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EXHIBIT 10.25
TERMINATION AGREEMENT
This TERMINATION AGREEMENT, dated as of April 30, 2001 (this "Agreement") is by
and between Florists' Transworld Delivery, Inc., a Michigan corporation
("FTDI"), and FTD Association, an Ohio nonprofit corporation that, as of the
Termination Date (as hereinafter defined in Section I), will change its name in
accordance with Section 1.2(a) hereof (the "Association").
RECITALS
WHEREAS, FTDI and the Association are parties to, among other
agreements, a Mutual Support Agreement, dated December 18, 1994 (the "Mutual
Support Agreement") and a Trademark License Agreement, dated December 18, 1994
(the "Trademark License Agreement" and together with the Mutual Support
Agreement, the "Operative Agreements");
WHEREAS, as contemplated by the Operative Agreements, the Association
currently is using the FTDI Licensed Intellectual Property (as hereinafter
defined in Section VI) in connection with the Association's ongoing trade
association activities;
WHEREAS, the parties wish to terminate their respective obligations
established pursuant to the Operative Agreements subject to the terms and
conditions contained herein and, in connection therewith, the Association
desires to transfer to FTDI, among other things, all agreements and records in
its possession that relate to membership and administrative matters relating to,
licensing or use of, or enforcement of restrictions on the use of the FTDI
Licensed Intellectual Property (the "LIP Activities");
NOW THEREFORE, in consideration of the foregoing and of the mutual
premises hereinafter set forth, the parties agree as follows:
Section I. TERMINATION
1.1 In consideration of the covenants and agreements set forth herein,
effective on the earlier to occur of 30 days following the Association's receipt
of the Member Approval (as hereinafter defined in Section X) or June 29, 2001
(the "Termination Date," provided, however, if such date falls on a Saturday or
a Sunday, the Termination Date shall be the Friday immediately preceding such
date) and subject to the terms and conditions contained in this Agreement FTDI
hereby:
(a) agrees to pay the Association the sum of $12.6 million
($12,600,000), in immediately available funds on the Termination Date;
(b) agrees to pay to a mutually agreeable third party escrow agent the
sum of $1.4 million in immediately available funds with such funds (and the
interest thereon) to be payable to the Association on the first anniversary of
the Termination Date, less the amount of any Losses
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(as hereinafter defined in Section XI) payable by the Association to FTDI
pursuant to Section 11.1 hereof plus the proportionate share of any interest
allocable to the amount of any such Losses; and
(c) releases and discharges the Association from any and all past,
present and future claims, demands, controversies, suits, losses, obligations,
disputes, causes of action, liabilities (including attorneys' fees and costs
actually incurred), debts, expenses of whatever kind, whether known or unknown,
fixed or contingent, liquidated or unliquidated, directly or indirectly arising
out of or in connection with the Operative Agreements, the termination thereof,
or any matters associated therewith, existing from the date of the Operative
Agreements through the Termination Date; provided, however, that this release
shall not include obligations arising under this Agreement. This release runs to
the benefit of all shareholders, members (in their capacity as members),
subsidiaries, affiliates, trustees, directors, officers, employees or
representatives of the Association and its successors and assigns. Nothing
herein shall be construed to in any way limit or release any current or past
Association member from any individual obligations to FTDI other than any such
obligations attributable to such member's status as a member of the Association.
1.2 In consideration of the covenants and agreements set forth herein, effective
as of the Termination Date and subject to the terms and conditions contained in
this Agreement the Association:
(a) agrees, as of the Termination Date, to change its name to "Extra
Touch Florist Association" or some other name which the parties agree is
sufficiently dissimilar to the name "FTD" or "Florists' Transworld Delivery";
and
(b) hereby releases and discharges FTDI from any and all past, present
and future claims, demands, controversies, suits, losses, obligations, disputes,
causes of action, liabilities (including attorneys' fees and costs actually
incurred), debts, expenses of whatever kind, whether known or unknown, fixed or
contingent, liquidated or unliquidated, directly or indirectly arising out of or
in connection with the Operative Agreements, the termination thereof, or any
matters associated therewith, existing from the date of the Operative Agreements
to the Termination Date; provided, however, that this release shall not include
obligations arising under this Agreement. This release runs to the benefit of
all shareholders, members, subsidiaries, affiliates, trustees, directors,
officers, employees or representatives of FTDI and its successors and assigns;
and
(c) hereby transfers and assigns to FTDI without representation or
warranty except as expressly set forth herein, and FTDI hereby accepts and
assumes from the Association, the Association's rights, title and interest in
those licenses, contracts, agreements, commitments and undertakings (or portions
thereof) relating to the Association members the types and portions of which are
set forth or described on Schedule 1.2(c) attached hereto (the "Assigned
Agreements"); and
(d) agrees to deliver to FTDI, in whatever form currently available
(i.e., hard copy, microfiche, digital or otherwise), records, including, to the
extent available, the original written copies of such records, relating to its
members described on Schedule 1.2(d) attached hereto (collectively, the
"Membership Records"). The parties hereto further acknowledge and agree that
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the Association may replicate and keep duplicate copies of the Membership
Records and, except as otherwise prohibited by Section 7.2 of this Agreement,
use them for all trade association and other reasonable business purposes, and
the parties further agree that they shall cooperate with each other and grant
the other party access to all business files, books and records relating to
members of the Association or FTDI for the period preceding the Termination
Date, it being understood that all costs and expenses relating to such access
(including photocopy charges) shall be borne by the party requesting such access
and such access shall be exercised during normal business hours in a fashion so
as not to disrupt or impair the other party's on-going operations; and
(e) shall transfer and deliver to FTDI at the Association's principal
offices substantially all commemorative plaques, photographs, trophies and other
historical memorabilia bearing any of the FTDI Licensed Intellectual Property,
owned and possessed by the Association, to the extent such can be identified
without unreasonable burden on the Association ("Memorabilia"), such Memorabilia
being listed on Schedule 1.2(e) attached hereto.
1.3 The Association and FTDI mutually acknowledge and agree that effective upon
the close of business on the Termination Date and payment in full of all amounts
due to the Association and the escrow agent pursuant to Sections 1.1(a) and
1.1(b), respectively, all of such parties' respective rights, duties and
obligations under the Operative Agreements shall be terminated and shall
thereafter have no force and effect, except as otherwise expressly set forth
herein.
1.4 The parties acknowledge and agree that after the Termination Date, members
of the Association shall have a direct relationship with FTDI and membership in
the Association will not be a prerequisite for obtaining rights in the
Trademarks (as hereinafter defined in Section V) of FTDI, obtaining services
from FTDI, or becoming a member of FTDI. The licensing of Trademarks by FTDI to
its members, to the Association members and non-Association members, and the
provision of services by FTDI to its members, to the Association members and
non-Association members, shall be on terms and conditions determined solely by
FTDI. Similarly, after the Termination Date, the Association shall have the
right to deal directly with its members with respect to all matters, including
terms and conditions of membership, the provision of services by the Association
to its members, and the licensing by the Association to its members of
Trademarks or other intellectual property.
Section II. FINAL ACCOUNTING
The parties each agree to undertake and complete within sixty (60) days of the
Termination Date a final accounting ("Final Accounting") in order to ascertain
amounts due to each party under the Mutual Support Agreement, the Trademark
License Agreement or otherwise which accrued on or before the Termination Date
("Outstanding Obligations"). Each party agrees to pay its Outstanding
Obligations to the other party insofar as practicable on or before the
Termination Date and thereafter to pay and perform any remaining Outstanding
Obligations through the Termination Date to the other party in accordance with
the terms of any such Outstanding Obligations. Notwithstanding anything to the
contrary, within thirty (30) days of completion of the Final Accounting, each
party agrees to deliver to the other party a written notice (a "Preservation
Notice") enumerating any asserted Outstanding Obligations and including a
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description of the asserted claim and the basis therefore, together with such
other information as is reasonably required in order for the other party to
understand the character, scope and size of such claim. The parties hereto
acknowledge and agree that any asserted Outstanding Obligations which are not
enumerated in a Preservation Notice within the time period specified above shall
be deemed to be waived and released pursuant to Section I hereof. Within fifteen
(15) days of the receipt of a Preservation Notice, each party will deliver to
the other party (A) a written notice certifying that it agrees with such
Preservation Notice and payment in accordance with such Preservation Notice or
(B) written notice certifying that it disagrees with such Preservation Notice,
including a reasonably detailed explanation for such disagreement. Any
Preservation Notice disagreements that are not resolved by mutual agreement
between the parties within thirty (30) days following delivery of such
Preservation Notice may be resolved, at the written election of either party, in
accordance with the arbitration procedures set forth in Section VIII.
Section III. REPRESENTATIONS AND WARRANTIES OF FTDI
3.1 Organization. FTDI is a corporation duly organized, validly existing and in
good standing under the laws of the State of Michigan. FTDI has the corporate
power to own its property and to carry on its business as now being conducted.
3.2 Authorization. The transactions contemplated by this Agreement and the
execution, delivery and performance by FTDI of its obligations under this
Agreement have been duly authorized by all requisite corporate or other action
on the part of the FTDI. The officers executing this Agreement on behalf of FTDI
have been authorized to execute and deliver the same as well as any other
documents required to consummate the transactions contemplated by this
Agreement.
3.3 Litigation and Other Proceedings. To its knowledge, after due investigation,
there is no action or proceeding pending or threatened against FTDI before any
court, administrative agency or governmental authority with respect to the
Operative Agreements, this Agreement or any of the transactions contemplated by
the Operative Agreements or this Agreement, respectively.
3.4 Breach. The execution and delivery by FTDI of this Agreement, the
consummation of the transactions contemplated hereby, and the fulfillment of and
compliance with the respective terms, conditions and provisions hereof or of any
instruments required hereby, will not conflict with or result in a breach of any
of the terms, conditions or provisions of any (i) law or regulation of any
administrative or governmental instrumentality applicable to FTDI, (ii) writ,
injunction or decree of any court, or (iii) material agreement or instrument to
which FTDI is a party, by which it is bound, or to which it is subject.
3.5 Consent. No registration with or authorization, consent, order or approval
of any federal, state or other governmental authority or regulatory body, or any
third person, which has not already been obtained or done and delivered to the
Association, is required in connection with the execution and delivery by the
FTDI of this Agreement or the performance by FTDI of its obligations hereunder.
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Section IV. REPRESENTATIONS AND WARRANTIES OF THE ASSOCIATION
4.1 Organization. The Association is a nonprofit corporation duly organized,
validly existing and in good standing under the laws of the State of Ohio. The
Association has the corporate power to own its property and to carry on its
business as now being conducted.
4.2 Authorization. The transactions contemplated by this Agreement and the
execution, delivery and performance by the Association of its obligations under
this Agreement have been duly authorized by all requisite corporate or other
action on the part of the Board of Trustees of the Association. The officers
executing this Agreement on behalf of the Association have been authorized to
execute and deliver the same as well as any other documents required to
consummate the transactions contemplated by this Agreement.
4.3 Litigation and Other Proceedings. To its knowledge, after due investigation,
there is no action or proceeding pending or threatened against the Association
before any court, administrative agency or governmental authority with respect
to the Operative Agreements, this Agreement or any of the transactions
contemplated by the Operative Agreements or this Agreement, respectively.
4.4 Breach. Subject to the Association's receipt of the Member Approval, the
execution and delivery by the Association of this Agreement, the consummation of
the transactions contemplated hereby, and the fulfillment of and compliance with
the respective terms, conditions and provisions hereof or of any instruments
required hereby, will not conflict with or result in a breach of any of the
terms, conditions or provisions of any (i) law or regulation of any
administrative or governmental instrumentality applicable to the Association,
(ii) writ, injunction or decree of any court, or (iii) material agreement or
instrument to which the Association is a party, by which it is bound, or to
which it is subject.
4.5 Consent. Subject to the Association's receipt of the Member Approval, no
registration with or authorization, consent, order or approval of any federal,
state or other governmental authority or regulatory body, or any third person,
which has not already been obtained or done and delivered to FTDI, is required
in connection with the execution and delivery by the Association of this
Agreement or the performance by the Association of its obligations hereunder.
4.6 Assigned Agreements. The Assigned Agreements, the types of which are
identified on Schedule 1.2(c), constitute all of the material licenses,
contracts and agreements relating to the LIP Activities as such activities are
conducted by the Association on the date of this Agreement. Subject to the
Association's receipt of the Member Approval, on and after the Termination Date,
FTDI will possess all of the Association's rights and interests in the Assigned
Agreements as the same existed on the date of this Agreement.
4.7 Membership Records. The Association has given FTDI or its representatives
access to all books, records, accounts, memoranda and other information in any
form that relate to or contain Membership Records and that, in reasonable
detail, fairly reflect the LIP Activities.
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4.8 Memorabilia. The Memorabilia identified on Schedule 1.2(e) constitute
substantially all of the Memorabilia in the possession and control of the
Association.
4.9 Member Approval. At the Special Membership Meeting (as hereinafter defined
in Section X) at which a quorum is present, the Association will seek approval
of this Agreement and the transactions contemplated by this Agreement by a
majority of the Association Members (as hereinafter defined in Section X)
attending the meeting, and no other vote of any of the members of the
Association or any other action is required to approve or authorize this
Agreement or the transactions contemplated hereby.
Section V. COVENANTS OF FTDI
5.1 Return and Nondisclosure of Association Intellectual Property, Association
Confidential Information and Association Customer Information. From and after
the Termination Date, FTDI agrees to keep confidential and not disclose or use
for any purpose whatsoever, except as otherwise required to fulfill its
obligations under this Agreement or as otherwise required by law, any
Association Intellectual Property, Association Confidential Information or
Association Customer Information (all as hereinafter defined). As used in this
Agreement, "Association Intellectual Property" means all Trademarks owned or
licensed by the Association (excluding any Trademarks licensed by the
Association from FTDI, including, without limitation, those rights terminated
under Section 1.3 hereof). As used in this Agreement, "Association Confidential
Information" means all data and information, other than data or information
relating to the LIP Activities, the Assigned Agreements and the Membership
Records, obtained from the Association in connection with this Agreement or the
Operative Agreements and any other information treated by the Association as
being confidential (including, without limitation, information about its
financial affairs, accounting, marketing, research, purchasing, advertising,
product development and production, pricing, training and operations materials
or memoranda, and the like), as well as all expressions and embodiments of any
of the foregoing in any form, except to the extent such data and information may
be publicly available through no fault of FTDI, shall be required by law to be
disclosed or was obtained by FTDI free of confidentiality restrictions or
obligations. As used in this Agreement, "Association Customer Information" means
any and all information of any type and in any form relating to the
Association's current or past members' customers, including without limitation,
any information accessible to FTDI prior to the Termination Date relating to the
names, addresses, e-mail addresses and other information regarding sending or
receiving customers of the Association's past or present members as a result of
such members using FTDI's clearinghouse, communications systems, credit card or
other operations, excluding, however, all Membership Records. As used in this
Agreement, "Trademarks" means all patents, patent applications, registered or
unregistered trademarks, trade dress, trade names, trade styles, logos, service
marks, drawings, trade secrets, secret processes, or other proprietary rights of
any kind or nature, including all registrations thereof and applications
therefor, in the United States, any political subdivisions thereof or any
foreign jurisdictions.
5.2 Nondiscrimination. FTDI agrees not to discriminate against members of the
Association and its successors and assigns in the licensing of its Trademarks or
in the provision of services after
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the Termination Date due (in whole or in part) to such person's or entity's
past, current or future affiliations with the Association.
5.3 Consent Order. FTDI acknowledges that it currently is bound by the terms of
the Modified Final Judgment, dated November 13, 1990, of the United States
District Court for the Eastern District of Michigan in the United States of
America v. Florists' Telegraph Delivery Association, Civ. Xx. 00-00000, xxx
Xxxxxx Xxxxxx xx Xxxxxxx v. Florists' Transworld Delivery Association, Civ. No.
66-28784, and the Enforcement Order entered on December 14, 1995 of the United
States District Court for the Eastern District of Michigan Supplemental to Civ.
No. 56-15748.
Section VI. COVENANTS OF THE ASSOCIATION
6.1 Return and Nondisclosure of FTDI Confidential Information, FTDI Licensed
Intellectual Property and FTDI Customer Information. From and after the
Termination Date, the Association agrees to keep confidential and not disclose
or use for any purpose whatsoever, except as otherwise required to fulfill its
obligations under this Agreement or as otherwise required by law, any FTDI
Confidential Information (as hereinafter defined), FTDI Licensed Intellectual
Property or FTDI Customer Information. As used in this Agreement, "FTDI
Confidential Information" means all data and information obtained from FTDI in
connection with this Agreement or the Operative Agreements and any other
information treated by FTDI as being confidential (including, without
limitation, information about its financial affairs, accounting, marketing,
research, purchasing, advertising, product development and production, pricing,
training and operations materials or memoranda, and the like), as well as all
expressions and embodiments of any of the foregoing in any form, except to the
extent such data and information may be publicly available through no fault of
the Association, shall be required by law to be disclosed, or was obtained by
the Association free from confidentiality restrictions or obligations. As used
in this Agreement, "FTDI Licensed Intellectual Property" means the Trademarks
used by the Association and owned by FTDI as of the date of this Agreement,
including without limitation, FTDI's mercury man logo and the Trademarks "FTD,"
"FTDA," "Florists' Transworld Delivery," "Florist" and "FTD Family." As used in
this Agreement, "FTDI Customer Information" means any and all information of any
type and in any form relating to FTDI's current or past customers, including
without limitation, any information accessible to the Association prior to the
Termination Date relating to the names, addresses, e-mail addresses and other
information regarding sending or receiving customers of FTDI as a result of such
customers using FTDI's clearinghouse, communications systems, credit card or
other operations, excluding, however, all Membership Records.
6.2 Consent Order. The Association acknowledges it currently is bound by the
terms of the Modified Final Judgment, dated November 13, 1990, of the United
States District Court for the Eastern District of Michigan in the United States
of America v. Florists' Telegraph Delivery Association, Civ. Xx. 00-00000, xxx
Xxxxxx Xxxxxx xx Xxxxxxx v. Florists' Transworld Delivery Association, Civ. No.
66-28784 and the Enforcement Order entered on December 14, 1995 of the United
States District Court for the Eastern District of Michigan Supplemental to Civ.
No. 56-15748.
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Section VII. NON-COMPETITION
7.1 FTDI. In exchange for the agreements set forth herein, for the period
beginning on the Termination Date and ending two (2) years after the Termination
Date (the "Non-Compete Period"):
(a) Except as described in Section 7.1(b), FTDI will not, and will not
permit any of its subsidiaries or affiliates to, directly or indirectly, use or
display the Licensed Intellectual Property (as defined in the Merger Agreement
dated August 2, 1994, among Perry Capital Corporation, FTD Acquisition
Corporation and Florists' Transworld Delivery Association) in the legal, assumed
or trade name of, and on or in connection with, any staffed retail operation
that:
1. is in a public area;
2. is accessible to a customer and provides a customer
with the opportunity to order flowers or other floral
products (a "Retail Floral Shop);
3. is within one hundred fifty (150) yards of any
Association member's then-currently operating Retail
Floral Shop that was in existence and owned by such
Association member on the Termination Date; and
4. that used or displayed the Licensed Intellectual
Property immediately prior to the Termination Date.
(b) Section 7.1(a) shall not restrict the ability of FTDI or any of its
subsidiaries or affiliates to directly or indirectly, use or display the
Licensed Intellectual Property in the legal, assumed or trade name of, and on or
in connection with (1) a Retail Floral Shop or other business that is acquired
by FTDI or any of its subsidiaries or affiliates on or after the Termination
Date or (2) any other individual retail operation where such individual retail
operation possesses a minimum of 40,000 square feet of which flowers and floral
products are not a material portion of the entire operation.
7.2 The Association. In exchange for the agreements set forth herein, the
Association will not, and will not permit any of its subsidiaries, affiliates,
successors or assigns to, directly or indirectly, whether alone or in
conjunction with any other person or entity, carry on, participate in, operate,
manage, engage in, facilitate or provide assistance to any business activity if
such activity consists of or includes (i) providing billing or collection
settlement services to either the sending or receiving florists in
"international" flowers-by-wire transactions during the first year of the
Non-Compete Period (it being understood that such transactions within or between
the United States and Canada shall not be deemed to be "international"), or (ii)
providing after-hours answering services or accounting software and services to
retail florists, selling hard goods, perishable goods or computer hardware to
retail florists, or publishing or producing a consumer floral magazine, at any
time during the Non-Compete Period (any of such activities described in (i) or
(ii) being referred to herein as a "Competitive Activity"), in any of: the City
of Downers Grove, Illinois, the County of DuPage, Illinois or any other city or
county in the State of Illinois; the District of Columbia or any other state,
territory, district or commonwealth of the United
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State or any county, parish, city or similar political subdivision in any other
state, territory, district or commonwealth of the United States; any other
country or territory anywhere in the world or in any city, canton, county,
district, parish, province or any other political subdivision in any such
country or territory; or anywhere in the world (each city, canton, commonwealth,
county, district, parish, province, state, country, territory or other political
subdivision or other location in the world shall be referred to as a
"Non-competition Area"). Anything herein to the contrary notwithstanding,
referring or promoting its members to other persons or entities, or referring or
promoting other persons or entities to its members, in both cases with respect
to such goods and services, and the Association's receipt of royalties,
sponsorship, endorsement, and/or promotional fees with respect thereto, shall
not be deemed to be a Competition Activity of the Association. The Parties
intend that the covenant contained in the preceding sentence of this Section 7.2
shall be construed as a series of separate covenants, one for each city, county,
district, parish, state, province, country, territory, or other political
subdivision or other area of the world specified. Except for geographic
coverage, each separate covenant shall be considered identical in terms to the
covenant contained in the preceding sentence. The Parties further acknowledge
the breadth of the covenants, but agree that such broad covenants are necessary
and appropriate in the light of the geographical nature of the Competitive
Activity. If, in any judicial or other proceeding, a court or other body
declines to enforce any of the separate covenants included in this Section 7.2,
the unenforceable covenant shall be considered eliminated from these provisions
for the purpose of those proceedings to the extent necessary to permit the
remaining separate covenants to be enforced.
Section VIII. DISPUTE RESOLUTION
Any dispute as to any claims under this Agreement and/or Outstanding Obligations
that the parties are unable to settle by agreement between themselves shall be
resolved exclusively by arbitration in Chicago, Illinois as follows. The party
requesting arbitration shall serve upon the other 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 twenty (20) days after
receipt of such written demand and nomination, the other party shall, in
writing, nominate a competent, disinterested person to act as a second
arbitrator, and the two (2) arbitrators so designated shall, within twenty (20)
days thereafter, select a third arbitrator. If either FTDI or the Association
fails to appoint an arbitrator within the time period specified above, or if the
first two arbitrators cannot agree on the appointment of a third arbitrator
within the time period specified above, then such arbitrator shall be appointed
by the Chief Judge of the United States District Court located in the City of
Chicago or by the American Arbitration Association. Following the selection of
arbitrators as set forth above, 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 arbitration, which shall be as soon as conveniently
possible and shall be conducted promptly and expeditiously and shall be
administered by the American Arbitration Association in accordance with its
Commercial Arbitration Rules. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction therefor. Each party
shall bear the expenses of the arbitrator it selects and shall jointly and
equally share with the other expenses for the third arbitrator and the
arbitration proceeding, including, without limitation, any expenses of the
arbitrators but excluding legal, expert, accountant and other professional fees
of the other
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side. Anything herein to the contrary notwithstanding, (i) any disputes or
claims which relate solely to accounting matters, including all disputes and
claims relating to Outstanding Obligations, shall be resolved by a mutually
acceptable single arbitrator from the Chicago, Illinois office of Ernst & Young
LLP or another "Big 5" accounting firm selected by mutual agreement of the
parties, whose fees and expenses shall be equally shared by the parties, and
(ii) the parties each reserve the right to seek injunctive relief in an
appropriate judicial forum against any actions by the other party which are
likely to cause irreparable harm and contravene the requirements of Section VII
hereof, pending the arbitrators' determination of the merits of the controversy.
Section IX. CONDITIONS OF TERMINATION
9.1. Conditions of Obligations of the Association. The obligations of the
Association to effect the transactions contemplated by this Agreement shall be
subject to the following conditions:
(a) Representations and Warranties of FTDI to be True. The
representations and warranties of FTDI herein contained shall be true and
correct in all material respects on the Termination Date with the same effect as
though made at such time (except for representations and warranties which speak
only as of a particular time), except to the extent any of such representations
and warranties have been waived hereunder or affected by the transactions
contemplated or permitted hereby. FTDI shall have performed in all material
respects all obligations and complied in all material respects with all
covenants and conditions required by this Agreement to be performed or complied
with by it at or prior to the Termination Date; and FTDI shall have delivered to
the Association a certificate of FTDI in form and substance satisfactory to the
Association dated the Termination Date and signed by either the Chairman of the
Board or President of FTDI and by its senior financial officer, certifying to
the knowledge of such officers, to all such effects.
(b) Satisfactions of Requirements of Section I. All obligations or
requirements of FTDI set forth in Section I of this Agreement to be performed or
complied with by FTDI at or prior to the Termination Date shall be satisfied.
(c) No Legal Proceedings. No injunction or restraining order shall be
in effect prohibiting this Agreement or the transactions contemplated hereby,
and no action or proceeding shall have been instituted and remain pending before
a court to restrain or prohibit the transactions contemplated by this Agreement.
(d) Member Approval No later than June 20, 2001, the Association shall
have obtained authorization to perform its obligations under this Agreement as
well as any other documents required to consummate the transactions contemplated
by this Agreement by a vote of a majority of the Association Members entitled to
vote at the Special Membership Meeting at which a quorum is present (the "Member
Approval") in accordance with the Ohio NCL (as hereinafter defined in Section X)
and the Association's Articles of Incorporation and Code of Regulations.
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(e) Escrow Agreement. The parties shall have executed and delivered the
Escrow Agreement in substantially the form attached hereto as Exhibit A.
9.2. Conditions of Obligations of FTDI. The obligations of FTDI to effect
the transactions contemplated by this Agreement shall be subject to the
following conditions:
(a) Representations and Warranties of the Association to be True. The
representations and warranties of the Association herein contained shall be true
and correct in all material respects on the Termination Date with the same
effect as though made at such time (except for representations and warranties
which speak only as of a particular time), except to the extent any of such
representations and warranties have been waived hereunder or affected by the
transactions contemplated or permitted hereby. The Association shall have
performed in all material respects all obligations and complied in all material
respects with all covenants and conditions required by this Agreement to be
performed or complied with by it at or prior to the Termination Date; and the
Association shall have delivered to FTDI a certificate of the Association in
form and substance satisfactory to FTDI dated the Termination Date and signed by
either the Chairman of the Board or President of the Association and by its
senior financial officer, certifying to the knowledge of such officers, to all
such effects.
(b) Satisfactions of Requirements of Section I. All obligations or
requirements of the Association set forth in Section I of this Agreement to be
performed or complied with by FTDI at or prior to the Termination Date shall be
satisfied.
(c) No Legal Proceedings. No injunction or restraining order shall be
in effect prohibiting this Agreement or the transactions contemplated hereby,
and no action or proceeding shall have been instituted and remain pending before
a court to restrain or prohibit the transactions contemplated by this Agreement.
(d) Member Approval. No later than June 20, 2001, the Association shall
have obtained the Member Approval.
(e) Escrow Agreement. The parties shall have executed and delivered the
Escrow Agreement in substantially the form attached hereto as Exhibit A.
(f) Other Documents. The Association shall have executed and delivered
to FTDI such other certificates, documents and instruments, each in a form
satisfactory to FTDI, that FTDI deems necessary, desirable and appropriate to
effect the transfer and assignment of any and all Assigned Agreements.
Section X. THE ASSOCIATION MEMBER APPROVAL
The Association, acting through its Board of Trustees, hereby agrees to promptly
take the action necessary in accordance with the Nonprofit Corporation Law of
the State of Ohio (the "Ohio NCL") and its Articles of Incorporation, Bylaws and
Code of Regulations to call and give notice of a special meeting (the "Special
Membership Meeting") of the members of the Association
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entitled to vote (the "Association Members") for the purpose of authorizing the
Association to perform its obligations under this Agreement and any other
documents required to consummate the transactions contemplated by this Agreement
or to otherwise facilitate other transactions contemplated hereby. The
Association agrees to hold the Special Membership Meeting at the earliest
practicable date for the foregoing purposes, but in no event later than June 20,
2001. The Association's Board of Trustees shall recommend that the Association
Members vote in favor of authorizing the Association to perform its obligations
under this Agreement and any other documents required to consummate the
transactions contemplated by this Agreement and shall include such
recommendation in an information statement to be sent to all Association Members
in connection with the Special Membership Meeting (the "Information Statement")
and other materials to be distributed to Association Members in connection with
the Special Membership Meeting. The Association shall promptly prepare and, a
reasonable time prior to the Association's distribution of the Information
Statement to the Association Members, submit the Information Statement to FTDI
for its review and comment. In addition, the Association agrees to consult and
cooperate with FTDI in connection with preparing or making any general
announcements to or communications with the Association Members or obtaining the
approval of the Association Members, in each case relating to the transactions
contemplated by this Agreement as well as any other documents required to
consummate the transactions contemplated by this Agreement. The Association
agrees that a representative of FTDI shall be entitled to be present at the
Special Membership Meeting.
Section XI. INDEMNIFICATION
11.1 Indemnification by the Association. The Association will indemnify, defend
and hold harmless FTDI and its stockholders, subsidiaries, officers, directors,
employees, agents, successors and assigns (such indemnified persons are
collectively hereinafter referred to as "FTDI's Indemnified Persons") from and
against any and all loss, liability, damage (excluding consequential, indirect
special, exemplary and punitive damages) or deficiency (including interest,
penalties, judgments, costs of preparation and investigation, and reasonable
attorneys' fees) (collectively, "Losses") that FTDI's Indemnified Persons
suffer, sustain, incur or become subject to arising out of, due to or related
to: (a) any breach of any representation or warranty of the Association that is
contained in this Agreement or any Schedule or Exhibit hereto; or (b) any breach
or nonfulfillment of, or any failure to perform, any of the covenants,
agreements, undertakings or other obligations of the Association that are
contained in or made pursuant to this Agreement, not otherwise waived by FTDI.
"Losses" as used herein is not limited to matters asserted by third parties, but
includes Losses incurred or sustained in the absence of third party claims.
11.2 Indemnification by FTDI. FTDI agrees to indemnify, defend and hold harmless
the Association and its members, subsidiaries, officers, trustees, employees,
agents, successors and assigns (such persons are hereinafter collectively
referred to as the "the Association's Indemnified Persons") from and against any
and all Losses that the Association's Indemnified Persons suffer, sustain, incur
or become subject to arising out of, due to or related to: (a) any breach of any
representation or warranty of FTDI that is contained in this Agreement or any
Schedule or Exhibit hereto; or (b) any breach or nonfulfillment of, or any
failure to perform, any
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of the covenants, agreements, undertakings or other obligations of FTDI that are
contained in or made pursuant to this Agreement, not otherwise waived by the
Association.
11.3 Limitations on Indemnification. The persons or entities indemnified
pursuant to this Section XI shall not assert any claim for indemnification
hereunder unless and until, and solely to the extent that, the aggregate of all
such Losses shall exceed $50,000 (the "Deductible"), in which event such
indemnification shall be effective with respect to such Losses in excess of the
Deductible; provided, however, Losses indemnified pursuant to Section 11.1
hereof shall in no event exceed the amounts actually received by the Association
pursuant to Sections 1.1(a) and (b) hereof. The sole and exclusive remedy of
either FTDI or the Association for any breach of any representation hereunder
shall be limited to the right to indemnification provided in this Section XI.
Section XII. MISCELLANEOUS
12.1 Amendments. Any amendment to this Agreement or additional obligation
assumed by either party in connection with this Agreement shall be binding only
if evidenced by a writing signed by each party or an authorized representative
of each party.
12.2 Survival. All representations, warranties and covenants contained herein or
made in writing by a party in connection herewith shall survive the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby for a period of one (1) year (other than those portions of
non-competition covenants contained in Section VII which, by their terms, extend
for two years, and which shall survive for a period of two (2) years after the
Termination Date), except for any claims made in writing and delivered to the
other party within one (1) year of the date of the Termination Date.
12.3 Public Announcements. Each of FTDI and the Association will consult with
the other party prior to issuing, and provide each other the opportunity to
review, comment upon and concur with, and use reasonable efforts to agree on,
any press release or other public statement made on or before the Termination
Date with respect to the transactions contemplated by this Agreement, and
neither party shall issue any such press release or make any such public
statement prior to such consultation, except as either party may determine is
required by applicable law or court process; provided however, this paragraph
shall not apply to any press releases or other public statements made by either
party with respect to its respective operations or members after the Termination
Date.
12.4 No Waiver. Silence, acquiescence or inaction shall not be deemed a waiver
of any right of either party hereunder, and a waiver shall only be effective if
in writing signed by the party to be charged and such waiver shall not be
construed to contain a continuing waiver of any other breaches of a same or
similar type of breach specifically set forth therein.
12.5 Successors and Assigns. The provisions of this Agreement shall bind and
inure to the benefit of the successors and assigns of the parties hereto.
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12.6 Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited or invalid under
applicable law, such provision shall be ineffective only to the extent of such
provision or invalidity, without invalidating the remainder of this Agreement.
12.7 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) upon the date actually delivered to the parties at the following
addresses:
If to FTDI:
Florists' Transworld Delivery, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopier No: (000) 000-0000
With a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
00 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
If to the Association:
FTD Association
00000 Xxxxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxx
Telecopier No: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxxx, Esq.
Xxxxxxxxx Xxxxxx PLLC
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopier No: (000) 000-0000
12.8 Section and Other Headings. The section and other headings contained in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.
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12.9 Entire Agreement. This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereto.
11.9 Further Assurances. Each party shall, upon request, make, execute and
deliver such documents as shall be reasonably necessary or take such action as
may be reasonably requested to fully implement and carry out the purposes of
this Agreement.
11.10 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan, without regard to any
otherwise applicable conflicts of law principles.
11.11 No Strict Construction. This Agreement has been drafted jointly by both
parties hereto and shall be construed in accordance with its fair meaning, and
not strictly against any party.
11.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date indicated above, by their duly authorized representatives.
FLORISTS' TRANSWORLD DELIVERY, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Its: President and CEO
-----------------
FTD ASSOCIATION
By: /s/ Xxxxx Xxxxxx
----------------
Its: Managing Executive
------------------
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SCHEDULE 1.2(c)
ASSIGNED AGREEMENTS
- Personal Guarantee of Stockholders of corporations applying for Membership
in FTD Association
- Paragraphs 1 (as it relates to LIP Activities and FTDI Standards), 2 (as it
relates to LIP Activities and FTDI Standards), 3, 4 and 6 (as it relates to
funds in the possession of FTDI and debts due to FTDI) of the Assignment of
Accounts and Certification of Application for Memberhip
- Trademark Membership License Agreement
- General Assignment of Accounts and Credit Guarantee
- Forms W-9 (to the extent they relate to FTDI)
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SCHEDULE 1.2(d)
MEMBERSHIP RECORDS
1. Microfiche Membership Records:
Certain Member records are filmed in microfiche either on reel or jacket
form. The following are records that would be recorded on microfiche.
- Application for Membership (including, without limitation, the Personal
Guarantee of Stockholders of Corporations Applying for Membership in FTD
Association and Assignment of Accounts and Certification of Application for
Membership)
- Trademark License Agreement (referred to in Schedule 1.2(c))
- Acceptance Letter
- Copy of Member demographic information entered into database
- Guarantee of Account contract, if applicable (referred to in Schedule
1.2(c))
- Member owner update
- Corporate change of ownership
- Affidavit of Conveyance
- Member record changes
- Below Standard Inspection reports
- Test order results
- Customer relations complaint letter
- Notice of Membership Committee or Board of Trustee hearings
- Membership Committee and Board of Trustee decision letters regarding any
disciplinary action
- Other disciplinary action letters
- Miscellaneous correspondence
2. Member record files in hard copy format include current records from the
categories listed above that have not yet been sent to be filmed.
3. Hard copies of membership applications being processed.
4. Terminated Member files for approximately last three years. Files include
hard copies of termination-related correspondence and microfiche of Member
records for the terminated Member.
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SCHEDULE 1.2(e)
MEMORABILIA
1. (1) 75th Anniversary - Interflora British Unit - Desk Clock- with Chimes
2. (1) Sterling Silver Paper Knife - Interflora British Unit August 1990
3. (1) FTD 75th Anniversary Swiza Quartz Clock - Fleurop Interflora Board &
Hdqtrs.
4. (1) American Florist Marketing Council 25th Anniversary picture "Flower
Power Since 1969 (2 ft. x 2 ft.)
5. X. X. Xxxxxxxxx Award Winners Plaque (2-1/2 ft. x 2 ft.)
6. (9) Past President Picture Frames (2-1/2 ft. x 2 ft.)
7. (1) Larado Spanish Conquistador - Interflora Espana 1990
8. (1) Glass Ship in a Bottle "Hands Across the Sea" - Interflora British Unit
- August 1987
9. (1) Picture Frame of Argentina "El Comite Organizador"
10. (1) Interflora Coin 1950 - 1975
11. (1) Crossbow - Solutions for Success 1996 - Fleurop - Interflora Switzerland
12. (1) 4 x 6 frame - Los Membros Argentinos - August 1966
13. (1) Hanging Stone Plaque 1985 - 75th Anniversary - Fleurop Interflora
14. (1) 16" 1 x 7" h - Fleurop - Interflora "Landesableilung Osterreich
15. (1) 1985 Interflora Espana - 75th Anniversary 1985 (7" x 6")
16. (1) IBERIADA 1996 ADEFI Leather Map of Argentina
17. (1) Silver Xxxx - Xxxxxx Interflora Xxxx
00. (1) Silver Bowl - 50th Anniversary 1960 - Interflora British Xxxx
00. (1) Silver Bowl - with blue bowl - Interflora British Unit - June 1975
20. (1) ADEFI Plaque - August 1995 - 10" x 9"
21. (1) Pewter Tray - Fleurop Interflora Switzerland 1985
22. (1) large glass bowl 10" diameter 6-23-80 L.C.C.
23. (1) Silver Tray 0000 - 00xx Xxxxxxxxxxx - Xxx Xxxx Florists Club
24. (1) The Xxxxx Award - Columbus Film Festival - October 30, 1969
25. (1) Interflora Pen Copenhagen 1946 from Xxxxxx Xxxxxxxx, President
Interflora
26. (1) Gold Book - Floricultural Hall of Fame Presented to Xxxx Xxxxxxxxx -
1963
27. (1) Plaque - 75th Anniversary Xxxxxxx Floristeria - Xxxx X. xx Xxxxxx - Xxxx
Colombia
28. (1) 75th Anniversary Pewter Plate - Osterreich Fleurop Interflora
29. (1) Silver Bowl - International Flower Show - New York, 1963 - Cut Flower
Display (6" h x 9" w)
30. (1) FTD Florist Picture (2-1/2 ft. w x 3-1/2 ft. h)
31. (1) photo album of old pictures
32. (1) FTD News 1938
33. (1) Texas State Florists Association 1996 - Hall of Fame Award (8" h x 10"
I)
34. (1) Iberiada 2000 - La Associacion Venezolana de Floristerias (9" x 11-1/2")
35. (1) ADEFI Plaque - Iberiada 1999 Las Vegas, Nevada Association Convention
(14-1/2" x 11-1/2")
36. (2) Convention Banners
37. (1) Photo FTD School - Atlanta March 9-10, 1933
38. (1) Photo 1918 Board of Directors Meeting
39. (1) Photo FTD News (11" x 13")
40. (1) Photo - Interflora International Conference of Florists - Hamburg,
Germany 1963
41. (1) Photo - Float Building - Year: unknown (11" x 13")
42. (1) Photo of Florists (14" x 11")
X-0
00
00. (1) Photo - 50 Years Plaque Presentation (13" x 11")
44. (1) Photo - Xxxxxx Xxxxxxxx (1914-1929) 11" x 14"
45. (1) Members' Creed (14" x 18")
46. (1) 75th Anniversary needlepoint (14" x 14")
47. (1) Photo 1946 Convention (4 ft. x 7")
48. (1) Photo 1960 50th Anniversary Convention (3 ft. x 8")
49. (1) Photo - Staff at FTD Headquarters - Detroit, Michigan Year: unknown (13"
x 11")
50. (1) Photo Headquarters Building - Detroit, Michigan (13" x 9")
51. (1) Photo Convention - Visit to Mt. Xxxxxx, Virginia - October 13, 1927
(2-1/2 ft. x 9")
52. (1) Photo - FTD Building Year: unknown (11-1/2" x 13")
53. (1) Photo - Floral Arrangement Xxxx Bros. Co. (11" x 13")
54. (1) Photo - Xxxxxx X. Xxxxxx Floral Shop (11" x 13")
55. (1) Photo Staff - headquarters Building - Southfield, Michigan Year: unknown
56. (1) Photo Lafayette Building - FTD Headquarters - Detroit, Michigan
57. (1) Photo Xxxxxx Xxxxxxxx (11" x 13")
58. (1) Photo Xxxxxx Xxxxxx Florist - year: unknown (14" x 11")
59. (1) Photo Xxxx X. Xxxxxxxxx (10-1/2 x 12-1/2")
60. (1) Photo Convention October 1922 (5 ft. 7" x 9")
61. (1) Photo Annual Members' Meeting September 1-5, 1930
62. (1) Photo Convention September 17-20, 1929
63. (1) Photo - Virginia Unit - June 22, 1932 - Roanoke, Virginia
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