Classmates.com 2009 Annual Report Download - page 79

Table of Contents
FTD received a $50 million revolving line of credit. The remaining cash consideration in the transaction was paid from United Online's and
FTD's existing cash on hand.
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 twelve-month consolidated adjusted EBITDA.
The obligations under the UOL Credit Agreement are guaranteed by our domestic wholly-owned subsidiaries, other than UNOL
Intermediate, Inc. (a wholly-owned subsidiary of United Online and 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 such pledge is
limited to 66% of the outstanding capital stock), excluding the capital stock of UNOL Intermediate, Inc.
The FTD Credit Agreement consists of (i) a term loan A facility of up to $75 million, (ii) a term loan B facility of up to $300 million, and
(iii) a revolving credit facility of up to $50 million. The interest rate set forth in the FTD Credit Agreement for loans made under the revolving
credit facility and term loan A facility is either the prime rate plus 2.50% per annum, or LIBOR plus 3.50% per annum (with a LIBOR floor of
3.00%), in each case, with step-downs in the interest rate depending on FTD's leverage ratio. The interest rate set forth in the FTD Credit
Agreement for loans made under the term loan B facility is either the prime rate plus 3.50% per annum, or LIBOR plus 4.50% per annum (with a
LIBOR floor of 3.00%), in each case, with step-downs in the interest rate depending on FTD's leverage ratio. In addition, there is a commitment
fee equal to 0.50% per annum (with step-downs in the commitment fee depending on FTD's leverage ratio) on the unused portion of the
revolving credit facility. The FTD Credit Agreement is guaranteed by UNOL Intermediate, Inc. and substantially all of the domestic subsidiaries
of FTD and is secured by substantially all of the assets of FTD and such subsidiaries, including a pledge of all of the outstanding capital stock
owned by FTD and such guarantors (provided that no more than 66% of the capital stock of any foreign subsidiary is pledged or otherwise
secures the FTD Credit Agreement). The FTD Credit Agreement contains customary representations and warranties, events of default,
affirmative covenants and negative covenants that, among other things, require FTD not to exceed a maximum leverage ratio and to maintain a
minimum fixed charge coverage ratio and imposes restrictions and limitations on, among other things, capital expenditures, investments,
dividends, asset sales, and the incurrence of additional debt and liens. On the date of the FTD acquisition, term loan A and term loan B under the
FTD Credit Agreement were fully funded.
In connection with the closing of the FTD acquisition, all of the approximately $122.1 million of outstanding borrowings under FTD's
existing credit facilities were repaid. In addition, FTD, Inc. ("FTDI"), a Delaware corporation and wholly-owned subsidiary of FTD Group, Inc.,
repurchased approximately $170.0 million aggregate principal amount of its 7.75% Senior Subordinated Notes due 2014 (the "FTDI Notes")
tendered pursuant to its offer to repurchase all of the approximately $170.1 million outstanding principal amount of FTDI Notes, which
purchased FTDI Notes were canceled. Substantially concurrently with the closing of the FTD acquisition, we effected a covenant defeasance
with respect to the balance of the FTDI Notes pursuant to the terms of the indenture governing the FTDI Notes.
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