Classmates.com 2008 Annual Report Download - page 131

Table of Contents
UNITED ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. GOODWILL, INTANGIBLE ASSETS AND OTHER LONG-LIVED ASSETS (Continued)
Summary of Impairment Charges Recognized
Impairment charges of goodwill, intangible assets and long-lived assets consisted of the following (in thousands):
6. CREDIT AGREEMENTS
UOL Credit Agreement
In connection with the FTD acquisition, in August 2008, United Online entered into a $60 million senior secured credit agreement (the
"UOL Credit Agreement") and borrowed $60 million thereunder. The net proceeds of the term loans under the UOL Credit Agreement were used
to finance, in part, the acquisition of FTD.
The term loans under the UOL Credit Agreement bear interest at either LIBOR plus 3.50% per annum (with a LIBOR floor of 3.00%) or
the prime rate plus 2.00% per annum. The UOL Credit Agreement contains customary representations and warranties, events of default,
affirmative covenants and negative covenants (which impose restrictions and limitations on, among other things, dividends, investments, asset
sales, and the ability to incur additional debt and liens) that, among other things, impose the maintenance of a maximum consolidated leverage
ratio and the maintenance of a minimum consolidated fixed charge coverage ratio and minimum consolidated adjusted EBITDA. Impairment
charges recorded by the Company do not impact covenants contained in the UOL Credit Agreement.
The obligations under the UOL Credit Agreement are guaranteed by the Company's domestic wholly-owned subsidiaries, other than UNOL
Intermediate, Inc. (the direct parent of FTD Group, Inc.) and its subsidiaries. In addition, the obligations under the UOL Credit Agreement are
secured by a lien on substantially all of the assets of the guarantors, including a pledge of all of the outstanding capital stock of the guarantors'
direct subsidiaries (except with respect to foreign subsidiaries, in which case
F-36
Year Ended December 31,
2008
2007
2006
Goodwill impairment charges:
FTD segment
$
114,000
$
—
$
—
Communications segment
—
—
5,738
Total goodwill impairment charges
114,000
—
5,738
Intangible assets impairment charges:
FTD segment
61,867
—
—
Communications segment
—
—
3,044
Total intangible assets impairment charges
61,867
—
3,044
Long
-
lived assets impairment:
Communications segment
283
—
4,503
Total long
-
lived assets impairment charges
283
—
4,503
Total impairment of goodwill, intangible assets and long
-
lived assets
$
176,150
$
—
$
13,285