in which xxx.xxx
occupies space and incurred by FTDI, plus a general and administrative charge of
5%. All premiums, costs and Operating Expenses will be re-evaluated by FTDI
quarterly based on a rolling 12 months of actual FTDI premiums, costs and
Operating Expenses. The term "Operating Expenses" includes all expenses incurred
by FTDI with respect to the maintenance and operation of the FTDI Facility in
which xxx.xxx occupies space. These items include, but are not limited to: snow
removal, landscaping, window washing (interior and exterior), exterminating
services, rubbish removal, parking lot maintenance (periodic resealing and
restripping), electricity, water and sewer charges, managing agent fees, which
will not exceed those customarily charged in the market for similar type
properties, and other general facility repairs and maintenance charges.
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