EXHIBIT 10.36
PLEDGE AGREEMENT
This Pledge Agreement (the "Agreement") is dated as of September 27,
2001, by and among IOS BRANDS CORPORATION, a Delaware corporation (the
"Parent"), FLORISTS' TRANSWORLD DELIVERY, INC., a Michigan corporation (the
"Borrower"), and the other parties executing this Agreement under the heading
"Pledgors" (the Parent, the Borrower and such other parties, along with any
parties who execute and deliver to the Agent (as defined below) an agreement
substantially in the form attached hereto as Schedule F being hereinafter
referred to collectively as the "Pledgors" and individually as a "Pledgor"),
each with its mailing address at 0000 Xxxxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxx
00000, and Xxxxxx Trust and Savings Bank, an Illinois banking corporation
("HTSB"), with its mailing address at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, acting as administrative agent hereunder for the Secured Creditors
hereinafter identified and defined (HTSB acting as such administrative agent and
any successor or successors to HTSB acting in such capacity being hereinafter
referred to as the "Agent").
PRELIMINARY STATEMENTS
A. The Borrower, the other Pledgors and HTSB, individually and as
Agent, have entered into a Credit Agreement dated as of September 27, 2001 (such
Credit Agreement, as the same may be amended or modified from time to time,
including amendments and restatements thereof in its entirety, being hereinafter
referred to as the "Credit Agreement"), pursuant to which HTSB and other banks
and financial institutions and letter of credit issuers from time to time party
to the Credit Agreement (HTSB, in its individual capacity, and such other banks
and financial institutions being hereinafter referred to collectively as the
"Lenders" and individually as a "Lender" and such letter of credit issuers being
hereinafter referred to collectively as the "L/C Issuers" and individually as an
"L/C Issuer") have agreed, subject to certain terms and conditions, to extend
credit and make certain other financial accommodations available to the Borrower
(the Agent, the Lenders and the L/C Issuers, together with any affiliates of the
Lenders party to the Hedging Agreements referred to below, being hereinafter
referred to collectively as the "Secured Creditors" and individually as a
"Secured Creditor").
B. The Borrower and the other Pledgors may from time to time enter
into one or more Hedging Agreements (as such term is defined in the Credit
Agreement) with respect to, among other things, interest rate exchange, swap,
cap, collar, floor, or other similar agreements and one or more foreign currency
contracts, currency swap contracts or other similar agreements with one or more
of the Lenders party to the Credit Agreement, or their affiliates, for the
purpose of hedging or otherwise protecting against interest rate and foreign
currency exposure.
C. As a condition to extending credit to the Borrower under the Credit
Agreement or entering into any Hedging Agreements, the Secured Creditors have
required, among other things, that each Pledgor grant to the Agent for the
benefit of the Secured Creditors a lien on and security interest in the personal
property of such Pledgor described herein subject to the terms and conditions
hereof.
D. The Parent owns, directly or indirectly, equity interests in each
of the other Pledgors and the Parent and the Borrower each provide the other
Pledgors with financial, management, administrative, and technical support which
enables such Pledgors to conduct their businesses in an orderly and efficient
manner in the ordinary course.
E. Each Pledgor will benefit, directly or indirectly, from credit and
other financial accommodations extended by the Secured Creditors to the
Borrower.
NOW, THEREFORE, for good and valuable consideration, receipt whereof
is hereby acknowledged, the parties hereto hereby agree as follows:
Section 1. Terms Defined in Credit Agreement. All capitalized terms
used herein without definition shall have the same meanings herein as such terms
have in the Credit Agreement. The term "Pledgor" and "Pledgors" as used herein
shall mean and include the Pledgors collectively and also each individually,
with all grants, representations, warranties and covenants of and by the
Pledgors, or any of them, herein contained to constitute joint and several
grants, representations, warranties and covenants of and by the Pledgors;
provided, however, that unless the context in which the same is used shall
otherwise require, any grant, representation, warranty or covenant contained
herein related to the Collateral shall be made by each Pledgor only with respect
to the Collateral owned by it or represented by such Pledgor as owned by it.
Section 2. Grant of Security Interest in the Collateral. Each Pledgor
hereby grants to the Agent for the benefit of the Secured Creditors a lien on
and security interest in, and acknowledges and agrees that the Agent has and
shall continue to have for the benefit of the Secured Creditors a continuing
lien on and security interest in, any and all right, title and interest of each
Pledgor in certain equity interests of each of its direct Subsidiaries as set
forth below, whether now owned or existing or hereafter created, acquired or
arising, and in whatever form, including the following:
(a) Stock Collateral. (i) All shares of the capital stock of
each Subsidiary which is a corporation owned or held directly by such
Pledgor, whether now owned or hereafter formed or acquired (those
shares delivered to and deposited with the Agent on or prior to the
date hereof being listed and described on Schedule A attached hereto),
and all substitutions and additions to such shares (herein, the
"Pledged Securities"), provided that, in the case of a lien and
security interest on the capital stock of a company incorporated or
otherwise organized outside of the United States of America or any
State or territory thereof (herein a "Foreign Company"), if any such
grant of lien would amount to more than 65% of the total combined
voting stock of any such Foreign Company, then such lien and security
interest shall be limited to a lien and security interest on the
shares of capital stock representing 65% of the total combined voting
stock of such Foreign Company if granting a lien and security interest
in more than such 65% ownership interest would cause material adverse
tax consequences to the Parent, and such voting stock of any Foreign
Company not required to be pledged hereunder shall not be included in
the definition of "Pledged Securities", (ii) all dividends,
distributions and sums distributable or payable from, upon or in
respect of the Pledged Securities, and
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(iii) all other rights and privileges incident to the Pledged
Securities (all of the foregoing being hereinafter referred to
collectively as the "Stock Collateral");
(b) Partnership Interest Collateral. (i) All partnership or
other equity interests in each Subsidiary which is a partnership
(whether general or limited) owned or held directly by such Pledgor,
whether now owned or hereafter formed or acquired (each of such equity
interests existing on the date hereof being listed and identified on
Schedule B attached hereto) (such partnerships being hereinafter
referred to collectively as the "Partnerships" and individually as a
"Partnership"), (ii) any and all payments and distributions of
whatever kind or character, whether in cash or other property, at any
time made, owing or payable to such Pledgor in respect of or on
account of its present or hereafter acquired interests in each
Partnership, whether due or to become due and whether representing
profits, distributions pursuant to complete or partial liquidation or
dissolution of any such Partnership, distributions representing the
complete or partial redemption of such Pledgor's interest in any such
Partnership or the complete or partial withdrawal of such Pledgor from
any such Partnership, repayment of capital contributions, payment of
management fees or commissions, or otherwise, and the right to
receive, receipt for, use and enjoy all such payments and
distributions, and (iii) all other rights and privileges incident to
such Pledgor's interest in each Partnership (all of the foregoing
being hereinafter collectively called the "Partnership Interest
Collateral");
(c) LLC Collateral. (i) All membership or other equity
interests in each Subsidiary which is a limited liability company
owned or held directly by such Pledgor, whether now owned or hereafter
formed or acquired (each of such equity interests existing on the date
hereof being listed and identified on Schedule C attached hereto)
(such limited liability companies being hereinafter referred to
collectively as the "LLCs" and individually as a "LLC"), (ii) any and
all payments and distributions of whatever kind or character, whether
in cash or other property, at any time made, owing or payable to such
Pledgor in respect of or on account of its present or hereafter
acquired interests in each LLC, whether due or to become due and
whether representing profits, distributions pursuant to complete or
partial liquidation or dissolution of any such LLC, distributions
representing the complete or partial redemption of such Pledgor's
interest in such LLC or the complete or partial withdrawal of such
Pledgor from any such LLC, repayment of capital contributions, payment
of management fees or commissions, or otherwise, and the right to
receive, receipt for, use and enjoy all such payments and
distributions, and (iii) all other rights and privileges incident to
such Pledgor's interest in each LLC (all of the foregoing being
hereinafter referred to as the "LLC Collateral"); and
(d) Proceeds. All proceeds of the foregoing;
all of the foregoing being herein sometimes referred to as the "Collateral". All
terms which are used in this Agreement which are defined in the Uniform
Commercial Code of the State of Illinois as in effect from time to time ("UCC")
shall have the same meanings herein as such terms are defined in the UCC, unless
this Agreement shall otherwise specifically provide.
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Section 3. Obligations Secured. This Agreement is made and given to
secure, and shall secure, the prompt payment and performance when due of (a) any
and all indebtedness, obligations and liabilities of the Pledgors, and of any of
them individually, to the Secured Creditors, and to any of them individually,
under or in connection with or evidenced by the Credit Agreement or any other
Loan Document, including, without limitation, all obligations evidenced by the
Notes of the Borrower heretofore or hereafter issued under the Credit Agreement,
all obligations of the Borrower to reimburse the Secured Creditors for the
amount of all drawings on all Letters of Credit issued pursuant to the Credit
Agreement and all other obligations of the Borrower under all Applications
therefor, all obligations of the Pledgors, and of any of them individually,
arising under or in connection with or otherwise evidenced by Hedging Agreements
with any one or more of the Secured Creditors, and all obligations of the
Pledgors, and of any of them individually, arising under any guaranty issued by
it relating to the foregoing or any part thereof, in each case whether now
existing or hereafter arising (and whether arising before or after the filing of
a petition in bankruptcy and including all interest accrued after the petition
date), due or to become due, direct or indirect, absolute or contingent, and
howsoever evidenced, held or acquired and (b) any and all expenses and charges,
legal or otherwise, suffered or incurred by the Secured Creditors, and any of
them individually, in collecting or enforcing any of such indebtedness,
obligations and liabilities or in realizing on or protecting or preserving any
security therefor, including, without limitation, the lien and security interest
granted hereby (all of the indebtedness, obligations, liabilities, expenses and
charges described above being hereinafter referred to as the "Obligations").
Notwithstanding anything in this Agreement to the contrary, the right of
recovery against any Pledgor under this Agreement (other than the Parent and the
Borrower to which this limitation shall not apply) shall not exceed $1.00 less
than the lowest amount which would render such Pledgor's obligations under this
Agreement void or voidable under applicable law, including fraudulent conveyance
law.
Section 4. Covenants, Agreements, Representations and Warranties. Each
Pledgor hereby covenants and agrees with, and represents and warrants to, the
Secured Creditors that:
(a) Each Pledgor is duly organized and validly existing in
good standing under the laws of the state of its organization. Each
Pledgor's legal name, state of organization, chief executive office
and organizational identification number (if any) are correctly set
forth on Schedule D to this Agreement. No Pledgor shall change its
legal name or chief executive office without giving 30 days' prior
written notice of its intent to do so to the Agent (provided in all
cases such chief executive office shall be within the United States of
America). No Pledgor shall change its state of organization without
the Agent's prior written consent. Each Pledgor is and shall be the
sole and lawful legal, record and beneficial owner of its Collateral,
and has full right, power, and authority to enter into this Agreement
and to perform each and all of the matters and things herein provided
for. The execution and delivery of this Agreement, and the observance
and performance of each of the matters and things herein set forth,
will not (i) contravene or constitute a default under any provision of
law or any judgment, injunction, order, or decree binding upon any
Pledgor or any provision of any Pledgor's organizational documents or
any covenant, indenture, or agreement of or affecting any Pledgor or
any of its property or (ii) result in the creation or imposition of
any lien or encumbrance on any property of any Pledgor except for the
lien and security interest granted to the Agent hereunder. No Pledgor
shall,
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without the Agent's prior written consent, sell, assign, or otherwise
dispose of the Collateral or any interest therein, except to the
extent permitted by Section 8.10 of the Credit Agreement.
(b) The Collateral, and every part thereof, is and shall be
free and clear of all security interests, liens, rights, claims,
attachments, levies and encumbrances of every kind, nature and
description and whether voluntary or involuntary, except for the
security interest of the Agent hereunder and for other Liens permitted
by Section 8.8 of the Credit Agreement. Each Pledgor shall warrant and
defend the Collateral against any claims and demands of all persons at
any time claiming the same or any interest in the Collateral adverse
to any Secured Creditor.
(c) Each Pledgor agrees to execute and deliver to the Agent
such further agreements, assignments, instruments and documents and to
do all such other things as the Agent may deem necessary, reasonable
or appropriate to assure the Agent its lien and security interest
hereunder, including such assignments, acknowledgments (including
acknowledgments of collateral assignment in the form attached hereto
as Schedule E), stock powers, financing statements, instruments and
documents as the Agent may from time to time require in order to
comply with the UCC. Each Pledgor hereby agrees that a carbon,
photographic or other reproduction of this Agreement or any such
financing statement is sufficient for filing as a financing statement
by the Agent without prior notice thereof to such Pledgor wherever the
Agent in its discretion desires to file the same. Each Pledgor hereby
authorizes the Agent to file any and all financing statements covering
Collateral or any part thereof as the Agent may require. Each Pledgor
hereby authorizes the Agent to order lien searches from time to time
as the Agent reasonably determines are necessary or advisable to
protect the perfection and priority of its security interest in the
Collateral against any Pledgor and the Collateral, and the Pledgors
shall promptly reimburse the Agent for all reasonable costs and
expenses incurred in connection with such lien searches. In the event
for any reason the law of any jurisdiction other than Illinois becomes
or is applicable to the Collateral or any part thereof, or to any of
the Obligations, each Pledgor agrees to execute and deliver all such
agreements, assignments, instruments and documents and to do all such
other things as the Agent in its discretion deems necessary or
appropriate to preserve, protect and enforce the lien and security
interest of the Agent under the law of such other jurisdiction.
(d) Each Pledgor shall promptly notify the Agent of any
Stock Collateral, Partnership Interest Collateral and LLC Collateral
acquired or maintained by it after the date hereof and not listed on
Schedule A, Schedule B, or Schedule C hereof, and shall submit to the
Agent a supplement to the relevant Schedule reflecting the additional
Collateral subject to this Agreement (provided a Pledgor's failure to
do so shall not impair the Agent's security interest therein).
(e) Except as disclosed on the relevant Schedule, none of
the Collateral constitutes margin stock (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System).
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(f) If any Pledgor fails to perform when due any of the
agreements and covenants herein contained, the Agent may, at its
option and upon prior notice to such Debtor (unless the Agent
reasonably determines that payment or performance without such notice
is necessary to protect, preserve or perfect its interests in the
relevant Collateral), perform the same and in so doing may expend such
sums as the Agent reasonably deems advisable in the performance
thereof, including, without limitation, the payment of any taxes,
liens and encumbrances, expenditures made in defending against any
adverse claim, and all other expenditures which the Agent may be
compelled to make by operation of law or which Agent may make by
agreement or otherwise for the protection of the security hereof. All
such sums and amounts so expended shall be repayable by the Pledgors
upon demand, shall constitute additional Obligations secured hereunder
and shall bear interest from the date said amounts are expended at the
rate per annum (computed on the basis of a year of 365 or 366 days, as
the case may be, for the actual number of days elapsed) determined by
adding 2% to the Base Rate from time to time in effect plus the
Applicable Margin for Base Rate Loans under the Revolving Credit, with
any change in such rate per annum as so determined by reason of a
change in such Base Rate to be effective on the date of such change in
said Base Rate (such rate per annum as so determined being hereinafter
referred to as the "Default Rate"). No such performance of any
covenant or agreement by the Agent on behalf of such Pledgor, and no
such advancement or expenditure therefor, shall relieve such Pledgor
of any default under the terms of this Agreement or in any way
obligate any Secured Creditor to take any further or future action
with respect thereto. The Agent, in making any payment hereby
authorized, may do so according to any xxxx, statement or estimate
procured from the appropriate public office or holder of the claim to
be discharged without inquiry into the accuracy of such xxxx,
statement or estimate, or into the validity of any tax assessment,
sale, forfeiture, tax lien or title or claim. The Agent, in performing
any act hereunder, shall be the sole judge of whether the relevant
Pledgor is required to perform the same under the terms of this
Agreement. The Agent is hereby authorized to charge any account of any
Pledgor maintained with any Secured Creditor for the amount of such
sums and amounts so expended.
Section 5. Special Provisions Re: Stock Collateral.
(a) Each Pledgor has the right to vote the Pledged
Securities and there are no restrictions, other than those
restrictions, if any, set forth in XXX.XXX's charter documents as such
documents are in effect on the date hereof and which relate to the
Class B Common Stock of XXX.XXX, upon the voting rights associated
with, or the transfer of, any of the Pledged Securities, except as
provided by federal, state and local and, with respect to Foreign
Companies, foreign laws applicable to the sale of securities generally
and the terms of this Agreement.
(b) The certificates for all shares of the Pledged
Securities shall be delivered by the relevant Pledgor to the Agent
duly endorsed in blank for transfer or accompanied by an appropriate
assignment or assignments or an appropriate undated stock power or
powers, in every case sufficient to transfer title thereto. The Agent
may, at any time after the occurrence of an Event of Default, cause to
be transferred into its name or into the
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name of its nominee or nominees any and all of the Pledged Securities.
The Agent shall at all times have the right to exchange the
certificates representing the Pledged Securities for certificates of
smaller or larger denominations.
(c) The Pledged Securities have been validly issued and,
except as described on Schedule A, are fully paid and non-assessable.
Except as set forth on Schedule A, there are no outstanding
commitments or other obligations of the issuers of any of the Pledged
Securities to issue, and no options, warrants or other rights of any
individual or entity to acquire, any share of any class or series of
capital stock of such issuers. The Pledged Securities listed and
described on Schedule A attached hereto constitute the percentage of
the issued and outstanding capital stock of each series and class of
the issuers thereof as set forth thereon owned by the relevant
Pledgor. Each Pledgor further agrees that in the event any such issuer
shall issue any additional capital stock of any series or class
(whether or not entitled to vote) to such Pledgor or otherwise on
account of its ownership interest therein, subject to the limitations
set forth in Section 2(a) above, such Pledgor will forthwith pledge
and deposit hereunder, or cause to be pledged and deposited hereunder,
all such additional shares of such capital stock.
Section 6. Special Provisions Re: Partnership Interest Collateral
and LLC Collateral.
(a) Each Pledgor represents and warrants to, and agrees
with, the Secured Creditors as follows:
(i) each Partnership is a valid and existing
entity of the type listed on Schedule B and is duly
organized and existing under applicable law; and each LLC is
duly organized and existing under applicable law;
(ii) the Partnership Interest Collateral listed
and described on Schedule B attached hereto constitutes the
percentage of the equity interest in each Partnership set
forth thereon owned by the relevant Pledgor; and the LLC
Collateral listed and described on Schedule C attached
hereto constitutes the percentage of the equity interest in
each LLC set forth thereon owned by the relevant Pledgor;
and
(iii) the copies of the partnership agreements of
each Partnership and the articles of association and
operating agreements of each LLC (each such agreement being
hereinafter referred to as "Organizational Agreement")
heretofore delivered to the Agent are true and correct
copies thereof and have not been amended or modified in any
respect.
(b) Each Pledgor agrees that it shall not, without the prior
written consent of the Agent, agree to any amendment or modification
to any of the Organizational Agreements which would in any manner
materially adversely affect or impair the Partnership Interest
Collateral or LLC Collateral or reduce or dilute the rights of such
Pledgor with respect to any Partnership or LLC, any of such done
without such prior written consent to be null and void. The Pledgors
shall promptly send to the Agent
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copies of all notices and communications with respect to each
Partnership and each LLC alleging the existence of a default by any
Pledgor in the performance of any of its obligations under any
Organizational Agreement. Each Pledgor agrees that it will promptly
notify the Agent of any litigation which is reasonably likely to have
a Material Adverse Effect or is reasonably likely to materially and
adversely affect a Partnership or a LLC or any of their respective
properties and of any material adverse change in the operations,
business properties, assets or conditions, financial or otherwise, of
any Partnership or any LLC. Each Pledgor shall perform when due all of
its obligations under each Organizational Agreement. In the event any
Pledgor fails to pay or perform any obligation arising under any
Organizational Agreement or otherwise related to any Partnership or
any LLC, the Agent may, but need not, pay or perform such obligation
at the expense and for the account of the Pledgors and all funds
expended for such purposes shall constitute Obligations secured hereby
which the Pledgors promise to pay to the Agent together with interest
thereon at the Default Rate.
(c) The certificates, if any, at any time evidencing any
Pledgor's interest in any Partnership or LLC shall be delivered to the
Agent duly endorsed in blank for transfer or accompanied by an
appropriate assignment or assignments or an appropriate undated stock
power or powers, in every case sufficient to transfer title thereto.
The Agent may, at any time after the occurrence of an Event of
Default, cause to be transferred into its name or the name of its
nominee or nominees, any and all of such Collateral. The Agent shall
at all times have the right to exchange the certificates representing
such Collateral for certificates of smaller or larger denominations.
(d) Each Pledgor has the right to vote its interest in each
Partnership and LLC (except as set forth herein) and there are no
restrictions upon the voting rights associated with, or the transfer
of, any of the Partnership Interest Collateral or LLC Collateral,
except as provided by federal, state and local laws applicable to the
sale of securities generally, the terms of any Organizational
Agreement under which such person is organized and the terms of this
Agreement.
(e) Except as set forth on Schedule C, there are no
outstanding commitments or other obligations of any LLC to issue, and
no options, warrants or other rights of any individual or entity to
acquire, any interest in such LLC.
Section 7. Voting Rights and Dividends. So long as no Event of
Default hereunder has occurred and is continuing and thereafter until notified
by the Agent pursuant to Section 9(b) hereof:
(a) Each Pledgor shall be entitled to exercise all voting
and/or consensual powers pertaining to the Collateral of such Pledgor,
or any part thereof, for all purposes not inconsistent with the terms
of this Agreement or any other document evidencing or otherwise
relating to any of the Obligations.
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(b) Each Pledgor shall be entitled to receive and retain all
dividends and distributions in respect of the Collateral which are
paid in cash of whatsoever nature; provided, however, that such
dividends and distributions representing:
(i) stock or liquidating dividends or a distribution
or return of capital upon or in respect of the Pledged
Securities or any part thereof or resulting from a split-up,
revision or reclassification of the Pledged Securities or
any part thereof or received in addition to, in substitution
of or in exchange for the Pledged Securities or any part
thereof as a result of a merger, consolidation or otherwise;
or
(ii) distributions in complete or partial
liquidation of any Partnership or LLC or the interest of
such Pledgor therein;
in each case, shall be paid, delivered or transferred, as appropriate,
directly to the Agent immediately upon the receipt thereof by such
Pledgor and may, in the case of cash, be applied by the Agent to the
Obligations in accordance with the terms of the Credit Agreement,
whether or not the same may then be due or otherwise adequately
secured and shall, in the case of all other property, together with
any cash received by the Agent and not applied as aforesaid, be held
by the Agent pursuant hereto as part of the Collateral pledged under
and subject to the terms of this Agreement. If an Event of Default
shall have occurred and be continuing, all dividends and distributions
received by the Agent and then held by it pursuant to this Section
7(b)(ii) as part of the Collateral will be applied as provided in
Section 10 hereof.
(c) In order to permit each Pledgor to exercise such voting
and/or consensual powers which it is entitled to exercise under
subsection (a) above and to receive such distributions which such
Pledgor is entitled to receive and retain under subsection (b) above,
the Agent will, if necessary, upon the written request of such
Pledgor, from time to time execute and deliver to such Pledgor
appropriate proxies and dividend orders.
Section 8. Power of Attorney. Each Pledgor hereby appoints the
Agent, its nominee, or any other person whom the Agent may designate as such
Pledgor's attorney-in-fact, with full power and authority upon the occurrence
and during the continuation of any Event of Default to ask, demand, collect,
receive, receipt for, xxx for, compound and give acquittance for any and all
sums or properties which may be or become due, payable or distributable in
respect of the Collateral or any part thereof, with full power to settle, adjust
or compromise any claim thereunder or therefor as fully as such Pledgor could
itself do, to endorse or sign the Pledgor's name on any assignments, stock
powers, or other instruments of transfer and on any checks, notes, acceptances,
money orders, drafts, and any other forms of payment or security that may come
into the Agent's possession and on all documents of satisfaction, discharge or
receipt required or requested in connection therewith, and, in its discretion,
to file any claim or take any other action or proceeding, either in its own name
or in the name of such Pledgor, or otherwise, which the Agent deems necessary or
appropriate to collect or otherwise realize upon all or any part of the
Collateral, or effect a transfer thereof, or which may be necessary or
appropriate to protect and preserve the right, title and interest of the Agent
in and to such Collateral and the
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security intended to be afforded hereby. Each Pledgor hereby ratifies and
approves all acts of any such attorney and agrees that neither the Agent nor any
such attorney will be liable for any such acts or omissions nor for any error of
judgment or mistake of fact or law other than such person's gross negligence or
willful misconduct. The Agent may file one or more financing statements
disclosing its security interest in all or any part of the Collateral without
any Pledgor's signature appearing thereon, and each Pledgor also hereby grants
the Agent a power of attorney to execute any such financing statements, and any
amendments or supplements thereto, to preserve the perfection and priority of
the security interests granted or purported to be granted hereby on behalf of
such Pledgor without notice thereof to such Pledgor. The foregoing powers of
attorney, being coupled with an interest, are irrevocable until the Obligations
have been fully satisfied and all commitments of the Lenders to extend credit to
or for the account of the Borrower under the Credit Agreement have expired or
otherwise terminated.
Section 9. Defaults and Remedies. (a) The occurrence of any event
or the existence of any condition which is specified as an "Event of Default"
under the Credit Agreement shall constitute an "Event of Default" hereunder.
(b) Upon the occurrence and during the continuation of any Event of
Default, all rights of the Pledgors to receive and retain the distributions
which they are entitled to receive and retain pursuant to Section 7(b) hereof
shall, at the option of the Agent cease and thereupon become vested in the Agent
which, in addition to all other rights provided herein or by law, shall then be
entitled solely and exclusively to receive and retain the distributions which
the Pledgors would otherwise have been authorized to retain pursuant to Section
7(b) hereof and all rights of the Pledgors to exercise the voting and/or
consensual powers which they are entitled to exercise pursuant to Section 7(a)
hereof shall, at the option of the Agent, cease and thereupon become vested in
the Agent which, in addition to all other rights provided herein or by law,
shall then be entitled solely and exclusively to exercise all voting and other
consensual powers pertaining to the Collateral and to exercise any and all
rights of conversion, exchange or subscription and any other rights, privileges
or options pertaining thereto as if the Agent were the absolute owner thereof
including, without limitation, the right to exchange, at its discretion, the
Collateral or any part thereof upon the merger, consolidation, reorganization,
recapitalization or other readjustment of the respective issuer thereof or upon
the exercise by or on behalf of any such issuer or the Agent of any right,
privilege or option pertaining to the Collateral or any part thereof and, in
connection therewith, to deposit and deliver the Collateral or any part thereof
with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Agent may determine. In the event
the Agent in good faith believes any of the Collateral constitutes restricted
securities within the meaning of any applicable securities law, any disposition
thereof in compliance with such laws shall not render the disposition
commercially unreasonable.
(c) Upon the occurrence and during the continuation of any Event of
Default, the Agent shall have, in addition to all other rights provided herein
or by law, the rights and remedies of a secured party under the UCC in all
relevant jurisdictions, and further the Agent may, without demand and, to the
extent permitted by applicable law, without advertisement, notice, hearing or
process of law to the extent permitted by applicable law, all of which each
Pledgor hereby waives to the extent permitted by applicable law, at any time or
times, sell and deliver any or all of the
-10-
Collateral held by or for it at public or private sale, at any securities
exchange or broker's board or at any of the Agent's offices or elsewhere, for
cash, upon credit or otherwise, at such prices and upon such terms as the Agent
deems advisable, in its sole discretion. In the exercise of any such remedies,
the Agent may sell the Collateral as a unit even though the sales price thereof
may be in excess of the amount remaining unpaid on the Obligations. Also, if
less than all the Collateral is sold, the Agent shall have no duty to marshal or
apportion the part of the Collateral so sold as between the Pledgors, or any of
them, but may sell and deliver any or all of the Collateral without regard to
which of the Pledgors are the owners thereof. In addition to all other sums due
any Secured Creditor hereunder, each Pledgor shall pay the Secured Creditors all
costs and expenses incurred by the Secured Creditors, including reasonable
attorneys' fees and court costs, in obtaining, liquidating or enforcing payment
of Collateral or the Obligations or in the prosecution or defense of any action
or proceeding by or against any Secured Creditor or any Pledgor concerning any
matter arising out of or connected with this Agreement or the Collateral or the
Obligations including, without limitation, any of the foregoing arising in,
arising under or related to a case under the United States Bankruptcy Code (or
any successor statute). Any requirement of reasonable notice shall be met if
such notice is personally served on or mailed, postage prepaid, to the Pledgors
in accordance with Section 14(b) hereof at least 10 days before the time of sale
or other event giving rise to the requirement of such notice; provided, however,
no notification need be given to a Pledgor if such Pledgor has signed, after an
Event of Default has occurred, a statement renouncing any right to notification
of sale or other intended disposition. The Agent shall not be obligated to make
any sale or other disposition of the Collateral regardless of notice having been
given. Any Secured Creditor may be the purchaser at any such sale. Each Pledgor
hereby waives all of its rights of redemption from any such sale to the extent
permitted by applicable law. The Agent may postpone or cause the postponement of
the sale of all or any portion of the Collateral by announcement at the time and
place of such sale, and such sale may, without further notice, be made at the
time and place to which the sale was postponed or the Agent may further postpone
such sale by announcement made at such time and place. The Agent may sell or
otherwise dispose of the Collateral without giving any warranties as to the
Collateral or any part thereof, including disclaimers of any warranties of title
or the like, and each Pledgor acknowledges and agrees that the absence of such
warranties shall not render the disposition commercially unreasonable.
EACH PLEDGOR AGREES THAT IF ANY PART OF THE COLLATERAL IS SOLD AT ANY
PUBLIC OR PRIVATE SALE, THE AGENT MAY ELECT TO SELL ONLY TO A BUYER WHO WILL
GIVE FURTHER ASSURANCES, SATISFACTORY IN FORM AND SUBSTANCE TO THE AGENT,
RESPECTING COMPLIANCE WITH THE REQUIREMENTS OF THE FEDERAL SECURITIES ACT OF
1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, AND A SALE SUBJECT TO
SUCH CONDITION SHALL BE DEEMED COMMERCIALLY REASONABLE.
EACH PLEDGOR FURTHER AGREES THAT IN ANY SALE OF ANY PART OF THE
COLLATERAL, THE AGENT IS HEREBY AUTHORIZED TO COMPLY WITH ANY LIMITATION OR
RESTRICTION IN CONNECTION WITH SUCH SALE AS IT MAY BE ADVISED BY COUNSEL IS
NECESSARY IN ORDER TO AVOID ANY VIOLATION OF APPLICABLE LAW (INCLUDING, WITHOUT
LIMITATION, COMPLIANCE WITH SUCH PROCEDURES AS MAY RESTRICT THE NUMBER OF
PROSPECTIVE BIDDERS AND PURCHASERS AND/OR FURTHER RESTRICT SUCH PROSPECTIVE
BIDDERS OR PURCHASERS TO PERSONS WHO WILL REPRESENT AND AGREE THAT THEY ARE
-11-
PURCHASING FOR THEIR OWN ACCOUNT FOR INVESTMENT AND NOT WITH A VIEW TO THE
DISTRIBUTION OR RESALE OF SUCH COLLATERAL ), OR IN ORDER TO OBTAIN ANY REQUIRED
APPROVAL OF THE SALE OR OF THE PURCHASER BY ANY GOVERNMENTAL REGULATORY
AUTHORITY OR OFFICIAL, AND EACH PLEDGOR FURTHER AGREES THAT SUCH COMPLIANCE
SHALL NOT RESULT IN SUCH SALE BEING CONSIDERED OR DEEMED NOT TO HAVE BEEN MADE
IN A COMMERCIALLY REASONABLE MANNER, NOR SHALL THE AGENT BE LIABLE OR
ACCOUNTABLE TO ANY PLEDGOR FOR ANY DISCOUNT ALLOWED BY REASON OF THE FACT THAT
SUCH COLLATERAL IS SOLD IN COMPLIANCE WITH ANY SUCH LIMITATION OR RESTRICTION.
(d) In the event the Agent shall sell or otherwise dispose of all or
any part of the Partnership Interest Collateral or LLC Collateral, each Pledgor
hereby grants the purchaser of such portion of the Partnership Interest
Collateral or LLC Collateral to the fullest extent of its capacity, the ability
(but not the obligation) to become a partner or member in the relevant
Partnership or LLC, as the case may be (subject to the approval of the relevant
Partnership or LLC, as the case may be, in the exercise of its discretion in
accordance with its Organizational Agreement and subject to any requirements of
applicable law), in the place and stead of such Pledgor. To exercise such right,
the purchaser shall give written notice to the relevant Partnership or LLC, as
the case may be, of its election to become a partner or member in such
Partnership or LLC. Following such election and giving of consent by all
necessary partners or members of the relevant Partnership or LLC as to the
purchaser becoming a partner or member, the purchaser shall have the right and
powers and be subject to the liabilities of a partner or member under the
relevant Organizational Agreement and the partnership or limited liability
company act governing the Partnership or LLC.
(e) Upon the occurrence and during the continuation of any Event of
Default, in addition to all other rights provided herein or by law, the Agent
shall have the right to cause all or any part of the Partnership Interest
Collateral or LLC Collateral of any of the Pledgors in any one or more of the
Partnerships or LLCs to be redeemed and to cause a withdrawal, in whole or in
part, of any Pledgor from any Partnership or LLC or any of its interest therein.
(f) The powers conferred upon the Agent hereunder are solely to
protect its interest in the Collateral and shall not impose on it any duties to
exercise such powers. The Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession or
control if the Collateral is accorded treatment substantially equivalent to that
which the Agent accords its own property, consisting of similar types
securities, it being understood, however, that the Agent shall have no
responsibility for (i) ascertaining or taking any action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Collateral, whether or not the Agent has or is deemed to have knowledge of such
matters, (ii) taking any necessary steps to preserve rights against any parties
with respect to any Collateral, or (iii) initiating any action to protect the
Collateral or any part thereof against the possibility of a decline in market
value. This Agreement constitutes an assignment of rights only and not an
assignment of any duties or obligations of the Pledgors in any way related to
the Collateral, and the Agent shall have no duty or obligation to discharge any
such duty or obligation. By its acceptance hereof, the Agent does not undertake
to perform or discharge and shall not be responsible or liable for the
performance or discharge of any such duties or responsibilities and shall not in
any event become a "Substituted Limited Partner" or words of like import (as
-12-
defined in the relevant Organizational Agreement) in the relevant Partnership.
Neither any Secured Creditor, nor any party acting as attorney for any Secured
Creditor, shall be liable hereunder for any acts or omissions or for any error
of judgment or mistake of fact or law other than such person's gross negligence
or willful misconduct.
(g) Failure by the Agent to exercise any right, remedy or option under
this Agreement or any other agreement between any Pledgor and the Agent or
provided by law, or delay by the Agent in exercising the same, shall not operate
as a waiver; and no waiver shall be effective unless it is in writing, signed by
the party against whom such waiver is sought to be enforced and then only to the
extent specifically stated. The rights and remedies of the Secured Creditors
under this Agreement shall be cumulative and not exclusive of any other right or
remedy which the any Secured Creditor may have. For purposes of this Agreement,
an Event of Default shall be construed as continuing after its occurrence until
the same is waived in writing by the Agent.
Section 10. Application of Proceeds. The proceeds and avails of
the Collateral at any time received by the Agent upon the occurrence and during
the continuation of any Event of Default shall, when received by the Agent in
cash or its equivalent, be applied by the Agent in reduction of, or held as
collateral security for, the Obligations in accordance with the terms of the
Credit Agreement. The Pledgors shall remain liable to the Secured Creditors for
any deficiency. Any surplus remaining after the full payment and satisfaction of
the Obligations shall be returned to the Borrower, as agent for Pledgors, or to
whomsoever the Agent reasonably determines is lawfully entitled thereto.
Section 11. Continuing Agreement. This Agreement shall be a
continuing agreement in every respect and shall remain in full force and effect
until all of the Obligations, both for principal and interest, have been fully
paid and satisfied and the commitments of the Secured Creditors to extend credit
to or for the account of the Borrower under the Credit Agreement shall have
expired or otherwise terminated. Upon such termination of this Agreement, the
Agent shall, upon the request and at the expense of the Pledgors, forthwith
release all its liens and security interests hereunder.
Section 12. The Agent. In acting under or by virtue of this
Agreement, the Agent shall be entitled to all the rights, authority, privileges,
and immunities provided in the Credit Agreement, all of which provisions of said
Credit Agreement (including, without limitation, Section 11 thereof) are
incorporated by reference herein with the same force and effect as if set forth
herein in their entirety. The Agent hereby disclaims any representation or
warranty to the other Secured Creditors or any other holders of the Obligations
concerning the perfection of the liens and security interests granted hereunder
or in the value of the Collateral.
Section 13. Primary Security; Obligations Absolute. The lien and
security herein created and provided for stand as direct and primary security
for the Obligations of the Borrower arising under or otherwise relating to the
Credit Agreement as well as for the other Obligations secured hereby. No
application of any sums received by the Agent in respect of the Collateral or
any disposition thereof to the reduction of the Obligations or any portion
thereof shall in any manner entitle any Pledgor to any right, title or interest
in or to the Obligations or any collateral security therefor, whether by
subrogation or otherwise, unless and until all Obligations have been
-13-
fully paid and satisfied and all commitments to extend credit to or for the
account of the Borrower under the Credit Agreement have expired or otherwise
terminated. Each Pledgor acknowledges and agrees that the lien and security
hereby created and provided for are absolute and unconditional and shall not in
any manner be affected or impaired by any acts or omissions whatsoever of any
Secured Creditor or any other holder of any of the Obligations, and without
limiting the generality of the foregoing, the lien and security hereof shall not
be impaired by any acceptance by any Secured Creditor or any other holder of any
of the Obligations of any other security for or guarantors upon any Obligations
or by any failure, neglect or omission on the part of any Secured Creditor or
any other holder of any of the Obligations to realize upon or protect any of the
Obligations or any collateral security therefor. The lien and security hereof
shall not in any manner be impaired or affected by (and the Secured Creditors,
without notice to anyone, are hereby authorized to make from time to time) any
sale, pledge, surrender, compromise, settlement, release, renewal, extension,
indulgence, alteration, substitution, exchange, change in, modification or
disposition of any of the Obligations, or of any collateral security therefor,
or of any guaranty thereof, or of any instrument or agreement setting forth the
terms and conditions pertaining to any of the foregoing. The Secured Creditors
may at their discretion at any time grant credit to the Borrower without notice
to the other Pledgors in such amounts and on such terms as the Secured Creditors
may elect without in any manner impairing the lien and security hereby created
and provided for. In order to realize hereon and to exercise the rights granted
the Secured Creditors hereunder and under applicable law, there shall be no
obligation on the part of any Secured Creditor or any other holder of any of the
Obligations at any time to first resort for payment to the Borrower or any other
Pledgor or to any guaranty of the Obligations or any portion thereof or to
resort to any other collateral security, property, liens or any other rights or
remedies whatsoever, and the Secured Creditors shall have the right to enforce
this Agreement as against any Pledgor or any of its Collateral irrespective of
whether or not other proceedings or steps seeking resort to or realization upon
or from any of the foregoing are pending.
Section 14. Miscellaneous. (a) This Agreement cannot be changed or
terminated orally. This Agreement shall create a continuing lien on and security
interest in the Collateral and shall be binding upon each Pledgor, its
successors and permitted assigns, and shall inure, together with the rights and
remedies of the Secured Creditors hereunder, to the benefit of the Secured
Creditors, and their successors and assigns; provided, however, that no Pledgor
may assign its rights or delegate its duties hereunder without the Agent's prior
written consent. Without limiting the generality of the foregoing, and subject
to the provisions of the Credit Agreement, any Lender may assign or otherwise
transfer any indebtedness held by it secured by this Agreement to any other
person, and such other person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise.
(b) All notices and other communications provided for hereunder shall
be given in the manner provided in and otherwise in accordance with the terms of
Section 13.8 of the Credit Agreement, provided that any notice to a Pledgor
other than the Borrower shall be sent in care of the Borrower in the same manner
as notices to the Borrower under the Credit Agreement.
(c) No Lender shall have the right to institute any suit, action or
proceeding in equity or at law for the foreclosure or other realization upon any
Collateral subject to this Agreement or for the execution of any trust or power
hereof or for the appointment of a receiver, or for the
-14-
enforcement of any other remedy under or upon this Agreement; it being
understood and intended that no one or more of the Lenders shall have any right
in any manner whatsoever to affect, disturb or prejudice the lien and security
interest of this Agreement by its or their action or to enforce any right
hereunder, and that all proceedings at law or in equity shall be instituted, had
and maintained by the Agent in the manner herein provided for the benefit of the
Secured Creditors.
(d) In the event that any provision hereof shall be deemed to be
invalid or unenforceable by reason of the operation of any law or by reason of
the interpretation placed thereon by any court, this Agreement shall be
construed as not containing such provision, but only as to such jurisdictions
where such law or interpretation is operative, and the invalidity or
unenforceability of such provision shall not affect the validity of any
remaining provision hereof, and any and all other provisions hereof which are
otherwise lawful and valid shall remain in full force and effect. Without
limiting the generality of the foregoing, in the event that this Agreement shall
be deemed to be invalid or otherwise unenforceable with respect to any Pledgor,
such invalidity or unenforceability shall not affect the validity of this
Agreement with respect to the other Pledgors.
(e) In the event the Secured Creditors shall at any time in their
discretion permit a substitution of Pledgors hereunder or a party shall wish to
become a Pledgor hereunder, such substituted or additional Pledgor shall, upon
executing an agreement in the form attached hereto as Schedule F, become a party
hereto and be bound by all the terms and conditions hereof to the same extent as
though such Pledgor had originally executed this Agreement and, in the case of a
substitution, in lieu of the Pledgor being replaced. Any such agreement shall
contain information as to such Pledgor necessary to update Schedules A, B, C and
D with respect to it. No such substitution shall be effective absent the written
consent of the Agent nor shall it in any manner affect the obligations of the
other Pledgors hereunder.
(f) This Agreement may be executed in any number of counterparts and
by different parties hereto on separate counterpart signature pages, each
constituting an original, but all together one and the same instrument. Each
Pledgor acknowledges that this Agreement is and shall be effective upon its
execution and delivery by such Pledgor to the Agent, and it shall not be
necessary for the Agent to execute this Agreement or any other acceptance hereof
or otherwise to signify or express its acceptance hereof.
(g) This Agreement shall be deemed to have been made in the State of
Illinois and shall be governed by, and construed in accordance with, the laws of
the State of Illinois. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning of any
provision hereof.
(h) Each Pledgor hereby submits to the non-exclusive 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, Illinois for purposes
of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. Each Pledgor 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 form. EACH PLEDGOR AND, BY
-15-
ACCEPTING THE BENEFITS OF THIS AGREEMENT, EACH SECURED CREDITOR HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
(i) Termination; Release. At such time as the Commitments are
terminated, all Letters of Credit have expired or have been cash collateralized
and the principal and interest on the Notes and all other Obligations of the
Parent, the Borrower or any Subsidiary under the Credit Agreement and the other
Loan Documents, including without limitation all Hedging Liability, shall have
been paid in full, this Agreement shall terminate (except for provisions that by
their terms survive such termination). Upon such termination, the Agent, at the
expense of the Pledgors, shall take such actions as are appropriate and
reasonably requested by the Pledgors in connection therewith to evidence such
termination. Upon any disposition of Collateral by any Pledgor permitted under
the Credit Agreement, 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 Agent, at the expense of the Pledgors,
shall take such actions as are appropriate and reasonably requested by the
Pledgors in connection therewith.
[SIGNATURE PAGES TO FOLLOW]
-16-
IN WITNESS WHEREOF, each Pledgor has caused this Agreement to be duly
executed and delivered as of the date first above written.
"PLEDGORS"
FLORISTS' TRANSWORLD DELIVERY, INC.
By
-----------------------------------
Name
------------------------------
Title
-----------------------------
IOS BRANDS CORPORATION
By
-----------------------------------
Name
------------------------------
Title
-----------------------------
VALUE NETWORK SERVICE, INC.
By
-----------------------------------
Name
------------------------------
Title
-----------------------------
FTD HOLDINGS, INCORPORATED
By
-----------------------------------
Name
------------------------------
Title
-----------------------------
By
-----------------------------------
Name
------------------------------
Title
-----------------------------
-17-
FTD INTERNATIONAL CORPORATION
By
-----------------------------------
Name
------------------------------
Title
-----------------------------
RENAISSANCE GREETING CARDS, INC.
By
-----------------------------------
Name
------------------------------
Title
-----------------------------
Acknowledged and agreed to in Chicago, Illinois as of the date first
above written.
XXXXXX TRUST AND SAVINGS BANK, as Agent
By
-----------------------------------
Name
------------------------------
Title
-----------------------------
-18-
SCHEDULE A TO PLEDGE AGREEMENT
THE PLEDGED SECURITIES
PERCENTAGE
JURISDICTION OF NO. OF OF ISSUER'S
NAME OF PLEDGOR NAME OF ISSUER INCORPORATION SHARES CERTIFICATE NO STOCK
--------------- -------------- ------------- ------ --------------- -----
IOS Brands Corporation Florists' Transworld Delivery, Inc. Michigan 100 #1 100%
Value Network Service, Inc. Delaware 100 #1 100%
FTD International Corporation Delaware 1,000 #1 100%
Florists' Transworld FTD Holdings, Incorporated Delaware 3,000 #1 (1 share) 100%
Delivery, Inc. #2 (2,999 shares)
XXX.XXX, Inc. Delaware 40,395,000 #2 83%
class B
Florists' Transworld Delivery Ontario 9.75 #2 65%
Association of Canada Limited
Interflora, Inc. Michigan 500 #1 33%
Value Network Service, None
Inc.
FTD Holdings, Renaissance Greeting Cards, Inc. Maine 800 #1 (1 share) 100%
Incorporated #2 (799 shares)
FTD International Florists' Transworld Delivery de Mexico, Federal 1,950 MXP N/A 65%
Corporation Mexico, S. de X.X. de C.V. District
Renaissance Greeting None
Cards, Inc.
SCHEDULE B TO
PLEDGE AGREEMENT
PARTNERSHIP INTEREST COLLATERAL
NAME OF TYPE OF JURISDICTION OF PERCENTAGE OF
NAME OF PLEDGOR PARTNERSHIP ORGANIZATION ORGANIZATION OWNERSHIP
--------------- ----------- ------------ ------------ ---------
IOS Brands Corporation None
Florists' Transworld None
Delivery, Inc.
Value Network Service, None
Inc.
FTD Holdings, None
Incorporated
FTD International None
Corporation
Renaissance Greeting None
Cards, Inc.
SCHEDULE C TO
PLEDGE AGREEMENT
LLC COLLATERAL
PERCENTAGE OF EQUITY
JURISDICTION OF INTEREST OWNED BY
NAME OF PLEDGOR NAME OF LLC INCORPORATION PLEDGOR
--------------- ----------- ------------- -------
IOS Brands Corporation None
Florists' Transworld None
Delivery, Inc.
Value Network Service, None
Inc.
FTD Holdings, None
Incorporated
FTD International None
Corporation
Renaissance Greeting None
Cards, Inc.
-2-
SCHEDULE D TO
PLEDGE AGREEMENT
ORGANIZATIONAL INFORMATION
STATE OF ORGANIZATION NO.
NAME OF PLEDGOR ORGANIZATION (IF ANY) CHIEF EXECUTIVE OFFICE
Florists' Transworld 0000 Xxxxxxxxx Xxxxx
Delivery, Inc. Michigan 000-000 Xxxxxxx Xxxxx, XX 00000
0000 Xxxxxxxxx Xxxxx
IOS Brands Corporation Delaware 2328319 Xxxxxxx Xxxxx, XX 00000
0000 Xxxxxxxxx Xxxxx
Value Network Service, Inc. Delaware 3070831 Xxxxxxx Xxxxx, XX 00000
0000 Xxxxxxxxx Xxxxx
FTD Holdings, Incorporated Delaware 2291883 Xxxxxxx Xxxxx, XX 00000
0000 Xxxxxxxxx Xxxxx
FTD International Corporation Delaware 3160529 Xxxxxxx Xxxxx, XX 00000
Renaissance Greeting Cards, 0000 Xxxxxxxxx Xxxxx
Inc. Maine 19930532D Xxxxxxx Xxxxx, XX 00000
SCHEDULE E TO
PLEDGE AGREEMENT
ACKNOWLEDGMENT TO COLLATERAL ASSIGNMENT
____________, 20__
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
Attention:
-------------------------
Ladies and Gentlemen:
_________________________ ("Pledgor") is a party to that certain
Pledge Agreement dated as of September 27, 2001 (the "
Pledge Agreement") in
favor of Xxxxxx Trust and Savings Bank (the "Agent"), a copy of which you have
received. Pursuant to the
Pledge Agreement, Pledgor assigned its equity
interests in ___________________ (the "Partnership/LLC") as collateral security
for, among other things, indebtedness and obligations of Florists' Transworld
Delivery, Inc. (the "Borrower") now or from time to time owing pursuant to that
certain Credit Agreement dated as of September 27, 2001 (such Credit Agreement
as the same may be amended, modified or restated from time to time being
hereinafter referred to as the "Credit Agreement") among the Borrower, the
Borrower's affiliates party thereto as guarantors, the Agent, and various other
lenders party thereto.
We ask you, by accepting this letter below on behalf of the
Partnership/LLC and as its general partner/manager, to confirm the following:
1. Pledgor is a partner/member in the Partnership/LLC.
2. You consent to the collateral assignment of Pledgor's
interest in the Partnership/LLC to the Agent, notwithstanding anything
to the contrary contained in the Partnership Agreement/Limited
Liability Company Articles of Association and Operating Agreement.
This letter will serve to evidence the consent to this collateral
assignment from the Partnership/LLC and its general partner/manager.
3. All parties required by the terms of the Partnership
Agreement/Limited Liability Company Articles of Association and
Operating Agreement to approve the collateral assignment made by the
Pledge Agreement have done so, and the interest of the Agent by virtue
of that assignment has been reflected on the books and records of the
Partnership/LLC.
4. The Partnership/LLC has been formed under the Partnership
Agreement dated as of ______________, _____/the Articles of
Association dated ______________, ______, and the Operating Agreement
dated as of ________________, _____ (the "Organizational Documents"),
and the Organizational Documents have not subsequently been modified
or amended and continue in full force and effect. The Organizational
Documents shall not be amended without the consent of the Agent. The
Agent agrees with the Partnership/LLC that the Agent will not
unreasonably withhold its consent to modifications or amendments to
the Organizational Documents which do not adversely affect the
interests of the Secured Creditors identified and defined in the
Pledge Agreement.
5. All payments and distributions due and to become due to
Pledgor pursuant to the Organizational Documents shall continue to be
paid directly to such Pledgor, unless and until the Agent notifies the
Partnership/LLC in writing to do otherwise. If the Agent so notifies
the Partnership/LLC, the Partnership/LLC will immediately cease making
such payments and distributions to the Pledgor and will as soon as
possible, but in any event within 5 days after receiving such notice,
remit all such payments and distributions directly to the Agent at 000
Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
6. By virtue of the Pledge Agreement, the Agent has the
right, upon the occurrence and during the continuation of any Event of
Default under the Credit Agreement, at its option to exercise
Pledgor's right (if any) to withdraw all or any part of such Pledgor's
interest in the Partnership/LLC by so notifying the Partnership/LLC in
writing no less than 10 days prior to the proposed withdrawal date.
All payments and distributions due or to become due under the
Organizational Documents to the Pledgor as a result of such withdrawal
shall be remitted directly to the Agent as stated above. If given at
all, the notice provided pursuant to this paragraph may (but need not)
be given concurrently with any notice provided pursuant to the
immediately preceding paragraph.
7. The Pledgor agrees that any such payment to the Agent
shall be a good receipt and acquittance as against it -- that is to
say, the Partnership/LLC should make the payment directly to the Agent
and in so doing, the Partnership/LLC discharges any liability to such
Pledgor for that payment.
8. The terms of the Pledge Agreement prohibit Pledgor from
making any transfer of its interest in the Partnership/LLC without the
Agent's prior written consent. You agree not to honor any such
transfer of Pledgor's interest without the Agent's prior written
consent.
-2-
The agreements in this letter shall be modified only in a writing
signed by the Agent, the Pledgor and the Partnership/LLC. We acknowledge that
the Partnership/LLC shall be entitled to assume that the Pledge Agreement
continues in full force and effect unless and until the Partnership/LLC receives
actual written notice of a termination of same from the Agent.
Very truly yours,
[PLEDGOR]
By
Name
--------------------------------------
Title
-------------------------------------
XXXXXX TRUST AND SAVINGS BANK, as Agent
By
Name
--------------------------------------
Title
-------------------------------------
The undersigned, both as the general partner/manager of the
Partnership/LLC and on behalf of the Partnership/LLC, join in this letter to
evidence their acknowledgment and agreement to the same.
[PARTNERSHIP/LLC]
By
Name
--------------------------------------
Title
-------------------------------------
[GENERAL PARTNER/MANAGER OF PARTNERSHIP]
By
Name
--------------------------------------
Title
-------------------------------------
-3-
SCHEDULE F TO PLEDGE AGREEMENT
ASSUMPTION AND SUPPLEMENTAL PLEDGE AGREEMENT
THIS AGREEMENT dated as of this _____ day of ______________, 20__ from
[NEW PLEDGOR], a __________ CORPORATION/PARTNERSHIP/LIMITED LIABILITY COMPANY
(the "New Pledgor"), to Xxxxxx Trust and Savings Bank ("HTSB") as administrative
agent for the Secured Creditors (defined in the Pledge Agreement hereinafter
identified and defined) (HTSB acting as such administrative agent and any
successor or successors to HTSB in such capacity being hereinafter referred to
as the "Agent");
PRELIMINARY STATEMENTS
A. Florists' Transworld Delivery, Inc. (the "Borrower") and certain
other Pledgors have executed and delivered to the Agent that certain Pledge
Agreement dated as of September 27, 2001 (such Pledge Agreement, as the same may
from time to time be modified or amended, including supplements thereto which
add additional parties as Pledgors thereunder, being hereinafter referred to as
the "Pledge Agreement") pursuant to which such parties (the "Existing Pledgors")
have granted to the Agent for the benefit of the Secured Creditors a lien on and
security interest in the Existing Pledgors' Collateral (as such term is defined
in the Pledge Agreement) to secure the Obligations (as such term is defined in
the Pledge Agreement).
B. The New Pledgor benefits, directly and indirectly, from credit and
other financial accommodations extended by the Secured Creditors to the
Borrower.
NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances
made or to be made, or credit accommodations given or to be given, to the
Borrower by the Secured Creditors from time to time, the New Pledgor hereby
agrees as follows:
1. The New Pledgor acknowledges and agrees that it shall become a
"Pledgor" party to the Pledge Agreement effective upon the date the New
Pledgor's execution of this Agreement and the delivery of this Agreement to the
Agent, and that upon such execution and delivery, all references in the Pledge
Agreement to the terms "Pledgor" or "Pledgors" shall be deemed to include the
New Pledgor. Without limiting the generality of the foregoing, the New Pledgor
hereby repeats and reaffirms all grants (including the grant of a lien and
security interest), covenants, agreements, representations and warranties
contained in the Pledge Agreement as amended hereby, each and all of which are
and shall remain applicable to the Collateral from time to time owned by the New
Pledgor or in which the New Pledgor from time to time has any rights. Without
limiting the foregoing, in order to secure payment of the Obligations, whether
now existing or hereafter arising, the New Pledgor does hereby grant to the
Agent for the benefit of the Secured Creditors, and hereby agrees that the Agent
has and shall continue to have for the benefit of the Secured Creditors a
continuing security interest in, among other things, all of the New Pledgor's
Collateral (as such term is defined in the Pledge Agreement) described in
Section 2 of the Pledge Agreement, each and all of such granting clauses being
incorporated herein by reference with the same force and effect as if set forth
in their entirety except that all
references in such clauses to the Existing Pledgors or any of them shall be
deemed to include references to the New Pledgor. Nothing contained herein shall
in any manner impair the priority of the liens and security interests heretofore
granted in favor of the Agent under the Pledge Agreement.
2. The following information shall be added to Schedules A, B and/or C
and to Schedule D to the Pledge Agreement, as applicable:
SCHEDULE A
THE PLEDGED SECURITIES
NAME AND PERCENTAGE
LOCATION OF NAME OF JURISDICTION OF NO. OF CERTIFICATE OF ISSUER'S
PLEDGOR ISSUER INCORPORATION SHARES CLASS NO. STOCK
OR
SCHEDULE B
PARTNERSHIP INTEREST COLLATERAL
NAME AND LOCATION OF NAME OF TYPE OF JURISDICTION OF PERCENT OF
PLEDGOR PARTNERSHIP ORGANIZATION ORGANIZATION OWNERSHIP
OR
SCHEDULE C
LLC COLLATERAL
PERCENTAGE OF
EQUITY INTEREST
NAME AND LOCATION OF JURISDICTION OF OWNED BY
PLEDGOR NAME OF LLC ORGANIZATION PLEDGOR
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AND
SCHEDULE D
ORGANIZATIONAL INFORMATION
STATE OF ORGANIZATION NO. CHIEF EXECUTIVE
NAME OF PLEDGOR ORGANIZATION (IF ANY) OFFICE
3. The New Pledgor hereby acknowledges and agrees that the Obligations
are secured by all of the Collateral according to, and otherwise on and subject
to, the terms and conditions of the Pledge Agreement to the same extent and with
the same force and effect as if the New Pledgor had originally been one of the
Existing Pledgors under the Pledge Agreement and had originally executed the
same as such an Existing Pledgor.
4. All capitalized terms used in this Agreement without definition
shall have the same meaning herein as such terms have in the Pledge Agreement,
except that any reference to the term "Pledgor" or "Pledgors" and any provision
of the Pledge Agreement providing meaning to such term shall be deemed a
reference to the Existing Pledgors and the New Pledgor. Except as specifically
modified hereby, all of the terms and conditions of the Pledge Agreement shall
stand and remain unchanged and in full force and effect.
5. The New Pledgor agrees to execute and deliver such further
instruments and documents and do such further acts and things as the Agent may
deem necessary or proper to carry out more effectively the purposes of this
Agreement.
6. No reference to this Agreement need be made in the Pledge Agreement
or in any other document or instrument making reference to the Pledge Agreement,
any reference to the Pledge Agreement in any of such to be deemed a reference to
the Pledge Agreement as modified hereby.
7. This Agreement shall be governed by and construed in accordance
with the State of
Illinois (without regard to principles of conflicts of law).
[NEW PLEDGOR]
By
Name
---------------------------------
Title
--------------------------------
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Acknowledged and agreed to as of the date first above written.
XXXXXX TRUST AND SAVINGS BANK, as Agent
By
Name
---------------------------------
Title
--------------------------------
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