Exhibit 10.1

Execution Version

CREDIT AGREEMENT

DATED AS OF JULY 28, 2006

AMONG

FTD, INC.,

THE LENDERS LISTED HEREIN,

as Lenders,

WELLS FARGO BANK, N.A.,

as Administrative Agent,

WELLS FARGO BANK, N.A.,

as Syndication Agent,

WELLS FARGO BANK, N.A.,

as Documentation Agent

and

WELLS FARGO BANK, N.A.,

as Sole Lead Arranger

and Sole Book Manager

 

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TABLE OF CONTENTS

 

 

 

Page No.

 

SECTION 1.

DEFINITIONS

 

2

 

 

 

 

 

 

 

1.1

 

Certain Defined Terms

 

2

 

 

 

 

 

 

 

 

 

1.2

 

Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement

 

30

 

 

 

 

 

 

 

 

 

1.3

 

Other Definitional Provisions and Rules of Construction

 

30

 

 

 

 

 

 

 

 

SECTION 2.

AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

 

31

 

 

 

 

 

 

 

2.1

 

Commitments; Making of Loans; the Register; Optional Notes

 

31

 

 

 

 

 

 

 

 

 

2.2

 

Interest on the Loans

 

37

 

 

 

 

 

 

 

 

 

2.3

 

Fees

 

42

 

 

 

 

 

 

 

 

 

2.4

 

Repayments, Prepayments and Reductions in Revolving Loan Commitments; General
Provisions Regarding Payments; Application of Proceeds of Collateral and
Payments Under Guaranties

 

43

 

 

 

 

 

 

 

 

 

2.5

 

Use of Proceeds

 

52

 

 

 

 

 

 

 

 

 

2.6

 

Special Provisions Governing Eurodollar Rate Loans

 

52

 

 

 

 

 

 

 

 

 

2.7

 

Increased Costs; Taxes; Capital Adequacy

 

54

 

 

 

 

 

 

 

 

 

2.8

 

Statement of Lenders; Obligation of Lenders and Issuing Lenders to Mitigate

 

59

 

 

 

 

 

 

 

 

 

2.9

 

Replacement of a Lender

 

59

 

 

 

 

 

 

 

 

SECTION 3.

LETTERS OF CREDIT

 

60

 

 

 

 

 

 

 

3.1

 

Issuance of Letters of Credit and Lenders’ Purchase of Participations Therein

 

60

 

 

 

 

 

 

 

 

 

3.2

 

Letter of Credit Fees

 

63

 

 

 

 

 

 

 

 

 

3.3

 

Drawings and Reimbursement of Amounts Paid Under Letters of Credit; Cash
Collateralization

 

64

 

 

 

 

 

 

 

 

 

3.4

 

Obligations Absolute

 

67

 

 

 

 

 

 

 

 

 

3.5

 

Nature of Issuing Lenders’ Duties

 

68

 

 

 

 

 

 

 

 

SECTION 4.

CONDITIONS TO LOANS AND LETTERS OF CREDIT

 

69

 

 

 

 

 

 

 

4.1

 

Conditions to Term Loans and Initial Revolving Loans and Swing Line Loans

 

69

 

 

 

 

 

 

 

 

 

4.2

 

Conditions to All Loans

 

75

 

 

 

 

 

 

 

 

 

4.3

 

Conditions to Letters of Credit

 

76

 

 

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SECTION 5.

COMPANY’S REPRESENTATIONS AND WARRANTIES

 

76

 

 

 

 

 

 

 

5.1

 

Organization, Powers, Qualification, Good Standing, Business and Subsidiaries

 

76

 

 

 

 

 

 

 

 

 

5.2

 

Authorization of Borrowing, etc

 

77

 

 

 

 

 

 

 

 

 

5.3

 

Financial Condition

 

78

 

 

 

 

 

 

 

 

 

5.4

 

No Material Adverse Change; No Restricted Junior Payments

 

78

 

 

 

 

 

 

 

 

 

5.5

 

Title to Properties; Liens; Real Property; Intellectual Property

 

78

 

 

 

 

 

 

 

 

 

5.6

 

Litigation; Adverse Facts

 

79

 

 

 

 

 

 

 

 

 

5.7

 

Payment of Taxes

 

80

 

 

 

 

 

 

 

 

 

5.8

 

Performance of Agreements; Material Contracts

 

80

 

 

 

 

 

 

 

 

 

5.9

 

Governmental Regulation

 

80

 

 

 

 

 

 

 

 

 

5.10

 

Securities Activities

 

80

 

 

 

 

 

 

 

 

 

5.11

 

Employee Benefit Plans

 

81

 

 

 

 

 

 

 

 

 

5.12

 

Certain Fees

 

81

 

 

 

 

 

 

 

 

 

5.13

 

Environmental Protection

 

82

 

 

 

 

 

 

 

 

 

5.14

 

Employee Matters

 

82

 

 

 

 

 

 

 

 

 

5.15

 

Solvency

 

82

 

 

 

 

 

 

 

 

 

5.16

 

Matters Relating to Collateral

 

83

 

 

 

 

 

 

 

 

 

5.17

 

Disclosure

 

84

 

 

 

 

 

 

 

 

 

5.18

 

Subordinated Indebtedness

 

84

 

 

 

 

 

 

 

 

 

5.19

 

Related Agreements

 

84

 

 

 

 

 

 

 

 

 

5.20

 

Reporting to IRS

 

84

 

 

 

 

 

 

 

 

 

5.21

 

Foreign Assets Control Regulations, etc.

 

85

 

 

 

 

 

 

 

 

 

5.22

 

Foreign Subsidiaries

 

85

 

 

 

 

 

 

 

 

SECTION 6.

COMPANY’S AFFIRMATIVE COVENANTS

 

85

 

 

 

 

 

 

 

6.1

 

Financial Statements and Other Reports

 

85

 

 

 

 

 

 

 

 

 

6.2

 

Existence, etc

 

90

 

 

 

 

 

 

 

 

 

6.3

 

Payment of Taxes and Claims; Tax

 

90

 

 

 

 

 

 

 

 

 

6.4

 

Maintenance of Properties; Insurance; Application of Net Insurance/ Condemnation
Proceeds

 

91

 

 

 

 

 

 

 

 

 

6.5

 

Inspection Rights; Lender Meeting

 

93

 

 

 

 

 

 

 

 

 

6.6

 

Compliance with Laws, etc.

 

93

 

 

ii

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6.7

Environmental Matters

 

93

 

 

 

 

 

 

 

 

6.8

Execution of Subsidiary Guaranty and Personal Property Collateral Documents
After the Closing Date

 

94

 

 

 

 

 

 

 

 

6.9

Matters Relating to Additional Real Property Collateral

 

96

 

 

 

 

 

 

 

 

6.10

Acquisition

 

96

 

 

 

 

 

 

 

 

6.11

Other Post Closing Matters

 

97

 

 

 

 

 

 

 

SECTION 7.

COMPANY’S NEGATIVE COVENANTS

 

97

 

 

 

 

 

 

 

7.1

Indebtedness

 

97

 

 

 

 

 

 

 

 

7.2

Liens and Related Matters

 

99

 

 

 

 

 

 

 

 

7.3

Investments; Acquisitions

 

100

 

 

 

 

 

 

 

 

7.4

Contingent Obligations

 

102

 

 

 

 

 

 

 

 

7.5

Restricted Junior Payments

 

103

 

 

 

 

 

 

 

 

7.6

Financial Covenants

 

104

 

 

 

 

 

 

 

 

7.7

Restriction on Fundamental Changes; Asset Sales

 

106

 

 

 

 

 

 

 

 

7.8

Consolidated Capital Expenditures

 

108

 

 

 

 

 

 

 

 

7.9

Transactions with Shareholders and Affiliates

 

108

 

 

 

 

 

 

 

 

7.10

Sales and Lease-Backs

 

109

 

 

 

 

 

 

 

 

7.11

Conduct of Business

 

109

 

 

 

 

 

 

 

 

7.12

Amendments or Waivers of Certain Agreements; Amendments of Documents Relating to
Subordinated Indebtedness; Designation of Designated Senior Indebtedness

 

109

 

 

 

 

 

 

 

 

7.13

Fiscal Year

 

110

 

 

 

 

 

 

 

SECTION 8.

EVENTS OF DEFAULT

 

110

 

 

 

 

 

 

 

8.1

Failure to Make Payments When Due

 

110

 

 

 

 

 

 

 

 

8.2

Default in Other Agreements

 

110

 

 

 

 

 

 

 

 

8.3

Breach of Certain Covenants

 

111

 

 

 

 

 

 

 

 

8.4

Breach of Warranty

 

111

 

 

 

 

 

 

 

 

8.5

Other Defaults Under Loan Documents

 

111

 

 

 

 

 

 

 

 

8.6

Involuntary Bankruptcy; Appointment of Receiver, etc.

 

111

 

 

 

 

 

 

 

 

8.7

Voluntary Bankruptcy; Appointment of Receiver, etc.

 

112

 

 

 

 

 

 

 

 

8.8

Judgments and Attachments

 

112

 

 

 

 

 

 

 

 

8.9

Dissolution

 

112

 

 

 

 

 

 

 

 

8.10

Employee Benefit Plans

 

112

 

 

iii

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8.11

Change in Control

 

113

 

 

 

 

 

 

 

 

8.12

Invalidity of Loan Documents; Failure of Security; Repudiation of Obligations

 

113

 

 

 

 

 

 

 

 

8.13

Conduct of Business By Holdings

 

113

 

 

 

 

 

 

 

 

8.14

Conduct of Business By Dormant Subsidiaries

 

113

 

 

 

 

 

 

 

 

8.15

Failure to Prepay the initial loans drawn to fund the Acquisition Financing
Requirements

 

114

 

 

 

 

 

 

 

 

8.16

Amendment of Certain Documents of Holdings

 

114

 

 

 

 

 

 

 

SECTION 9.

ADMINISTRATIVE AGENT

 

114

 

 

 

 

 

 

 

9.1

Appointment

 

114

 

 

 

 

 

 

 

 

9.2

Powers and Duties; General Immunity

 

116

 

 

 

 

 

 

 

 

9.3

Independent Investigation by Lenders; No Responsibility For Appraisal of
Creditworthiness

 

117

 

 

 

 

 

 

 

 

9.4

Right to Indemnity

 

117

 

 

 

 

 

 

 

 

9.5

Successor Administrative Agent and Swing Line Lender

 

118

 

 

 

 

 

 

 

 

9.6

Collateral Documents and Guaranties

 

118

 

 

 

 

 

 

 

 

9.7

Duties of Other Agents

 

119

 

 

 

 

 

 

 

 

9.8

Administrative Agent May File Proofs of Claim

 

120

 

 

 

 

 

 

 

SECTION 10.

MISCELLANEOUS

 

120

 

 

 

 

 

 

 

10.1

Successors and Assigns; Assignments and Participations in Loans and Letters of
Credit

 

120

 

 

 

 

 

 

 

 

10.2

Expenses

 

125

 

 

 

 

 

 

 

 

10.3

Indemnity

 

126

 

 

 

 

 

 

 

 

10.4

Set-Off

 

127

 

 

 

 

 

 

 

 

10.5

Ratable Sharing

 

127

 

 

 

 

 

 

 

 

10.6

Amendments and Waivers

 

128

 

 

 

 

 

 

 

 

10.7

Independence of Covenants

 

129

 

 

 

 

 

 

 

 

10.8

Notices; Effectiveness of Signatures

 

129

 

 

 

 

 

 

 

 

10.9

Survival of Representations, Warranties and Agreements

 

130

 

 

 

 

 

 

 

 

10.10

Failure or Indulgence Not Waiver; Remedies Cumulative

 

130

 

 

 

 

 

 

 

 

10.11

Marshalling; Payments Set Aside

 

130

 

 

 

 

 

 

 

 

10.12

Severability

 

131

 

 

iv

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10.13

Obligations Several; Independent Nature of Lenders’ Rights; Damage Waiver

 

131

 

 

 

 

 

 

 

 

10.14

Release of Security Interest or Guaranty

 

131

 

 

 

 

 

 

 

 

10.15

Applicable Law

 

132

 

 

 

 

 

 

 

 

10.16

Construction of Agreement; Nature of Relationship

 

132

 

 

 

 

 

 

 

 

10.17

Consent to Jurisdiction and Service of Process

 

132

 

 

 

 

 

 

 

 

10.18

Waiver of Jury Trial

 

133

 

 

 

 

 

 

 

 

10.19

Confidentiality

 

134

 

 

 

 

 

 

 

 

10.20

Counterparts; Effectiveness

 

134

 

 

 

 

 

 

 

Signature pages

 

S-1

 

 

v

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EXHIBITS

I                                            FORM OF NOTICE OF BORROWING

II                                        FORM OF NOTICE OF
CONVERSION/CONTINUATION

III                                    FORM OF REQUEST FOR ISSUANCE

IV                                    FORM OF TERM NOTE

V                                        Intentionally Deleted

VI                                    FORM OF REVOLVING NOTE

VII                                FORM OF SWING LINE NOTE

VIII                            FORM OF COMPLIANCE CERTIFICATE

IX                                   FORM OF OPINION OF COMPANY COUNSEL

X                                       FORM OF OPINION OF O’MELVENY & MYERS LLP

XI                                   FORM OF ASSIGNMENT AGREEMENT

XII                               FORM OF SOLVENCY CERTIFICATE

XIII                           FORM OF SUBSIDIARY GUARANTY

XIV                           FORM OF SECURITY AGREEMENT

XV                               FORM OF HOLDINGS GUARANTY

XVI                           FORM OF NOTICE OF PREPAYMENT

XVII                       FORM OF MORTGAGE

vi

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SCHEDULES

2.1                                 LENDERS’ COMMITMENTS AND PRO RATA SHARES

4.1C                         CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP;
MANAGEMENT

4.1M                     CLOSING DATE MORTGAGED PROPERTIES

5.1                                 SUBSIDIARIES OF COMPANY

5.3                                 CONTINGENT LIABILITIES

5.5B                         REAL PROPERTY

5.5C                         INTELLECTUAL PROPERTY

5.6                                 LITIGATION

5.8                                 MATERIAL CONTRACTS

5.11                           CERTAIN EMPLOYEE BENEFIT PLANS

7.1                                 CERTAIN EXISTING INDEBTEDNESS

7.2                                 CERTAIN EXISTING LIENS

7.3                                 CERTAIN EXISTING INVESTMENTS

7.4                                 CERTAIN EXISTING CONTINGENT OBLIGATIONS

7.9                                 AFFILIATE TRANSACTIONS

vii

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FINAL

EXHIBITS

I               FORM OF NOTICE OF BORROWING

II             FORM OF NOTICE OF CONVERSION/CONTINUATION

III            FORM OF REQUEST FOR ISSUANCE

IV            FORM OF TERM NOTE

V             Intentionally Deleted

VI            FORM OF REVOLVING NOTE

VII           FORM OF SWING LINE NOTE

VIII         FORM OF COMPLIANCE CERTIFICATE

IX            FORM OF OPINION OF COMPANY COUNSEL

X             Intentionally Deleted

XI            FORM OF ASSIGNMENT AGREEMENT

XII          FORM OF SOLVENCY CERTIFICATE

XIII         FORM OF SUBSIDIARY GUARANTY

XIV         FORM OF SECURITY AGREEMENT

XV          FORM OF HOLDINGS GUARANTY

XVI         FORM OF NOTICE OF PREPAYMENT

XVII        FORM OF MORTGAGE

 

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Execution Version

 

FTD, INC.

CREDIT AGREEMENT

This CREDIT AGREEMENT is dated as of July 28, 2006 and entered into by and among
FTD, INC., a Delaware corporation, as borrower (“Company”), THE LENDERS LISTED
ON THE SIGNATURE PAGES HEREOF, WELLS FARGO BANK, N.A. (“Wells Fargo”), as
administrative agent for Lenders (in such capacity, “Administrative Agent”), as
syndication agent for Lenders (in such capacity, “Syndication Agent”), and as
documentation agent for Lenders (in such capacity, “Documentation Agent”).

R E C I T A L S

WHEREAS, UK Bidco (this and other capitalized terms used in these recitals
without definition being used as defined in subsection 1.1) has been formed by
Company for the purpose of acquiring all or substantially all of the outstanding
shares of UK Target;

WHEREAS, Company desires to provide financing to UK Bidco to fund the
Acquisition Financing Requirements with such funding to be in the form of common
equity in UK Bidco and by way of an intercompany loan to UK Bidco evidenced by
an Intercompany Promissory Note;

WHEREAS, Lenders, at the request of Company, have agreed to extend certain
credit facilities to Company, the proceeds of which will be used (i) to provide
financing to UK Bidco to fund the Acquisition Financing Requirements, (ii) to
refinance all Indebtedness and other amounts outstanding under the Existing
Credit Agreement, and (iii) to provide financing for working capital and other
general corporate purposes of Company and its Subsidiaries;

WHEREAS, Company desires to secure all of the Obligations hereunder and under
the other Loan Documents by granting to Administrative Agent, on behalf of
Lenders, a First Priority Lien on substantially all of its real, personal and
mixed property, including a pledge of all of the Capital Stock of its Domestic
Subsidiaries and 66% of the Capital Stock of its first tier Foreign
Subsidiaries; and

WHEREAS, Holdings and all of the Domestic Subsidiaries of Company (other than
the Dormant Subsidiaries and Interflora Inc.) have agreed to guarantee the
Obligations hereunder and under the other Loan Documents and to secure their
Guaranties by granting to Administrative Agent, on behalf of Lenders, a First
Priority Lien on substantially all of their real, personal and mixed property,
including a pledge of all of the Capital Stock of their Domestic Subsidiaries
and 66% of the Capital Stock of their first tier Foreign Subsidiaries:

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, Company, Lenders, Syndication Agent,
Documentation Agent and Administrative Agent agree as follows:

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Section 1.                                          DEFINITIONS

1.1                               Certain Defined Terms.

The following terms used in this Agreement shall have the following meanings:

“Acquisition” means the transactions contemplated by the Acquisition Agreement.

“Acquisition Agreement” means the agreement relating to the sale and purchase of
all or substantially all of the Capital Stock of UK Target between certain
shareholders of UK Target as vendors, UK Bidco as purchaser and Company as
guarantor, dated July 7, 2006.

“Acquisition Financing Requirements” means the aggregate of all amounts
necessary to finance the purchase price payable in connection with the
Acquisition.

“Additional Mortgage” has the meaning set forth in subsection 6.9A.

“Additional Mortgaged Property” has the meaning set forth in subsection 6.9A.

“Administrative Agent” has the meaning assigned to that term in the introduction
to this Agreement and also means and includes any successor Administrative Agent
appointed pursuant to subsection 9.5A.

“Affected Lender” has the meaning assigned to that term in subsection 2.6C.

“Affected Loans” has the meaning assigned to that term in subsection 2.6C.

“Affiliate”, as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.

“Agents” means Administrative Agent, Syndication Agent, the Sole Lead Arranger
and Documentation Agent.

“Agreement” means this Credit Agreement dated as of July 28, 2006, as it may be
amended, supplemented or otherwise modified from time to time.

“Approved Fund” means a Fund that is administered or managed by (i) a Lender,
(ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity
that administers or manages a Lender.

“Asset Sale” means the sale by Company or any of its Subsidiaries to any Person
other than Company or any of its wholly-owned Subsidiaries of (i) any of the
stock of any of

2

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Company’s Subsidiaries, (ii) substantially all of the assets of any division or
line of business of Company or any of its Subsidiaries, or (iii) any other
assets (whether tangible or intangible) of Company or any of its Subsidiaries
(other than (a) inventory sold in the ordinary course of business, (b) sales,
assignments, transfers or dispositions of accounts in the ordinary course of
business for purposes of collection and (c) any such other assets to the extent
that the aggregate value of such assets sold in any single transaction or
related series of transactions is equal to $500,000 or less).

“Assignment Agreement” means an Assignment and Assumption in substantially the
form of Exhibit XI annexed hereto.

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy”, as now and hereafter in effect, or any successor statute.

“Base Rate” means, at any time, the higher of (i) the Prime Rate or (ii) the
rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate.  Any
change in the Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change.

“Base Rate Loans” means Loans bearing interest at rates determined by reference
to the Base Rate as provided in subsection 2.2A.

“Base Rate Margin” means the margin over the Base Rate used in determining the
rate of interest of Base Rate Loans pursuant to subsection 2.2A.

“Business Day” means (i) for all purposes other than as covered by clause (ii)
below, any day excluding Saturday, Sunday and any day which is a legal holiday
under the laws of the State of New York or is a day on which banking
institutions located in such state are authorized or required by law or other
governmental action to close, and (ii) with respect to all notices,
determinations, fundings and payments in connection with the Eurodollar Rate or
any Eurodollar Rate Loans, any day that is a Business Day described in
clause (i) above and that is also a day for trading by and between banks in
Dollar deposits in the London interbank market.

“Capital Lease”, as applied to any Person, means any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is accounted for as a capital lease on the balance sheet of that
Person.

“Capital Stock” means the capital stock or other equity interests of a Person.

“Cash” means money, currency or a credit balance in a Deposit Account.

“Cash Equivalents” means, as at any date of determination: (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to interest
and principal by the United States Government or (b) issued by any agency of the
United States the obligations of which are backed by the full faith and credit
of the United States, in each case maturing within one year after such date;
(ii) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date
and having, at the time of the

3

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acquisition thereof, a rating within the highest two rating categories
obtainable from S&P, Moody’s or any other credit rating agency of recognized
national standing; (iii) commercial paper maturing no more than one year from
the date of creation thereof and having, at the time of the acquisition thereof,
a rating of at least A-2 from S&P or at least P-2 from Moody’s; (iv) demand
deposits, time deposits and certificates of deposit or bankers’ acceptances
maturing within one year after such date and issued or accepted by any Lender or
by any commercial bank organized under the laws of the United States of America
or any state thereof or the District of Columbia that (a) is at least
“adequately capitalized” (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such regulations)
of not less than $100,000,000; (v) repurchase agreements and reverse repurchase
agreements with any Lender or any Affiliate thereof relating to marketable
securities meeting the criteria set forth in clause (i) above, (vi) shares of
any money market mutual fund that (a) has at least 95% of its assets invested
continuously in the types of investments referred to in clauses (i) through (v)
above, (b) has net assets of not less than $500,000,000, and (c) has the highest
rating obtainable from either S&P, Moody’s or any other credit rating agency of
recognized national standing, or (vii) with respect to Investments by any
Foreign Subsidiary, any demand deposit account.

 

“Change in Control” means:

(a)                                  any “person” or “group” (within the meaning
of the Exchange Act and the rules of the Securities and Exchange Commission
thereunder as in effect on the date hereof), other than LGP or any of its
controlled Affiliates, shall become, or obtain rights to become, the “beneficial
owner” (as defined in the Exchange Act) directly or indirectly, of more than 40%
of the Voting Stock of Holdings;

(b)                                 Holdings shall fail to own directly or
indirectly 100% of the common stock of Company, provided, however, that during
the first one month after the Closing Date, Holding’s failure to hold such
percentage shall not constitute a Change in Control so long as Holdings owns no
less than 95% of Company’s common stock during such period;

(c)                                  Holdings shall fail to have the ability to
elect all of the Governing Body of Company;

(d)                                 the occurrence of a change in the
composition of the Governing Body of Holdings or Company such that a majority of
the members of any such Governing Body are not Continuing Members; or

(e)                                  the occurrence of any “Change of Control”
as defined in the Subordinated Note Indenture.

“Class”, as applied to Lenders, means each of the following two classes of
Lenders: (i) Lenders having Revolving Loan Exposure and (ii) Lenders having Term
Loan Exposure.

“Closing Date” means the date on or before September 1, 2006 on which the
initial Loans are made.

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“Closing Date Certificate” means an Officer’s Certificate of Company certifying
the Consolidated Leverage Ratio after giving pro forma effect to the Acquisition
as at the Closing Date and setting forth the calculation of such Consolidated
Leverage Ratio in reasonable detail.

“Closing Date Mortgaged Property” has the meaning set forth in subsection 4.1M.

“Closing Date Mortgages” has the meaning set forth in subsection 4.1M.

“Collateral” means, collectively, all of the real, personal and mixed property
(including Capital Stock) in which Liens are purported to be granted pursuant to
the Collateral Documents as security for the Obligations.

“Collateral Access Agreement” means any landlord waiver, mortgagee waiver,
bailee letter or any similar acknowledgement or agreement of any landlord or
mortgagee in respect of any Real Property Asset where any Collateral is located
or any warehouseman or processor in possession of any inventory of any Loan
Party, in form and substance reasonably satisfactory to Administrative Agent.

“Collateral Account” has the meaning assigned to that term in the Security
Agreement.

“Collateral Documents” means the Security Agreement, the Foreign Pledge
Agreements, if any, the Control Agreements, the Mortgages and all other
instruments or documents delivered by any Loan Party pursuant to this Agreement
or any of the other Loan Documents in order to grant to Administrative Agent, on
behalf of Lenders, a Lien on any real, personal or mixed property of that Loan
Party as security for the Obligations.

“Commercial Letter of Credit” means any letter of credit or similar instrument
issued for the purpose of providing the primary payment mechanism in connection
with the purchase of any materials, goods or services by Company or any of its
Subsidiaries in the ordinary course of business of Company or such Subsidiary.

“Commitments” means the commitments of Lenders to make Loans as set forth in
subsection 2.1A and subsection 3.3.

“Company” has the meaning assigned to that term in the introduction to this
Agreement.

“Company Employee Benefit Plan” means any “employee benefit plan” as defined in
Section 3(3) of ERISA which is or was maintained or contributed to by Company or
any of its Subsidiaries.

“Company Pension Plan” means any Company Employee Benefit Plan, other than a
Multiemployer Plan, that is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA, and, for purposes of subsection 8.10, any Foreign Plan.

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 “Compliance Certificate” means a certificate substantially in the form of
Exhibit VIII annexed hereto.

“Confidential Information Memorandum” means the Confidential Information
Memorandum dated July, 2006 prepared by the Sole Lead Arranger, relating to the
credit facilities evidenced by this Agreement.

“Consolidated Capital Expenditures” means, for any period, the sum of the
aggregate of all expenditures (whether paid in cash or other consideration or
accrued as a liability and including that portion of Capital Leases which is
capitalized on the consolidated balance sheet of Company and its Subsidiaries)
by Company and its Subsidiaries during that period that, in conformity with
GAAP, are included in “additions to property, plant or equipment” or comparable
items reflected in the consolidated statement of cash flows of Company and its
Subsidiaries minus the sum of the following to the extent included in
calculating Consolidated Capital Expenditures during such period: (a) any
Permitted Acquisition during such period, (b) capital expenditures in respect of
the reinvestment of Net Asset Sale Proceeds in accordance with the terms of
subsection 2.4B(iii) during such period, and (c) capital expenditures in respect
of the reinvestment of Net Insurance/Condemnation Proceeds in accordance with
the terms of subsection 6.4C during such period.  For purposes of this
definition, the purchase price of equipment that is purchased simultaneously
with the trade-in of existing equipment or with insurance proceeds shall be
included in Consolidated Capital Expenditures only to the extent of the gross
amount of such purchase price less the credit granted by the seller of such
equipment for the equipment being traded in at such time or the amount of such
proceeds, as the case may be.

“Consolidated Cash Interest Expense” means, for any period, Consolidated
Interest Expense for such period excluding, however, any interest expense not
payable in Cash (including amortization of discount and amortization of debt
issuance costs).

“Consolidated Current Assets” means, as at any date of determination, the total
assets of Company and its Subsidiaries on a consolidated basis which may
properly be classified as current assets in conformity with GAAP, excluding Cash
and Cash Equivalents.

“Consolidated Current Liabilities” means, as at any date of determination, the
total liabilities of Company and its Subsidiaries on a consolidated basis which
may properly be classified as current liabilities in conformity with GAAP,
excluding (i) the current portions of Indebtedness that by its terms matures
more than one year from the date of its creation, (ii) Revolving Loans and Swing
Line Loans and (iii) Capital Leases.

“Consolidated EBITDA” means, for any period, the sum, without duplication, of
the amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) provisions for taxes based on income, (including
payments made pursuant to subsection 7.5(iii)(b)), (iv) total depreciation
expense, (v) total amortization expense, (vi) Transaction Costs,
(vii) management or employee retention or incentive payments under Company’s
cliff bonus plan, (viii) any foreign currency translation or transaction gains
or losses, (ix) all extraordinary, unusual or non-recurring losses, charges or
expenses (minus any extraordinary, unusual or non-recurring gains) (it being
understood and agreed that Item 10(e) of Regulation S-K under the

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Securities Act shall not constitute a limitation on any such determination and
unusual or non-recurring losses, charges, expenses or gains shall be determined
by Company in good faith), (x) other non-cash items, including, without
limitation, non-cash stock compensation paid to officers, directors and
employees (other than any such non-cash item to the extent it represents an
accrual of or reserve for cash expenditures in any future period) but only, in
the case of clauses (ii)-(x), to the extent deducted in the calculation of
Consolidated Net Income, less non-cash items added in the calculation of
Consolidated Net Income (other than any such non-cash item to the extent it will
result in the receipt of cash payments in any future period), and all of the
foregoing as determined on a consolidated basis for Company and its Subsidiaries
in conformity with GAAP.

“Consolidated Excess Cash Flow” means, for any period, an amount (if positive)
equal to (i) the sum, without duplication, of the amounts for such period of (a)
Consolidated EBITDA and (b) the Consolidated Working Capital Adjustment minus
(ii) the sum, without duplication, of the amounts for such period of (a)
voluntary and scheduled repayments of Consolidated Total Debt (excluding
voluntary repayments of the Loans and scheduled repayments of Revolving Loans
except to the extent the Revolving Loan Commitments are permanently reduced in
connection with such repayments), (b) Consolidated Capital Expenditures (net of
any proceeds of any related financings, other than the proceeds of Revolving
Loans or Swing Line Loans, with respect to such expenditures), (c) Consolidated
Cash Interest Expense, (d) current taxes based on income of Company and its
Subsidiaries and paid in cash with respect to such period, (e) to the extent
expensed in a prior Fiscal Year, the amount, if any, of cliff bonus payments
made during such Fiscal Year, (f) Restricted Junior Payments during such Fiscal
Year permitted by subsection 7.5, (g) any other cash expenses incurred during
such period to the extent added back in determining Consolidated EBITDA and (f)
Cash consideration paid in connection with Investments permitted pursuant to
subsection 7.3(vii) or subsection 7.3(viii).

“Consolidated Fixed Charges” means, for any period, the sum (without
duplication) of the amounts for such period of (i) Consolidated Cash Interest
Expense, (ii) scheduled principal payments in respect of Consolidated Total
Debt, and (iii) current taxes based on income of Company and its Subsidiaries
and paid in cash with respect to such period, all of the foregoing as determined
on a consolidated basis for Company and its Subsidiaries in conformity with
GAAP.

“Consolidated Interest Expense” means, for any period, total interest expense
(including that portion attributable to Capital Leases in accordance with GAAP
and capitalized interest) of Company and its Subsidiaries on a consolidated
basis with respect to all outstanding Indebtedness of Company and its
Subsidiaries, including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers’ acceptance financing, net
costs under Interest Rate Agreements and amounts referred to in subsection 2.3
payable to Administrative Agent and Lenders that are considered interest expense
in accordance with GAAP, but excluding, however, any such amounts referred to in
subsection 2.3 payable on or before the Closing Date.  For purposes of the
foregoing, total interest expense shall be determined after giving effect to any
net payments made or received with respect to Interest Rate Agreements.

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“Consolidated Leverage Ratio” means, as of the last day of any Fiscal Quarter,
the ratio of (a) Consolidated Total Debt as at such day to (b) Consolidated
EBITDA for the consecutive four Fiscal Quarters ending on such day.  In
connection with calculation of the Consolidated Leverage Ratio for any purpose,
if, during the four Fiscal Quarter period ending on the date as of which such
calculation is made, Company has made an acquisition permitted by subsection
7.3(v), subsection 7.3(vii) or subsection 7.3(viii), calculation of Consolidated
EBITDA used in such calculation of the Consolidated Leverage Ratio shall be made
as if such acquisition occurred on the first day of such period on a pro forma
basis for the portion of the period prior to the date such acquisition actually
occurred.

“Consolidated Net Income” means, for any period, the net income (or loss) of
Company and its Subsidiaries on a consolidated basis for such period taken as a
single accounting period determined in conformity with GAAP; provided that there
shall be excluded (i) the income (or loss) of any Person (other than a
Subsidiary of Company) in which any other Person (other than Company or any of
its Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (ii) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Company or is merged
into or consolidated with Company or any of its Subsidiaries or that Person’s
assets are acquired by Company or any of its Subsidiaries (provided however that
the exclusion in this sub-clause (ii) shall not apply in connection with the
calculation of any Consolidated Leverage Ratio), (iii) the income of any
Subsidiary of Company to the extent that the declaration or payment of dividends
or similar distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary, (iv) any after-tax gains or losses attributable to asset sales
or returned surplus assets of any Pension Plan, and (v) (to the extent not
included in clauses (i) through (iv) above) any net extraordinary gains or net
extraordinary losses.

“Consolidated Total Debt” means, as at any date of determination, the sum of (i)
the aggregate stated balance sheet amount of all Indebtedness of Company and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP and
(ii) the Letter of Credit Usage.

“Consolidated Working Capital” means, as at any date of determination, the
excess (or deficit) of Consolidated Current Assets over Consolidated Current
Liabilities.

“Consolidated Working Capital Adjustment” means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.

“Contingent Obligation”, as applied to any Person, means any direct or indirect
liability, contingent or otherwise, of that Person (i) with respect to any
Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof,
(ii) with respect to any letter of credit issued for the

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account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings, or (iii) under Hedge Agreements.  Contingent
Obligations shall include (a) the direct or indirect guaranty, endorsement
(otherwise than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such Person of the
obligation of another, (b) the obligation to make take-or-pay or similar
payments if required regardless of non-performance by any other party or parties
to an agreement, and (c) any liability of such Person for the obligation of
another through any agreement (contingent or otherwise) (1) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise) or
(2) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described under
subclauses (1) or (2) of this sentence, the primary purpose or intent thereof is
as described in the preceding sentence.  The amount of any Contingent Obligation
shall be equal to the principal amount of the obligation so guaranteed or
otherwise supported or, if less, the amount to which such Contingent Obligation
is specifically limited or, if not stated, the maximum reasonably anticipated
liability in respect thereof as determined by such Person in good faith.

“Continuing Member” means, as of any date of determination any member of the
Governing Body of Holdings or Company who (i) was a member of such Governing
Body on the Closing Date or (ii) was nominated for election or elected to such
Governing Body with the affirmative vote of a majority of the members who were
either members of such Governing Body on the Closing Date or whose nomination or
election was previously so approved.

“Contractual Obligation”, as applied to any Person, means any provision of any
Security issued by that Person or of any material indenture, mortgage, deed of
trust, contract, undertaking, agreement or other instrument to which that Person
is a party or by which it or any of its properties is bound or to which it or
any of its properties is subject.

“Control Agreement” means an agreement, reasonably satisfactory in form and
substance to Administrative Agent and executed by the financial institution or
securities intermediary at which a Deposit Account or a Securities Account, as
the case may be, is maintained, pursuant to which such financial institution or
securities intermediary confirms and acknowledges Administrative Agent’s
security interest in such account, and agrees that the financial institution or
securities intermediary, as the case may be, will comply with instructions or
entitlement orders originated by Administrative Agent as to disposition of funds
in such account, without further consent by Company or any Subsidiary.

“Currency Agreement” means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement to which Company or any of its Subsidiaries is a party.

“Deposit Account” means a demand, time, savings, passbook or similar account
maintained with a Person engaged in the business of banking, including a savings
bank, savings and loan association, credit union or trust company.

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“Direct Liability”, with respect to any event, means the payment of money by
Company or any of its Subsidiaries with respect to such event.

“Documentation Agent” has the meaning assigned to that term in the introduction
to this Agreement.

“Dollars” and the sign “$” mean the lawful money of the United States of
America.

“Domestic Subsidiary” means any Subsidiary of Company that is incorporated or
organized under the laws of the United States of America, any state thereof or
in the District of Columbia.

“Dormant Subsidiaries” means each of (1) FTD International Corporation, a
Delaware corporation, (2) Value Network Service, Inc., a Delaware corporation,
(3) Flowers USA, Inc., a Connecticut corporation, (4) FTD Holdings,
Incorporated, a Delaware corporation and (5) Renaissance Greeting Cards, Inc., a
Maine corporation.

“Eligible Assignee” means (i) any Lender, any Affiliate of any Lender and any
Approved Fund of any Lender; and (ii) (a) a commercial bank organized under the
laws of the United States or any state thereof; (b) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; (c) a commercial bank organized under the laws of any other
country or a political subdivision thereof; provided that (1) such bank is
acting through a branch or agency located in the United States or (2) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (d) any other entity that is an “accredited investor” (as defined
in Regulation D under the Securities Act) that extends credit or buys loans as
one of its businesses including insurance companies, mutual funds, finance
companies and lease financing companies; provided that neither Company nor any
Affiliate of Company shall be an Eligible Assignee.

“Employee Benefit Plan” means any “employee benefit plan” as defined in Section
3(3) of ERISA which is or was maintained or contributed to by Company, any of
its Subsidiaries or any of their respective ERISA Affiliates.

“Environmental Claim” means any investigation, notice, notice of violation,
claim, action, suit, proceeding, demand, abatement order or other order or
directive (conditional or otherwise), by any Government Authority or any other
Person, arising (i) pursuant to or in connection with any actual or alleged
violation of any Environmental Law, (ii) in connection with any Hazardous
Materials or any actual or alleged Hazardous Materials Activity, or (iii) in
connection with any actual or alleged damage, injury, threat or harm to health,
safety, natural resources or the environment.

“Environmental Laws” means any and all current or future statutes, ordinances,
orders, rules, regulations, guidance documents, judgments, Governmental
Authorizations, or any other requirements of any Government Authority relating
to (i) environmental matters, including those relating to any Hazardous
Materials Activity, (ii) the generation, use, storage, transportation or
disposal of Hazardous Materials, or (iii) occupational safety and health,

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industrial hygiene, land use or the protection of human, plant or animal health
or welfare, in any manner applicable to Company or any of its Subsidiaries or
any Facility.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor thereto.

“ERISA Affiliate”, as applied to any Person, means: (i) any corporation that is
a member of a controlled group of corporations within the meaning of Section
414(b) of the Internal Revenue Code of which that Person is a member; (ii) any
trade or business (whether or not incorporated) that is a member of a group of
trades or businesses under common control within the meaning of Section 414(c)
of the Internal Revenue Code of which that Person is a member; and (iii) any
member of an affiliated service group within the meaning of Section 414(m) or
(o) of the Internal Revenue Code of which that Person, any corporation described
in clause (i) above or any trade or business described in clause (ii) above is a
member.  Any former ERISA Affiliate of a Person or any of its Subsidiaries shall
continue to be considered an ERISA Affiliate of such Person or such Subsidiary
within the meaning of this definition with respect to the period such entity was
an ERISA Affiliate of such Person or such Subsidiary and with respect to
liabilities arising after such period for which such Person or such Subsidiary
could be liable under the Internal Revenue Code or ERISA.

“ERISA Event” means (i) a “reportable event” within the meaning of Section 4043
of ERISA and the regulations issued thereunder with respect to any Pension Plan
(excluding those for which the provision for 30-day notice to the PBGC has been
waived by regulation); (ii) the failure to meet the minimum funding standard of
Section 412 of the Internal Revenue Code with respect to any Pension Plan
(whether or not waived in accordance with Section 412(d) of the Internal Revenue
Code) or the failure to make by its due date a required installment under
Section 412(m) of the Internal Revenue Code with respect to any Pension Plan or
the failure to make any required contribution to a Multiemployer Plan; (iii) the
provision by the administrator of any Pension Plan pursuant to Section
4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the withdrawal by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates
from any Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan resulting in liability pursuant to Section 4063 or 4064
of ERISA; (v) the institution by the PBGC of proceedings to terminate any
Pension Plan, or the occurrence of any event or condition which might constitute
grounds under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of liability on Company, any
of its Subsidiaries or any of their respective ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of Section
4212(c) of ERISA; (vii) the withdrawal of Company, any of its Subsidiaries or
any of their respective ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer
Plan if there is any potential liability therefor, or the receipt by Company,
any of its Subsidiaries or any of their respective ERISA Affiliates of notice
from any Multiemployer Plan that it is in reorganization or insolvency pursuant
to Section 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4041A or 4042 of ERISA; (viii) the assertion of a
material claim (other than routine claims for benefits) against any Company
Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or
against Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in

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connection with any Company Employee Benefit Plan; (ix) receipt from the
Internal Revenue Service of notice of the failure of any Company Pension Plan
(or any other Company Employee Benefit Plan intended to be qualified under
Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of
the Internal Revenue Code, or the failure of any trust forming part of any
Company Pension Plan to qualify for exemption from taxation under Section 501(a)
of the Internal Revenue Code; or (x) the imposition of a Lien pursuant to
Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA
with respect to any Pension Plan; provided that any event described in the
foregoing clauses shall not be an ERISA Event unless it could reasonably be
expected to result in a Direct Liability.

“Eurodollar Rate” means, for any Interest Rate Determination Date, with respect
to any Eurodollar Rate Loan for any Interest Period, the rate per annum obtained
by dividing (i) the rate per annum determined by Administrative Agent at
approximately 11:00 a.m. (London time) on the date that is two Business Days
prior to the beginning of such Interest Period by reference to the British
Bankers’ Association Interest Settlement Rate for deposits in Dollars (as set
forth by any service selected by Administrative Agent which has been nominated
by the British Bankers’ Association as an authorized information vendor for the
purpose of displaying such rates) for a period equal to such Interest Period;
provided that, to the extent that an interest rate is not ascertainable pursuant
to the foregoing provisions of this definition the “Eurodollar Rate” shall be
the interest rate per annum determined by Administrative Agent to be the average
of the rates per annum at which deposits in Dollars are offered for such
Interest Period to major banks in the London interbank market in London, England
at approximately 11:00 a.m. (London time) on the date that is two Business Days
prior to the beginning of such Interest Period by (ii) a percentage equal to
100% minus the stated maximum rate of all reserve requirements (including any
marginal, emergency, supplemental, special or other reserves) applicable on such
Interest Rate Determination Date to any member bank of the Federal Reserve
System in respect of “Eurocurrency liabilities” as defined in Regulation D (or
any successor category of liabilities under Regulation D).  Each determination
by Administrative Agent pursuant to this definition shall be conclusive absent
manifest error.

“Eurodollar Rate Loans” means Loans bearing interest at rates determined by
reference to the Eurodollar Rate as provided in subsection 2.2A.

“Eurodollar Rate Margin” means the margin over the Eurodollar Rate used in
determining the rate of interest of Eurodollar Rate Loans pursuant to subsection
2.2A.

“Event of Default” means each of the events set forth in Section 8.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, and any successor statute.

“Exchange Rate” means, on any date (as determined in the discretion of
Administrative Agent) when an amount expressed in a currency other than Dollars
is to be determined with respect to any Letter of Credit, the nominal rate of
exchange of Administrative Agent in the New York foreign exchange market for the
sale of such currency in exchange for Dollars at 12:00 noon (New York time) one
Business Day prior to such date, expressed as a number of units of such currency
per one Dollar.

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“Existing Credit Agreement” means that certain Credit Agreement dated as of
February 24, 2004 among Company, Nectar Merger Corporation, the agents and the
lenders listed thereunder, as amended.

“Existing Letters of Credit” means those letters of credit set forth on Schedule
7.4 annexed hereto.

“Facilities” means any and all real property (including all buildings, fixtures
or other improvements located thereon) now, hereafter or heretofore owned,
leased, operated or used by Company or any of its Subsidiaries or any of their
respective predecessors or Affiliates.

“Federal Funds Effective Rate” means, for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.

“Financial Plan” has the meaning assigned to that term in subsection 6.1(xiii).

“First Priority” means, with respect to any Lien purported to be created in any
Collateral pursuant to any Collateral Document, that (i) such Lien is perfected
and has priority over any other Lien on such Collateral (other than Liens not
prohibited pursuant to subsection 7.2A) and (ii) such Lien is the only Lien
(other than Liens not prohibited pursuant to subsection 7.2A) to which such
Collateral is subject.

“Fiscal Quarter” means a fiscal quarter of any Fiscal Year.

“Fiscal Year” means the fiscal year of Company and its Subsidiaries ending on
June 30 of each calendar year.  For purposes of this Agreement, any particular
Fiscal Year shall be designated by reference to the calendar year in which such
Fiscal Year ends.

“Flood Hazard Property” means a Closing Date Mortgaged Property or an Additional
Mortgaged Property located in an area designated by the Federal Emergency
Management Agency as having special flood or mud slide hazards.

“Foreign Plan” means any employee benefit plan maintained by Company or any of
its Subsidiaries that is mandated or governed by any law, rule or regulation of
any Government Authority other than the United States of America, any state
thereof or any other political subdivision thereof.

“Foreign Pledge Agreement” means each pledge agreement or similar instrument
governed by the laws of a country other than the United States, executed on the
Closing Date or from time to time thereafter in accordance with subsection 6.8
by Company or any Domestic Subsidiary that owns Capital Stock of one or more
Foreign Subsidiaries organized or incorporated in such country, in form and
substance satisfactory to Administrative Agent, as

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such Foreign Pledge Agreement may be amended, supplemented or otherwise modified
from time to time.

“Foreign Subsidiary” means any Subsidiary of Company that is not a Domestic
Subsidiary.

“Fund” means any Person (other than a natural Person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

“Funding and Payment Account” means the account specified in the payment
instructions appearing below Administrative Agent’s signature herein or at the
account designated as such in any other written notice delivered by
Administrative Agent to Company and each Lender.

“Funding and Payment Office” means the office of Administrative Agent located at
201 Third Street, Eighth Floor, MAC A0187-081, San Francisco, CA 94103 or such
other office of Administrative Agent as may from time to time hereafter be
designated as such in a written notice delivered by Administrative Agent to
Company and each Lender.

“Funding Date” means the date of the funding of a Loan.

“GAAP” means, subject to the limitations on the application thereof set forth in
subsection 1.2, generally accepted accounting principles set forth in opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting profession,
in each case as the same are applicable to the circumstances as of the date of
determination.

“Governing Body” means the board of directors or other body having the power to
direct or cause the direction of the management and policies of a Person that is
a corporation, partnership, trust or limited liability company.

“Government Authority” means the government of the United States or any other
nation, or any state, regional or local political subdivision or department
thereof, and any other governmental or regulatory agency, authority, body,
commission, central bank, board, bureau, organ, court, instrumentality or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, in each case
whether federal, state, local or foreign (including supra-national bodies such
as the European Union or the European Central Bank).

“Governmental Authorization” means any permit, license, registration,
authorization, plan, directive, accreditation, consent, order or consent decree
of or from, or notice to, any Government Authority.

“Guaranties” means the Holdings Guaranty and the Subsidiary Guaranty.

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“Hazardous Materials” means:  (i) any chemical, material or substance at any
time defined as or included in the definition of “hazardous substances”,
“hazardous wastes”, “hazardous materials”, “extremely hazardous waste”, “acutely
hazardous waste”, “radioactive waste”, “biohazardous waste”, “pollutant”, “toxic
pollutant”, “contaminant”, “restricted hazardous waste”, “infectious waste”,
“toxic substances”, or any other term or expression intended to define, list or
classify substances by reason of properties harmful to health, safety or the
indoor or outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, “TCLP toxicity” or “EP toxicity” or words of similar import under any
applicable Environmental Laws); (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) any asbestos-containing
materials; (vii) urea formaldehyde foam insulation; (viii) electrical equipment
which contains any oil or dielectric fluid containing polychlorinated biphenyls;
(ix) pesticides; and (x) any other chemical, material or substance, exposure to
which is prohibited, limited or regulated by any Government Authority or which
may or could pose a hazard to the health and safety of the owners, occupants or
any Persons in the vicinity of any Facility or to the indoor or outdoor
environment.

“Hazardous Materials Activity” means any past, current, proposed or threatened
activity, event or occurrence involving any Hazardous Materials, including the
use, manufacture, possession, storage, holding, presence, existence, location,
Release, threatened Release, discharge, placement, generation, transportation,
processing, construction, treatment, abatement, removal, remediation, disposal,
disposition or handling of any Hazardous Materials, and any corrective action or
response action with respect to any of the foregoing.

“Hedge Agreement” means an Interest Rate Agreement or a Currency Agreement
designed to hedge against fluctuations in interest rates or currency values,
respectively.

“Holdings” means FTD Group, Inc., a Delaware corporation (formerly Mercury Man
Holdings Corporation).

“Holdings Guaranty” means the Holdings Guaranty executed and delivered by
Holdings on the Closing Date, substantially in the form of Exhibit XV annexed
hereto, as such Holdings Guaranty may thereafter be amended, supplemented or
otherwise modified from time to time.

“Holdings Loan Notes” means the Fixed Rate Unsecured Loan Notes 2008 in an
aggregate amount of up to £6,000,000 issued by Holdings under the Deed dated
July 31, 2006 between Holdings and HSBC Bank plc as guarantor of the payment
obligations of Holdings in respect of the Holdings Loan Notes.

“Indebtedness”, as applied to any Person, means (i) all indebtedness for
borrowed money, (ii) that portion of obligations with respect to Capital Leases
that is properly classified as a liability on a balance sheet in conformity with
GAAP, (iii) notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for

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borrowed money, (iv) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations incurred
under ERISA), which purchase price is (a) due more than six months from the date
of incurrence of the obligation in respect thereof or (b) evidenced by a note or
similar written instrument, (v) Synthetic Lease Obligations, and (vi) all
indebtedness secured by any Lien on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that Person. 
Obligations under Interest Rate Agreements and Currency Agreements constitute
(1) in the case of Hedge Agreements, Contingent Obligations, and (2) in all
other cases, Investments, and in neither case constitute Indebtedness.

“Indemnified Liabilities” has the meaning assigned to that term in subsection
10.3.

“Indemnitee” has the meaning assigned to that term in subsection 10.3.

“Intellectual Property” means all patents, trademarks, tradenames, copyrights,
technology, software, know-how and processes used in or necessary for the
conduct of the business of Company and its Subsidiaries.

“Intercompany Promissory Note” means the debt instrument dated July 31, 2006
between Company and UK Bidco evidencing the $48,000,000 intercompany loan from
Company to UK Bidco.

“Interest Payment Date” means (i) with respect to any Base Rate Loan, each
January 31, April 30, July 31 and October 31 of each year, commencing on the
first such date to occur after the Closing Date, and (ii) with respect to any
Eurodollar Rate Loan, the last day of each Interest Period applicable to such
Loan; provided that in the case of each Interest Period of longer than three
months “Interest Payment Date” shall also include each date that is three
months, or a multiple thereof, after the commencement of such Interest Period.

“Interest Period” has the meaning assigned to that term in subsection 2.2B.

“Interest Rate Agreement” means any interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement or other similar agreement or
arrangement to which Company or any of its Subsidiaries is a party.

“Interest Rate Determination Date”, with respect to any Interest Period, means
the second Business Day prior to the first day of such Interest Period.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to
the date hereof and from time to time hereafter, and any successor statute.

“Investment” means (i) any direct or indirect purchase or other acquisition by
Company or any of its Subsidiaries of, or of a beneficial interest in, any
Securities of any other Person (including any Subsidiary of Company), (ii) any
direct or indirect redemption, retirement, purchase or other acquisition for
value, by Company or any Subsidiary of Company from any Person other than
Company or any of its Subsidiaries, of any equity Securities of such

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Subsidiary, (iii) any direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital contribution
by Company or any of its Subsidiaries to any other Person, including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary course
of business, or (iv) Interest Rate Agreements or Currency Agreements not
constituting Hedge Agreements; provided, however, that Investment shall not
include prepaid expenses of any Person incurred and prepaid in the ordinary
course of business. The amount of any Investment shall be the original cost of
such Investment plus the cost of all additions thereto, without any adjustments
for increases or decreases in value, or write-ups, write-downs or write-offs
with respect to such Investment (other than adjustments for the repayment of, or
the refund of capital with respect to, the original principal amount of any such
Investment).

“IP Collateral” means, collectively, the Intellectual Property that constitutes
Collateral under the Security Agreement.

“Issuing Lender”, with respect to any Letter of Credit, means the Revolving
Lender that agrees or is otherwise obligated to issue such Letter of Credit,
determined as provided in subsection 3.1C(ii) or, with respect to the Existing
Letters of Credit, the applicable ‘Revolving Lender’ under the Existing Credit
Agreement that issued such Letter of Credit.

“Joint Venture” means a joint venture, partnership or other similar arrangement,
whether in corporate, partnership or other legal form.

“Leasehold Property” means any leasehold interest of any Loan Party (other than
a Foreign Subsidiary) as lessee under any lease of real property.

“Lender” and “Lenders” means the Persons identified as “Lenders” and listed on
the signature pages of this Agreement, together with their successors and
permitted assigns pursuant to subsection 10.1, and the term “Lenders” shall
include Swing Line Lender unless the context otherwise requires; provided that
the term “Lenders”, when used in the context of a particular Commitment, shall
mean Lenders having that Commitment.

“Letter of Credit” or “Letters of Credit” means (i) Commercial Letters of Credit
and Standby Letters of Credit issued or to be issued by Issuing Lenders for the
account of Company pursuant to subsection 3.1 and (ii) the Existing Letters of
Credit.

“Letter of Credit Usage” means, as at any date of determination, the sum of
(i) the maximum aggregate amount which is or at any time thereafter may become
available for drawing under all Letters of Credit then outstanding plus (ii) the
aggregate amount of all drawings under Letters of Credit honored by Issuing
Lenders and not theretofore reimbursed out of the proceeds of Revolving Loans
pursuant to subsection 3.3B or otherwise reimbursed by Company.  For purposes of
this definition, any amount described in clause (i) or (ii) of the preceding
sentence which is denominated in a currency other than Dollars shall be valued
based on the applicable Exchange Rate for such currency as of the applicable
date of determination.

“LGP” means Leonard Green & Partners, L.P. and Affiliates thereof.

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“Lien” means any lien, mortgage, pledge, assignment, security interest, charge
or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.

“Loan” or “Loans” means one or more of the Term Loans, Revolving Loans or Swing
Line Loans or any combination thereof.

“Loan Documents” means this Agreement, the Notes, the Letters of Credit (and any
applications for, or reimbursement agreements or other documents or certificates
executed by Company in favor of an Issuing Lender relating to, the Letters of
Credit), the Guaranties, the Collateral Documents, and all amendments, waivers
and consents relating thereto.

“Loan Party” means each of Holdings, Company and any of Company’s Subsidiaries
from time to time executing a Loan Document, and “Loan Parties” means all such
Persons, collectively.

“Margin Stock” has the meaning assigned to that term in Regulation U of the
Board of Governors of the Federal Reserve System as in effect from time to time.

“Material Adverse Effect” means (i) a material adverse effect upon the business,
operations, properties, assets, liabilities, accounting treatment, condition
(financial or otherwise) or prospects of Holdings and its Subsidiaries (and for
purposes of this definition, references to Holdings and its Subsidiaries shall
be deemed to include UK Target, whether or not the Acquisition has occurred)
taken as a whole or (ii) the material impairment of the ability of the Loan
Parties, taken as a whole, to perform, or of Administrative Agent or Lenders to
enforce, the Obligations.

“Material Contract” means any contract or other arrangement to which Company or
any of its Subsidiaries is a party (other than the Loan Documents) for which
breach, nonperformance, cancellation or failure to renew could reasonably be
expected to have a Material Adverse Effect.

“Material Leasehold Property” means a Leasehold Property reasonably determined
by Administrative Agent to be of material value as Collateral or of material
importance to the business operations of Company or any of its Subsidiaries.

“Material Subsidiary” means each Subsidiary of Company now existing or hereafter
acquired or formed by Company which, on a consolidated basis for such Subsidiary
and its Subsidiaries, (i) for the most recent Fiscal Year accounted for more
than 5% of the consolidated revenues of Company and its Subsidiaries or (ii) as
at the end of such Fiscal Year, was the owner of more than 5% of the
consolidated assets of Company and its Subsidiaries.

“Maximum Consolidated Capital Expenditures Amount” has the meaning assigned to
that term in subsection 7.8.

“Moody’s” means Moody’s Investors Service, Inc.

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“Mortgage” means (i) a security instrument (whether designated as a deed of
trust or a mortgage or by any similar title) executed and delivered by any Loan
Party, substantially in the form of Exhibit XVII annexed hereto or in such other
form as may be approved by Administrative Agent in its reasonable discretion, in
each case with such changes thereto as may be recommended by Administrative
Agent’s local counsel based on local laws or customary local mortgage or deed of
trust practices, or (ii) at Administrative Agent’s option, in the case of an
Additional Mortgaged Property, an amendment to an existing Mortgage, in form
reasonably satisfactory to Administrative Agent, adding such Additional
Mortgaged Property to the Real Property Assets encumbered by such existing
Mortgage, in either case as such security instrument or amendment may be
amended, supplemented or otherwise modified from time to time.  “Mortgages”
means all such instruments, including the Closing Date Mortgages and any
Additional Mortgages, collectively.

“Multiemployer Plan” means any Employee Benefit Plan that is a “multiemployer
plan” as defined in Section 3(37) of ERISA.

“Net Asset Sale Proceeds”, with respect to any Asset Sale, means Cash payments
(including any Cash received by way of deferred payment pursuant to, or by
monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any bona fide direct costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably paid or estimated to be actually payable within two years of the date
of such Asset Sale as a result of any gain recognized in connection with such
Asset Sale , (ii) legal, consulting or other fees incurred or sales or use taxes
paid or payable in connection with such Asset Sale, (iii) payment of the
outstanding principal amount of, premium or penalty, if any, and interest on any
Indebtedness (other than the Loans) that is (a) secured by a Lien on the stock
or assets in question and that is required to be repaid under the terms thereof
as a result of such Asset Sale and (b) actually paid to a Person that is not an
Affiliate of any Loan Party or of any Affiliate of a Loan Party and (iv) a
reasonable reserve for any indemnification payments (fixed or contingent)
attributable to the seller’s indemnities and representations and warranties to
the purchaser in respect of such Asset Sale undertaken by Holdings or any of its
Subsidiaries in connection with such Asset Sale; provided, however, that Net
Asset Sale Proceeds shall not include any Cash payments received from any Asset
Sale by a Foreign Subsidiary unless such proceeds may be repatriated (by reason
of a repayment of an intercompany note or otherwise) to the United States
without (in the reasonable judgment of Company) resulting in a material tax
liability to Company.

“Net Insurance/Condemnation Proceeds” means any Cash payments or proceeds
received by Company or any of its Domestic Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
taxes paid or payable and actual and reasonable documented costs incurred by
Company or any of its Subsidiaries in connection with the adjustment or
settlement of any claims of Company or such Subsidiary in respect thereof, and,
in each case, only to the extent such Cash payments or proceeds, net of the
foregoing documented costs, exceed $1,000,000.

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“Net Securities Proceeds” means the cash proceeds (net of underwriting discounts
and commissions and other reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses and taxes paid or payable) from the
(i) issuance of Capital Stock of or incurrence of Indebtedness by Holdings,
Company or any of its Subsidiaries, and (ii) capital contributions made by a
holder of Capital Stock of Holdings.  Net Securities Proceeds shall not include
(a) any capital contribution by Holdings, Company or any Subsidiary of either or
(b) the proceeds of the issuance or sale of any Capital Stock of a Subsidiary of
Company, in each case, to Company or another Subsidiary of Company.

“Non-US Lender” means a Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other political
subdivision thereof.

“Notes” means one or more of the Term Notes, Revolving Notes or Swing Line Note
or any combination thereof.

“Notice of Borrowing” means a notice substantially in the form of Exhibit I
annexed hereto.

“Notice of Conversion/Continuation” means a notice substantially in the form of
Exhibit II annexed hereto.

“Notice of Prepayment” means a notice substantially in the form of Exhibit XVI
annexed hereto.

“Obligations” means all obligations of every nature of each Loan Party from time
to time owed to Administrative Agent, Lenders or any of them under the Loan
Documents, whether for principal, interest, reimbursement of amounts drawn under
Letters of Credit, fees, expenses, indemnification or otherwise, including
post-petition interest on such amounts accruing subsequent to, and interest that
would have accrued but for the commencement of a proceeding under, the
Bankruptcy Code (whether or not such interest is allowed as a claim in such
proceeding).

“Officer” means the president, chief executive officer, a vice president, chief
financial officer, treasurer, general partner (if an individual), managing
member (if an individual) or other individual appointed by the Governing Body or
the Organizational Documents of a corporation, partnership, trust or limited
liability company to serve in a similar capacity as the foregoing, or, in the
case of any Subsidiary incorporated in England and Wales, any director or any
attorney appointed by power of attorney.

“Officer’s Certificate”, as applied to any Person that is a corporation,
partnership, trust or limited liability company, means a certificate executed on
behalf of such Person by one or more Officers of such Person or one or more
Officers of a general partner or a managing member if such general partner or
managing member is a corporation, partnership, trust or limited liability
company.

“Operating Lease”, as applied to any Person, means any lease (including leases
that may be terminated by the lessee at any time) of any property (whether real,
personal or mixed) that is not a Capital Lease other than any such lease under
which that Person is the lessor.

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“Organizational Documents” means (i) with respect to any corporation, its
certificate or articles of incorporation or organization, as amended, and its
bylaws, as amended, (ii) with respect to any limited partnership, its
certificate of limited partnership, as amended, and its partnership agreement,
as amended, (iii) with respect to any general partnership, its partnership
agreement, as amended, (iv) with respect to any limited liability company, its
articles of organization, as amended, and its operating agreement, as amended
and (v) with respect to any Foreign Subsidiary, to the extent not covered above,
the equivalent thereof in its jurisdiction of incorporation, formation or
organization.

“Participant” means a purchaser of a participation in the rights and obligations
under this Agreement pursuant to subsection 10.1C.

“Patriot Act” means the Uniting And Strengthening America By Providing
Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act)
Act of 2001.

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan,
that is subject to Section 412 of the Internal Revenue Code or Section 302 of
ERISA, and, for purposes of subsection 8.10, any Foreign Plan.

“Permitted Encumbrances” means the following types of Liens (excluding any such
Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue
Code or by ERISA, any such Lien imposed by a Government Authority in connection
with any Foreign Plan, any such Lien relating to or imposed in connection with
any Environmental Claim, and any such Lien expressly prohibited by any
applicable terms of any of the Collateral Documents):

(i)            Liens for taxes, fees, assessments or governmental charges or
claims the payment of which is not, at the time, required by subsection 6.3;

(ii)           statutory Liens of landlords, Liens of collecting banks under the
UCC on items in the course of collection, statutory Liens and rights of set-off
of banks, statutory Liens of carriers, warehousemen, mechanics, repairmen,
workmen and materialmen, and other Liens imposed by law, in each case incurred
in the ordinary course of business (a) for amounts not yet overdue or (b) for
amounts that are overdue and that (in the case of any such amounts overdue for a
period in excess of 10 days) are being contested in good faith by appropriate
proceedings, so long as (1) such reserves or other appropriate provisions, if
any, as shall be required by GAAP shall have been made for any such contested
amounts, and (2) in the case of a Lien with respect to any material portion of
the Collateral, such contest proceedings conclusively operate to stay the sale
of any material portion of the Collateral on account of such Lien;

(iii)          Liens incurred or pledges or deposits made in the ordinary course
of business in connection with workers’ compensation, unemployment insurance and
other types of social security, or to secure the performance of statutory

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obligations, bids, leases, government contracts, trade contracts, and other
similar obligations (exclusive of obligations for the payment of borrowed
money), so long as no foreclosure, sale or similar proceedings have been
commenced with respect to any material portion of the Collateral on account
thereof;

(iv)          any attachment or judgment Lien not constituting an Event of
Default under subsection 8.8;

(v)           licenses (with respect to Intellectual Property and other
property), leases or subleases granted to third parties in accordance with any
applicable terms of the Collateral Documents and not interfering in any material
respect with the ordinary conduct of the business of Company or any of its
Subsidiaries or resulting in a material diminution in the value of any
Collateral as security for the Obligations;

(vi)          easements, rights-of-way, restrictions, encroachments, and other
minor defects or irregularities in title, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the business of
Company or any of its Subsidiaries or result in a material diminution in the
value of any Collateral as security for the Obligations;

(vii)         any (a) interest or title of a lessor or sublessor under any lease
not prohibited by this Agreement, (b) Lien or restriction that the interest or
title of such lessor or sublessor may be subject to, or (c) subordination of the
interest of the lessee or sublessee under such lease to any Lien or restriction
referred to in the preceding clause (b), so long as the holder of such Lien or
restriction agrees to recognize the rights of such lessee or sublessee under
such lease;

(viii)        Liens arising from filing UCC financing statements relating solely
to leases not prohibited by this Agreement;

(ix)           Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;

(x)            any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;

(xi)           Liens granted pursuant to the Collateral Documents;

(xii)          Liens securing obligations (other than obligations representing
Indebtedness for borrowed money) under operating, reciprocal easement or similar
agreements entered into in the ordinary course of business of Company and its
Subsidiaries;

(xiii)         Liens incurred in the ordinary course of business on Securities
to secure repurchase and reverse repurchase obligations in respect of such
Securities; and

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(xiv)        exceptions to title disclosed by a title policy, preliminary title
report or certificate of title delivered to and approved by Administrative Agent
other than Liens securing Indebtedness prohibited by subsection 7.1 or
Contingent Obligations prohibited by subsection 7.4.

“Permitted Transferees” means, with respect to any Person, (i) any Affiliate of
such Person, (ii) the heirs, executors, administrators, testamentary trustees,
legatees or beneficiaries of any such Person or (iii) a trust, the beneficiaries
of which, or a corporation or partnership, the stockholders or general and
limited partners of which, include only such Person or his or her spouse or
lineal descendants, in each case to whom such Person has transferred the
beneficial ownership of any Securities of Holdings (or a parent entity thereof).

“Person” means and includes natural persons, corporations, limited partnerships,
general partnerships, limited liability companies, limited liability
partnerships, joint stock companies, Joint Ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.

“Pledged Collateral” means, collectively, the “Pledged Collateral” as defined in
the Security Agreement and any Foreign Pledge Agreement.

“Potential Event of Default” means a condition or event that, after notice or
lapse of time or both, would constitute an Event of Default.

“Pricing Certificate” means an Officer’s Certificate of Company certifying the
Consolidated Leverage Ratio as at the last day of any Fiscal Quarter and setting
forth the calculation of such Consolidated Leverage Ratio in reasonable detail,
which Officer’s Certificate may be delivered to Administrative Agent at any time
on or after the date of delivery by Company of the Compliance Certificate with
respect to the period ending on the last day of such Fiscal Quarter.

“Prime Rate” means the rate that Wells Fargo announces from time to time as its
prime lending rate, as in effect from time to time. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer.  Wells Fargo or any other Lender may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.

“Proceedings” means any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investigation or arbitration.

“Pro Rata Share” means (i) with respect to all payments, computations and other
matters relating to the Term Loan Commitment or the Term Loan of any Lender, the
percentage obtained by dividing (x) the Term Loan Exposure of that Lender by
(y) the aggregate Term Loan Exposure of all Lenders, (ii)  with respect to all
payments, computations and other matters relating to the Revolving Loan
Commitment or the Revolving Loans of any Lender or any Letters of Credit issued
or participations therein deemed purchased by any Lender or any assignments of
any Swing Line Loans deemed purchased by any Lender, the percentage obtained

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by dividing (x) the Revolving Loan Exposure of that Lender by (y) the aggregate
Revolving Loan Exposure of all Lenders, and (iii) for all other purposes with
respect to each Lender, the percentage obtained by dividing (x) the sum of the
Term Loan Exposure of that Lender plus the Revolving Loan Exposure of that
Lender by (y) the sum of the aggregate Term Loan Exposure of all Lenders plus
the aggregate Revolving Loan Exposure of all Lenders, in any such case as the
applicable percentage may be adjusted by assignments permitted pursuant to
subsection 10.1.  The initial Pro Rata Share of each Lender for purposes of each
of clauses (i), (ii) and (iii) of the preceding sentence is set forth opposite
the name of that Lender in Schedule 2.1 annexed hereto.

“PTO” means the United States Patent and Trademark Office or any successor or
substitute office in which filings are necessary or, in the reasonable opinion
of Administrative Agent, desirable in order to create or perfect Liens on any IP
Collateral.

“Public Offering of Stock” means the closing of a firm commitment underwritten
initial public offering pursuant to an effective registration statement filed
under the Securities Act covering the offer and sale of shares of Holdings’
common stock.

“Put/Call Agreements” means (i) the FTD Group, Inc. Put/Call Agreement dated as
of July 31, 2006, by and among Holdings and each of the individuals listed on
Annex A thereto and (ii) the FTD, Inc. Put/Call Agreement dated as of July 31,
2006, by and among Company and each of the individuals listed on Annex A
thereto.

“Real Property Asset” means, at any time of determination, any interest then
owned by any Loan Party (other than any Foreign Subsidiary) in any real
property.

“Refunded Swing Line Loans” has the meaning assigned to that term in subsection
2.1A(iii)(b).

“Register” has the meaning assigned to that term in subsection 2.1D.

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.

“Reimbursement Date” has the meaning assigned to that term in subsection 3.3B.

“Related Agreements” means, collectively, the Acquisition Agreement, the
Intercompany Promissory Note, the UK Loan Notes, the Put/Call Agreements and the
Subordinated Note Indenture.

“Release” means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of Hazardous Materials into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Materials), including the movement
of any Hazardous Materials through the air, soil, surface water or groundwater.

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“Request for Issuance” means a request substantially in the form of Exhibit III
annexed hereto.

“Requisite Class Lenders” means, at any time of determination (i) for the Class
of Lenders having Revolving Loan Exposure, Lenders having or holding more than
50% of the aggregate Revolving Loan Exposure of all Lenders and (ii) for the
Class of Lenders having Term Loan Exposure, Lenders having or holding more than
50% of the aggregate Term Loan Exposure of all Lenders.

“Requisite Lenders” means Lenders having or holding more than 50% of the sum of
the aggregate Term Loan Exposure of all Lenders plus the aggregate Revolving
Loan Exposure of all Lenders.

“Restricted Junior Payment” means (i) any dividend or other distribution, direct
or indirect, on account of any shares of any class of stock of Company or
Holdings now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company or
Holdings now or hereafter outstanding, (iii) any payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of stock of Company or Holdings now or hereafter
outstanding, and (iv) any payment or prepayment of principal of, premium, if
any, or interest on, or redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment with respect
to, any Subordinated Indebtedness.

“Revolving Lender” means a Lender that has a Revolving Loan Commitment and/or
that has an outstanding Revolving Loan.

“Revolving Loan Commitment” means the commitment of a Revolving Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(ii), and “Revolving Loan
Commitments” means such commitments of all Revolving Lenders in the aggregate.

“Revolving Loan Commitment Amount” means, at any date, the aggregate amount of
the Revolving Loan Commitments of all Revolving Lenders.

“Revolving Loan Commitment Termination Date” means July 28, 2012.

“Revolving Loan Exposure”, with respect to any Revolving Lender, means, as of
any date of determination (i) prior to the termination of the Revolving Loan
Commitments, the amount of that Lender’s Revolving Loan Commitment, and
(ii) after the termination of the Revolving Loan Commitments, the sum of (a) the
aggregate outstanding principal amount of the Revolving Loans of that Lender
plus (b) in the event that Lender is an Issuing Lender, the aggregate Letter of
Credit Usage in respect of all Letters of Credit issued by that Lender (in each
case net of any participations purchased by other Lenders in such Letters of
Credit or in any unreimbursed drawings thereunder) plus (c) the aggregate amount
of all participations purchased by that Lender in any outstanding Letters of
Credit or any unreimbursed drawings under any Letters of Credit plus (d) in the
case of Swing Line Lender, the aggregate outstanding principal amount of all
Swing Line Loans (net of any assignments thereof deemed purchased by other

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Revolving Lenders) plus (e) the aggregate amount of all assignments deemed
purchased by that Lender in any outstanding Swing Line Loans.

“Revolving Loans” means the Loans made by Revolving Lenders to Company pursuant
to subsection 2.1A(ii).

“Revolving Notes” means any promissory notes of Company issued pursuant to
subsection 2.1E to evidence the Revolving Loans of any Revolving Lenders,
substantially in the form of Exhibit VI annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.

“Securities” means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated,
certificated or uncertificated, or otherwise, or in general any instruments
commonly known as “securities” or any certificates of interest, shares or
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.

“Securities Account” means an account to which a financial asset is or may be
credited in accordance with an agreement under which the Person maintaining the
account undertakes to treat the Person for whom the account is maintained as
entitled to exercise the rights that comprise the financial asset.

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and any successor statute.

“Security Agreement” means the Security Agreement executed and delivered on the
Closing Date, substantially in the form of Exhibit XIV annexed hereto, as such
Security Agreement may thereafter be amended, supplemented or otherwise modified
from time to time.

“Sole Lead Arranger” means Wells Fargo Bank, National Association.

“Solvent”, with respect to any Person, means that as of the date of
determination both (i)(a) the then fair saleable value of the property of such
Person is (1) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (2) not less than the amount that will be
required to pay the probable liabilities on such Person’s then existing debts as
they become absolute and due considering all financing alternatives and
potential asset sales reasonably available to such Person; (b) such Person’s
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (c) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (ii) such Person is
“solvent” within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances.  For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

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“S&P” means Standard & Poor’s Ratings Services.

“SPC” has the meaning assigned to that term in subsection 10.1B(iv).

“Standby Letter of Credit” means any standby letter of credit or similar
instrument issued for the purpose of supporting (i) Indebtedness of Company or
any of its Subsidiaries in respect of industrial revenue or development bonds or
financings, (ii) workers’ compensation liabilities of Company or any of its
Subsidiaries, (iii) the obligations of third party insurers of Company or any of
its Subsidiaries arising by virtue of the laws of any jurisdiction requiring
third party insurers, (iv) the obligations of HSBC Bank plc as a guarantor under
the UK Loan Notes, (v) the obligations of one or more revolving lenders in
connection with any letters of credit issued by such lender under the Existing
Credit Agreement, (vi) obligations with respect to Capital Leases or Operating
Leases of Company or any of its Subsidiaries, (vi) performance, payment, deposit
or surety obligations of Company or any of its Subsidiaries, in any case if
required by law or governmental rule or regulation or in accordance with custom
and practice in the industry and (vii)  other lawful corporate purposes of
Company or any of its Subsidiaries; provided that with respect to this subclause
(viii) the relevant Issuing Lender and Administrative Agent consent to the
issuance of such standby letter of credit.

“Sterling” and “£” mean the lawful currency of the United Kingdom.

“Subordinated Indebtedness” means (i) the Subordinated Notes and (ii) any
Indebtedness of Company incurred from time to time and subordinated in right of
payment to the Obligations.

“Subordinated Note Indenture” means the indenture or indentures, pursuant to
which the Subordinated Notes are issued, as such indenture or indentures may be
amended from time to time to the extent permitted under subsection 7.12B.

“Subordinated Notes” means the Company’s 7.75% Senior Subordinated Notes due
2014 in an aggregate principal amount not to exceed $170,117,000 issued pursuant
to the Subordinated Note Indenture.

“Subsidiary”, with respect to any Person, means any corporation, partnership,
trust, limited liability company, association, Joint Venture or other business
entity of which more than 50% of the total voting power of shares of stock or
other ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the members of the Governing Body is at
the time owned or controlled, directly or indirectly, by that Person or one or
more of the other Subsidiaries of that Person or a combination thereof.

“Subsidiary Guarantor” means any Subsidiary of Company that executes and
delivers a counterpart of the Subsidiary Guaranty on the Closing Date or from
time to time thereafter pursuant to subsection 6.8.

“Subsidiary Guaranty” means the Subsidiary Guaranty executed and delivered by
existing Domestic Subsidiaries (other than the Dormant Subsidiaries and
Interflora Inc.) of Company on the Closing Date and to be executed and delivered
by additional Subsidiaries of Company from time to time thereafter in accordance
with subsection 6.8, substantially in the

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form of Exhibit XIII annexed hereto, as such Subsidiary Guaranty may hereafter
be amended, supplemented or otherwise modified from time to time.

“Supplemental Collateral Agent” has the meaning assigned to that term in
subsection 9.1B.

“Swing Line Funding and Payment Office” means the office of Swing Line Lender
located at 201 Third Street, Eighth Floor, MAC A0187-081, San Francisco, CA
94103 or such other offices of Swing Line Lender as may from time to time be
hereafter designated as such in a written notice delivered by Swing Line Lender
to Company and each other Lender.

“Swing Line Lender” means Wells Fargo, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender hereunder.

“Swing Line Loan Commitment” means the commitment of Swing Line Lender to make
Swing Line Loans to Company pursuant to subsection 2.1A(iii).

“Swing Line Loans” means the Loans made by Swing Line Lender to Company pursuant
to subsection 2.1A(iii).

“Swing Line Note” means any promissory note of Company issued pursuant to
subsection 2.1E to evidence the Swing Line Loans of Swing Line Lender,
substantially in the form of Exhibit VII annexed hereto, as it may be amended,
supplemented or otherwise modified from time to time.

“Syndication Agent” has the meaning assigned to that term in the introduction to
this Agreement.

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a)
a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

“Tax” or “Taxes” means any present or future tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature and whatever called, imposed by a
Governmental Authority, on whomsoever and wherever imposed, levied, collected,
withheld or assessed, including interest, penalties, additions to tax and any
similar liabilities with respect thereto; except that, in the case of a Lender,
there shall be excluded (i) taxes that are imposed on the overall net income or
net profits (including franchise taxes imposed in lieu thereof) (a) by the
United States, (b) by any other Government Authority under the laws of which
such Lender is organized or has its principal office or maintains its applicable
lending office, or (c) by any jurisdiction solely as a result of a present or
former connection between such Lender and such jurisdiction (other than any such
connection arising solely from such Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, any of the
Loan Documents), and (ii) any branch profits taxes imposed by the United States
or any similar tax imposed by any other jurisdiction in which such Lender is
located.

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“Term Loan Commitment” means the commitment of a Lender to make a Term Loan to
Company pursuant to subsection 2.1A(i), and “Term Loan Commitments” means such
commitments of all Lenders in the aggregate.

“Term Loan Exposure”, with respect to any Lender, means, as of any date of
determination (i) prior to the funding of the Term Loans, the amount of that
Lender’s Term Loan Commitment, and (ii) after the funding of the Term Loans, the
outstanding principal amount of the Term Loan of that Lender.

“Term Loans” means the Loans made by Lenders to Company pursuant to subsection
2.1A(i).

“Term Notes” means any promissory notes of Company issued pursuant to subsection
2.1E to evidence the Term Loans of any Lenders, substantially in the form of
Exhibit IV annexed hereto, as they may be amended, supplemented or otherwise
modified from time to time.

“Total Utilization of Revolving Loan Commitments” means, as at any date of
determination, the sum of (i) the aggregate principal amount of all outstanding
Revolving Loans plus (ii) the aggregate principal amount of all outstanding
Swing Line Loans plus (iii) the Letter of Credit Usage.

“Transaction Costs” means the fees, costs and expenses payable by Holdings or
any of its Subsidiaries in connection with the transactions contemplated by the
Loan Documents and the Related Agreements.

“UCC” means the Uniform Commercial Code as in effect in any applicable
jurisdiction.

“UK Bidco” means FTD UK Holdings Limited, a company incorporated in England and
Wales with registration number 5866360.

“UK Bidco Loan Notes” means (1) the Fixed Rate Unsecured Loan Notes 2009 in the
aggregate amount of up to £8,000,000 issued by UK Bidco under the Deed dated
July 31, 2006 between UK Bidco and HSBC Bank plc as guarantor of the payment
obligations of UK Bidco in respect of the UK Bidco Loan Notes and (2) any
additional fixed rate unsecured loan notes 2009 issued under the Acquisition
Agreement in connection with the working capital adjustment if any.

“UK Loan Notes” means the Holdings Loan Notes and the UK Bidco Loan Notes.

“UK Target” means Interflora Holdings Limited, a company incorporated in England
and Wales with registration number 05286424.

“UK Target’s Fiscal Years” means the fiscal year of UK Target and its
Subsidiaries ending in May of each calendar year.  For purposes of this
Agreement, any

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particular fiscal year shall be designated by reference to the calendar year in
which such fiscal year ends.

“Voting Stock” means (a) with respect to a corporation, the stock of such
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect members of the Governing Body of such
corporation, (b) with respect to a partnership, the partnership units of such
partnership the holders of which are ordinarily, in the absence of
contingencies, entitled to select or remove the general partner or otherwise
direct the management of the partnership, and (c) with respect to a limited
liability company, the membership interests of such limited liability company
the holders of which are ordinarily, in the absence of contingencies, entitled
to elect the Governing Body of the limited liability company.

“Wells Fargo” has the meaning assigned to that term in the introduction to this
Agreement.

1.2                               Accounting Terms; Utilization of GAAP for
Purposes of Calculations Under Agreement.

Except as otherwise expressly provided in this Agreement, all accounting terms
not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP.  Financial statements and other information required to be
delivered by Company to Lenders pursuant to clauses (iii), (iv) and (xiii) of
subsection 6.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 6.1(vi)).  Except as otherwise expressly
provided in this Agreement, calculations in connection with the definitions,
covenants and other provisions of this Agreement shall utilize GAAP as in effect
on the date of determination, applied in a manner consistent with that used in
preparing the financial statements referred to in subsection 5.3.  If Company
elects to change its accounting practices during the term of this Agreement, or
if at any time any change occurs in GAAP, which change, in either case, would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and Company, Administrative Agent or Requisite Lenders shall so
request, Administrative Agent, Lenders and Company shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in accounting practices or GAAP (subject to the approval of
Requisite Lenders), provided that, until so amended, such ratio or requirement
shall continue to be computed in accordance with GAAP prior to such change
therein and Company shall provide to Administrative Agent and Lenders
reconciliation statements provided for in subsection 6.1(vi).

1.3                               Other Definitional Provisions and Rules of
Construction.

A.                                    Any of the terms defined herein may,
unless the context otherwise requires, be used in the singular or the plural,
depending on the reference.

B.                                    References to “Sections” and “subsections”
shall be to Sections and subsections, respectively, of this Agreement unless
otherwise specifically provided.  Section and subsection headings in this
Agreement are included herein for convenience of reference only and

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shall not constitute a part of this Agreement for any other purpose or be given
any substantive effect.

C.                                    The use in any of the Loan Documents of
the word “include” or “including”, when following any general statement, term or
matter, shall not be construed to limit such statement, term or matter to the
specific items or matters set forth immediately following such word or to
similar items or matters, whether or not nonlimiting language (such as “without
limitation” or “but not limited to” or words of similar import) is used with
reference thereto, but rather shall be deemed to refer to all other items or
matters that fall within the broadest possible scope of such general statement,
term or matter.

Section 2.                                          AMOUNTS AND TERMS OF
COMMITMENTS AND LOANS

2.1                               Commitments; Making of Loans; the Register;
Optional Notes.

A.                                    Commitments.  Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of Company herein set forth, each Lender hereby severally agrees to
make the Loans as described in subsections 2.1A(i) and 2.1A(ii) and Swing Line
Lender hereby agrees to make the Swing Line Loans as described in subsection
2.1A(iii).

(i)                                     Term Loans.  Each Lender that has a Term
Loan Commitment severally agrees to lend to Company on the Closing Date an
amount not exceeding its Pro Rata Share of the aggregate amount of the Term Loan
Commitments to be used for the purposes identified in subsection 2.5A.  The
amount of each Lender’s Term Loan Commitment will be set forth in an allocation
letter delivered to such Lender by Administrative Agent and the aggregate amount
of the Term Loan Commitments is $150,000,000; provided that the Term Loan
Commitments of Lenders shall be adjusted to give effect to any assignments of
the Term Loan Commitments pursuant to subsection 10.1B.  Each Lender’s Term Loan
Commitment shall expire immediately and without further action on September 1,
2006 if the Term Loans are not made on or before that date.  Company may make
only one borrowing under the Term Loan Commitments.  Amounts borrowed under this
subsection 2.1A(i) and subsequently repaid or prepaid may not be reborrowed.

(ii)                                  Revolving Loans.  Each Revolving Lender
severally agrees, subject to the limitations set forth below with respect to the
maximum amount of Revolving Loans permitted to be outstanding from time to time,
to lend to Company from time to time during the period from the Closing Date to
but excluding the Revolving Loan Commitment Termination Date an aggregate amount
not exceeding its Pro Rata Share of the aggregate amount of the Revolving Loan
Commitments to be used for the purposes identified in subsection 2.5B.  The
original amount of each Revolving Lender’s Revolving Loan Commitment will be set
forth in an allocation letter delivered to such Lender by Administrative Agent
and the aggregate original amount of the Revolving Loan Commitments is
$75,000,000; provided that the Revolving Loan Commitments of Revolving Lenders
shall be adjusted to give effect to any assignments of the Revolving Loan
Commitments pursuant to subsection 10.1B and shall be reduced from time to time

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by the amount of any reductions thereto made pursuant to subsection 2.4.  Each
Revolving Lender’s Revolving Loan Commitment shall expire on the Revolving Loan
Commitment Termination Date and all Revolving Loans and all other amounts owed
hereunder with respect to the Revolving Loans and the Revolving Loan Commitments
shall be paid in full no later than that date; provided that each Revolving
Lender’s Revolving Loan Commitment shall expire immediately and without further
action on September 1, 2006 if the Term Loans are not made on or before that
date.  Amounts borrowed under this subsection 2.1A(ii) may be repaid and
reborrowed to but excluding the Revolving Loan Commitment Termination Date.

Anything contained in this Agreement to the contrary notwithstanding, the
Revolving Loans and the Revolving Loan Commitments shall be subject to the
limitation that in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the Revolving Loan Commitments then in effect.

(iii)                               Swing Line Loans.

(a)                                  General Provisions.  Swing Line Lender
hereby agrees, subject to the limitations set forth below with respect to the
maximum amount of Swing Line Loans permitted to be outstanding from time to
time, to make a portion of the Revolving Loan Commitments available to Company
from time to time during the period from the Closing Date to but excluding the
Revolving Loan Commitment Termination Date by making Swing Line Loans to Company
in an aggregate amount not exceeding the amount of the Swing Line Loan
Commitment to be used for the purposes identified in subsection 2.5B,
notwithstanding the fact that such Swing Line Loans, when aggregated with Swing
Line Lender’s outstanding Revolving Loans and Swing Line Lender’s Pro Rata Share
of the Letter of Credit Usage then in effect, may exceed Swing Line Lender’s
Revolving Loan Commitment.  The original amount of the Swing Line Loan
Commitment is $5,000,000; provided that any reduction of the Revolving Loan
Commitment Amount made pursuant to subsection 2.4 that reduces the Revolving
Loan Commitment Amount to an amount less than the then current amount of the
Swing Line Loan Commitment shall result in an automatic corresponding reduction
of the amount of the Swing Line Loan Commitment to the Revolving Loan Commitment
Amount, as so reduced, without any further action on the part of Company,
Administrative Agent or Swing Line Lender.  The Swing Line Loan Commitment shall
expire on the Revolving Loan Commitment Termination Date and all Swing Line
Loans and all other amounts owed hereunder with respect to the Swing Line Loans
shall be paid in full no later than that date; provided that the Swing Line Loan
Commitment shall expire immediately and without further action on September 1,
2006 if the Term Loans are not made on or before that date.  Amounts borrowed
under this subsection 2.1A(iii) may be repaid and reborrowed to but excluding
the Revolving Loan Commitment Termination Date.

Anything contained in this Agreement to the contrary notwithstanding, the Swing
Line Loans and the Swing Line Loan Commitment shall be subject to the limitation
that in no event

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shall the Total Utilization of Revolving Loan Commitments at any time exceed the
Revolving Loan Commitment Amount then in effect.

(b)                                 Swing Line Loan Prepayment with Proceeds of
Revolving Loans.  With respect to any Swing Line Loans that have not been
voluntarily prepaid by Company pursuant to subsection 2.4B(i), Swing Line Lender
may, at any time in its sole and absolute discretion, deliver to Administrative
Agent (with a copy to Company), no later than 10:00 A.M. (New York City time) on
the first Business Day in advance of the proposed Funding Date, a notice
requesting Revolving Lenders to make Revolving Loans that are Base Rate Loans on
such Funding Date in an amount equal to the amount of such Swing Line Loans (the
“Refunded Swing Line Loans”) outstanding on the date such notice is given. 
Company hereby authorizes the giving of any such notice and the making of any
such Revolving Loans.  Anything contained in this Agreement to the contrary
notwithstanding, (1) the proceeds of such Revolving Loans made by Revolving
Lenders other than Swing Line Lender shall be immediately delivered by
Administrative Agent to Swing Line Lender (and not to Company) and applied to
repay a corresponding portion of the Refunded Swing Line Loans and (2) on the
day such Revolving Loans are made, Swing Line Lender’s Pro Rata Share of the
Refunded Swing Line Loans shall be deemed to be paid with the proceeds of a
Revolving Loan made by Swing Line Lender, and such portion of the Swing Line
Loans deemed to be so paid shall no longer be outstanding as Swing Line Loans
and shall no longer be due under the Swing Line Note, if any, of Swing Line
Lender but shall instead constitute part of Swing Line Lender’s outstanding
Revolving Loans and shall be due under the Revolving Note, if any, of Swing Line
Lender.  Company hereby authorizes Administrative Agent and Swing Line Lender to
charge Company’s accounts with Administrative Agent and Swing Line Lender (up to
the amount available in each such account) in order to immediately pay Swing
Line Lender the amount of the Refunded Swing Line Loans to the extent the
proceeds of such Revolving Loans made by Revolving Lenders, including the
Revolving Loan deemed to be made by Swing Line Lender, are not sufficient to
repay in full the Refunded Swing Line Loans.  If any portion of any such amount
paid (or deemed to be paid) to Swing Line Lender should be recovered by or on
behalf of Company from Swing Line Lender in any bankruptcy proceeding, in any
assignment for the benefit of creditors or otherwise, the loss of the amount so
recovered shall be ratably shared among all Lenders in the manner contemplated
by subsection 10.5.

(c)                                  Swing Line Loan Assignments.  On the
Funding Date of each Swing Line Loan, each Revolving Lender shall be deemed to,
and hereby agrees to, purchase an assignment of such Swing Line Loan in an
amount equal to its Pro Rata Share.  If for any reason (1) Revolving Loans are
not made upon the request of Swing Line Lender as provided in the immediately
preceding paragraph in an amount sufficient to repay any amounts owed to Swing
Line Lender in respect of any outstanding Swing Line Loans or (2) the Revolving
Loan Commitments are terminated at a time when any Swing Line Loans are
outstanding, upon notice from Swing Line Lender as provided below, each
Revolving Lender shall fund

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the purchase of such assignment in an amount equal to its Pro Rata Share
(calculated, in the case of the foregoing clause (2), immediately prior to such
termination of the Revolving Loan Commitments) of the unpaid amount of such
Swing Line Loans together with accrued interest thereon.  Upon one Business
Day’s notice from Swing Line Lender to Administrative Agent, who shall promptly
notify the Revolving Lenders, each Revolving Lender shall deliver to
Administrative Agent for the benefit of Swing Line Lender such amount in same
day funds at the Funding and Payment Account.  Without limiting the effect of
the deemed assignment described in the preceding sentence, in order to further
evidence such assignment (and without prejudice to the effectiveness of the
assignment provisions set forth above), each Revolving Lender agrees to enter
into an Assignment Agreement at the request of Swing Line Lender in form and
substance reasonably satisfactory to Swing Line Lender.  In the event any
Revolving Lender fails to make available to Swing Line Lender any amount as
provided in this paragraph, Swing Line Lender shall be entitled to recover such
amount on demand from such Revolving Lender together with interest thereon at
the rate customarily used by Swing Line Lender for the correction of errors
among banks for three Business Days and thereafter at the Base Rate.  In the
event Swing Line Lender receives a payment of any amount in which other
Revolving Lenders have purchased assignments as provided in this paragraph,
Swing Line Lender shall promptly remit such payment to Administrative Agent for
distribution to each such other Revolving Lender its Pro Rata Share of such
payment.

(d)                                 Revolving Lenders’ Obligations.  Anything
contained herein to the contrary notwithstanding, each Revolving Lender’s
obligation to make Revolving Loans for the purpose of repaying any Refunded
Swing Line Loans pursuant to subsection 2.1A(iii)(b) and each Revolving Lender’s
obligation to purchase an assignment of any unpaid Swing Line Loans pursuant to
the immediately preceding paragraph shall be absolute and unconditional and
shall not be affected by any circumstance, including (1) any set-off,
counterclaim, recoupment, defense or other right which such Revolving Lender may
have against Swing Line Lender, Company or any other Person for any reason
whatsoever; (2) the occurrence or continuation of an Event of Default or a
Potential Event of Default; (3) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Company
or any of its Subsidiaries; (4) any breach of this Agreement or any other Loan
Document by any party thereto; or (5) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided that such
obligations of each Revolving Lender are subject to the condition that (x) Swing
Line Lender believed in good faith that all conditions under Section 4 to the
making of the applicable Refunded Swing Line Loans or other unpaid Swing Line
Loans, as the case may be, were satisfied at the time such Refunded Swing Line
Loans or unpaid Swing Line Loans were made or (y) the satisfaction of any such
condition not satisfied had been waived in accordance with subsection 10.6 prior
to or at the time such Refunded Swing Line Loans or other unpaid Swing Line
Loans were made.

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B.                                    Borrowing Mechanics.  Term Loans or
Revolving Loans made as Base Rate Loans on any Funding Date (other than
Revolving Loans made pursuant to a request by Swing Line Lender pursuant to
subsection 2.1A(iii) or Revolving Loans made pursuant to subsection 3.3B) shall
be in an aggregate minimum amount of $1,000,000 and multiples of $100,000 in
excess of that amount.  Term Loans or Revolving Loans made on any Funding Date
as Eurodollar Rate Loans with a particular Interest Period shall be in an
aggregate minimum amount of $2,000,000 and multiples of $100,000 in excess of
that amount.  Swing Line Loans made on any Funding Date shall be in an aggregate
minimum amount of $500,000 and multiples of $100,000 in excess of that amount. 
Whenever Company desires that Lenders make Term Loans or Revolving Loans it
shall deliver to Administrative Agent a duly executed Notice of Borrowing no
later than 11:00 A.M. (New York City time) at least three Business Days in
advance of the proposed Funding Date (in the case of a Eurodollar Rate Loan) or
at least one Business Day in advance of the proposed Funding Date (in the case
of a Base Rate Loan).  Whenever Company desires that Swing Line Lender make a
Swing Line Loan, it shall deliver to Swing Line Lender at the Swing Line Funding
and Payment Office a duly executed Notice of Borrowing no later than 12:00 Noon
(New York City time) on the proposed Funding Date.  Term Loans and Revolving
Loans may be continued as or converted into Base Rate Loans and Eurodollar Rate
Loans in the manner provided in subsection 2.2D.  In lieu of delivering a Notice
of Borrowing, Company may give Administrative Agent (or in the case of Swing
Line Loans, Swing Line Lender and Administrative Agent), as applicable,
telephonic notice by the required time of any proposed borrowing under this
subsection 2.1B; provided that such notice shall be promptly confirmed in
writing by delivery of a duly executed Notice of Borrowing to Administrative
Agent (or Swing Line Lender in the case of Swing Line Loans) on or before the
applicable Funding Date.

Neither Administrative Agent nor any Lender (including Swing Line Lender) shall
incur any liability to Company in acting upon any telephonic notice referred to
above that Administrative Agent (or Swing Line Lender, as applicable) believes
in good faith to have been given by an Officer or other person authorized to
borrow on behalf of Company or for otherwise acting in good faith under this
subsection 2.1B or under subsection 2.2D, and upon funding of Loans by Lenders,
and upon conversion or continuation of the applicable basis for determining the
interest rate with respect to any Loans pursuant to subsection 2.2D, in each
case in accordance with this Agreement, pursuant to any such telephonic notice
Company shall have effected Loans or a conversion or continuation, as the case
may be, hereunder.

Company shall notify Administrative Agent (or in the case of Swing Line Loans,
Swing Line Lender and Administrative Agent) prior to the funding of any Loans in
the event that any of the matters to which Company is required to certify in the
applicable Notice of Borrowing is no longer true and correct as of the
applicable Funding Date, and the acceptance by Company of the proceeds of any
Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.

Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice of
Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable and Company shall be bound to make a borrowing in
accordance therewith.

35

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C.                                    Disbursement of Funds.  All Term Loans and
Revolving Loans under this Agreement shall be made by Lenders simultaneously and
proportionately to their respective Pro Rata Shares, it being understood that
neither Administrative Agent nor any Lender shall be responsible for any default
by any other Lender in that other Lender’s obligation to make a Loan requested
hereunder nor shall the Commitment of any Lender to make the particular type of
Loan requested or Pro Rata Share of any Lender be increased or decreased as a
result of a default by any other Lender in that other Lender’s obligation to
make a Loan requested hereunder.

Promptly after receipt by Administrative Agent of a Notice of Borrowing pursuant
to subsection 2.1B (or telephonic notice in lieu thereof), Administrative Agent
shall notify each Lender for that type of Loan (other than Swing Line Lender in
the case of a Swing Line Loan borrowing) of the proposed borrowing.  Each such
Lender (other than Swing Line Lender) shall make the amount of its Loan
available to Administrative Agent at the Funding and Payment Office not later
than 1:00 P.M. (New York City time) on the applicable Funding Date in same day
funds in Dollars, at the Funding and Payment Office.  Swing Line Lender shall
make the amount of its Loan available directly to Company as provided below. 
Except as provided in subsection 2.1A(iii) or subsection 3.3B with respect to
Revolving Loans used to repay Refunded Swing Line Loans or to reimburse any
Issuing Lender for the amount of a drawing under a Letter of Credit issued by
it, upon satisfaction or waiver of the conditions precedent specified in
subsections 4.1 (in the case of Loans made on the Closing Date) and 4.2 (in the
case of all Loans), Administrative Agent or Swing Line Lender, as the case may
be, shall make the proceeds of such Loans available to Company on the applicable
Funding Date by causing an amount of same day funds in Dollars equal to the
proceeds of all such Loans received by Administrative Agent from Lenders or to
be disbursed by Swing Line Lender, as applicable, to be credited to the account
designated by Company in the applicable Notice of Borrowing.

Unless Administrative Agent shall have been notified by any Lender prior to a
Funding Date for any Loans that such Lender does not intend to make available to
Administrative Agent the amount of such Lender’s Loan requested on such Funding
Date, Administrative Agent may assume that such Lender has made such amount
available to Administrative Agent on such Funding Date and Administrative Agent
may, in its sole discretion, but shall not be obligated to, make available to
Company a corresponding amount on such Funding Date.  If such corresponding
amount is not in fact made available to Administrative Agent by such Lender,
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
customary rate set by Administrative Agent for the correction of errors among
banks for three Business Days and thereafter at the Base Rate.  If such Lender
does not pay such corresponding amount forthwith upon Administrative Agent’s
demand therefor, Administrative Agent shall promptly notify Company and Company
shall immediately pay such corresponding amount to Administrative Agent together
with interest thereon, for each day from such Funding Date until the date such
amount is paid to Administrative Agent, at the rate payable under this Agreement
for Base Rate Loans.  Nothing in this subsection 2.1C shall be deemed to relieve
any Lender from its obligation to fulfill its Commitments hereunder or to
prejudice any rights that Company may have against any Lender as a result of any
default by such Lender hereunder.

36

--------------------------------------------------------------------------------

D.                                    The Register.  Administrative Agent,
acting for these purposes solely as an agent of Company (it being acknowledged
that Administrative Agent, in such capacity, and its officers, directors,
employees, agent and affiliates shall constitute Indemnitees under subsection
10.3), shall maintain (and make available for inspection by Company and Lenders
upon reasonable prior notice at reasonable times) at its address referred to in
subsection 10.8 a register for the recordation of, and shall record, the names
and addresses of Lenders and the Term Loan Commitment, Revolving Loan
Commitment, Swing Line Loan Commitment, Term Loans, Revolving Loans and Swing
Line Loans of each Lender from time to time (the “Register”).  Company,
Administrative Agent and Lenders shall, absent manifest error, deem and treat
the Persons listed as Lenders in the Register as the holders and owners of the
corresponding Commitments and Loans listed therein for all purposes hereof; all
amounts owed with respect to any Commitment or Loan shall be owed to the Lender
listed in the Register as the owner thereof; and any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be conclusive
and binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Loans.  Each Lender shall record on its internal
records the amount of its Loans and Commitments and each payment in respect
hereof, and any such recordation shall be conclusive and binding on Company,
absent manifest error, subject to the entries in the Register, which shall,
absent manifest error, govern in the event of any inconsistency with any
Lender’s records.  Failure to make any recordation in the Register or in any
Lender’s records, or any error in such recordation, shall not affect any Loans
or Commitments or any Obligations in respect of any Loans.

E.                                      Optional Notes.  If so requested by any
Lender by written notice to Company at least two Business Days prior to the
Closing Date or at any time thereafter, Company shall execute and deliver to
such Lender (and/or, if applicable and if so specified in such notice, to any
Person who is an assignee of such Lender pursuant to subsection 10.1) on the
Closing Date (or, if such notice is delivered after the Closing Date, promptly
after Company’s receipt of such notice) a promissory note or promissory notes to
evidence such Lender’s Term Loan, Revolving Loans or Swing Line Loans,
substantially in the form of Exhibit IV, Exhibit VI or Exhibit VII annexed
hereto, respectively, with appropriate insertions.

2.2                               Interest on the Loans.

A.                                    Rate of Interest.  Subject to the
provisions of subsections 2.6 and 2.7, each Term Loan and each Revolving Loan
shall bear interest on the unpaid principal amount thereof from the date made
through maturity (whether by acceleration or otherwise) at a rate determined by
reference to the Base Rate or the Eurodollar Rate.  Subject to the provisions of
subsection 2.7, each Swing Line Loan shall bear interest on the unpaid principal
amount thereof from the date made through maturity (whether by acceleration or
otherwise) at a rate determined by reference to the Base Rate.  The applicable
basis for determining the rate of interest with respect to any Term Loan or any
Revolving Loan shall be selected by Company initially at the time a Notice of
Borrowing is given with respect to such Loan pursuant to subsection 2.1B
(subject to the last sentence of subsection 2.1B), and the basis for determining
the interest rate with respect to any Term Loan or any Revolving Loan may be
changed from time to time pursuant to subsection 2.2D (subject to the last
sentence of subsection 2.1B).  If on any day a Term Loan or Revolving Loan is
outstanding with respect to which notice has not been delivered

37

--------------------------------------------------------------------------------

to Administrative Agent in accordance with the terms of this Agreement
specifying the applicable basis for determining the rate of interest, then for
that day that Loan shall bear interest determined by reference to the Base Rate.

(i)                                     Subject to the provisions of subsections
2.2E, 2.2G and 2.7, the Term Loans shall bear interest through maturity as
follows:

(a)                                  if a Base Rate Loan, then at the sum of the
Base Rate plus the Base Rate Margin set forth in the table below opposite the
applicable Consolidated Leverage Ratio for the four-Fiscal Quarter period for
which the applicable Pricing Certificate has been delivered pursuant to
subsection 6.1(v); or

(b)                                 if a Eurodollar Rate Loan, then at the sum
of the Eurodollar Rate plus the Eurodollar Rate Margin set forth in the table
below opposite the applicable Consolidated Leverage Ratio for the four-Fiscal
Quarter period for which the applicable Pricing Certificate has been delivered
pursuant to subsection 6.1(v):

 

Consolidated
Leverage Ratio

 

Eurodollar Rate
Margin

 

Base Rate Margin

 

 

 

 

 

 

 

 

 

Greater than

 

3.50:1.00

 

2.000

%

1.000

%

 

 

 

 

 

 

 

 

Less than or equal to

 

3.50:1.00

 

1.750

%

0.750

%

provided that, for the first six months after the Closing Date, the applicable
margin for Term Loans that are Eurodollar Rate Loans shall be 2.000% per annum
and the applicable margin for Term Loans that are Base Rate Loans shall be
1.000% per annum.

(ii)                                  Subject to the provisions of subsections
2.2E, 2.2G and 2.7, the Revolving Loans shall bear interest through maturity as
follows:

(a)                                  if a Base Rate Loan, then at the sum of the
Base Rate plus the Base Rate Margin set forth in the table below opposite the
applicable Consolidated Leverage Ratio for the four-Fiscal Quarter period for
which the applicable Pricing Certificate has been delivered pursuant to
subsection 6.1(v); or

(b)                                 if a Eurodollar Rate Loan, then at the sum
of the Eurodollar Rate plus the Eurodollar Rate Margin set forth in the table
below opposite the applicable Consolidated Leverage Ratio for the four-Fiscal
Quarter period for which the applicable Pricing Certificate has been delivered
pursuant to subsection 6.1(v):

38

--------------------------------------------------------------------------------

 

 

Consolidated
Leverage Ratio

 

Eurodollar Rate
Margin

 

Base
Rate Margin

 

 

 

 

 

 

 

 

 

Greater than
or equal to

 

4.50:1.00

 

2.500

%

1.500

%

 

 

 

 

 

 

 

 

Greater than
or equal to
but less than

 

4.00:1.00
4.50:1.00

 

2.250

%

1.250

%

 

 

 

 

 

 

 

 

Greater than
or equal to
but less than

 

3.50:1.00
4.00:1.00

 

2.000

%

1.000

%

 

 

 

 

 

 

 

 

Greater than
or equal to
but less than

 

3.00:1.00
3.50:1.00

 

1.875

%

0.875

%

 

 

 

 

 

 

 

 

Less than

 

3.00:1.00

 

1.750

%

0.750

%

 

provided that, for the first six months after the Closing Date, the applicable
margin for Revolving Loans that are Eurodollar Rate Loans shall be 2.250% per
annum and the applicable margin for Revolving Loans that are Base Rate Loans
shall be 1.250% per annum.

(iii)                               Upon delivery of the Pricing Certificate by
Company to Administrative Agent pursuant to subsection 6.1(v), the Base Rate
Margin and the Eurodollar Rate Margin for Term Loans and Revolving Loans shall
automatically be adjusted in accordance with such Pricing Certificate, such
adjustment to become effective on the next succeeding Business Day following the
receipt by Administrative Agent of such Pricing Certificate (subject to the
provisions of the foregoing clauses (i) and (ii)); provided that, if at any time
a Pricing Certificate is not delivered at the time required pursuant to
subsection 6.1(v), from the time such Pricing Certificate was required to be
delivered until the Business Day next succeeding delivery of such Pricing
Certificate, the applicable margins shall be the maximum percentage amount for
the relevant Loan set forth above.

(iv)                              Subject to the provisions of subsections 2.2E,
2.2G and 2.7, the Swing Line Loans shall bear interest through maturity at the
sum of the Base Rate plus the applicable Base Rate Margin for Revolving Loans.

39

--------------------------------------------------------------------------------

B.                                    Interest Periods.  In connection with each
Eurodollar Rate Loan, Company may, pursuant to the applicable Notice of
Borrowing or Notice of Conversion/Continuation, as the case may be, select an
interest period (each an “Interest Period”) to be applicable to such Loan, which
Interest Period shall be, at Company’s option, either a one, two, three or six
month period; provided that:

(i)                                     the initial Interest Period for any
Eurodollar Rate Loan shall commence on the Funding Date in respect of such Loan,
in the case of a Loan initially made as a Eurodollar Rate Loan, or on the date
specified in the applicable Notice of Conversion/Continuation, in the case of a
Loan converted to a Eurodollar Rate Loan;

(ii)                                  in the case of immediately successive
Interest Periods applicable to a Eurodollar Rate Loan continued as such pursuant
to a Notice of Conversion/Continuation, each successive Interest Period shall
commence on the day on which the next preceding Interest Period expires;

(iii)                               if an Interest Period would otherwise expire
on a day that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of the month
after which no further Business Day occurs in such month, such Interest Period
shall expire on the next preceding Business Day;

(iv)                              any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (v) of this subsection 2.2B, end on the last Business
Day of a calendar month;

(v)                                 no Interest Period with respect to any
portion of the Term Loans shall extend beyond July 28, 2013 and no Interest
Period with respect to any portion of the Revolving Loans shall extend beyond
the Revolving Loan Commitment Termination Date;

(vi)                              no Interest Period with respect to any type of
Term Loans shall extend beyond a date on which Company is required to make a
scheduled payment of principal of such type of Term Loans, unless the sum of (a)
the aggregate principal amount of such type of Term Loans that are Base Rate
Loans plus (b) the aggregate principal amount of such type of Term Loans that
are Eurodollar Rate Loans with Interest Periods expiring on or before such date
equals or exceeds the principal amount required to be paid on such type of Term
Loans on such date;

(vii)                           there shall be no more than ten Interest Periods
outstanding at any time; and

(viii)                        in the event Company fails to specify an Interest
Period for any Eurodollar Rate Loan in the applicable Notice of Borrowing or
Notice of Conversion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.

40

--------------------------------------------------------------------------------

C.                                    Interest Payments.  Subject to the
provisions of subsection 2.2E, interest on each Loan shall be payable in arrears
on and to each Interest Payment Date applicable to that Loan, upon any
prepayment of that Loan (to the extent accrued on the amount being prepaid) and
at maturity (including final maturity); provided that in the event any Swing
Line Loans or any Revolving Loans that are Base Rate Loans are prepaid pursuant
to subsection 2.4B(i), interest accrued on such Loans through the date of such
prepayment shall be payable on the next succeeding Interest Payment Date
applicable to Base Rate Loans (or, if earlier, at final maturity).

D.                                    Conversion or Continuation.  Subject to
the provisions of subsection 2.6, Company shall have the option (i) to convert
at any time all or any part of its outstanding Term Loans or Revolving Loans
equal to $2,000,000 and multiples of $100,000 in excess of that amount from
Loans bearing interest at a rate determined by reference to one basis to Loans
bearing interest at a rate determined by reference to an alternative basis or
(ii) upon the expiration of any Interest Period applicable to a Eurodollar Rate
Loan, to continue all or any portion of such Loan equal to $2,000,000 and
multiples of $100,000 in excess of that amount as a Eurodollar Rate Loan;
provided, however, that a Eurodollar Rate Loan may only be converted into a Base
Rate Loan on the expiration date of an Interest Period applicable thereto.

Company shall deliver a duly executed Notice of Conversion/Continuation to
Administrative Agent no later than 11:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan).  In lieu of delivering a Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a duly executed Notice of Conversion/Continuation to
Administrative Agent on or before the proposed conversion/continuation date. 
Administrative Agent shall notify each Lender of any Loan subject to any Notice
of Conversion/Continuation.

Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice of
Conversion/Continuation for conversion to, or continuation of, a Eurodollar Rate
Loan (or telephonic notice in lieu thereof) shall be irrevocable and Company
shall be bound to effect a conversion or continuation in accordance therewith.

E.                                      Default Rate.  Upon the occurrence and
during the continuance of any Event of Default resulting from the failure to pay
when due, whether at stated maturity, by notice of prepayment, by acceleration
or otherwise, any principal payments on the Loans, any interest payments thereon
or any fees and other amounts due and payable hereunder, the outstanding
principal amount of all Loans and, to the extent permitted by applicable law,
such interest payments and fees and other amounts shall thereafter bear interest
(including post-petition interest in any proceeding under the Bankruptcy Code or
other applicable bankruptcy laws) payable upon demand at a rate that is 2% per
annum in excess of the interest rate otherwise payable under this Agreement with
respect to the applicable Loans (or, in the case of any such fees and other
amounts, at a rate which is 2% per annum in excess of the interest rate
otherwise payable under this Agreement for Base Rate Loans that are Revolving
Loans); provided that, in the case of Eurodollar Rate Loans, upon the expiration
of the Interest Period in effect at the time

41

--------------------------------------------------------------------------------

any such increase in interest rate is effective such Eurodollar Rate Loans shall
thereupon become Base Rate Loans and shall thereafter bear interest payable upon
demand at a rate which is 2% per annum in excess of the interest rate otherwise
payable under this Agreement for Base Rate Loans.  Payment or acceptance of the
increased rates of interest provided for in this subsection 2.2E is not a
permitted alternative to timely payment and shall not constitute a waiver of any
Event of Default or otherwise prejudice or limit any rights or remedies of
Administrative Agent or any Lender.

F.                                      Computation of Interest.  Interest on
the Loans shall be computed (i) in the case of Base Rate Loans, on the basis of
a 365-day or 366-day year, as the case may be, and (ii) in the case of
Eurodollar Rate Loans, on the basis of a 360-day year, in each case for the
actual number of days elapsed in the period during which it accrues.  In
computing interest on any Loan, the date of the making of such Loan or the first
day of an Interest Period applicable to such Loan or, with respect to a Base
Rate Loan being converted from a Eurodollar Rate Loan, the date of conversion of
such Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted to a Eurodollar Rate Loan, the date of conversion of such Base
Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded;
provided that if a Loan is repaid on the same day on which it is made, one day’s
interest shall be paid on that Loan.

G.                                    Maximum Rate.  Notwithstanding the
foregoing provisions of this subsection 2.2, in no event shall the rate of
interest payable by Company with respect to any Loan exceed the maximum rate of
interest permitted to be charged under applicable law.

2.3                               Fees.

A.                                    Commitment Fees.  Company agrees to pay to
Administrative Agent, for distribution to each Revolving Lender in proportion to
that Lender’s Pro Rata Share, commitment fees for the period from and including
the Closing Date to and excluding the Revolving Loan Commitment Termination Date
equal to the excess of the Revolving Loan Commitment Amount on each day during
such period over the sum of (i) the aggregate principal amount of outstanding
Revolving Loans (but not any outstanding Swing Line Loans) on such day plus
(ii) the Letter of Credit Usage on such day multiplied by a rate per annum equal
to the percentage set forth in the table below opposite the applicable
Consolidated Leverage Ratio for the four-Fiscal Quarter period for which the
applicable Pricing Certificate has been delivered pursuant to subsection 6.1(v):

42

--------------------------------------------------------------------------------

 

 

Consolidated
Leverage Ratio

 

Commitment
Fee Percentage

 

 

 

 

 

 

 

Greater than
or equal to

 

4.50:1.00

 

0.500

%

 

 

 

 

 

 

Greater than
or equal to
but less than

 

4.00:1.00
4.50:1.00

 

0.500

%

 

 

 

 

 

 

Greater than
or equal to
but less than

 

3.50:1.00
4.00:1.00

 

0.375

%

 

 

 

 

 

 

Greater than
or equal to
but less than

 

3.00:1.00
3.50:1.00

 

0.375

%

 

 

 

 

 

 

Less than

 

3.00:1.00

 

0.250

%

 

provided that, for the first six months after the Closing Date, the applicable
commitment fee percentage shall be 0.500%.  Such commitment fees to be
calculated on the basis of a 360-day year and the actual number of days elapsed
and to be payable quarterly in arrears on the last Business Day of each of
January, April, July and October of each year, commencing on the first such date
to occur after the Closing Date, and on the Revolving Loan Commitment
Termination Date.

B.                                    Other Fees.  Company agrees to pay to
Administrative Agent and the Syndication Agent such fees in the amounts and at
the times separately agreed upon between Company, Administrative Agent and the
Syndication Agent.

2.4                               Repayments, Prepayments and Reductions in
Revolving Loan Commitments; General Provisions Regarding Payments; Application
of Proceeds of Collateral and Payments Under Guaranties.

A.                                    Scheduled Payments of Term Loans.  Company
shall make principal payments on the Term Loans in installments on the dates and
in the amounts set forth below:

43

--------------------------------------------------------------------------------

 

Date

 

Scheduled Repayment

 

October 31, 2006

 

$

375,000

 

 

 

 

 

January 31, 2007

 

$

375,000

 

April 30, 2007

 

$

375,000

 

July 31, 2007

 

$

375,000

 

October 31, 2007

 

$

375,000

 

 

 

 

 

January 31, 2008

 

$

375,000

 

April 30, 2008

 

$

375,000

 

July 31, 2008

 

$

375,000

 

October 31, 2008

 

$

375,000

 

 

 

 

 

January 31, 2009

 

$

375,000

 

April 30, 2009

 

$

375,000

 

July 31, 2009

 

$

375,000

 

October 31, 2009

 

$

375,000

 

 

 

 

 

January 31, 2010

 

$

375,000

 

April 30, 2010

 

$

375,000

 

July 31, 2010

 

$

375,000

 

October 31, 2010

 

$

375,000

 

 

 

 

 

January 31, 2011

 

$

375,000

 

April 30, 2011

 

$

375,000

 

July 31, 2011

 

$

375,000

 

October 31, 2011

 

$

375,000

 

 

 

 

 

January 31, 2012

 

$

375,000

 

April 30, 2012

 

$

375,000

 

July 31, 2012

 

$

375,000

 

October 31, 2012

 

$

375,000

 

 

 

 

 

January 31, 2013

 

$

375,000

 

April 30, 2013

 

$

375,000

 

 

 

 

 

July 28, 2013

 

$

139,875,000

 

 

 

 

 

Total

 

$

150,000,000

 

; provided that the scheduled installments of principal of the Term Loans set
forth above shall be reduced in connection with any voluntary or mandatory
prepayments of the Term Loans in

44

--------------------------------------------------------------------------------

accordance with subsection 2.4B(iv); and provided, further that the Term Loans
and all other amounts owed hereunder with respect to the Term Loans shall be
paid in full no later than July 28, 2013, and the final installment payable by
Company in respect of the Term Loans on such date shall be in an amount, if such
amount is different from that specified above, sufficient to repay all amounts
owing by Company under this Agreement with respect to the Term Loans.

B.            Prepayments and Reductions in Revolving Loan Commitments.

(i)            Voluntary Prepayments. Company may, upon delivery of a Notice of
Prepayment to Administrative Agent or upon telephonic notice to Administrative
Agent promptly confirmed in writing by delivery of a Notice of Prepayment, on or
prior to 11:00 A.M. (New York City time) on the date of prepayment, at any time
and from time to time prepay any Swing Line Loan on any Business Day in whole or
in part in an aggregate minimum amount of $500,000 and multiples of $100,000 in
excess of that amount. Company may, upon not less than one Business Day’s prior
written notice by delivery of a Notice of Prepayment or telephonic notice
promptly confirmed in writing by delivery of a Notice of Prepayment, in the case
of Base Rate Loans, and three Business Days’ prior written notice by delivery of
a Notice of Prepayment or telephonic notice promptly confirmed in writing by
delivery of a Notice of Prepayment, in the case of Eurodollar Rate Loans, in
each case given to Administrative Agent by 11:00 A.M. (New York City time) on
the date required (who will promptly notify each Lender whose Loans are to be
prepaid of such prepayment), at any time and from time to time prepay any Term
Loans or Revolving Loans on any Business Day in whole or in part in an aggregate
minimum amount of $1,000,000 and multiples of $100,000 in excess of that amount;
provided, however, that a Eurodollar Rate Loan may only be prepaid on the
expiration of the Interest Period applicable thereto unless Company compensates
Lenders for all breakage costs resulting from such payment or conversion
pursuant to subsection 2.6D. Any written or telephonic notice of voluntary
prepayment delivered pursuant to this subsection 2.4B(i) shall be irrevocable
and once such Notice of Prepayment has been given as aforesaid, the principal
amount of the Loans specified in such notice shall become due and payable on the
prepayment date specified therein; provided that a Notice of Prepayment
delivered by Company may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by Company (by notice to Administrative Agent on or prior to the
specified effective date) if such condition is not satisfied. Any such voluntary
prepayment shall be applied as specified in subsection 2.4B(iv).

(ii)           Voluntary Reductions of Revolving Loan Commitments. Company may,
upon not less than three Business Days’ prior written notice by delivery of a
Notice of Prepayment to Administrative Agent or upon telephonic notice promptly
confirmed in writing by the delivery of a Notice of Prepayment to Administrative
Agent or upon such lesser number of days’ prior written or telephonic notice, as
determined by Administrative Agent in its sole discretion, at any time and from
time to time, terminate in whole or permanently reduce in part, without premium
or penalty, the Revolving Loan Commitments in an amount up to the amount by
which the Revolving Loan Commitment Amount exceeds the Total Utilization of
Revolving Loan Commitments at the time of such proposed termination or
reduction; provided that any such partial reduction of the

45

--------------------------------------------------------------------------------

Revolving Loan Commitment Amount shall be in an aggregate minimum amount of
$3,000,000 and multiples of $1,000,000 in excess of that amount. Company’s
notice to Administrative Agent (who will promptly notify each Revolving Lender
of such notice) shall designate the date (which shall be a Business Day) of such
termination or reduction and the amount of any partial reduction, and such
termination or reduction shall be effective on the date specified in Company’s
notice and shall reduce the amount of the Revolving Loan Commitment of each
Revolving Lender proportionately to its Pro Rata Share. Any such voluntary
reduction of the Revolving Loan Commitment Amount shall be applied as specified
in subsection 2.4B(iv). All written or telephonic notices of termination or
reduction of the Revolving Loan Commitments delivered pursuant to this
subsection 2.4B(ii) shall be irrevocable and Company shall be bound to the
termination or reduction of the Revolving Loan Commitments referenced in such
notice; provided that a notice of termination or reduction of the Revolving Loan
Commitments delivered by Company may state that such notice is conditioned upon
the effectiveness of other credit facilities, in which case such notice may be
revoked by Company (by notice to Administrative Agent on or prior to the
specified effective date) if such condition is not satisfied.

(iii)          Mandatory Prepayments and Mandatory Reductions of Revolving Loan
Commitments. The Loans shall be prepaid and/or the Revolving Loan Commitment
Amount shall be permanently reduced in the amounts and under the circumstances
set forth below, all such prepayments and/or reductions to be applied as set
forth below or as more specifically provided in subsection 2.4B(iv) and
subsection 2.4D and shall be made after delivery of the notice required by
subsection 2.4B(iii)(f):

(a)           Prepayments and Reductions From Net Asset Sale Proceeds. No later
than the fifth Business Day following the date of receipt by Company or any of
its Domestic Subsidiaries of any Net Asset Sale Proceeds in respect of any Asset
Sale, Company shall either (1) prepay the Loans and/or the Revolving Loan
Commitment Amount shall be permanently reduced in an aggregate amount equal to
such Net Asset Sale Proceeds or (2), so long as no Event of Default shall have
occurred and be continuing and to the extent that aggregate Net Asset Sale
Proceeds for the Fiscal Year in which such proceeds are received do not exceed
$15,000,000 deliver to Administrative Agent an Officer’s Certificate setting
forth (x) that portion of such Net Asset Sale Proceeds that Company or such
Subsidiary intends to reinvest in equipment or other productive assets of the
general type used in the business of Company and its Subsidiaries within 270
days of such date of receipt and (y) the proposed use of such portion of the Net
Asset Sale Proceeds and such other information with respect to such reinvestment
as Administrative Agent may reasonably request, and Company shall, or shall
cause one or more of its Subsidiaries to, promptly and diligently apply such
portion to such reinvestment purposes; provided, however, that, pending such
reinvestment, such portion of the Net Asset Sale Proceeds shall be applied to
prepay outstanding Revolving Loans (without a reduction in the Revolving Loan
Commitment Amount) to the full extent thereof. In addition, Company shall, no
later than 270 days after receipt of such Net Asset Sale Proceeds that have not
theretofore been applied to the Obligations or that have not been so reinvested
as provided above,

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make an additional prepayment of the Loans (and/or the Revolving Loan Commitment
Amount shall be permanently reduced) in the full amount of all such Net Asset
Sale Proceeds.

(b)           Prepayments and Reductions from Net Insurance/Condemnation
Proceeds. No later than the fifth Business Day following the date of receipt by
Administrative Agent or by Company or any of its Domestic Subsidiaries of any
Net Insurance/Condemnation Proceeds that are required to be applied to prepay
the Loans and/or reduce the Revolving Loan Commitment Amount pursuant to the
provisions of subsection 6.4C, Company shall prepay the Loans and/or the
Revolving Loan Commitment Amount shall be permanently reduced in an aggregate
amount equal to the amount of such Net Insurance/Condemnation Proceeds.

(c)           Prepayments and Reductions Due to Issuance of Equity Securities.
Not later than the third Business Day following the date of receipt of the Net
Securities Proceeds from the issuance of any Capital Stock of Company or of
Holdings or of any Domestic Subsidiary of Company, Company shall prepay the
Loans and/or the Revolving Loan Commitment Amount shall be permanently reduced
in an aggregate amount equal to 50% of such Net Securities Proceeds (other than
Net Securities Proceeds resulting from the issuance of Capital Stock of Holdings
(i) to (or a capital contribution by) LGP or any Permitted Transferee or
(ii) pursuant to employee and executive compensation plans); provided, that no
prepayment shall be required hereunder with respect to the receipt of any Net
Securities Proceeds described in this subsection 2.4B(iii)(c) to the extent that
the Consolidated Leverage Ratio as of the last day of the Fiscal Quarter
immediately preceding the date on which such Net Securities Proceeds are
received is less than 3.50:1.00.

(d)           Prepayments and Reductions Due to Issuance of Indebtedness. Not
later than the third Business Day following the date of receipt of the Net
Securities Proceeds from the issuance of any Indebtedness of Company, Holdings
or any of its Domestic Subsidiaries after the Closing Date, other than
Indebtedness permitted pursuant to subsection 7.1, Company shall prepay the
Loans and/or the Revolving Loan Commitment Amount shall be permanently reduced
in an aggregate amount equal to such Net Securities Proceeds.

(e)           Prepayments and Reductions from Consolidated Excess Cash Flow. In
the event that there shall be Consolidated Excess Cash Flow for any Fiscal Year
(commencing with the Fiscal Year ending June 30, 2007), Company shall, no later
than 105 days after the end of such Fiscal Year, prepay the Loans and/or the
Revolving Loan Commitment Amount shall be permanently reduced in an aggregate
amount equal to (i) 50% of such Consolidated Excess Cash Flow minus
(ii) voluntary repayments of the Loans (excluding repayments of Revolving Loans
or Swingline Loans, except to the extent the Revolving Commitments are
permanently reduced in connection with such repayments); provided that for any

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Fiscal Year in which the Consolidated Leverage Ratio as of the last day of such
Fiscal Year is less than 3.00:1.00 no prepayment shall be required hereunder.

(f)            Calculations of Net Proceeds Amounts; Additional Prepayments and
Reductions Based on Subsequent Calculations. Company shall provide
Administrative Agent with not less than one Business Day’s prior written notice
by delivery of a Notice of Prepayment or prior telephonic notice promptly
confirmed in writing by the delivery of a Notice of Prepayment, of any
prepayment of the Loans pursuant to subsections 2.4B(iii)(a)-(e). Such written
or telephonic notice shall be irrevocable and Company shall be bound to make the
mandatory prepayment referenced in such notice on the date indicated in such
notice. Administrative Agent shall promptly notify each Lender of such
prepayment and of the amount of the prepayment proposed to be applied to such
Lender’s Loans. Concurrently with any prepayment of the Loans and/or reduction
of the Revolving Loan Commitment Amount pursuant to subsections
2.4B(iii)(a)-(e), Company shall deliver to Administrative Agent an Officer’s
Certificate demonstrating the calculation of the amount of the applicable Net
Asset Sale Proceeds, Net Insurance/Condemnation Proceeds, Net Securities
Proceeds, or Consolidated Excess Cash Flow, as the case may be, that gave rise
to such prepayment and/or reduction. In the event that Company shall
subsequently determine that the actual amount was greater than the amount set
forth in such Officer’s Certificate, Company shall promptly make an additional
prepayment of the Loans (and/or, if applicable, the Revolving Loan Commitment
Amount shall be permanently reduced) in an amount equal to the amount of such
excess, and Company shall concurrently therewith deliver to Administrative Agent
an Officer’s Certificate demonstrating the derivation of the additional amount
resulting in such excess.

(g)           Prepayments Due to Reductions or Restrictions of Revolving Loan
Commitments. Company shall from time to time prepay first the Swing Line Loans
and second the Revolving Loans (and, to the extent necessary after such
prepayment, cash collateralize any outstanding Letters of Credit) to the extent
necessary so that the Total Utilization of Revolving Loan Commitments shall not
at any time exceed the Revolving Loan Commitment Amount then in effect.

(h)           Prepayments Due to Failure to Consummate the Acquisition in
accordance with subsection 6.10. In the event the Acquisition is not consummated
in accordance with subsection 6.10 of this Agreement, not later than noon
Pacific time Monday August 7, 2006, Company shall prepay the Term Loans in an
aggregate amount equal to the amounts drawn on the Closing Date to fund the
Acquisition Financing Requirements.

(iv)          Application of Prepayments.

(a)           Application of Voluntary Prepayments by Type of Loans and Order of
Maturity. Any voluntary prepayments pursuant to subsection 2.4B(i) shall be
applied as specified by Company in the applicable Notice of Prepayment;

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provided that all such voluntary prepayments shall, irrespective of any
application specified by Company, first be applied in the following priority to
repay any amounts owing to (i) first, Swing Line Lender due to the failure of
any Revolving Lender to (A) fund a Revolving Loan for the purpose of repaying
any Refunded Swing Line Loan pursuant to subsection 2.1A(iii)(b) or (B) purchase
an assignment of an unpaid Swing Line Loan pursuant to subsection 2.1A(iii)(c),
and (ii) second, Issuing Lenders due to the failure of any Revolving Lender to
(A) fund a Revolving Loan for the purpose of repaying any unreimbursed amounts
of a drawing under a Letter of Credit pursuant to subsection 3.3B or (B) fund a
participation in any such unreimbursed Letter of Credit drawing pursuant to
subsection 3.3C; provided further that in the event Company fails to specify the
Loans to which any such prepayment shall be applied, and funds remain after
being applied in accordance with this subsection 2.4B(iv)(a), such prepayment
shall be applied first to repay outstanding Swing Line Loans to the full extent
thereof, second to repay outstanding Revolving Loans to the full extent thereof,
and third to repay outstanding Term Loans to the full extent thereof. Any
voluntary prepayments of the Term Loans pursuant to subsection 2.4B(i) shall be
applied to reduce each remaining scheduled installment of principal of the Term
Loans set forth in subsection 2.4A on a pro rata basis (in accordance with the
respective outstanding principal amounts thereof).

(b)           Application of Mandatory Prepayments by Type of Loans. Except as
provided in subsection 2.4D, any amount required to be applied as a mandatory
prepayment of the Loans and/or a reduction of the Revolving Loan Commitment
Amount pursuant to subsections 2.4B(iii)(a)-(f) shall be applied first to prepay
the Term Loans to the full extent thereof, second, to the extent of any
remaining portion of such amount, to prepay the Swing Line Loans to the full
extent thereof and to permanently reduce the Revolving Loan Commitment Amount by
the amount of such prepayment, third, to the extent of any remaining portion of
such amount, to prepay the Revolving Loans to the full extent thereof and to
further permanently reduce the Revolving Loan Commitment Amount by the amount of
such prepayment, fourth, to the extent of any remaining portion of such amount,
to further permanently reduce the Revolving Loan Commitment Amount to the full
extent thereof and fifth, to the extent of any remaining portion of such amount,
to cash collateralize any outstanding Letters of Credit. Any mandatory reduction
of the Revolving Loan Commitment Amount pursuant to this subsection 2.4B shall
be in proportion to each Revolving Lender’s Pro Rata Share.

(c)           Application of Mandatory Prepayments of Term Loans to the
Scheduled Installments of Principal Thereof. Except as provided in
subsection 2.4D, any mandatory prepayments of the Term Loans pursuant to
subsection 2.4B(iii) shall be applied to reduce each remaining scheduled
installment of principal of the Terms Loans set forth in subsection 2.4A on a
pro rata basis (in accordance with the respective outstanding principal amounts
thereof).

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(d)           Application of Prepayments to Base Rate Loans and Eurodollar Rate
Loans. Considering Term Loans and Revolving Loans being prepaid separately, any
prepayment thereof shall be applied first to Base Rate Loans to the full extent
thereof before application to Eurodollar Rate Loans, in each case in a manner
that minimizes the amount of any payments required to be made by Company
pursuant to subsection 2.6D.

C.            General Provisions Regarding Payments.

(i)            Manner and Time of Payment. All payments by Company of principal,
interest, fees and other Obligations shall be made in Dollars in same day funds,
without defense, setoff or counterclaim, free of any restriction or condition,
and delivered to Administrative Agent not later than 12:00 noon (New York City
time) on the date due at the Funding and Payment Office for the account of
Lenders; funds received by Administrative Agent after that time on such due date
shall be deemed to have been paid by Company on the next succeeding Business
Day. Company hereby authorizes Administrative Agent to charge its accounts with
Administrative Agent in order to cause timely payment to be made to
Administrative Agent of all principal, interest, fees and expenses due hereunder
(subject to sufficient funds being available in its accounts for that purpose).

(ii)           Application of Payments to Principal and Interest. Except as
provided in subsection 2.2C, all payments in respect of the principal amount of
any Loan shall include payment of accrued interest on the principal amount being
repaid or prepaid, and all such payments shall be applied to the payment of
interest before application to principal.

(iii)          Apportionment of Payments. Aggregate principal and interest
payments in respect of Term Loans and Revolving Loans shall be apportioned among
all outstanding Loans to which such payments relate, in each case
proportionately to Lenders’ respective Pro Rata Shares; provided, that all
payments in respect of Loans shall first be applied in the following priority to
repay any amounts owing to (i) first, Swing Line Lender due to the failure of
any Revolving Lender to (A) fund a Revolving Loan for the purpose of repaying
any Refunded Swing Line Loan pursuant to subsection 2.1A(iii)(b) or (B) purchase
an assignment of an unpaid Swing Line Loan pursuant to subsection 2.1A(iii)(c),
and (ii) second, Issuing Lenders due to the failure of any Revolving Lender to
(A) fund a Revolving Loan for the purpose of repaying any unreimbursed amounts
of a drawing under a Letter of Credit pursuant to subsection 3.3B or (B) fund a
participation in any such unreimbursed Letter of Credit drawing pursuant to
subsection 3.3C. Administrative Agent shall promptly distribute to each Lender,
at the account specified in the payment instructions set forth below its name on
the appropriate signature page hereof or at such other account as such Lender
may request in subsequent payment instructions delivered to Administrative Agent
by such Lender, its Pro Rata Share of all such payments received by
Administrative Agent and the commitment fees and letter of credit fees of such
Lender, if any, when received by Administrative Agent pursuant to subsection 2.3
and subsection 3.2. Notwithstanding the foregoing provisions of this subsection
2.4C(iii), if, pursuant to the provisions of subsection 2.6C, any Notice

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of Conversion/Continuation is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning interest payments received thereafter.

(iv)          Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, such
payment shall be made on the next preceding Business Day.

(v)           Notation of Payment. Each Lender agrees that before disposing of
any Note held by it, or any part thereof (other than by granting participations
therein), that Lender will make a notation thereon of all Loans evidenced by
that Note and all principal payments previously made thereon and of the date to
which interest thereon has been paid; provided that the failure to make (or any
error in the making of) a notation of any Loan made under such Note shall not
limit or otherwise affect the obligations of Company hereunder or under such
Note with respect to any Loan or any payments of principal or interest on such
Note.

D.            Application of Proceeds of Collateral and Payments after Event of
Default.

Upon the occurrence and during the continuation of an Event of Default, if
requested by Requisite Lenders, (a) all payments received by Administrative
Agent, whether from Company, from any Subsidiary Guarantor, from Holdings or
otherwise, and (b) all proceeds received by Administrative Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral under any Collateral Document may, in the discretion of
Administrative Agent, be held by Administrative Agent as Collateral for, and/or
(then or at any time thereafter) applied in full or in part by Administrative
Agent, in each case in the following order of priority:

(i)            to the payment of all costs and expenses of such sale, collection
or other realization, all other expenses, liabilities and advances made or
incurred by Administrative Agent in connection therewith, and all amounts for
which Administrative Agent is entitled to compensation (including the fees
described in subsection 2.3), reimbursement and indemnification under any Loan
Document and all advances made by Administrative Agent thereunder for the
account of the applicable Loan Party, and to the payment of all costs and
expenses paid or incurred by Administrative Agent in connection with the Loan
Documents, all in accordance with subsections 9.4, 10.2 and 10.3 and the other
terms of this Agreement and the Loan Documents;

(ii)           thereafter, to the payment of all other Obligations and
obligations of Loan Parties under any Lender Swap Agreement (as defined in the
Subsidiary Guaranty) for the ratable benefit of the holders thereof (subject to
the provisions of subsection 2.4C(ii) and subsection 2.4C(iii) hereof); and

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(iii)          thereafter, to the payment to or upon the order of such Loan
Party or to whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct.

2.5                               Use of Proceeds.

A.            Term Loans. The proceeds of the Term Loans shall be applied by
Company (i) to discharge all Indebtedness and other sums payable under the
Existing Credit Agreement, (ii) to acquire Capital Stock in UK Bidco and make
intercompany loans to UK Bidco to permit UK Bidco to fund the Acquisition
Financing Requirements and (iii) to pay Transaction Costs.

B.            Revolving Loans; Swing Line Loans. The proceeds of any Revolving
Loans and any Swing Line Loans shall be applied by Company for working capital
and other general corporate purposes (which may include the making of
intercompany loans to any of Company’s wholly-owned Subsidiaries in accordance
with subsection 7.1(iv), for their own general corporate purposes).

C.            Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by Company or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation U, Regulation T or Regulation X of the Board of Governors of
the Federal Reserve System or any other regulation of such Board or to violate
the Exchange Act, in each case as in effect on the date or dates of such
borrowing and such use of proceeds.

2.6                               Special Provisions Governing Eurodollar Rate
Loans.

Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to Eurodollar Rate Loans as to
the matters covered:

A.            Determination of Applicable Interest Rate. On each Interest Rate
Determination Date, Administrative Agent shall determine in accordance with the
terms of this Agreement (which determination shall, absent manifest error, be
conclusive and binding upon all parties) the interest rate that shall apply to
the Eurodollar Rate Loans for which an interest rate is then being determined
for the applicable Interest Period and shall promptly give notice thereof (in
writing or by telephone confirmed in writing) to Company and each applicable
Lender.

B.            Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date that by reason of circumstances affecting the London
interbank market adequate and fair means do not exist for ascertaining the
interest rate applicable to such Loans on the basis provided for in the
definition of Eurodollar Rate, Administrative Agent shall on such date give
notice (by telefacsimile or by telephone confirmed in writing) to Company and
each Lender of such determination, whereupon (i) no Loans may be made as, or
converted to, Eurodollar Rate Loans until such time as Administrative Agent
notifies Company and Lenders that the circumstances giving rise to such notice
no longer exist and (ii) any Notice of Borrowing or Notice of
Conversion/Continuation

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given by Company with respect to the Loans in respect of which such
determination was made shall be deemed to be for a Base Rate Loan.

C.            Illegality or Impracticability of Eurodollar Rate Loans. In the
event that on any date any Lender shall have reasonably determined (which
determination shall be conclusive and binding upon all parties hereto but shall
be made only after consultation with Company and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful) or (ii) has become impracticable, or would cause such Lender material
hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the London interbank market or
the position of such Lender in that market, then, and in any such event, such
Lender shall be an “Affected Lender” and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to Company and
Administrative Agent of such determination. Administrative Agent shall promptly
notify each other Lender of the receipt of such notice. Thereafter (a) the
obligation of the Affected Lender to make Loans as, or to convert Loans to,
Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn by
the Affected Lender, (b) to the extent such determination by the Affected Lender
relates to a Eurodollar Rate Loan then being requested by Company pursuant to a
Notice of Borrowing or a Notice of Conversion/Continuation, the Affected Lender
shall make such Loan as (or convert such Loan to, as the case may be) a Base
Rate Loan, (c) the Affected Lender’s obligation to maintain its outstanding
Eurodollar Rate Loans (the “Affected Loans”) shall be terminated at the earlier
to occur of the expiration of the Interest Period then in effect with respect to
the Affected Loans or when required by law, and (d) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a Eurodollar Rate Loan then being requested
by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, Company shall have the option, subject to the
provisions of subsection 2.6D, to rescind such Notice of Borrowing or Notice of
Conversion/Continuation as to all Lenders by giving notice (by telefacsimile or
by telephone confirmed in writing) to Administrative Agent of such rescission on
the date on which the Affected Lender gives notice of its determination as
described above. Administrative Agent shall promptly notify each other Lender of
the receipt of such notice. Except as provided in the immediately preceding
sentence, nothing in this subsection 2.6C shall affect the obligation of any
Lender other than an Affected Lender to make or maintain Loans as, or to convert
Loans to, Eurodollar Rate Loans in accordance with the terms of this Agreement.

D.            Compensation For Breakage or Non-Commencement of Interest Periods.
Company shall compensate each Lender, upon written request by that Lender
pursuant to subsection 2.8, for all reasonable losses, expenses and liabilities
(including any interest paid by that Lender to lenders of funds borrowed by it
to make or carry its Eurodollar Rate Loans and any loss, expense or liability
sustained by that Lender in connection with the liquidation or re-employment of
such funds) which that Lender may sustain: (i) if for any reason (other than a
default by that Lender or because such Lender is an Affected Lender) a borrowing
of any Eurodollar Rate Loan does not occur on a date specified therefor in a
Notice of Borrowing or a

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telephonic request therefor, or a conversion to or continuation of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request therefor, (ii) if any prepayment
or other principal payment or any conversion of any of its Eurodollar Rate Loans
(including any prepayment or conversion occasioned by the circumstances
described in subsection 2.6C) occurs on a date prior to the last day of an
Interest Period applicable to that Loan, (iii) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a Notice of
Prepayment given by Company, or (iv) as a consequence of any other default by
Company in the repayment of its Eurodollar Rate Loans when required by the terms
of this Agreement.

E.             Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.

F.             Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had funded each of its
Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing
interest at the rate obtained pursuant to clause (i) of the definition of
Eurodollar Rate in an amount equal to the amount of such Eurodollar Rate Loan
and having a maturity comparable to the relevant Interest Period, whether or not
its Eurodollar Rate Loans had been funded in such manner.

G.            Eurodollar Rate Loans After Default. If, after the occurrence of
and during the continuation of a Potential Event of Default or an Event of
Default, Administrative Agent or Requisite Lenders have determined in its or
their sole discretion not to permit the making or continuation of any Loans as,
or the conversion of any Loans to Eurodollar Rate Loans and Administrative Agent
has so notified Company in writing, (i) Company may not elect to have a Loan be
made or maintained as, or converted to, a Eurodollar Rate Loan after the
expiration of any Interest Period then in effect for that Loan and (ii) subject
to the provisions of subsection 2.6D, any Notice of Borrowing or Notice of
Conversion/Continuation given by Company with respect to a requested borrowing
or conversion/continuation that has not yet occurred shall be deemed to be for a
Base Rate Loan or, if the conditions to making a Loan set forth in subsection
4.2 cannot then be satisfied, to be rescinded by Company.

2.7                               Increased Costs; Taxes; Capital Adequacy.

A.            Compensation for Increased Costs. Subject to the provisions of
subsection 2.7B (which shall be controlling with respect to the matters covered
thereby), in the event that any Lender (including any Issuing Lender) shall
determine (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) that any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or other Government Authority, in each case that
becomes effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other Government Authority (whether or not having the force of
law):

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(i)                                     subjects such Lender to any additional
Tax with respect to this Agreement or any of its obligations hereunder
(including with respect to issuing or maintaining any Letters of Credit or
purchasing or maintaining any participations therein or maintaining any
Commitment hereunder) or any payments to such Lender of principal, interest,
fees or any other amount payable hereunder;

(ii)                                  imposes, modifies or holds applicable any
reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets held by, or deposits or other liabilities in or for
the account of, or advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Eurodollar Rate Loans that are
reflected in the definition of Eurodollar Rate); or

(iii)                               imposes any other condition (other than with
respect to Taxes) on or affecting such Lender or its obligations hereunder or
the London interbank market;

and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining its Loans or Commitments or agreeing to
issue, issuing or maintaining any Letter of Credit or agreeing to purchase,
purchasing or maintaining any participation therein or to reduce any amount
received or receivable by such Lender with respect thereto; then, in any such
case, Company shall promptly pay to such Lender, upon receipt of the statement
referred to in subsection 2.8A, such additional amount or amounts (in the form
of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its sole discretion shall determine) as may be
necessary to compensate such Lender for any such increased cost or reduction in
amounts received or receivable hereunder and any Tax incurred or payable by such
Lender as a result of the obligation of Company to pay such additional amounts.

B.                                    Taxes.

(i)                                     Payments to Be Free and Clear. Except as
otherwise provided in this Agreement, all sums payable by Company under this
Agreement and the other Loan Documents shall be paid free and clear of, and
without any deduction or withholding on account of, any Tax imposed, levied,
collected, withheld or assessed by or within the United States of America or any
political subdivision in or of the United States of America or any other
jurisdiction from or to which a payment is made by or on behalf of Company or by
any federation or organization of which the United States of America or any such
jurisdiction is a member at the time of payment.

(ii)                                  Grossing-up of Payments. If Company or any
other Person is required by law to make any deduction or withholding on account
of any such Tax from any sum paid or payable by Company to Administrative Agent
or any Lender under any of the Loan Documents:

(a)                                  Company shall notify Administrative Agent
of any such requirement or any change in any such requirement as soon as Company
becomes aware of it;

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(b)                                 Company shall pay any such Tax when such Tax
is due, such payment to be made (if the liability to pay is imposed on Company)
for its own account or (if that liability is imposed on Administrative Agent or
such Lender, as the case may be) on behalf of and in the name of Administrative
Agent or such Lender;

(c)                                  the sum payable by Company in respect of
which the relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the making of that
deduction, withholding or payment, Administrative Agent or such Lender, as the
case may be, receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been required or made;
and

(d)                                 within 30 days after paying any sum from
which it is required by law to make any deduction or withholding, and within 30
days after the due date of payment of any Tax which it is required by clause
(b) above to pay, Company shall deliver to Administrative Agent evidence
reasonably satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant taxing or
other authority;

provided that no such additional amount shall be required to be paid to any
Lender under clause (c) above except to the extent that any change after the
date on which such Lender became a Lender in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect on the date on which such Lender became a Lender, in respect of payments
to such Lender.

(iii)                               Evidence of Exemption from U.S. Withholding
Tax.

(a)                                  Each Non-US Lender shall deliver to
Administrative Agent and to Company, and Administrative Agent shall deliver to
Company if a payment to Administrative Agent hereunder is treated as a payment
to a Person that is not a “United States person” (as defined in
Section 7701(a)(30) of the Internal Revenue Code), on or prior to the Closing
Date (in the case of each Lender listed on the signature pages hereof) or on or
prior to the date of the Assignment Agreement pursuant to which it becomes a
Lender (in the case of each other Lender), and at such other times as may be
necessary in the determination of Company or Administrative Agent (each in the
reasonable exercise of its discretion), two original copies of Internal Revenue
Service Form W-8BEN or W-8ECI (or any successor forms) properly completed and
duly executed by such Lender, or, in the case of a Non-US Lender claiming
exemption from United States federal withholding tax under Section 871(h) or
881(c) of the Internal Revenue Code with respect to payments of “portfolio
interest”, a Form W-8BEN, and a certificate of such Lender certifying that such
Lender is not (i) a “bank” for purposes of Section 881(c) of the Internal
Revenue Code, (ii) a ten-percent shareholder (within the

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meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of Company or
Holdings or (iii) a controlled foreign corporation related to Company (within
the meaning of Section 864(d)(4) of the Internal Revenue Code), in each case
together with any other certificate or statement of exemption required under the
Internal Revenue Code or the regulations issued thereunder to establish that
such Lender is not subject to, or is subject to a reduced rate of, United States
withholding tax with respect to any payments to such Lender of interest payable
under any of the Loan Documents.

(b)                                 Each Non-US Lender, to the extent it does
not act or ceases to act for its own account with respect to any portion of any
sums paid or payable to such Lender under any of the Loan Documents (for
example, in the case of a typical participation by such Lender), shall deliver
to Administrative Agent and to Company, on or prior to the Closing Date (in the
case of each Lender listed on the signature pages hereof), on or prior to the
date of the Assignment Agreement pursuant to which it becomes a Lender (in the
case of each other Lender), or on such later date when such Lender ceases to act
for its own account with respect to any portion of any such sums paid or
payable, and at such other times as may be necessary in the determination of
Company or Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of the forms or statements required to be
provided by such Lender under subsection 2.7B(iii)(a), properly completed and
duly executed by such Lender, to establish the portion of any such sums paid or
payable with respect to which such Lender acts for its own account that is not
subject to United States withholding tax, and (2) two original copies of
Internal Revenue Service Form W-8IMY (or any successor forms) properly completed
and duly executed by such Lender, together with any information, if any, such
Lender chooses to transmit with such form, and any other certificate or
statement of exemption required under the Internal Revenue Code or the
regulations issued thereunder, to establish that such Lender is not acting for
its own account with respect to a portion of any such sums payable to such
Lender.

(c)                                  Each Non-US Lender hereby agrees, from time
to time after the initial delivery by such Lender of such forms, whenever a
lapse in time or change in circumstances renders such forms, certificates or
other evidence so delivered obsolete or inaccurate in any material respect, that
such Lender shall promptly (1) deliver to Administrative Agent and to Company
two original copies of renewals, amendments or additional or successor forms,
properly completed and duly executed by such Lender, together with any other
certificate or statement of exemption required in order to confirm or establish
that such Lender is not subject to United States withholding tax with respect to
payments to such Lender under the Loan Documents and, if applicable, that such
Lender does not act for its own account with respect to any portion of such
payment, or (2) notify Administrative Agent and Company of its inability to
deliver any such forms, certificates or other evidence.

(d)                                 Company shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of subsection 2.7B(ii),
(1) with respect to any Tax required to be deducted or withheld on the basis of
the information,

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certificates or statements of exemption such Lender chooses to transmit with an
Internal Revenue Service Form W-8IMY pursuant to subsection 2.7B(iii)(b)(2) or
(2) if such Lender shall have failed to satisfy the requirements of clause (a),
(b) or (c)(1) of this subsection 2.7B(iii); provided that (i) notwithstanding
anything to the contrary in subsection 2.7B(iii)(d)(1), Company shall be
required to pay additional amounts with respect to payments beneficially owned
by Participants entitled to the benefits of subsection 2.7 as though such
Participants were Lenders and (ii) if a Lender shall have satisfied the
requirements of subsection 2.7B(iii)(a) on the date such Lender became a Lender,
nothing in this subsection 2.7B(iii)(d) shall relieve Company of its obligation
to pay any amounts pursuant to subsection 2.7B(ii)(c) in the event that, as a
result of any change in any applicable law, treaty or governmental rule,
regulation or order, or any change in the interpretation, administration or
application thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date establishing the fact
that such Lender is not subject to withholding as described in subsection
2.7B(iii)(a).

(e)                                  Company shall not be required to pay any
additional amount to any Lender that is not a Non-U.S. Lender under clause
(c) of subsection 2.7B(ii) if such Lender does not provide prior to or on the
Closing Date (or on or prior to the date it becomes a party to this Agreement)
to Administrative Agent and Company a properly completed and executed IRS
Form W-9 (certifying that such Lender is not subject to United States backup
withholding tax) or any successor form. Solely for purposes of this subsection
2.7B(iii)(e), a Lender shall not include a Lender that may be treated as an
exempt recipient based on the indicators described in Treasury Regulation
Section 1.6049-4(c)(l)(ii).

C.                                    Capital Adequacy Adjustment. If any Lender
shall have determined that the adoption, effectiveness, phase-in or
applicability after the date hereof of any law, rule or regulation (or any
provision thereof) regarding capital adequacy, or any change therein or in the
interpretation or administration thereof by any Government Authority charged
with the interpretation or administration thereof, or compliance by any Lender
with any guideline, request or directive regarding capital adequacy (whether or
not having the force of law) of any such Government Authority, has or would have
the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender’s Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Company from
such Lender of the statement referred to in subsection 2.8A, Company shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such controlling corporation for such reduction, increased to the extent
necessary to take into account any Tax incurred or payable by such Lender as a
result of the obligation of Company to pay such additional amounts.

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2.8                               Statement of Lenders; Obligation of Lenders
and Issuing Lenders to Mitigate.

A.                                    Statements. Each Lender claiming
compensation or reimbursement pursuant to subsection 2.6D, 2.7 or 2.8B shall
deliver to Company (with a copy to Administrative Agent) a written statement,
setting forth in reasonable detail the basis of the calculation of such
compensation or reimbursement, which statement shall be conclusive and binding
upon all parties hereto absent manifest error. In the event such written
statement is given by such Lender more than 180 days after such Lender has
knowledge of the occurrence or existence of the event or circumstance that
entitled such Lender to provide such written statement, such Lender shall not be
entitled to receive any compensation or reimbursement under subsection 2.6D or
2.7, as the case may be, in respect of the period ending 180 days preceding the
date on which such written statement is given to Company.

B.                                    Mitigation. Each Lender and Issuing Lender
agrees that, as promptly as practicable after the officer of such Lender or
Issuing Lender responsible for administering the Loans or Letters of Credit of
such Lender or Issuing Lender, as the case may be, becomes aware of the
occurrence of an event or the existence of a condition that would cause such
Lender to become an Affected Lender or that would entitle such Lender or Issuing
Lender to receive payments under subsection 2.7, it will use reasonable efforts
to make, issue, fund or maintain the Commitments of such Lender or the Loans or
Letters of Credit of such Lender or Issuing Lender through another lending or
letter of credit office of such Lender or Issuing Lender, if (i) as a result
thereof the circumstances which would cause such Lender to be an Affected Lender
would cease to exist or the additional amounts which would otherwise be required
to be paid to such Lender or Issuing Lender pursuant to subsection 2.7 would be
materially reduced and (ii) as determined by such Lender or Issuing Lender in
its sole discretion, such action would not otherwise be disadvantageous to such
Lender or Issuing Lender; provided that such Lender or Issuing Lender will not
be obligated to utilize such other lending or letter of credit office pursuant
to this subsection 2.8B unless Company agrees to pay all incremental expenses
incurred by such Lender or Issuing Lender as a result of utilizing such other
lending or letter of credit office as described above.

2.9                               Replacement of a Lender.

If Company receives a statement of amounts due pursuant to subsection 2.8A from
a Lender, a Revolving Lender defaults in its obligations to fund a Revolving
Loan pursuant to this Agreement, a Lender (a “Non-Consenting Lender”) refuses to
consent to an amendment, modification or waiver of this Agreement that, pursuant
to subsection 10.6, requires consent of 100% of Lenders or 100% of Lenders with
Obligations directly affected or a Lender becomes an Affected Lender (any such
Lender, a “Subject Lender”), so long as (i) no Potential Event of Default or
Event of Default shall have occurred and be continuing and Company has obtained
a commitment from another Lender or an Eligible Assignee to purchase at par the
Subject Lender’s Loans and assume the Subject Lender’s Commitments and all other
obligations of the Subject Lender hereunder, (ii) such Lender is not an Issuing
Lender with respect to any Letters of Credit outstanding (unless all such
Letters of Credit are terminated or arrangements acceptable to such Issuing
Lender (such as a “back-to-back” letter of credit) are made) and (iii), if
applicable, the Subject Lender is unwilling to withdraw the notice delivered to
Company

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pursuant to subsection 2.8 and/or is unwilling to remedy its default upon 10
days prior written notice to the Subject Lender and Administrative Agent,
Company may require the Subject Lender to assign all of its Loans and
Commitments to such other Lender, Lenders, Eligible Assignee or Eligible
Assignees pursuant to the provisions of subsection 10.1B; provided that, prior
to or concurrently with such replacement, (1) the Subject Lender shall have
received payment in full of all principal, interest, fees and other amounts
(including all amounts under subsections 2.6D, 2.7 and/or 2.8B (if applicable))
through such date of replacement and a release from its obligations under the
Loan Documents, (2) all of the requirements for such assignment contained in
subsection 10.1B, excluding payment of the processing fee otherwise required
thereby, but including, without limitation, the consent of Administrative Agent
(if required) and the receipt by Administrative Agent of an Assignment Agreement
executed by the assignee (Administrative Agent being hereby authorized to
execute any Assignment Agreement on behalf of a Subject Lender relating to the
assignment of Loans and/or Commitments of such Subject Lender) and other
supporting documents, have been fulfilled, and (3) in the event such Subject
Lender is a Non-Consenting Lender, each assignee shall consent, at the time of
such assignment, to each matter in respect of which such Subject Lender was a
Non-Consenting Lender and Company also requires each other Subject Lender that
is a Non-Consenting Lender to assign its Loans and Commitments. For the
avoidance of doubt, if a Lender is a Non-Consenting Lender solely because it
refused to consent to an amendment, modification or waiver that required the
consent of 100% of Lenders with Obligations directly affected thereby (which
amendment, modification or waiver did not accordingly require the consent of
100% of all Lenders) the Loans and Commitments of such Non-Consenting Lender
that are subject to the assignments required by this subsection 2.9 shall
include only those Loans and Commitments that constitute the Obligations
directly affected by the amendment, modification or waiver to which such
Non-Consenting Lender refused to provide its consent.

Section 3.                                          LETTERS OF CREDIT

3.1                               Issuance of Letters of Credit and Lenders’
Purchase of Participations Therein.

A.                                    Letters of Credit. In addition to Company
requesting that Lenders make Loans pursuant to subsection 2.1A, Company may
request, in accordance with the provisions of this subsection 3.1, from time to
time during the period from the Closing Date to but excluding the 30th day prior
to the Revolving Loan Commitment Termination Date, that one or more Revolving
Lenders issue Letters of Credit payable on a sight basis for the account of
Company for the purposes specified in the definitions of Commercial Letters of
Credit and Standby Letters of Credit. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of
Company herein set forth, any one or more Lenders may, but (except as provided
in subsection 3.1C(ii)) shall not be obligated to, issue such Letters of Credit
in accordance with the provisions of this subsection 3.1; provided that Company
shall not request that any Revolving Lender issue (and no Revolving Lender shall
issue):

(i)                                     any Letter of Credit if, after giving
effect to such issuance, the Total Utilization of Revolving Loan Commitments
would exceed the Revolving Loan Commitment Amount;

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(ii)                                  any Letter of Credit if, after giving
effect to such issuance, the Letter of Credit Usage would exceed $60,000,000;

(iii)                               any Standby Letter of Credit having an
expiration date later than the earlier of (a) ten days prior to the Revolving
Loan Commitment Termination Date and (b) the date which is one year from the
date of issuance of such Standby Letter of Credit; provided that the immediately
preceding clause (b) shall not prevent any Issuing Lender from agreeing that a
Standby Letter of Credit will automatically be extended for one or more
successive periods not to exceed one year each unless such Issuing Lender elects
not to extend for any such additional period; and provided, further that such
Issuing Lender shall elect not to extend such Standby Letter of Credit if it has
knowledge that an Event of Default has occurred and is continuing (and has not
been waived in accordance with subsection 10.6) at the time such Issuing Lender
must elect whether or not to allow such extension;

(iv)                              any Standby Letter of Credit issued for the
purpose of supporting (a) trade payables or (b) any Indebtedness constituting
“antecedent debt” (as that term is used in Section 547 of the Bankruptcy Code);

(v)                                 any Commercial Letter of Credit having an
expiration date (a) later than the earlier of (1) the date which is 30 days
prior to the Revolving Loan Commitment Termination Date and (2) the date which
is 180 days from the date of issuance of such Commercial Letter of Credit or
(b) that is otherwise unacceptable to the applicable Issuing Lender in its
reasonable discretion; or

(vi)                              any Letter of Credit denominated in a currency
other than Dollars or Canadian dollars that in the reasonable judgment of
Administrative Agent or the applicable Issuing Lender is not readily and freely
available.

B.                                    Sublimits. The following restrictions
shall apply in relation to any request by Company to one or more Revolving
Lenders to issue Letters of Credit in accordance with the provisions of this
subsection 3.1:

(i)                                     Letter of Credit Usage (other than under
clause (ii) below) shall at no time exceed $20,000,000; and

(ii)                                  Company may request that one or more
Revolving Lenders issue Standby Letters of Credit or similar instruments for the
purpose of supporting the obligations of HSBC Bank plc as a guarantor under the
UK Loan Notes (the “Applicable Standby Letters of Credit”) provided that the
maximum aggregate amount which may become available for drawing under the
Applicable Standby Letters of Credit shall not exceed $60,000,000; and

(iii)                               Letter of Credit Usage on the Closing Date
shall not exceed $50,000,000.

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C.                                    Mechanics of Issuance.

(i)                                     Request for Issuance. Whenever Company
desires the issuance of a Letter of Credit, it shall deliver to Administrative
Agent a Request for Issuance no later than 12:00 Noon (New York City time) at
least three Business Days (in the case of Standby Letters of Credit) or five
Business Days (in the case of Commercial Letters of Credit), or in each case
such shorter period as may be agreed to by the Issuing Lender in any particular
instance, in advance of the proposed date of issuance. The Issuing Lender, in
its reasonable discretion, may require changes in the text of the proposed
Letter of Credit or any documents described in or attached to the Request for
Issuance. In furtherance of the provisions of subsection 10.8, and not in
limitation thereof, Company may submit Requests for Issuance by telefacsimile
and Administrative Agent and Issuing Lenders may rely and act upon any such
Request for Issuance without receiving an original signed copy thereof. No
Letter of Credit shall require payment against a conforming demand for payment
to be made thereunder on the same business day (under the laws of the
jurisdiction in which the office of the Issuing Lender to which such demand for
payment is required to be presented is located) that such demand for payment is
presented if such presentation is made after 10:00 A.M. (in the time zone of
such office of the Issuing Lender) on such business day.

Company shall notify the applicable Issuing Lender (and Administrative Agent, if
Administrative Agent is not such Issuing Lender) prior to the issuance of any
Letter of Credit in the event that any of the matters to which Company is
required to certify in the applicable Request for Issuance is no longer true and
correct as of the proposed date of issuance of such Letter of Credit, and upon
the issuance of any Letter of Credit Company shall be deemed to have
re-certified, as of the date of such issuance, as to the matters to which
Company is required to certify in the applicable Request for Issuance.

Notwithstanding the foregoing, the Existing Letters of Credit shall be deemed
issued on the Closing Date and shall be subject to the terms and conditions of
this Agreement.

(ii)                                  Determination of Issuing Lender. Upon
receipt by Administrative Agent of a Request for Issuance pursuant to subsection
3.1C(i) requesting the issuance of a Letter of Credit, in the event
Administrative Agent elects to issue such Letter of Credit, Administrative Agent
shall promptly so notify Company, and Administrative Agent shall be the Issuing
Lender with respect thereto. In the event that Administrative Agent, in its sole
discretion, elects not to issue such Letter of Credit, Administrative Agent
shall promptly so notify Company, whereupon Company may request any other
Revolving Lender to issue such Letter of Credit by delivering to such Revolving
Lender a copy of the applicable Request for Issuance. Any Revolving Lender so
requested to issue such Letter of Credit shall promptly notify Company and
Administrative Agent whether or not, in its sole discretion, it has elected to
issue such Letter of Credit, and any such Revolving Lender that so elects to
issue such Letter of Credit shall be the Issuing Lender with respect thereto. In
the event that all other Revolving Lenders shall have declined to issue such
Letter of Credit, notwithstanding the prior election of Administrative Agent not
to issue such Letter of Credit, Administrative Agent shall be obligated to issue
such

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Letter of Credit and shall be the Issuing Lender with respect thereto,
notwithstanding the fact that the Letter of Credit Usage with respect to such
Letter of Credit and with respect to all other Letters of Credit issued by
Administrative Agent, when aggregated with Administrative Agent’s outstanding
Revolving Loans and Swing Line Loans, may exceed Administrative Agent’s
Revolving Loan Commitment then in effect.

(iii)                               Issuance of Letter of Credit. Upon
satisfaction or waiver (in accordance with subsection 10.6) of the conditions
set forth in subsection 4.3, the Issuing Lender shall issue the requested Letter
of Credit in accordance with the Issuing Lender’s standard operating procedures.

(iv)                              Notification to Revolving Lenders. Upon the
issuance of or amendment to any Standby Letter of Credit the applicable Issuing
Lender shall promptly notify Administrative Agent and Company of such issuance
or amendment in writing. Upon receipt of such notice (or, if Administrative
Agent is the Issuing Lender, together with such notice), Administrative Agent
shall notify each Revolving Lender in writing of such issuance or amendment and
the amount of such Revolving Lender’s respective participation in such Standby
Letter of Credit or amendment, and, if so requested by a Revolving Lender,
Administrative Agent shall provide such Lender with a copy of such Letter of
Credit or amendment. In the case of Commercial Letters of Credit, in the event
that Issuing Lender is other than Administrative Agent, such Issuing Lender will
send by facsimile transmission to Administrative Agent, promptly upon the first
Business Day of each week, a report of its daily aggregate maximum amount
available for drawing under Commercial Letters of Credit for the previous week.
Administrative Agent shall notify each Revolving Lender in writing on a
quarterly basis of the contents thereof.

D.                                    Revolving Lenders’ Purchase of
Participations in Letters of Credit. Immediately upon the issuance of each
Letter of Credit, each Revolving Lender shall be deemed to, and hereby agrees
to, have irrevocably purchased from the Issuing Lender a participation in such
Letter of Credit and any drawings honored thereunder in an amount equal to such
Revolving Lender’s Pro Rata Share of the maximum amount that is or at any time
may become available to be drawn thereunder.

3.2                               Letter of Credit Fees.

Company agrees to pay the following amounts with respect to Letters of Credit
issued hereunder:

(i)                                     with respect to each Standby Letter of
Credit, (a) a fronting fee, payable directly to the applicable Issuing Lender
for its own account, equal to the greater of (i) 0.25% multiplied by the daily
amount available to be drawn under such Standby Letter of Credit, and (ii) $500
(or such lesser amount as may be agreed between Company and the applicable
Issuing Lender) and (b) a letter of credit fee, payable to Administrative Agent
for the account of Revolving Lenders, equal to the applicable Eurodollar Rate
Margin for Revolving Loans plus, upon the application of increased interest
pursuant to subsection 2.2E, 2% per annum multiplied by the daily amount
available to be drawn under such Standby Letter of Credit, each such fronting
fee or letter of credit fee to be

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payable in arrears on and to (but excluding) the last Business Day of each of
January, April, July and October of each year and computed on the basis of a
360-day year for the actual number of days elapsed;

(ii)                                  with respect to each Commercial Letter of
Credit, (a) a fronting fee, payable directly to the applicable Issuing Lender
for its own account, equal to the greater of (i) 0.25% multiplied by the daily
amount available to be drawn under such Commercial Letter of Credit, and
(ii) $500 and (b) a letter of credit fee, payable to Administrative Agent for
the account of Revolving Lenders, equal to 50% of the applicable Eurodollar Rate
Margin for Revolving Loans plus, upon the application of increased interest
pursuant to subsection 2.2E, 2% per annum multiplied by the daily amount
available to be drawn under such Commercial Letter of Credit, each such fronting
fee or letter of credit fee to be payable in arrears on and to (but excluding)
the last Business Day of each of January, April, July and October of each year
and computed on the basis of a 360-day year for the actual number of days
elapsed; and

(iii)                               with respect to the issuance, amendment or
transfer of each Letter of Credit and each payment of a drawing made thereunder
(without duplication of the fees payable under clauses (i) and (ii) above),
documentary and processing charges payable directly to the applicable Issuing
Lender for its own account in accordance with such Issuing Lender’s standard
schedule for such charges in effect at the time of such issuance, amendment,
transfer or payment, as the case may be.

For purposes of calculating any fees payable under clauses (i) and (ii) of this
subsection 3.2, (1) the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination and (2) any amount described in such clauses that is denominated
in a currency other than Dollars shall be valued based on the applicable
Exchange Rate for such currency as of the applicable date of determination (such
date to be determined at the discretion of Administrative Agent and/or the
applicable Issuing Lender). Promptly upon receipt by Administrative Agent of any
amount described in clause (i)(b) or clause (ii)(b) of this subsection 3.2,
Administrative Agent shall distribute to each Revolving Lender its Pro Rata
Share of such amount.

3.3                               Drawings and Reimbursement of Amounts Paid
Under Letters of Credit; Cash Collateralization.

A.                                    Responsibility of Issuing Lender With
Respect to Drawings. In determining whether to honor any drawing under any
Letter of Credit by the beneficiary thereof, the Issuing Lender shall be
responsible only to examine the documents delivered under such Letter of Credit
with reasonable care so as to ascertain whether they appear on their face to be
in accordance with the terms and conditions of such Letter of Credit.

B.                                    Reimbursement by Company of Amounts Paid
Under Letters of Credit. In the event an Issuing Lender has determined to honor
a drawing under a Letter of Credit issued by it, such Issuing Lender shall
immediately notify Company and Administrative Agent, and Company shall reimburse
such Issuing Lender on or before the Business Day immediately following the date
on which such drawing is honored (the “Reimbursement Date”)

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in an amount in Dollars (which amount, in the case of a payment under a Letter
of Credit which is denominated in a currency other than Dollars, shall be
calculated by reference to the applicable Exchange Rate) or, at the option of
such Issuing Lender, in the case of a Letter of Credit denominated in a currency
other than Dollars, in such other currency, and in same day funds equal to the
amount of such payment; provided that, anything contained in this Agreement to
the contrary notwithstanding, (i) unless Company shall have notified
Administrative Agent and such Issuing Lender prior to 12:00 Noon (New York City
time) on the date such drawing is honored that Company intends to reimburse such
Issuing Lender for the amount of such payment with funds other than the proceeds
of Revolving Loans, Company shall be deemed to have given a timely Notice of
Borrowing to Administrative Agent requesting Revolving Lenders to make Revolving
Loans that are Base Rate Loans on the Reimbursement Date in an amount in Dollars
(which amount, in the case of a payment under a Letter of Credit which is
denominated in a currency other than Dollars, shall be calculated by reference
to the applicable Exchange Rate) equal to the amount of such payment and
(ii) subject to satisfaction or waiver of the conditions specified in subsection
4.2B, Revolving Lenders shall, on the Reimbursement Date, make Revolving Loans
that are Base Rate Loans in the amount of such payment, the proceeds of which
shall be applied directly by Administrative Agent to reimburse such Issuing
Lender for the amount of such payment; and provided, further that if for any
reason proceeds of Revolving Loans are not received by such Issuing Lender on
the Reimbursement Date in an amount equal to the amount of such payment, Company
shall reimburse such Issuing Lender, on demand, in an amount in same day funds
equal to the excess of the amount of such payment over the aggregate amount of
such Revolving Loans, if any, which are so received. Nothing in this subsection
3.3B shall be deemed to relieve any Revolving Lender from its obligation to make
Revolving Loans on the terms and conditions set forth in this Agreement, and
Company shall retain any and all rights it may have against any Revolving Lender
resulting from the failure of such Revolving Lender to make such Revolving Loans
under this subsection 3.3B.

C.                                    Payment by Lenders of Unreimbursed Amounts
Paid Under Letters of Credit.

(i)                                     Payment by Revolving Lenders. In the
event that Company shall fail for any reason to reimburse any Issuing Lender as
provided in subsection 3.3B in an amount (calculated, in the case of a payment
under a Letter of Credit denominated in a currency other than Dollars, by
reference to the applicable Exchange Rate) equal to the amount of any payment by
such Issuing Lender under a Letter of Credit issued by it, such Issuing Lender
shall promptly notify Administrative Agent, who shall notify each other
Revolving Lender of the unreimbursed amount of such honored drawing and of such
other Revolving Lender’s respective participation therein based on such
Revolving Lender’s Pro Rata Share. Each Revolving Lender (other than such
Issuing Lender) shall make available to Administrative Agent an amount equal to
its respective participation, in Dollars and in same day funds, at the Funding
and Payment Account, not later than 12:00 Noon (New York City time) on the first
Business Day after the date notified by Administrative Agent and Administrative
Agent shall make available to such Issuing Lender in Dollars in same day funds,
at the office of such Issuing Lender on such Business Day, the aggregate amount
of the participation payments so received by Administrative Agent. In the event
that any Revolving Lender fails to make available to Administrative Agent on
such Business Day the amount of such Revolving Lender’s

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participation in such Letter of Credit as provided in this subsection 3.3C, such
Issuing Lender shall be entitled to recover such amount on demand from such
Revolving Lender together with interest thereon at the Federal Funds Effective
Rate. Nothing in this subsection 3.3C shall be deemed to prejudice the right of
Administrative Agent to recover, for the benefit of Revolving Lenders, from any
Issuing Lender any amounts made available to such Issuing Lender pursuant to
this subsection 3.3C in the event that it is determined by the final judgment of
a court of competent jurisdiction that the payment with respect to a Letter of
Credit by such Issuing Lender in respect of which such participation payments
were made by Revolving Lenders constituted gross negligence or willful
misconduct on the part of such Issuing Lender.

(ii)                                  Distribution to Lenders of Reimbursements
Received From Company. In the event any Issuing Lender shall have been
reimbursed by other Revolving Lenders pursuant to subsection 3.3C(i) for all or
any portion of any payment by such Issuing Lender under a Letter of Credit
issued by it, and Administrative Agent or such Issuing Lender thereafter
receives any payments from Company in reimbursement of such payment under the
Letter of Credit, to the extent any such payment is received by such Issuing
Lender, it shall distribute such payment to Administrative Agent, and
Administrative Agent shall distribute to each other Revolving Lender that has
paid all amounts payable by it under subsection 3.3C(i) with respect to such
payment such Revolving Lender’s Pro Rata Share of all payments subsequently
received by Administrative Agent or by such Issuing Lender from Company. Any
such distribution shall be made to a Revolving Lender at the account specified
in subsection 2.4C(iii).

D.                                    Interest on Amounts Paid Under Letters of
Credit.

(i)                                     Payment of Interest by Company. Company
agrees to pay to Administrative Agent, with respect to payments under any
Letters of Credit issued by any Issuing Lender, interest on the amount paid by
such Issuing Lender in respect of each such payment from the date a drawing is
honored to but excluding the date such amount is reimbursed by Company
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B) at a rate equal to (a) for the period from the date
such drawing is honored to but excluding the Reimbursement Date, the rate then
in effect under this Agreement with respect to Revolving Loans that are Base
Rate Loans and (b) thereafter, a rate which is 2% per annum in excess of the
rate of interest otherwise payable under this Agreement with respect to
Revolving Loans that are Base Rate Loans. Interest payable pursuant to this
subsection 3.3D(i) shall be computed on the basis of a 360-day year for the
actual number of days elapsed in the period during which it accrues and shall be
payable on demand or, if no demand is made, on the date on which the related
drawing under a Letter of Credit is reimbursed in full.

(ii)                                  Distribution of Interest Payments by
Administrative Agent. Promptly upon receipt by Administrative Agent of any
payment of interest pursuant to subsection 3.3D(i) with respect to a payment
under a Letter of Credit, (a) Administrative Agent shall distribute to (x) each
Revolving Lender, out of the interest received by Administrative Agent in
respect of the period from the date such drawing is honored to but excluding the
date on which the applicable Issuing Lender is reimbursed for the amount of such

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payment (including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B), the amount that such Revolving Lender would have
been entitled to receive in respect of the letter of credit fee that would have
been payable in respect of such Letter of Credit for such period pursuant to
subsection 3.2 if no drawing had been honored under such Letter of Credit and
(y) such Issuing Lender the amount, if any, remaining after payment of the
amounts applied pursuant to the immediately preceding clause (x), and (b) in the
event such Issuing Lender shall have been reimbursed by other Revolving Lenders
pursuant to subsection 3.3C(i) for all or any portion of such payment,
Administrative Agent shall distribute to each Revolving Lender (including such
Issuing Lender) that has paid all amounts payable by it under subsection
3.3C(i) with respect to such payment such Revolving Lender’s Pro Rata Share of
any interest received by Administrative Agent in respect of that portion of such
payment so made by Revolving Lenders for the period from the date on which such
Issuing Lender was so reimbursed to but excluding the date on which such portion
of such payment is reimbursed by Company. Any such distribution shall be made to
a Revolving Lender at the account specified in subsection 2.4C(iii).

E.                                      Cash Collateralization. If
Administrative Agent notifies Company at any time that, due to a fluctuation in
the applicable Exchange Rate or otherwise, the Letter of Credit Usage at such
time exceeds 105% of the sublimit for Letters of Credit specified in subsection
3.1A(ii), then, within two Business Days after receipt of such notice, Company
shall deposit in the Collateral Account established pursuant to the Security
Agreement an amount equal to the amount by which the Letter of Credit Usage
exceeds such sublimit, which amount shall constitute Collateral and be subject
to the provisions of the Security Agreement. At such time as the Letter of
Credit Usage shall be equal to or less than such sublimit, if no Event of
Default has occurred and is continuing, such amount may, at the request of
Company, be released to Company.

3.4                               Obligations Absolute.

The obligation of Company to reimburse each Issuing Lender for payments under
the Letters of Credit issued by it and to repay any Revolving Loans made by
Revolving Lenders pursuant to subsection 3.3B and the obligations of Revolving
Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:

(i)                                     any lack of validity or enforceability
of any Letter of Credit;

(ii)                                  the existence of any claim, set-off,
defense or other right which Company or any Lender may have at any time against
a beneficiary or any transferee of any Letter of Credit (or any Persons for whom
any such transferee may be acting), any Issuing Lender or other Revolving Lender
or any other Person or, in the case of a Revolving Lender, against Company,
whether in connection with this Agreement, the transactions contemplated herein
or any unrelated transaction (including any underlying transaction between
Company or one of its Subsidiaries and the beneficiary for which any Letter of
Credit was procured);

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(iii)                               any draft or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;

(iv)                              payment by the applicable Issuing Lender under
any Letter of Credit against presentation of a draft or other document which
does not substantially comply with the terms of such Letter of Credit;

(v)                                 any adverse change in the business,
operations, properties, assets, condition (financial or otherwise) or prospects
of Company or any of its Subsidiaries;

(vi)                              any breach of this Agreement or any other Loan
Document by any party thereto;

(vii)                           any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or

(viii)                        the fact that an Event of Default or a Potential
Event of Default shall have occurred and be continuing;

provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).

3.5                               Nature of Issuing Lenders’ Duties.

As between Company and any Issuing Lender, Company assumes all risks of the acts
and omissions of, or misuse of the Letters of Credit issued by such Issuing
Lender by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, such Issuing Lender shall
not be responsible for:  (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of any such Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) failure of the beneficiary of any such Letter of Credit to comply
fully with any conditions required in order to draw upon such Letter of Credit;
(iv) errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise, whether or not they
be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Lender, including any act or
omission by a Government Authority, and none of the above shall affect or
impair, or prevent the vesting of, any of such Issuing Lender’s rights or powers
hereunder.

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In furtherance and extension and not in limitation of the specific provisions
set forth in the first paragraph of this subsection 3.5, any action taken or
omitted by any Issuing Lender under or in connection with the Letters of Credit
issued by it or any documents and certificates delivered thereunder, if taken or
omitted in good faith, shall not put such Issuing Lender under any resulting
liability to Company.

Notwithstanding anything to the contrary contained in this subsection 3.5,
Company shall retain any and all rights it may have against any Issuing Lender
for any liability arising solely out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.

Section 4.                                          CONDITIONS TO LOANS AND
LETTERS OF CREDIT

The obligations of Lenders to make Loans and the issuance of Letters of Credit
hereunder are subject to the satisfaction of the following conditions.

4.1                               Conditions to Term Loans and Initial Revolving
Loans and Swing Line Loans.

The obligations of Lenders to make the Term Loans and any Revolving Loans and
Swing Line Loans to be made on the Closing Date are, in addition to the
conditions precedent specified in subsection 4.2, subject to prior or concurrent
satisfaction of the following conditions:

A.                                    Loan Party Documents. On or before the
Closing Date, Company shall, and shall cause each other Loan Party to, deliver
to Lenders (or to Administrative Agent with sufficient originally executed
copies, where appropriate, for each Lender) the following with respect to
Company or such Loan Party, as the case may be, each, unless otherwise noted,
dated the Closing Date:

(i)                                     Copies of the Organizational Documents
of such Person, certified by the Secretary of State of its jurisdiction of
organization (or other applicable authority) or, if such document is of a type
that may not be so certified, certified by the secretary or similar officer of
the applicable Loan Party, together with a good standing certificate from the
Secretary of State (or other applicable authority) of its jurisdiction of
organization (if available from such jurisdiction) and, to the extent generally
available, a certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority of
such jurisdiction, each dated a recent date prior to the Closing Date;

(ii)                                  Resolutions of the Governing Body of such
Person approving and authorizing the execution, delivery and performance of the
Loan Documents to which it is a party, certified as of the Closing Date by the
secretary or similar officer of such Person as being in full force and effect
without modification or amendment;

(iii)                               Signature and incumbency certificates of the
officers of such Person executing the Loan Documents to which it is a party;

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(iv)                              Executed originals of the Loan Documents to
which such Person is a party; and

(v)                                 Such other documents as Administrative Agent
may reasonably request.

B.                                    Fees. Company shall have paid to
Administrative Agent, for distribution (as appropriate) to Administrative Agent,
the Syndication Agent and Lenders, the fees payable on the Closing Date referred
to in subsection 2.3.

C.                                    Corporate and Capital Structure;
Ownership.

(i)                                     Corporate and Capital Structure and
Ownership. The corporate organizational structure, capital structure and
ownership of Company and its Subsidiaries, both before and after giving effect
to the Acquisition, shall be as set forth on Schedule 4.1C annexed hereto.

(ii)                                  Ownership of Company. Upon consummation of
the Acquisition UK Bidco shall directly control UK Target.

D.                                    Representations and Warranties;
Performance of Agreements. Company shall, have delivered to Administrative Agent
an Officer’s Certificate, in form and substance reasonably satisfactory to
Administrative Agent, to the effect that the representations and warranties in
Section 5 are true, correct and complete in all material respects on and as of
the Closing Date to the same extent as though made on and as of that date (or,
to the extent such representations and warranties specifically relate to an
earlier date, that such representations and warranties were true, correct and
complete in all material respects on and as of such earlier date) and that
Company shall have performed in all material respects all agreements and
satisfied all conditions which this Agreement provides shall be performed or
satisfied by it on or before the Closing Date except as otherwise disclosed to
and agreed to in writing by Administrative Agent; provided that, if a
representation and warranty, covenant or condition is qualified as to
materiality, with respect to such representation and warranty, covenant or
condition the applicable materiality qualifier set forth in this subsection 4.1D
shall be disregarded for purposes of this condition.

E.                                      Financial Statements. On or before the
Closing Date, Lenders shall have received from Company (i) audited financial
statements of Holdings and its Subsidiaries for Fiscal Years 2003, 2004 and
2005, consisting of balance sheets and the related consolidated statements of
income, stockholders’ equity and cash flows for such Fiscal Years,
(ii) unaudited financial statements of Holdings and its Subsidiaries as at
March 31, 2006, consisting of a balance sheet and the related consolidated
statements of income, stockholders’ equity and cash flows for the 9-month period
ending on such date, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present in all material respects
the financial condition of Holdings and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments, (iii) audited financial statements of UK Target and its
Subsidiaries for February through May 2005, consisting of balance sheets and the
related consolidated statements of income, stockholders’ equity and cash flows
for such period and (iv) unaudited financial statements of UK Target and its
Subsidiaries as at May 31, 2006, consisting

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of balance sheets and the related consolidated statements of income,
stockholders’ equity and cash flows for the 12 month period ending on such date
all in reasonable detail.

F.                                      Opinions of Counsel to Loan Parties.
Lenders shall have received originally executed copies of one or more favorable
written opinions of Latham & Watkins LLP, special counsel for Holdings and
Company and such other counsel, acceptable to Administrative Agent and its
counsel, in form and substance reasonably satisfactory to Administrative Agent
and its counsel, dated as of the Closing Date and setting forth substantially
the matters in the opinions designated in Exhibit IX annexed hereto and as to
such other matters as Administrative Agent acting on behalf of Lenders may
reasonably request (this Agreement constituting a written request by Company to
such counsel to deliver such opinions to Lenders).

G.                                    Opinion of Administrative Agent’s Counsel.
Lenders shall have received originally executed copies of a favorable written
opinion of O’Melveny & Myers LLP, counsel to Administrative Agent, dated as of
the Closing Date, substantially in the form of Exhibit X annexed hereto.

H.                                    Reserved.

I.                                         Evidence of Insurance. Administrative
Agent shall have received a certificate from Company’s insurance broker or other
evidence satisfactory to it that all insurance required to be maintained
pursuant to subsection 6.4 is in full force and effect and that Administrative
Agent on behalf of Lenders has been named as additional insured and/or loss
payee thereunder to the extent required under subsection 6.4.

J.                                      Necessary Governmental Authorizations
and Consents; Expiration of Waiting Periods, Etc. Company shall have obtained
all Governmental Authorizations and all consents of other Persons, in each case
that are necessary or advisable in connection with the Acquisition, the other
transactions contemplated by the Loan Documents and the Related Agreements and
the continued operation of the business conducted by Company and its
Subsidiaries and the UK Target and its Subsidiaries in substantially the same
manner as conducted prior to the Closing Date. Each such Governmental
Authorization and consent shall be in full force and effect, except in a case
where the failure to obtain or maintain a Governmental Authorization or consent,
either individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect. All applicable waiting periods shall have
expired without any action being taken or threatened by any competent authority
that would restrain, prevent or otherwise impose adverse conditions on the
Acquisition or the financing thereof. No action, request for stay, petition for
review or rehearing, reconsideration, or appeal with respect to any of the
foregoing shall be pending, and the time for any applicable Government Authority
to take action to set aside its consent on its own motion shall have expired.

K.                                    Environmental Reports. Administrative
Agent shall have received reports and other information, in form, scope and
substance reasonably satisfactory to Administrative Agent, regarding
environmental matters relating to Company and its Subsidiaries and the
Facilities.

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L.            Security Interests in Personal and Mixed Property. To the extent
not otherwise satisfied pursuant to subsection 4.1M, Administrative Agent shall
have received evidence reasonably satisfactory to it that Holdings, Company and
Subsidiary Guarantors shall have taken or caused to be taken (or will be taken
within applicable perfection periods) all such actions, executed and delivered
or caused to be executed and delivered all such agreements, documents and
instruments (other than the items to be delivered pursuant to subsection 6.11),
and made or caused to be made all such filings and recordings (other than the
filing or recording of items described in clauses (ii), (iii) and (iv) below)
that may be necessary in order to create in favor of Administrative Agent, for
the benefit of Lenders, a valid and (upon such filing and recording) perfected
First Priority security interest in the entire personal and mixed property
Collateral. Such actions shall include the following:

(i)            Stock Certificates and Instruments. Delivery to Administrative
Agent of (a) certificates (which certificates shall be accompanied by
irrevocable undated stock powers, duly endorsed in blank and otherwise
satisfactory in form and substance to Administrative Agent, or the equivalent
thereof in any applicable jurisdiction) representing all Capital Stock pledged
pursuant to the Security Agreement (66% of the outstanding Capital Stock in the
case of first tier Foreign Subsidiaries) and (b) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner satisfactory to
Administrative Agent) evidencing any Collateral;

(ii)           Lien Searches and UCC Termination Statements. Delivery to
Administrative Agent of (a) the results of a recent search, by a Person
satisfactory to Administrative Agent, of all effective UCC financing statements
and fixture filings and all judgment and tax lien filings which may have been
made with respect to any personal or mixed property of any Loan Party, together
with copies of all such filings disclosed by such search, to the extent
requested by Administrative Agent, and (b) UCC termination statements duly
executed (if necessary) by all applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC financing
statements or fixture filings disclosed in such search (other than any such
financing statements or fixture filings in respect of Liens permitted to remain
outstanding pursuant to the terms of this Agreement).

(iii)          UCC Financing Statements and Fixture Filings. Delivery to
Administrative Agent of UCC financing statements and, where appropriate, fixture
filings, duly executed by each applicable Loan Party (if required) with respect
to all personal and mixed property Collateral of such Loan Party, for filing in
all jurisdictions as may be necessary or, in the opinion of Administrative
Agent, desirable to perfect the security interests created in such Collateral
pursuant to the Collateral Documents;

(iv)          PTO Cover Sheets, Etc. Delivery to Administrative Agent of all
cover sheets or other documents or instruments required to be filed with the PTO
in order to create or perfect Liens in respect of any IP Collateral together
with releases of all security interests duly executed (if necessary) by all
applicable Persons for filing in all applicable jurisdictions as may be
necessary to terminate any effective PTO filings in respect of IP Collateral
(other than any such PTO filings in respect of Liens permitted to remain
outstanding pursuant to the terms of this Agreement); and

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(v)           Opinions of Local Counsel. Delivery to Administrative Agent of an
opinion of counsel (which counsel shall be reasonably satisfactory to
Administrative Agent) under the laws of each jurisdiction in which any Loan
Party or any personal or mixed property Collateral is located with respect to
the creation and perfection of the security interests in favor of Administrative
Agent in such Collateral and such other matters governed by the laws of such
jurisdiction regarding such security interests as Administrative Agent may
reasonably request, in each case in form and substance reasonably satisfactory
to Administrative Agent.

M.           Closing Date Mortgages; Closing Date Mortgage Policies; Etc.
Administrative Agent shall have received from Company and each applicable
Subsidiary Guarantor:

(i)            Closing Date Mortgages. Fully executed and notarized Mortgages
(each a “Closing Date Mortgage” and, collectively, the “Closing Date
Mortgages”), in proper form for recording in all appropriate places in all
applicable jurisdictions, encumbering each Real Property Asset listed in
Schedule 4.1M annexed hereto (each a “Closing Date Mortgaged Property” and,
collectively, the “Closing Date Mortgaged Properties”), it being agreed that no
Closing Date Mortgage will encumber any Leasehold Property as of the Closing
Date and no Leasehold Property is a Closing Date Mortgaged Property;

(ii)           Opinions of Local Counsel. An opinion of counsel (which counsel
shall be reasonably satisfactory to Administrative Agent) in each state in which
a Closing Date Mortgaged Property is located with respect to the enforceability
of the form(s) of Closing Date Mortgages to be recorded in such state and such
other matters as Administrative Agent may reasonably request, in each case in
form and substance reasonably satisfactory to Administrative Agent; and

(iii)          Reserved:

(iv)          Matters Relating to Flood Hazard Properties. (a) Evidence, which
may be in the form of a letter from an insurance broker or a municipal engineer,
as to whether (1) any Closing Date Mortgaged Property is a Flood Hazard Property
and (2) the community in which any such Flood Hazard Property is located is
participating in the National Flood Insurance Program, (b) if there are any such
Flood Hazard Properties, such Loan Party’s written acknowledgement of receipt of
written notification from Administrative Agent (1) as to the existence of each
such Flood Hazard Property and (2) as to whether the community in which each
such Flood Hazard Property is located is participating in the National Flood
Insurance Program, and (c) in the event any such Flood Hazard Property is
located in a community that participates in the National Flood Insurance
Program, evidence that Company has obtained flood insurance in respect of such
Flood Hazard Property to the extent required under the applicable regulations of
the Board of Governors of the Federal Reserve System.

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N.            Matters Relating to Existing Indebtedness of Company and its
Subsidiaries.

(i)            Termination of Existing Credit Agreement and Related Liens. On
the Closing Date, Company and its Subsidiaries shall have (a) repaid in full all
Indebtedness outstanding under the Existing Credit Agreement, (b) terminated any
commitments to lend or make other extensions of credit thereunder and
(c) delivered to Administrative Agent all documents or instruments necessary to
release all Liens securing Indebtedness or other obligations of Company and its
Subsidiaries thereunder.

(ii)           Existing Indebtedness to Remain Outstanding. Administrative Agent
shall have received an Officer’s Certificate of Company stating that, after
giving effect to the transactions described in this subsection 4.1N, the Loan
Parties shall have no Indebtedness (other than Indebtedness under the Loan
Documents and the Related Agreements and other Indebtedness described in
Schedule 7.1).

O.            Solvency Assurances. On the Closing Date, Administrative Agent and
Lenders shall have received an Officer’s Certificate of Company dated the
Closing Date, substantially in the form of Exhibit XII annexed hereto and with
appropriate attachments, in each case demonstrating that, after giving effect to
the consummation of the Acquisition and the other transactions contemplated by
the Loan Documents and Related Agreements, Company and each Subsidiary Guarantor
on a consolidated basis will be Solvent.

P.            Related Agreements. Administrative Agent shall have received a
fully executed or conformed copy of each Related Agreement and any documents
executed in connection therewith, and each Related Agreement shall be in full
force and effect and no provision thereof shall have been modified or waived in
any respect determined by Administrative Agent to be material, in each case
without the written consent of Administrative Agent and Syndication Agent with
such consent not to be unreasonably withheld and the provisions of each Related
Agreement shall be in compliance in all material respects with applicable laws
and regulations.

Q.            Consummation of Acquisition. Administrative Agent shall have
received an Officer’s Certificate of Company stating that Holdings, Company and
UK Bidco will proceed without delay to consummate the Acquisition in accordance
with the terms of the Acquisition Agreement upon the making of the initial
Loans.

R.            Patriot Act Compliance. Administrative Agent and Syndication Agent
shall have received all documentation and other information required by bank
regulatory authorities under the applicable “know your customer” and anti-money
laundering rules and regulations, including without limitation the Patriot Act.

S.            Completion of Proceedings. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto shall be reasonably satisfactory in form and
substance to Administrative Agent and such counsel, and Administrative Agent and
such counsel shall have received all such

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counterpart originals or certified copies of such documents as Administrative
Agent may reasonably request.

T.            Litigation. On the Closing Date, Administrative Agent and Lenders
shall have received an Officer’s Certificate of Company dated the Closing Date,
confirming that it is not aware of any pending or threatened Proceedings that
could reasonably be expected to have a Material Adverse Effect.

U.            Closing Date Leverage Ratio. On the Closing Date, Administrative
Agent shall have received a Closing Date Certificate signed by the Company’s
chief financial officer, demonstrating in reasonable detail (to the reasonable
satisfaction of the Administrative Agent) that the Consolidated Leverage Ratio
after giving pro forma effect to the Acquisition is no more than 4.75 to 1.00.

4.2                               Conditions to All Loans.

The obligations of each Lender to make its Loans on each Funding Date are
subject to the following further conditions precedent:

A.            Administrative Agent shall have received before that Funding Date,
in accordance with the provisions of subsection 2.1B, an originally executed
Notice of Borrowing, in each case signed by a duly authorized Officer of
Company.

B.            As of that Funding Date:

(i)            The representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though made on and
as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations and
warranties shall have been true, correct and complete in all material respects
on and as of such earlier date; provided, that, if a representation and warranty
is qualified as to materiality, with respect to such representation and
warranty, the materiality qualifier set forth above shall be disregarded for
purposes of this condition;

(ii)           No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of Borrowing
that would constitute an Event of Default or a Potential Event of Default;

(iii)          Each Loan Party shall have performed in all material respects all
agreements and satisfied all conditions which this Agreement provides shall be
performed or satisfied by it on or before that Funding Date; and

(iv)          No order, judgment or decree of any arbitrator or Government
Authority shall purport to enjoin or restrain such Lender from making the Loans
to be made by it on that Funding Date.

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4.3                               Conditions to Letters of Credit.

The issuance of any Letter of Credit hereunder (whether or not the applicable
Issuing Lender is obligated to issue such Letter of Credit) is subject to the
following conditions precedent:

A.            On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.

B.            On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1C(i), an originally executed Request for Issuance (or a facsimile
copy thereof) in each case signed by a duly authorized Officer of Company,
together with all other information specified in subsection 3.1C(i) and such
other documents or information as the applicable Issuing Lender may reasonably
require in connection with the issuance of such Letter of Credit.

C.            On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same extent as
if the issuance of such Letter of Credit were the making of a Loan and the date
of issuance of such Letter of Credit were a Funding Date.

Section 5.              COMPANY’S REPRESENTATIONS AND WARRANTIES

In order to induce Lenders to enter into this Agreement and to make the Loans,
to induce Issuing Lenders to issue Letters of Credit and to induce Revolving
Lenders to purchase participations therein, Company (for purposes of this
Section 5, references to Holdings and its Subsidiaries shall be deemed to
include UK Target once the Acquisition has occurred) represents and warrants to
each Lender:

5.1                               Organization, Powers, Qualification, Good
Standing, Business and Subsidiaries.

A.            Organization and Powers. Each of Holdings and its Subsidiaries is
a corporation, partnership, trust or limited liability company duly organized or
incorporated, validly existing and in good standing (where applicable) under the
laws of its jurisdiction of organization or incorporation as specified in
Schedule 5.1 annexed hereto. Each of Holdings and its Subsidiaries has all
requisite power and authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter into the
Loan Documents and the Related Agreements to which it is a party and to carry
out the transactions contemplated thereby.

B.            Qualification and Good Standing. Each of Holdings and its
Subsidiaries is qualified to do business and (to the extent such concept is
relevant) in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and could not reasonably be expected to result in a Material Adverse Effect.

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C.            Conduct of Business. Holdings and its Subsidiaries are engaged
only in the businesses permitted to be engaged in pursuant to subsections 7.11
and 8.13.

D.            Subsidiaries. All of the Subsidiaries of Company as of the Closing
Date and their jurisdictions of organization or incorporation are identified in
Schedule 5.1 annexed hereto, as said Schedule 5.1 may be supplemented from time
to time pursuant to the provisions of subsection 6.1(xv). The Capital Stock of
each of the Subsidiaries of Company identified in Schedule 5.1 annexed hereto
(as so supplemented) is duly authorized, validly issued, fully paid and
nonassessable and none of such Capital Stock constitutes Margin Stock. Each of
the Subsidiaries of Company identified in Schedule 5.1 annexed hereto (as so
supplemented) is a corporation, partnership, trust or limited liability company
duly organized or incorporated, validly existing and, where applicable, in good
standing under the laws of its respective jurisdiction of organization or
incorporation set forth therein, has all requisite power and authority to own
and operate its properties and to carry on its business as now conducted and as
proposed to be conducted, and is qualified to do business and (to the extent
such concept is relevant) in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, in each case except where failure to be so qualified or in good
standing or a lack of such power and authority has not had and could not
reasonably be expected to result in a Material Adverse Effect. Schedule 5.1
annexed hereto (as so supplemented) correctly sets forth, as of the Closing
Date, the ownership interest of Company and each of its Subsidiaries in each of
the Subsidiaries of Company identified therein.

5.2                               Authorization of Borrowing, etc.

A.            Authorization of Borrowing. The execution, delivery and
performance of the Loan Documents and the Related Agreements have been duly
authorized by all necessary action on the part of each Loan Party that is a
party thereto.

B.            No Conflict. Except as disclosed in the Related Agreements, the
execution, delivery and performance by the Loan Parties of the Loan Documents
and the Related Agreements to which they are parties and the consummation of the
transactions contemplated by the Loan Documents and the Related Agreements do
not and will not (i) violate any provision of any law or any governmental
rule or regulation applicable to Holdings or any of its Subsidiaries, the
Organizational Documents of Holdings or any of its Subsidiaries or any order,
judgment or decree of any court or other Government Authority binding on
Holdings or any of its Subsidiaries, (ii) conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Holdings or any of its Subsidiaries, (iii) result in
or require the creation or imposition of any Lien upon any of the properties or
assets of Holdings or any of its Subsidiaries (other than any Liens created
under any of the Loan Documents in favor of Administrative Agent on behalf of
Lenders), or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of Holdings or any of its
Subsidiaries, except for such approvals or consents which will be obtained on or
before the Closing Date and disclosed in writing to Lenders and except, in each
case, to the extent such violation, conflict, Lien or failure to obtain such
approval or consent could not reasonably be expected to result in a Material
Adverse Effect.

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C.            Governmental Consents. The execution, delivery and performance by
the Loan Parties of the Loan Documents and the Related Agreements to which they
are parties and the consummation of the transactions contemplated by the Loan
Documents and the Related Agreements do not and will not require any
Governmental Authorization, except as have been obtained and as of the Closing
Date, any thereof which the failure to obtain or make could not reasonably be
expected to have a Material Adverse Effect.

D.            Binding Obligation. Each of the Loan Documents and the Related
Agreements has been duly executed and delivered by Holdings, Company and each
Subsidiary of Company (to the extent each of them is a party thereto) and is the
legally valid and binding obligation of such Person, enforceable against such
Person in accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors’ rights generally or by equitable principles relating to
enforceability.

5.3                               Financial Condition.

Company has heretofore delivered to Lenders, at Lenders’ request, financial
statements and information for the period ended March 31, 2006. All such
statements other than pro forma financial statements were prepared in conformity
with GAAP and fairly present, in all material respects, the financial position
(on a consolidated basis) of the entities described in such financial statements
as at the respective dates thereof and the results of operations and cash flows
(on a consolidated basis) of the entities described therein for each of the
periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments.
Except as set forth on Schedule 5.3, neither Company nor any of its Subsidiaries
has (and will not have following the funding of the initial Loans) any
Contingent Obligation, contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that, as of the Closing Date,
is not reflected in the foregoing financial statements or the notes thereto and,
as of any Funding Date subsequent to the Closing Date, is not reflected in the
most recent financial statements delivered to Lenders pursuant to subsection 6.1
or the notes thereto and that, in any such case, is material in relation to the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Company or any of its Subsidiaries.

5.4                               No Material Adverse Change; No Restricted
Junior Payments.

Since June 30, 2005, no event or change has occurred that has resulted in or
evidences, either in any case or in the aggregate, a Material Adverse Effect.
Neither Company nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted by subsection 7.5.

5.5                               Title to Properties; Liens; Real Property;
Intellectual Property.

A.            Title to Properties; Liens. Company and its Subsidiaries have
(i) good, sufficient and legal title to (in the case of fee interests in real
property), (ii) valid leasehold interests in (in the case of leasehold interests
in real or personal property), or (iii) good title to (in

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the case of all other personal property), all of their respective properties and
assets reflected in the financial statements referred to in subsection 5.3 or in
the most recent financial statements delivered pursuant to subsection 6.1, in
each case except for assets disposed of since the date of such financial
statements in the ordinary course of business or as otherwise permitted under
subsection 7.7 and except for such defects that individually or in the aggregate
would not have a Material Adverse Effect. Except as permitted by this Agreement,
all such properties and assets are free and clear of Liens.

B.            Real Property. As of the Closing Date, Schedule 5.5B annexed
hereto contains a true, accurate and complete list of (i) all fee interests in
any Real Property Assets and (ii) all leases, subleases or assignments of leases
(together with all amendments, modifications, supplements, renewals or
extensions of any thereof) affecting each Real Property Asset, regardless of
whether a Loan Party is the landlord or tenant (whether directly or as an
assignee or successor in interest) under such lease, sublease or assignment.
Except as specified in Schedule 5.5B annexed hereto, each agreement listed in
clause (ii) of the immediately preceding sentence is in full force and effect
and Company does not have knowledge of any default that has occurred and is
continuing thereunder, and each such agreement constitutes the legally valid and
binding obligation of each applicable Loan Party, enforceable against such Loan
Party in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors’ rights generally or by equitable principles.

C.            Intellectual Property. As of the Closing Date, Company and its
Subsidiaries own or have the right to use, all Intellectual Property used in the
conduct of their business, except where the failure to own or have such right to
use in the aggregate could not reasonably be expected to result in a Material
Adverse Effect. No claim has been asserted against Company or any of its
Subsidiaries and is pending by any Person challenging or questioning such use of
any such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does any Officer of Company know of any valid basis
for any such claim, except for such claims that in the aggregate could not
reasonably be expected to result in a Material Adverse Effect. The use of such
Intellectual Property by Company and its Subsidiaries does not infringe on the
rights of any Person, except for such claims and infringements that, in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. All material federal and state and all material foreign registrations of
and applications for Intellectual Property, and all material unregistered
Intellectual Property that is not readily available in the marketplace, that are
owned or licensed by Company or any of its Subsidiaries on the Closing Date are
described on Schedule 5.5C annexed hereto.

5.6                               Litigation; Adverse Facts.

Except as set forth in Schedule 5.6 annexed hereto, there are no Proceedings
(whether or not purportedly on behalf of Company or any of its Subsidiaries) at
law or in equity, or before or by any court or other Government Authority
(including any Environmental Claims) that are pending or, to the knowledge of
any Officer of Company, threatened against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries and that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither Company nor any of its Subsidiaries (i) is in
violation of any applicable

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laws (including Environmental Laws) that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect, or (ii) is
subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or other Government
Authority that, individually or in the aggregate, could reasonably be expected
to result in a Material Adverse Effect.

5.7                               Payment of Taxes.

Except to the extent permitted by subsection 6.3 and except as would not
reasonably be expected to result in a Material Adverse Effect, all tax returns
and reports of Holdings and its Subsidiaries required to be filed by any of them
have been timely filed, and all taxes shown on such tax returns to be due and
payable and all assessments, fees and other governmental charges upon Holdings
and its Subsidiaries and upon their respective properties, assets, income,
businesses and franchises that are due and payable have been paid prior to
delinquency. As of the date hereof, Company knows of no proposed tax assessment
against Holdings or any of its Subsidiaries that is not being actively contested
by Holdings or such Subsidiary in good faith and by appropriate proceedings;
provided that such reserves or other appropriate provisions, if any, as shall be
required in conformity with GAAP shall have been made or provided therefor.

5.8                               Performance of Agreements; Material Contracts.

A.            Neither Holdings nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, could not reasonably be expected to result in
a Material Adverse Effect.

B.            Schedule 5.8 contains a true, correct and complete list of all the
Material Contracts in effect on the Closing Date. Except as described on
Schedule 5.8, all such Material Contracts are in full force and effect and no
material defaults by Company or any of its Subsidiaries currently exist
thereunder.

5.9                               Governmental Regulation.

Neither Company nor any of its Subsidiaries is subject to regulation under the
Federal Power Act, the Interstate Commerce Act or the Investment Company Act of
1940 or under any other federal or state statute or regulation which may limit
its ability to incur Indebtedness or which may otherwise render all or any
portion of the Obligations unenforceable.

5.10                        Securities Activities.

A.            Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.

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B.                                    Following application of the proceeds of
each Loan, not more than 25% of the value of the assets (either of Company only
or of Company and its Subsidiaries on a consolidated basis) subject to the
provisions of subsection 7.2 or 7.7 or subject to any restriction contained in
any agreement or instrument, between Company and any Lender or any Affiliate of
any Lender, relating to Indebtedness and within the scope of subsection 8.2,
will be Margin Stock.

5.11                        Employee Benefit Plans.

A.                                    Company and each of its Subsidiaries are
in compliance in all material respects with all applicable provisions and
requirements of ERISA and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their obligations in all material respects under each Employee Benefit Plan.
Each Company Employee Benefit Plan that is intended to qualify under
Section 401(a) of the Internal Revenue Code is so qualified.

B.                                    No ERISA Event has occurred or is
reasonably expected to occur.

C.                                    Except to the extent required under
Section 4980B of the Internal Revenue Code or except as set forth in Schedule
5.11 annexed hereto, no Employee Benefit Plan provides health or welfare
benefits (through the purchase of insurance or otherwise) for any retired or
former employee of Company or any of its Subsidiaries.

D.                                    As of the most recent valuation date for
any Pension Plan, the amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension
Plans (excluding for purposes of such computation any Pension Plans with respect
to which assets exceed benefit liabilities), which could reasonable be expected
to result in a Direct Liability does not exceed $1,500,000.

E.                                      As of the most recent valuation date for
each Multiemployer Plan for which the actuarial report is available, the
potential liability of Company and its Subsidiaries for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to
Section 4221(e) of ERISA, does not exceed $1,500,000.

F.                                      As of the date hereof, Company and its
Subsidiaries have made full payment when due of all required contributions in
excess of $1,000,000 in aggregate (or its equivalent in other currencies) to any
Foreign Plan.

5.12                        Certain Fees.

No broker’s or finder’s fee or commission will be payable with respect to this
Agreement or any of the transactions contemplated hereby, except, such as are
included in Transaction Costs, and Company hereby indemnifies Lenders against,
and agrees that it will hold Lenders harmless from, any claim, demand or
liability for any such broker’s or finder’s fees alleged to have been incurred
in connection herewith or therewith and any expenses (including

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reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.

5.13                        Environmental Protection.

(i)                                     Neither Company nor any of its
Subsidiaries nor any of their respective Facilities or operations are subject to
any outstanding written order, consent decree or settlement agreement with any
Person relating to (a) any Environmental Law, (b) any Environmental Claim, or
(c) any Hazardous Materials Activity in each case that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect;

(ii)                                  as of the Closing Date, neither Company
nor any of its Subsidiaries has received any letter or written request for
information under Section 104 of the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. § 9604) or any comparable state law;

(iii)                               there are and, to any Officer of Company’s
knowledge, have been no conditions, occurrences, or Hazardous Materials
Activities that could reasonably be expected to form the basis of an
Environmental Claim against Company or any of its Subsidiaries that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect;

(iv)                              as of the Closing Date neither Company nor any
of its Subsidiaries nor, to any Officer of Company’s knowledge, any predecessor
of Company or any of its Subsidiaries has filed any notice under any
Environmental Law indicating past or present treatment of Hazardous Materials at
any Facility, and none of Company’s or any of its Subsidiaries’ operations
involves the generation, transportation, treatment, storage or disposal of
hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state
equivalent; and

(v)                                 compliance with all current or reasonably
foreseeable future requirements pursuant to or under Environmental Laws would
not, individually or in the aggregate, be reasonably expected to result in a
Material Adverse Effect.

5.14                        Employee Matters.

There is no strike or work stoppage in existence or threatened involving Company
or any of its Subsidiaries that could reasonably be expected to result in a
Material Adverse Effect.

5.15                        Solvency.

The Loan Parties, on a consolidated basis, are, and, upon the incurrence of any
Obligations by any Loan Party on any date on which this representation is made,
will be, Solvent.

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5.16                        Matters Relating to Collateral.

A.                                    Creation, Perfection and Priority of
Liens. The execution and delivery of the Collateral Documents by the Loan
Parties, together with (i) the actions taken to date pursuant to subsections
4.1L, 4.1M, 6.8 and 6.9 and (ii) the delivery to Administrative Agent of any
Pledged Collateral not delivered to Administrative Agent at the time of
execution and delivery of the applicable Collateral Document (all of which
Pledged Collateral has been so delivered) are effective to create in favor of
Administrative Agent for the benefit of Lenders, as security for the respective
Secured Obligations (as defined in the applicable Collateral Document in respect
of any Collateral), a valid First Priority Lien on all of the Collateral, and
all filings and other actions necessary to perfect and maintain the perfection
and First Priority status of such Liens have been duly made or taken and remain
in full force and effect (or will be duly made or taken within applicable time
periods), other than the filing of any UCC financing statements and PTO filings
delivered to Administrative Agent for filing (but not yet filed) and the
periodic filing of UCC continuation statements in respect of UCC financing
statements filed by or on behalf of Administrative Agent.

B.                                    Governmental Authorizations. No
authorization, approval or other action by, and no notice to or filing with, any
Government Authority is required for either (i) the pledge or grant by any Loan
Party of the Liens purported to be created in favor of Administrative Agent
pursuant to any of the Collateral Documents or (ii) the exercise by
Administrative Agent of any rights or remedies in respect of any Collateral
(whether specifically granted or created pursuant to any of the Collateral
Documents or created or provided for by applicable law), except for filings or
recordings contemplated by subsection 5.16A and except as may be required, in
connection with the disposition of any Pledged Collateral, by laws generally
affecting the offering and sale of securities.

C.                                    Absence of Third-Party Filings. Except
such as may have been filed in favor of Administrative Agent as contemplated by
subsection 5.16A and to evidence permitted lease obligations and other Liens
permitted pursuant to subsection 7.2 and those that are being terminated in
connection with the refinancing of the Existing Credit Agreement, (i) no
effective UCC financing statement, fixture filing or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO (to Company’s knowledge) or in the United
States Copyright Office.

D.                                    Margin Regulations. The pledge of the
Pledged Collateral pursuant to the Collateral Documents does not violate
Regulation T, U or X of the Board of Governors of the Federal Reserve System.

E.                                      Information Regarding Collateral. All
information supplied to Administrative Agent by or on behalf of any Loan Party
with respect to the Collateral is accurate and complete in all material
respects.

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5.17                        Disclosure.

All factual information (taken as a whole) furnished by or on behalf of Holdings
or any of its Subsidiaries to Administrative Agent or any Lender in writing on
or before the Closing Date (including any such information contained in the
Confidential Information Memorandum or in any Loan Document or Related Agreement
or in any other document, certificate or written statement furnished to Lenders
by or on behalf of Holdings or any of its Subsidiaries) for use in connection
with the transactions contemplated by this Agreement is true and correct in all
material respects and does not omit to state a material fact necessary in order
to make the statements contained herein and therein, taken as a whole, not
misleading at such time in light of the circumstances in which the same were
made, it being understood that for purposes of this subsection 5.17, such
factual information does not include projections and pro forma financial
information. Any projections and pro forma financial information contained in
such materials or delivered pursuant to this Agreement from time to time are or
will be based upon good faith estimates and assumptions believed by Company to
be reasonable at the time made, it being recognized by Lenders that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
from the projected results.

5.18                        Subordinated Indebtedness.

The Obligations constitute senior indebtedness that is entitled to the benefits
of the subordination provisions, if any, of all Indebtedness of Company and the
Subsidiary Guarantors.

5.19                        Related Agreements.

A.                                    Delivery of Related Agreements. Company
has delivered to Lenders complete and correct copies of each Related Agreement
and of all exhibits and schedules thereto.

B.                                    Warranties of Company. Subject to the
qualifications set forth therein, each of the representations and warranties
given by UK Bidco to the Vendors (as defined in the Acquisition Agreement) in
the Acquisition Agreement is true and correct in all material respects as of the
date hereof and will be true and correct in all material respects as of the
Closing Date.

C.                                    Survival. Notwithstanding anything in the
Acquisition Agreement to the contrary, the representations and warranties of UK
Bidco and Company set forth in subsections 5.19B shall, solely for purposes of
this Agreement, survive the Closing Date for the benefit of Lenders.

5.20                        Reporting to IRS.

Company does not intend to treat the Loans and related transactions as being a
“reportable transaction” (within the meaning of Treasury Regulation
Section 1.6011-4). In the event Company determines to take any action
inconsistent with such intention, it will promptly notify Administrative Agent
thereof.

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Company acknowledges that one or more Lenders may treat their Loans as part of a
transaction that is subject to Treasury Regulation Section 1.6011-4 or
Section 301.6112-1, and Administrative Agent and such Lender or Lenders, as
applicable, may file such IRS forms or maintain such lists and other records as
they may determine is required by such Treasury Regulations.

5.21                        Foreign Assets Control Regulations, etc.

Neither the making of the Loans to, or issuance of a Letter of Credit on behalf
of, Company nor its use of the proceeds thereof will violate the Trading with
the Enemy Act, as amended, or any of the foreign assets control regulations of
the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) or any enabling legislation or executive order relating thereto.
Without limiting the foregoing, neither Company nor any of its Subsidiaries or
Affiliates (a) is or will become a Person whose property or interests in
property are blocked pursuant to Section 1 of Executive Order 13224 of
September 23, 2001 Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001))
or (b) engages or will engage in any dealings or transactions, or be otherwise
associated, with any such Person. Company and its Subsidiaries and Affiliates
are in compliance, in all material respects, with the Patriot Act.

5.22                        Foreign Subsidiaries.

FTD Canada, Inc. is not a Material Subsidiary as of the Closing Date.

Section 6.                                          COMPANY’S AFFIRMATIVE
COVENANTS

Company covenants and agrees that, so long as any of the Commitments hereunder
shall remain in effect and until payment in full of all of the Loans and other
Obligations and the cancellation, expiration or collateralization with cash or a
letter of credit of all Letters of Credit, unless Requisite Lenders shall
otherwise give prior written consent, Company shall perform, and shall cause
each of its Subsidiaries to perform, all covenants in this Section 6.

6.1                               Financial Statements and Other Reports.

Company will maintain, and cause each of its Subsidiaries to maintain, a system
of accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in conformity with GAAP.
Company will deliver to Administrative Agent, which will distribute to each
Lender:

(i)                                     Events of Default, etc.:  promptly upon
any Officer of Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or becoming aware
that any Lender has given any written notice (other than to Administrative
Agent) or taken any other action with respect to a claimed Event of Default or
Potential Event of Default, (b) that any Person has given any notice to Company
or any of its Subsidiaries or taken any other action with respect to a claimed
default or event or condition of the type referred to in subsection 8.2, (c) of
any condition

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or event that would be required to be disclosed in a current report filed by
Company with the Securities and Exchange Commission on Form 8-K if Company were
required to file such reports under the Exchange Act, or (d) of the occurrence
of any event or change that has caused or evidences, either in any case or in
the aggregate, a Material Adverse Effect, an Officer’s Certificate specifying
the nature and period of existence of such condition, event or change, or
specifying the notice given or action taken by any such Person and the nature of
such claimed Event of Default, Potential Event of Default, default, event or
condition, and what action Company has taken, is taking and proposes to take
with respect thereto;

(ii)                                  Pro Forma Financials:  as soon as
available and in any event within 30 days after the Closing Date, pro forma
consolidated balance sheets (in form and substance reasonably satisfactory to
Administrative Agent) of Holdings and its Subsidiaries as of June 30, 2006,
which shall be prepared in accordance with GAAP and reflect the consummation of
the Acquisition, the related financings and the other transactions contemplated
by the Loan Documents and the Related Agreements;

(iii)                               Quarterly Financials:  as soon as available
and in any event within 50 days after the end of each of the first three Fiscal
Quarters of each Fiscal Year, (a) (i) the consolidated balance sheet of Holdings
and its Subsidiaries as at the end of such Fiscal Quarter, (ii) the related
consolidated statement of income of Holdings and its Subsidiaries for such
Fiscal Quarter and for the period from the beginning of the then current Fiscal
Year to the end of such Fiscal Quarter and (iii) the related consolidated
statements of stockholders’ equity and cash flows of Holdings and its
Subsidiaries for the period from the beginning of the then current Fiscal Year
to the end of such Fiscal Quarter, setting forth in each case in comparative
form the corresponding figures for the corresponding periods of the previous
Fiscal Year, all in reasonable detail and certified by the chief financial
officer of Company that they fairly present, in all material respects, the
financial condition of Holdings and its Subsidiaries as at the dates indicated
and the results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments, and (b) a narrative report describing the operations of Holdings
and its Subsidiaries for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal Quarter (it
being understood that the information required by this Section 6.1(iii) may be
furnished in the form of a Form 10-Q);

(iv)                              Year-End Financials:  as soon as available and
in any event within 105 days after the end of each Fiscal Year, (a) the
consolidated balance sheet of Holdings and its Subsidiaries as at the end of
such Fiscal Year and the related consolidated statements of income,
stockholders’ equity and cash flows of Holdings and its Subsidiaries for such
Fiscal Year, setting forth in each case in comparative form the corresponding
figures for the previous Fiscal Year, all in reasonable detail and certified by
the chief financial officer of Company that they fairly present, in all material
respects, the financial condition of Holdings and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for the
periods indicated, (b) a narrative report describing the operations of Holdings
and its Subsidiaries for such Fiscal Year, and (c) in the case of such
consolidated financial statements, a report thereon of Ernst & Young LLP or
other

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independent certified public accountants of recognized national standing
selected by Company and reasonably satisfactory to Administrative Agent, which
report shall be unqualified, shall express no doubts, assumptions or
qualifications concerning the ability of Holdings and its Subsidiaries to
continue as a going concern, and shall state that such consolidated financial
statements fairly present, in all material respects, the consolidated financial
position of Holdings and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years (except as
otherwise disclosed in such financial statements) and that the examination by
such accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards (it being
understood that the information required by this Section 6.1(v) may be furnished
in the form of a Form 10-K);

(v)                                 Pricing and Compliance Certificates: 
together with each delivery of financial statements pursuant to subdivisions
(iii) and (iv) above, (a) an Officer’s Certificate of Company stating that the
signers have reviewed the terms of this Agreement and have made, or caused to be
made under their supervision, a review in reasonable detail of the transactions
and condition of Holdings and its Subsidiaries during the accounting period
covered by such financial statements and that such review has not disclosed the
existence during or at the end of such accounting period, and that the signers
do not have knowledge of the existence as at the date of such Officer’s
Certificate, of any condition or event that constitutes an Event of Default or
Potential Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what action
Company has taken, is taking and proposes to take with respect thereto; and
(b) a Compliance Certificate demonstrating in reasonable detail compliance
during and at the end of the applicable accounting periods with the restrictions
contained in Section 7, in each case to the extent compliance with such
restrictions is required to be tested at the end of the applicable accounting
period; in addition, on or before the 50th day following the end of each Fiscal
Quarter, a Pricing Certificate demonstrating in reasonable detail the
calculation of the Consolidated Leverage Ratio as of the end of the four-Fiscal
Quarter period then ended;

(vi)                              Reconciliation Statements:  if, as a result of
any change in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in subsection 5.3,
the consolidated financial statements of Holdings and its Subsidiaries delivered
pursuant to subdivisions (iii), (iv) or (xiii) of this subsection 6.1 will
differ in any material respect from the consolidated financial statements that
would have been delivered pursuant to such subdivisions had no such change in
accounting principles and policies been made, then (a) together with the first
delivery of financial statements pursuant to subdivision (iii), (iv) or (xiii)
of this subsection 6.1 following such change, consolidated financial statements
of Holdings and its Subsidiaries for (y) the current Fiscal Year to the
effective date of such change and (z) the two full Fiscal Years immediately
preceding the Fiscal Year in which such change is made, in each case prepared on
a pro forma basis as if such change had been in effect during such periods, and
(b) together with each delivery of financial statements pursuant to subdivision
(iii), (iv) or (xiii) of this subsection 6.1 following such change, if required
pursuant to subsection 1.2, a written statement of the chief accounting officer
or chief

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financial officer of Company setting forth the differences (including any
differences that would affect any calculations relating to the financial
covenants set forth in subsection 7.6) which would have resulted if such
financial statements had been prepared without giving effect to such change;

(vii)                           Accountants’ Certification:  together with each
delivery of consolidated financial statements pursuant to subdivision
(iv) above, a written statement by the independent certified public accountants
giving the report thereon (a) stating that their audit examination has included
a review of the terms of this Agreement and the other Loan Documents as they
relate to accounting matters, (b) stating whether, in connection with their
audit examination, any condition or event that constitutes an Event of Default
or Potential Event of Default has come to their attention and, if such a
condition or event has come to their attention, specifying the nature and period
of existence thereof; provided that such accountants shall not be liable by
reason of any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the course of their
audit examination, and (c) stating that based on their audit examination nothing
has come to their attention that causes them to believe either or both that the
information contained in the certificates delivered therewith pursuant to
subdivision (v) above is not correct or that the matters set forth in the
Compliance Certificates delivered therewith pursuant to clause (b) of
subdivision (v) above for the applicable Fiscal Year are not stated in
accordance with the terms of this Agreement;

(viii)                        Accountants’ Reports:  promptly upon receipt
thereof (unless restricted by applicable professional standards), copies of all
reports submitted to Company by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Holdings and its Subsidiaries made by such accountants, including
any comment letter submitted by such accountants to management in connection
with their annual audit;

(ix)                                SEC Filings and Press Releases:  promptly
upon their becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by Company to its
security holders or by any Subsidiary of Company to its security holders other
than Company or another Subsidiary of Company, (b) all regular and periodic
reports and all registration statements (other than on Form S-8 or a similar
form) and prospectuses, if any, filed by Company or any of its Subsidiaries with
any securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (c) all press releases and
other statements made available generally by Company or any of its Subsidiaries
to the public concerning material developments in the business of Company or any
of its Subsidiaries;

(x)                                   Litigation or Other Proceedings:  promptly
upon any Officer of Company obtaining knowledge of (1) the institution of, or
non-frivolous threat of, any Proceeding against or affecting Company or any of
its Subsidiaries or any property of Company or any of its Subsidiaries not
previously disclosed in writing by Company to Lenders or (2) any material
development in any Proceeding that, in any case:

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(x)                                   if adversely determined, has a reasonable
possibility after giving effect to the coverage and policy limits of insurance
policies issued to Company and its Subsidiaries of giving rise to a Material
Adverse Effect; or

(y)                                 seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;

written notice thereof together with such other information as may be reasonably
available to Company to enable Lenders and their counsel to evaluate such
matters;

(xi)                                ERISA Events:  promptly upon any Officer of
Company becoming aware of the occurrence of or forthcoming occurrence of any
ERISA Event, a written notice specifying the nature thereof, what action
Company, any of its Subsidiaries or any of their respective ERISA Affiliates has
taken, is taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, the Department of
Labor or the PBGC with respect thereto;

(xii)                             ERISA Notices:  with reasonable promptness,
copies of (a) all written notices received by Company, any of its Subsidiaries
or any of their respective ERISA Affiliates from a Multiemployer Plan sponsor
concerning an ERISA Event; and (b) copies of such other documents or
governmental reports or filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;

(xiii)                          Financial Plans:  as soon as practicable and in
any event no later than 90 days after the beginning of each Fiscal Year, a
consolidated plan and financial forecast for such Fiscal Year (the “Financial
Plan” for such Fiscal Year), including (a) forecasted consolidated balance
sheets and forecasted consolidated statements of income and cash flows of
Holdings and its Subsidiaries for each such Fiscal Year, together with pro forma
Compliance Certificates for each such Fiscal Year and an explanation of the
assumptions on which such forecasts are based, (b) forecasted consolidated
statements of income and cash flows of Holdings and its Subsidiaries for each
quarter of such Fiscal Year, and (c) such other information and projections as
any Lender may reasonably request;

(xiv)                         Insurance:  as soon as practicable after any
material change in insurance coverage maintained by Company and its
Subsidiaries, notice thereof to Administrative Agent specifying the changes and
reasons therefor;

(xv)                            Governing Body:  with reasonable promptness,
written notice of any change in the Governing Body of Company;

(xvi)                         New Subsidiaries:  promptly upon any Person
becoming a Subsidiary of Company, a written notice setting forth with respect to
such Person (a) the date on which such Person became a Subsidiary of Company and
(b) all of the data required to be set forth in Schedule 5.1 annexed hereto with
respect to all Subsidiaries of Company (it being understood that such written
notice shall be deemed to supplement Schedule 5.1 annexed hereto for all
purposes of this Agreement);

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(xvii)                      Good Standing Certificates:  upon request of
Administrative Agent, good standing certificates (if applicable) as to each Loan
Party from its jurisdiction of organization;

(xviii)                   Notices from Holders of Subordinated Indebtedness: 
promptly, upon receipt, copies of all notices from holders of Subordinated
Indebtedness or a trustee, agent or other representative of such a holder;

(xix)                           Patriot Act, etc.: with reasonable promptness,
information to confirm compliance with the representations contained in
subsection 5.21 reasonably requested by any Lender through Administrative Agent;
and

(xx)                              Other Information:  with reasonable
promptness, such other information and data with respect to Company or any of
its Subsidiaries as from time to time may be reasonably requested by any Lender
through Administrative Agent.

Company and its Subsidiaries shall be deemed to have delivered reports referred
to in clauses (iii), (iv) and (ix) of this subsection 6.1 when (A) such reports
or other information have been posted on the Internet website of the Securities
and Exchange Commission (http://www.sec.gov) or on its own Internet website as
previously identified to Administrative Agent and Lenders, and (B) Company and
its Subsidiaries have notified Administrative Agent and Lenders by electronic
mail of such posting; provided that if Administrative Agent or any Lender
request such information to be delivered in hard copies, Company and/or any of
its Subsidiaries, as applicable, shall furnish to Administrative Agent or
Lender, as applicable, such information accordingly.

6.2                               Existence, etc.

Except as permitted under subsection 7.7, Company will, and will cause each of
its Subsidiaries to, at all times preserve and keep in full force and effect its
existence in the jurisdiction of organization specified on Schedule 5.1 and all
rights and franchises material to its business; provided, however that neither
Company nor any of its Subsidiaries shall be required to preserve any such right
or franchise if the Governing Body of Company or such Subsidiary shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of Company or such Subsidiary, as the case may be, and that the loss
thereof is not disadvantageous in any material respect to Company, such
Subsidiary or Lenders.

6.3                               Payment of Taxes and Claims; Tax.

A.                                    Except as would not reasonably be expected
to result in a Material Adverse Effect, Holdings will, and will cause each of
its Subsidiaries to, pay all taxes, assessments and other governmental charges
imposed upon it or any of its properties or assets or in respect of any of its
income, businesses or franchises before any penalty accrues thereon, and all
claims (including claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no such tax, assessment,
charge or claim need be paid if it is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, so long as
(i)

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such reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor and (ii) in the case of a
tax, assessment, charge or claim which has or may become a Lien against any of
the Collateral, such proceedings conclusively operate to stay the sale of any
portion of the Collateral to satisfy such charge or claim.

B.                                    Holdings will not, nor will it permit any
of its Subsidiaries to, file or consent to the filing of any consolidated income
tax return with any Person (other than Holdings or any of its Subsidiaries or a
corporation that directly owns 50% or more of the Voting Stock of Holdings).

6.4                               Maintenance of Properties; Insurance;
Application of Net Insurance/ Condemnation Proceeds.

A.                                    Maintenance of Properties. Company will,
and will cause each of its Subsidiaries to, maintain or cause to be maintained
in good repair, working order and condition, ordinary wear and tear excepted,
all material properties necessary for and used in the business of Company and
its Subsidiaries (including all Intellectual Property) and from time to time
will make or cause to be made all appropriate repairs, renewals and replacements
thereof, except where the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.

B.                                    Insurance. Company will maintain or cause
to be maintained, with financially sound and reputable insurers, such public
liability insurance, third party property damage insurance, business
interruption insurance and casualty insurance with respect to liabilities,
losses or damage in respect of the assets, properties and businesses of Company
and its Subsidiaries as may customarily be carried or maintained under similar
circumstances by corporations of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for corporations similarly situated in the industry.
Without limiting the generality of the foregoing, Company will maintain or cause
to be maintained (i) flood insurance with respect to each Flood Hazard Property
that is located in a community that participates in the National Flood Insurance
Program, in each case in compliance with any applicable regulations of the Board
of Governors of the Federal Reserve System, and (ii) replacement value casualty
insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts, with such deductibles, and covering such
risks as are at all times satisfactory to Administrative Agent in its
commercially reasonable judgment. Each such policy of insurance shall (a) name
Administrative Agent for the benefit of Lenders as an additional insured
thereunder as its interests may appear and (b) in the case of each business
interruption and casualty insurance policy, contain a loss payable clause or
endorsement, satisfactory in form and substance to Administrative Agent, that
names Administrative Agent for the benefit of Lenders as the loss payee
thereunder for any covered loss in excess of $1,000,000 and provides for at
least 30 days prior written notice to Administrative Agent of any modification
or cancellation of such policy.

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C.                                    Application of Net Insurance/Condemnation
Proceeds.

(i)                                     Business Interruption Insurance. Upon
receipt by Company or any of its Subsidiaries of any business interruption
insurance proceeds constituting Net Insurance/Condemnation Proceeds, (a) so long
as no Event of Default shall have occurred and be continuing, Company or such
Subsidiary may retain and apply such Net Insurance/Condemnation Proceeds for
working capital purposes, and (b) if an Event of Default shall have occurred and
be continuing, Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or the Revolving Loan
Commitment Amount shall be reduced) as provided in subsection 2.4B;

(ii)                                  Net Insurance/Condemnation Proceeds
Received by Company. Upon receipt by Company or any of its Subsidiaries of any
Net Insurance/Condemnation Proceeds other than from business interruption
insurance, (a) so long as no Event of Default shall have occurred and be
continuing, Company shall, or shall cause one or more of its Subsidiaries to,
promptly and diligently apply such Net Insurance/Condemnation Proceeds to pay or
reimburse the costs of repairing, restoring or replacing the assets in respect
of which such Net Insurance/Condemnation Proceeds were received or, to the
extent not so applied, to prepay the Loans (and/or the Revolving Loan Commitment
Amount shall be reduced) as provided in subsection 2.4B, and (b) if an Event of
Default shall have occurred and be continuing, Company shall apply an amount
equal to such Net Insurance/Condemnation Proceeds to prepay the Loans (and/or
the Revolving Loan Commitment Amount shall be reduced) as provided in subsection
2.4B.

(iii)                               Net Insurance/Condemnation Proceeds Received
by Administrative Agent. Upon receipt by Administrative Agent of any Net
Insurance/Condemnation Proceeds as loss payee, (a) if and to the extent Company
would have been required to apply such Net Insurance/Condemnation Proceeds (if
it had received them directly) to prepay the Loans and/or reduce the Revolving
Loan Commitment Amount, Administrative Agent shall, and Company hereby
authorizes Administrative Agent to, apply such Net Insurance/Condemnation
Proceeds to prepay the Loans (and/or the Revolving Loan Commitment Amount shall
be reduced) as provided in subsection 2.4B, and (b) to the extent the foregoing
clause (a) does not apply, Administrative Agent shall deliver such Net
Insurance/Condemnation Proceeds to Company, and Company shall, or shall cause
one or more of its Subsidiaries to, promptly apply such Net
Insurance/Condemnation Proceeds to the costs of repairing, restoring, or
replacing the assets in respect of which such Net Insurance/Condemnation
Proceeds were received; provided, however that if at any time Administrative
Agent reasonably determines (i) with respect to Net Insurance/Condemnation
Proceeds described in subsection 6.4C(ii) in excess of $1,000,000 or (ii) with
respect to Net Insurance/Condemnation Proceeds described in this subsection
6.4C(iii), (A) that Company or any Subsidiary is not proceeding diligently with
the applicable repair, restoration or replacement or (B) that the applicable
repair, restoration or replacement cannot be completed with such Net
Insurance/Condemnation Proceeds, together with funds otherwise available to
Company for such purpose, or that the applicable repair, restoration or
replacement cannot be completed within 270 days after the receipt by
Administrative Agent or Company or any of its Subsidiaries, as applicable, of
such Net Insurance/Condemnation Proceeds,

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Company shall apply such Net Insurance/ Condemnation Proceeds to prepay the
Loans (and/or the Revolving Loan Commitment Amount shall be reduced) as provided
in subsection 2.4B.

6.5                               Inspection Rights; Lender Meeting.

A.                                    Inspection Rights. Company shall, and
shall cause each of its Subsidiaries to, permit any authorized representatives
designated by any Lender to visit and inspect any of the properties of Company
or of any of its Subsidiaries, to inspect, copy and take extracts from its and
their financial and accounting records, and to discuss its and their affairs,
finances and accounts with its and their officers and independent public
accountants (provided that Company may, if it so chooses, be present at or
participate in any such discussion), all upon reasonable notice and at such
reasonable times during normal business hours and, upon reasonable notice, as
often as may reasonably be requested or at any time or from time to time
following the occurrence and during the continuance of an Event of Default.

B.                                    Lender Meeting. Company will, upon the
request of Administrative Agent or Requisite Lenders, participate in a meeting
of Administrative Agent and Lenders once during each Fiscal Year to be held at
Company’s principal offices (or at such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.

6.6                               Compliance with Laws, etc.

Company shall comply, and shall cause each of its Subsidiaries and all other
Persons on or occupying any Facilities to comply, with the requirements of all
applicable laws, rules, regulations and orders of any Government Authority
(including all Environmental Laws), noncompliance with which could reasonably be
expected to result in, individually or in the aggregate, a Material Adverse
Effect.

6.7                               Environmental Matters.

A.                                    Environmental Disclosure. Company will
deliver to Administrative Agent and Lenders:

(i)                                     Environmental Audits and Reports. As
soon as practicable following receipt thereof, copies of all environmental
audits, investigations, analyses and reports of any kind or character, whether
prepared by personnel of Company or any of its Subsidiaries or by independent
consultants, governmental authorities or any other Persons, with respect to
significant environmental matters at any Facility that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
or with respect to any Environmental Claims that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect;

(ii)                                  Notice of Certain Releases, Remedial
Actions, Etc. Promptly upon the occurrence thereof, written notice describing in
reasonable detail (a) any Release required to be reported to any federal, state
or local governmental or regulatory agency under any applicable Environmental
Laws, (b) any remedial action taken by Company or any other

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Person in response to (1) any Hazardous Materials Activities the existence of
which could reasonably be expected to result in one or more Environmental Claims
having, individually or in the aggregate, a Material Adverse Effect, or (2) any
Environmental Claims that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect, and (c) Company’s discovery of
any occurrence or condition on any real property adjoining or in the vicinity of
any Facility that could cause such Facility or any part thereof to be subject to
any material restrictions on the ownership, occupancy, transferability or use
thereof under any Environmental Laws.

(iii)                               Written Communications Regarding
Environmental Claims, Releases, Etc. As soon as practicable following the
sending or receipt thereof by Company or any of its Subsidiaries, a copy of any
and all written communications with respect to (a) any Environmental Claims
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect, (b) any Release required to be reported to any
federal, state or local governmental or regulatory agency, and (c) any request
for information from any governmental agency that suggests such agency is
investigating whether Company or any of its Subsidiaries may be potentially
responsible for any material Hazardous Materials Activity.

(iv)                              Notice of Certain Proposed Actions Having
Environmental Impact. Prompt written notice describing in reasonable detail
(a) any proposed acquisition of stock, assets, or property by Company or any of
its Subsidiaries that could reasonably be expected to (1) expose Company or any
of its Subsidiaries to, or result in, Environmental Claims that could reasonably
be expected to result in, individually or in the aggregate, a Material Adverse
Effect or (2) affect the ability of Company or any of its Subsidiaries to
maintain in full force and effect all material Governmental Authorizations
required under any Environmental Laws for their respective operations and
(b) any proposed action to be taken by Company or any of its Subsidiaries to
commence manufacturing or other industrial operations or to modify current
operations in a manner that could reasonably be expected to subject Company or
any of its Subsidiaries to any material additional obligations or requirements
under any Environmental Laws that could reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect.

B.                                    Company’s Actions Regarding Hazardous
Materials Activities. Company shall, in compliance with all applicable
Environmental Laws, promptly undertake, and shall cause each of its Subsidiaries
promptly to undertake, any and all investigations, studies, sampling, testing,
abatement, cleanup, removal, remediation or other response actions necessary to
remove, remediate, clean up or abate any Hazardous Materials Activity on, under
or about any Facility that is in violation of any Environmental Laws or that
presents a material risk of giving rise to an Environmental Claim.

6.8                               Execution of Subsidiary Guaranty and Personal
Property Collateral Documents After the Closing Date.

A.                                    Execution of Subsidiary Guaranty and
Personal Property Collateral Documents. In the event that any Person becomes a
Domestic Subsidiary of Company after the date hereof, Company will promptly
notify Administrative Agent of that fact and cause such

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Domestic Subsidiary to execute and deliver to Administrative Agent a counterpart
of the Subsidiary Guaranty and Security Agreement and to take all such further
actions and execute all such further documents and instruments (including
actions, documents and instruments comparable to those described in subsection
4.1L) as may be necessary or, in the opinion of Administrative Agent, desirable
to create in favor of Administrative Agent, for the benefit of Lenders, a valid
and perfected First Priority Lien on all of the personal and mixed property
assets of such Domestic Subsidiary described in the applicable forms of
Collateral Documents. In addition, as provided in the Security Agreement,
Company shall, or shall cause the Subsidiary that owns the Capital Stock of such
Person, to execute and deliver to Administrative Agent a supplement to the
Security Agreement and to deliver to Administrative Agent all certificates
representing such Capital Stock of such Person (accompanied by irrevocable
undated stock powers, duly endorsed in blank).

B.                                    Foreign Subsidiaries. In the event that
any Foreign Subsidiary of Company becomes a Material Subsidiary (whether or not
such Foreign Subsidiary was a Subsidiary of Company on the date hereof) after
the date hereof, Company will promptly notify Administrative Agent of that fact
and, if such Subsidiary is directly owned by Company or a Domestic Subsidiary,
cause such Subsidiary to execute and deliver to Administrative Agent such
documents and instruments and take such further actions (including actions,
documents and instruments comparable to those described in subsection 4.1L and
the execution and delivery of any Foreign Pledge Agreements) as may be necessary
or, in the opinion of Administrative Agent, desirable to create in favor of
Administrative Agent, for the benefit of Lenders, a valid and perfected First
Priority Lien on 66% of the Capital Stock of such Foreign Subsidiary.

C.                                    Subsidiary Organizational Documents, Legal
Opinions, Etc. Company shall deliver to Administrative Agent, together with such
Loan Documents, (i) certified copies of such Subsidiary’s Organizational
Documents, together with, if such Subsidiary is a Domestic Subsidiary, a good
standing certificate from the Secretary of State of the jurisdiction of its
organization and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable franchise or similar
taxes from the appropriate taxing authority of such jurisdiction, each to be
dated a recent date prior to their delivery to Administrative Agent, (ii) a
certificate executed by the secretary or similar officer of such Subsidiary as
to (a) the fact that the attached resolutions of the Governing Body of such
Subsidiary approving and authorizing the execution, delivery and performance of
such Loan Documents are in full force and effect and have not been modified or
amended and (b) the incumbency and signatures of the officers of such Subsidiary
executing such Loan Documents, (iii) an executed supplement to the Security
Agreement evidencing the pledge of the Capital Stock of such Subsidiary by
Company or a Subsidiary of Company that owns such Capital Stock (or such other
Collateral Document as is appropriate), accompanied by a certificate evidencing
such Capital Stock, together with an irrevocable undated stock powers duly
endorsed in blank and satisfactory in form and substance to Administrative Agent
(or the equivalent thereof in any other jurisdiction), and (iv) if requested by
Administrative Agent, a favorable opinion of counsel to such Subsidiary, in form
and substance reasonably satisfactory to Administrative Agent and its counsel,
as to (a) the due organization or incorporation and good standing (where
applicable) of such Subsidiary, (b) the due authorization, execution and
delivery by such Subsidiary of such Loan Documents, (c) the enforceability of
such Loan Documents against such Subsidiary and (d) such other matters
(including matters relating to the creation and perfection of Liens in any

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Collateral pursuant to such Loan Documents) as Administrative Agent may
reasonably request, all of the foregoing to be reasonably satisfactory in form
and substance to Administrative Agent and its counsel.

6.9                               Matters Relating to Additional Real Property
Collateral.

A.                                    Additional Mortgages, Etc. From and after
the Closing Date, in the event that (i) Company or any Subsidiary Guarantor
acquires any fee interest in real property or any Material Leasehold Property
(which may include a renewal of any lease on existing Leasehold Property) or
(ii) at the time any Person becomes a Subsidiary Guarantor, such Person owns or
holds any fee interest in real property with a value in excess of $1,000,000 or
any Leasehold Property, in the case of clause (ii) above excluding any such Real
Property Asset the encumbrancing of which requires the consent of any applicable
lessor or then-existing senior lienholder, where Company and its Subsidiaries
have attempted in good faith, but are unable, to obtain such lessor’s or senior
lienholder’s consent (any such non-excluded Real Property Asset described in the
foregoing clause (i) or (ii) being an “Additional Mortgaged Property”), Company
or such Subsidiary Guarantor shall deliver to Administrative Agent, as soon as
practicable after such Person acquires such Additional Mortgaged Property or
becomes a Subsidiary Guarantor, as the case may be, a fully executed and
notarized Mortgage (an “Additional Mortgage”), in proper form for recording in
all appropriate places in all applicable jurisdictions, encumbering the interest
of such Loan Party in such Additional Mortgaged Property; and such opinions,
appraisal, documents, title insurance and environmental reports that may be
reasonably required by Administrative Agent.

B.                                    Real Estate Appraisals. Company shall, and
shall cause each of its Subsidiaries to, permit an independent real estate
appraiser reasonably satisfactory to Administrative Agent, upon reasonable
notice, to visit and inspect any Additional Mortgaged Property for the purpose
of preparing an appraisal of such Additional Mortgaged Property satisfying the
requirements of any applicable laws and regulations (in each case to the extent
required under such laws and regulations as determined by Administrative Agent
in its discretion).

6.10                        Acquisition.

A.                                    Obligation to apply certain proceeds of
initial loans to fund the Acquisition Financing Requirements. Immediately upon
the making of the initial Loans, Company shall apply approximately $96,000,000
of the proceeds of the initial Loans to fund the Acquisition Financing
Requirements, contributing to UK Bidco, (1) approximately $48,000,000 (or its
foreign currency equivalent) as common equity and (2) approximately $48,000,000
as an intercompany loan evidenced by the Intercompany Promissory Note.

B.                                    Obligation to Cause Acquisition to Occur.
Company shall cause the Acquisition to be consummated in accordance with the
terms and conditions of the Acquisition Agreement.

C.                                    Consummation of Acquisition. On or before
noon Pacific time Wednesday August 2, 2006 all conditions to the Acquisition set
forth in the Acquisition

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Agreement shall have been satisfied or the fulfillment of any such conditions
shall have been waived with the written consent of Administrative Agent and the
Acquisition shall have become effective in accordance with the terms of the
Acquisition Agreement.

6.11                        Other Post Closing Matters.

To the extent not delivered on or prior to the Closing Date, Company shall use,
and shall cause each of its Subsidiaries to use, as applicable, commercially
reasonable efforts to deliver within 60 days after the Closing Date (i) executed
Collateral Access Agreements in favor of Administrative Agent for those
inventory and equipment locations listed on Schedule 4 to the Security Agreement
for which it is indicated on such schedule that a Collateral Access Agreement is
required to be obtained and (ii) executed consents to assignment in favor of
Administrative Agent with respect to those Assigned Agreements (as defined in
the Security Agreement) listed on Schedule 15 to the Security Agreement for
which it is indicated on such schedule that a consent is required to be
obtained. Within 30 days after the Closing Date Company shall deliver to
Administrative Agent a report describing the efforts that have been made to
obtain the Collateral Access Agreements and consents referred to in clauses
(i) and (ii) of the preceding sentence. Such report shall be updated no earlier
than 50 days after the Closing Date and no later than 60 days after the Closing
Date with further updates thereafter to be delivered upon the reasonable request
of Administrative Agent.

Section 7.                                          COMPANY’S NEGATIVE COVENANTS

Company covenants and agrees that, so long as any of the Commitments hereunder
shall remain in effect and until payment in full of all of the Loans and other
Obligations and the cancellation, expiration or collateralization with cash or a
letter of credit of all Letters of Credit, unless Requisite Lenders shall
otherwise give prior written consent, Company shall perform, and shall cause
each of its Subsidiaries to perform, all covenants in this Section 7.

7.1                               Indebtedness.

Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, create, incur, assume or guaranty, or otherwise become or remain
directly or indirectly liable with respect to, any Indebtedness, except:

(i)                                     each Loan Party may become and remain
liable with respect to the Obligations;

(ii)                                  Company and its Subsidiaries may become
and remain liable with respect to Contingent Obligations permitted by subsection
7.4 and, upon any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so extinguished;

(iii)                               Company and its Subsidiaries may become and
remain liable with respect to Indebtedness in respect of Capital Leases
aggregating, together with Indebtedness of Company and its Subsidiaries secured
by Liens permitted by subsection 7.2A(ii), not in excess of $20,000,000 at any
one time;

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(iv)                              Company may become and remain liable with
respect to Indebtedness to any Subsidiary Guarantor, and any wholly-owned
Subsidiary of Company may become and remain liable with respect to Indebtedness
to Company or any Subsidiary Guarantor; provided that (a) a Lien on all such
intercompany Indebtedness shall have been granted to Administrative Agent for
the benefit of Lenders; (b) if such intercompany Indebtedness is evidenced by a
promissory note or other instrument, such promissory note or instrument shall
have been pledged to Administrative Agent pursuant to the Security Agreement;
and (c) except as permitted under clause (vii) below, no wholly-owned Foreign
Subsidiary may become and remain liable to Company or a Subsidiary Guarantor in
an amount in excess of $20,000,000; provided that any such Indebtedness of a
wholly-owned Foreign Subsidiary to Company or a Subsidiary Guarantor shall be
evidenced by a promissory note or other instrument and such promissory note or
other instrument shall be pledged to Administrative Agent;

(v)                                 Company and its Subsidiaries, as applicable,
may remain liable with respect to Indebtedness described in Schedule 7.1 annexed
hereto and any refinancings, refundings, renewals or extensions thereof that in
any case do not increase the principal or commitment amount thereof;

(vi)                              Company may remain liable with respect to
Indebtedness evidenced by the Subordinated Notes in an aggregate principal
amount not to exceed $170,117,000;

(vii)                           UK Bidco may remain liable with respect to
Indebtedness evidenced by the UK Bidco Loan Notes and the Intercompany
Promissory Note;

(viii)                        Company or a Domestic Subsidiary of Company may
become and remain liable with respect to Indebtedness of any Person assumed in
connection with any acquisition of such Person permitted under subsection 7.3
and a Person that becomes a direct or indirect wholly-owned Subsidiary of
Company as a result of any acquisition permitted under subsection 7.3 may remain
liable with respect to Indebtedness existing on the date of such acquisition;
provided that such Indebtedness is not created in anticipation of such
acquisition;

(ix)                                Any Foreign Subsidiary may become and remain
liable with respect to Indebtedness of a Person assumed in connection with any
acquisition of a Person permitted under subsection 7.3 and a Person that becomes
a direct or indirect wholly-owned Foreign Subsidiary of Company as a result of
any acquisition permitted under subsection 7.3 may remain liable with respect to
Indebtedness existing on the date of such acquisition; provided that such
Indebtedness is not created in anticipation of such acquisition; provided
further that the aggregate amount of such Indebtedness shall not exceed
$10,000,000 at any one time; and

(x)                                   Company and its Subsidiaries may become
and remain liable with respect to other Indebtedness in an aggregate principal
amount not to exceed $20,000,000 at any time outstanding; provided that no more
than $10,000,000 of such Indebtedness may be Indebtedness of Company’s Domestic
Subsidiaries.

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7.2                               Liens and Related Matters.

A.                                    Prohibition on Liens. Company shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly, create,
incur, assume or permit to exist any Lien on or with respect to any property or
asset of any kind (including any document or instrument in respect of goods or
accounts receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC or under any similar recording or notice statute, except:

(i)                                     Permitted Encumbrances;

(ii)                                  Liens on any asset existing at the time of
acquisition of such asset by Company or a Subsidiary, or Liens to secure the
payment of all or any part of the purchase price of an asset upon the
acquisition of such asset by Company or a Subsidiary or to secure any
Indebtedness permitted hereby incurred by Company or a Subsidiary at the time of
or within ninety days after the acquisition of such asset, which Indebtedness is
incurred for the purpose of financing all or any part of the purchase price
thereof; provided, however, that the Lien shall apply only to the asset so
acquired and proceeds thereof; and provided further, that all such Liens do not
in the aggregate secure Indebtedness that, together with the aggregate amount of
all Capital Leases entered into pursuant to subsection 7.1(iii), exceeds
$20,000,000 at any time;

(iii)                               Liens on assets of a Person that becomes a
direct or indirect Subsidiary of Company after the date of this Agreement,
provided, however, that such Liens exist at the time such Person becomes a
Subsidiary and are not created in anticipation thereof and, in any event, do not
in the aggregate secure Indebtedness in excess of $5,000,000 at any time;

(iv)                              Liens described in Schedule 7.2 annexed
hereto;

(v)                                 Other Liens securing Indebtedness in an
aggregate amount not to exceed $10,000,000 at any time outstanding; and

(vi)                              Liens securing Indebtedness replacing or
renewing the Indebtedness secured by Liens described in clauses (ii), (iii) and
(iv) of this subsection 7.2A; provided that such Liens encumber the same
property encumbered by the original Liens and no other property and the
principal or commitment amount of Indebtedness secured thereby does not
increase.

B.                                    No Further Negative Pledges. Neither
Company nor any of its Domestic Subsidiaries shall enter into any agreement
(other than the Subordinated Note Indenture or any agreement prohibiting only
the creation of Liens securing Subordinated Indebtedness) prohibiting the
creation or assumption of any Lien upon any of its properties or assets, whether
now owned or hereafter acquired, except (i) with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to an Asset Sale; (ii) this Agreement and
the other Loan Documents; (iii) any covenant in

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documents creating Liens permitted by Section 7.2A prohibiting further liens on
the assets encumbered thereby; and (iv) any other agreement that does not
restrict Liens created pursuant to the Loan Documents on assets of Company or
its Domestic Subsidiaries securing the Obligations or any Interest Rate
Agreement and does not require the granting of any Lien securing any other
Indebtedness or other obligation by virtue of the granting of Liens on or pledge
of assets of Company or its Domestic Subsidiaries to secure the Obligations or
any Interest Rate Agreement.

C.                                    No Restrictions on Subsidiary
Distributions to Company or Other Subsidiaries. Company will not, and will not
permit any of its Subsidiaries to, create or otherwise cause or suffer to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary’s Capital Stock owned by Company or any
other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (iii) make loans or
advances to Company or any other Subsidiary of Company, or (iv) transfer any of
its property or assets to Company or any other Subsidiary of Company, except as
provided (a) in any of the Loan Documents, (b) in an agreement with respect to
an Asset Sale (or a sale not prohibited hereby that does not constitute an Asset
Sale), (c) in any agreement in existence at the time any Person becomes a
Subsidiary after the Closing Date that apply only to property of such Person,
including restrictions under any acquired Indebtedness of such Person not
incurred in violation of this Agreement (including any equity interest) relating
to the property, assets or business of the Person acquired by Company or any of
its Subsidiaries, which restriction in each case existed at the time of
acquisition, were not put into place in connection with or in anticipation of
such acquisition and are not applicable to any Person other than the Person
acquired, or to any property, assets or business, other than the property,
assets or business so acquired, (d) in leases or licenses of, or mortgages and
other agreements relating to Liens, which Liens constitute Permitted
Encumbrances, on, specified property or assets limiting or prohibiting transfers
of such property or assets (including, without limitation, non-assignment
clauses, the absence of consent to assignment clauses, due-on-sale clauses and
clauses prohibiting junior Liens), (e) the Subordinated Note Indenture,
(f) Joint Venture agreements and other similar agreements relating to the
disposition or distribution of assets, (g) in any agreement that amends,
refinances or replaces any agreement containing restrictions permitted under the
preceding clauses (a) through (f); provided that the terms and conditions of
such agreement, as they relate to any such restrictions, are no less favorable
to Company or such Subsidiaries, as applicable, than those under the agreement
so amended, refinanced or replaced, and (h) restrictions contained in
Indebtedness not incurred in violation hereof by a Foreign Subsidiary; provided
that such restrictions relate only to one or more Foreign Subsidiaries.

7.3                               Investments; Acquisitions.

Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, make or own any Investment in any Person, including any Joint
Venture, or acquire, by purchase or otherwise, all or substantially all the
business, property or fixed assets of, or Capital Stock or other ownership
interest of any other Person, or any division or line of business of any other
Person except:

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(i)            Company and its Subsidiaries may make and own Investments in Cash
and Cash Equivalents;

(ii)           Company and its wholly-owned Domestic Subsidiaries may make and
own additional equity Investments in their respective wholly-owned Domestic
Subsidiaries;

(iii)          Company and its Subsidiaries may make (a) intercompany loans to
the extent permitted under subsection 7.1(iv), and (b) intercompany loans or
other Investments in connection with the Acquisition including intercompany
loans to UK Bidco to fund the repayment or prepayment of the UK Loan Notes and
the existing loan notes of UK Target;

(iv)          Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted by subsection 7.8;

(v)           Company and its Subsidiaries may consummate the Acquisition in
accordance with the terms and conditions of the Acquisition Agreement;

(vi)          Company and its Subsidiaries may continue to own the Investments
owned by them and described in Schedule 7.3 annexed hereto;

(vii)         Company and its Domestic Subsidiaries may acquire assets
(including Capital Stock and including Capital Stock of Subsidiaries formed in
connection with any such acquisition) having a fair market value not in excess
of $30,000,000 in any one Fiscal Year and $80,000,000 in the aggregate and
continue to own such assets after the acquisition thereof; provided that
(a) Company shall, and shall cause its Domestic Subsidiaries to, comply with the
requirements of subsections 6.8 and 6.9 with respect to each such acquisition
that results in a Person becoming a Subsidiary, (b) Company shall be in pro
forma compliance with all financial covenants after giving effect to such
acquisition and (c) no Event of Default shall have occurred and be continuing
prior to such acquisition or result from such acquisition;

(viii)        any Foreign Subsidiary of Company may acquire assets (including
Capital Stock and including Capital Stock of Subsidiaries formed in connection
with any such acquisition) having a fair market value not in excess of
$15,000,000 in any one Fiscal Year and $40,000,000 in the aggregate and continue
to own such assets after the acquisition thereof; provided that (a) Company
shall cause such Foreign Subsidiary to comply with the requirements of
subsection 6.8 with respect to each such acquisition that results in a Person
becoming a Subsidiary, (b) Company shall be in pro forma compliance with all
financial covenants after giving effect to such acquisition and (c) no Event of
Default have occurred and be continuing prior to such acquisition or result from
such acquisition;

(ix)           Company and its wholly-owned Domestic Subsidiaries may make
additional Investments in their respective Foreign Subsidiaries; provided that
the amount of all such Investments does not exceed $10,000,000 (plus the amount
of all loans or advances permitted under subsection 7.1(iv)) in the aggregate
for all such Investments

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since the Closing Date, including all Contingent Obligations of Company pursuant
to subsections 7.4(viii) and (ix);

(x)            Company and its Domestic Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time $10,000,000;

(xi)           Company may acquire and hold obligations of one or more officers
or other employees of Company or its Subsidiaries in connection with (i) such
officers’ or employees’ acquisition of shares of Holdings’ common stock (or the
common stock of a parent entity of Holdings that directly owns 50% or more of
the Voting Stock of Holdings) so long as no cash is actually advanced by Company
or any of its Subsidiaries to such officers or employees in connection with the
acquisition of any such obligations or (ii) in connection with the payment of
income taxes on employee-owned stock of Holdings, Company or its Subsidiaries
(in an aggregate amount during any Fiscal Year not in excess of $1,000,000);

(xii)          Company and its Subsidiaries may receive and hold promissory
notes and other non-cash consideration received in connection with any Asset
Sale permitted by subsection 7.7;

(xiii)         Company and its Subsidiaries may acquire Securities in connection
with the satisfaction or enforcement of Indebtedness or claims due or owing to
Company or any of its Subsidiaries, including Securities received in connection
with the bankruptcy, insolvency or reorganization of the Person obligated on
such Indebtedness or claim, or as security for any such Indebtedness or claim;

(xiv)        Company and its Subsidiaries may make loans (financing equipment
sold by Company and its Subsidiaries) or equipment leases to customers doing
business with Company and its Subsidiaries in an aggregate principal amount not
to exceed $40,000,000 (with the principal amount of such leases to be deemed to
be equal to the discounted present value, at a market rate of interest, of the
remaining rental payments plus any residual value of the leased equipment as
shown on Company’s financial statements); provided that, Company or such
Subsidiary has filed appropriate UCC financing statements to protect its
interest in all such financed equipment to the extent such equipment has, at the
time of such transaction, a fair market value in excess of $30,000; and

(xv)         Company and its Subsidiaries may make loans to customers doing
business with Company and its Subsidiaries in settlement of accounts receivable
owing to Company or any of its Subsidiaries from such customer in an aggregate
principal amount not to exceed $15,000,000 at any one time.

7.4                               Contingent Obligations.

Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, create or become or remain liable with respect to any Contingent
Obligation, except:

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(i)            Subsidiaries of Company may become and remain liable with respect
to Contingent Obligations in respect of the Subsidiary Guaranty;

(ii)           Company may become and remain liable with respect to Contingent
Obligations in respect of Letters of Credit;

(iii)          Hedge Agreements;

(iv)          Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of customary indemnification and
purchase price adjustment obligations incurred in connection with Asset Sales or
other sales of assets;

(v)           Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of any obligation of Company or any
of its Domestic Subsidiaries not prohibited under this Agreement;

(vi)          Company and its Subsidiaries, as applicable, may remain liable
with respect to Contingent Obligations described in Schedule 7.4 annexed hereto;

(vii)         Subsidiary Guarantors may become and remain liable with respect to
Contingent Obligations arising under their subordinated guaranties of the
Subordinated Notes;

(viii)        Company (subject to subsection 7.3(ix)) and Company’s Foreign
Subsidiaries may become and remain liable with respect to Contingent Obligations
in respect of any obligation of another Foreign Subsidiary of Company not
prohibited under this Agreement; and

(ix)           Company and its Subsidiaries may become and remain liable with
respect to other Contingent Obligations in an aggregate amount not to exceed
$5,000,000.

7.5                               Restricted Junior Payments.

Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, declare, order, pay, make or set apart any sum for any Restricted
Junior Payment; provided that (i)  Company may make regularly scheduled payments
of interest in respect of any Subordinated Indebtedness in accordance with the
terms of, and only to the extent required by, and subject to the subordination
provisions contained in, the indenture or other agreement pursuant to which such
Subordinated Indebtedness was issued, as such indenture or other agreement may
be amended from time to time to the extent not prohibited under subsection
7.12B, (ii) Company may make all payments necessary in connection with the
Acquisition, (iii) in the case of clauses (a), (c), (d), (e) and (f) below, so
long as no Event of Default shall have occurred and be continuing or shall be
caused thereby, Company may make Restricted Junior Payments to Holdings (a) in
an aggregate amount not to exceed $3,000,000 in any Fiscal Year to the extent
necessary to permit Holdings to pay general administrative costs and expenses,
(b) to the extent necessary to permit Holdings (or an Affiliate of Holdings) to
discharge the consolidated, combined or other group tax liabilities of Holdings
and its Subsidiaries, in each case so long as Holdings (or an Affiliate of
Holdings) applies the amount of any such Restricted

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Junior Payment for such purpose, (c) for repurchases of Capital Stock from
employees of Company or any of its Subsidiaries, FTD-member florists,
distributors or directors (or their heirs or estates) of Holdings, Company or
any Subsidiary of Company upon the death, disability or termination of
employment (or termination of membership or distribution, in the case of a
FTD-member florist or distributor); provided that such repurchases are made with
the proceeds of such Restricted Junior Payments within three Business Days of
the payment of such Restricted Junior Payments, (d) to make payments of cash, in
lieu of the issuance of fractional shares upon the exercise of warrants or upon
the conversion or exchange of, or issuance of Capital Stock in lieu of cash
dividends on any Capital Stock of Holdings, provided that the aggregate amount
of Restricted Junior Payments made after the Closing Date pursuant to this
clause (d) and clause (c) above shall not exceed $7,500,000, (e) for other
repurchases of Capital Stock of Holdings in an aggregate amount not to exceed
$30,000,000; provided that after giving pro forma effect to any such Restricted
Junior Payments and repurchases (A) the Consolidated Leverage Ratio as of the
last day of the Fiscal Quarter immediately preceding the date of any such
Restricted Junior Payment is less than 4:1.00 and (B) the excess of the
aggregate Revolving Loan Commitments over the Total Utilization of Revolving
Loan Commitments as of the date of any such Restricted Junior Payment is at
least $20,000,000; provided further that, such repurchases are made with the
proceeds of the applicable Restricted Junior Payments within three Business Days
of the payment of such Restricted Junior Payments, and (f) to allow Holdings to
pay principal and interest on the Holdings Loan Notes, (iv) Company may purchase
Capital Stock of Holdings in a purchase deemed to occur upon the exercise of
stock options, warrants or other convertible securities to the extent such
Capital Stock represents a portion of the exercise price thereof and (v) Company
may purchase or redeem the Subordinated Notes using the proceeds from a Public
Offering of Stock to the extent the gross proceeds from such Public Offering of
Stock aggregate no less than $50,000,000 and are not otherwise required to be
applied as a mandatory prepayment pursuant to subsection 2.4B(iii)(c), provided
that (a) the Consolidated Leverage Ratio (calculated to give pro forma effect to
any mandatory prepayment that will be made using the proceeds from such Public
Offering of Stock) as of the last day of the Fiscal Quarter immediately
preceding the date such proceeds are received is less than 3.5:1.00, (b) the
excess of the Revolving Loan Commitment Amount over the Total Utilization of
Revolving Loan Commitments on the date immediately proceeding the closing of
such Public Offering of Stock is at least $15,000,000 and (c) Administrative
Agent shall have received an Officer’s Certificate setting forth the calculation
of the Consolidated Leverage Ratio required by the foregoing clause (a) and
setting forth the availability of Revolving Loans as required by the foregoing
clause (b).

7.6                               Financial Covenants.

A.            Minimum Fixed Charge Coverage Ratio.  Company shall not permit the
ratio of (i) Consolidated EBITDA to (ii) Consolidated Fixed Charges for any
four-Fiscal Quarter period ending on any of the dates set forth below to be less
than the correlative ratio indicated:

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Minimum Fixed

 

Period Ending

 

Charge Coverage Ratio

 

 

 

 

 

September 30, 2006

 

1.30:1.00

 

December 31, 2006

 

1.30:1.00

 

 

 

 

 

March 31, 2007

 

1.30:1.00

 

June 30, 2007

 

1.30:1.00

 

September 30, 2007

 

1.30:1.00

 

December 31, 2007

 

1.30:1.00

 

 

 

 

 

March 31, 2008

 

1.30:1.00

 

June 30, 2008

 

1.30:1.00

 

September 30, 2008

 

1.35:1.00

 

December 31, 2008

 

1.35:1.00

 

 

 

 

 

March 31, 2009

 

1.35:1.00

 

June 30, 2009

 

1.35:1.00

 

 

 

 

 

September 30, 2009 and the last day of each Fiscal Quarter thereafter

 

1.40:1.00

 

 

B.            Maximum Leverage Ratio.  Company shall not permit the Consolidated
Leverage Ratio as of the last day of each Fiscal Quarter ending on the dates set
forth below to exceed the correlative ratio indicated:

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Period Ending

 

Maximum Leverage Ratio

 

September 30, 2006

 

5.75:1.00

 

December 31, 2006

 

5.75:1.00

 

 

 

 

 

March 31, 2007

 

5.75:1.00

 

June 30, 2007

 

5.75:1.00

 

September 30, 2007

 

5.50:1.00

 

December 31, 2007

 

5.50:1.00

 

 

 

 

 

March 31, 2008

 

5.50:1.00

 

June 30, 2008

 

5.50:1.00

 

September 30, 2008

 

5.25:1.00

 

December 31, 2008

 

5.25:1.00

 

 

 

 

 

March 31, 2009

 

5.25:1.00

 

June 30, 2009

 

5.25:1.00

 

September 30, 2009

 

5.00:1.00

 

December 31, 2009

 

5.00:1.00

 

 

 

 

 

March 31, 2010

 

5.00:1.00

 

June 30, 2010

 

5.00:1.00

 

September 30, 2010

 

4.75:1.00

 

December 31, 2010

 

4.75:1.00

 

 

 

 

 

March 31, 2011

 

4.75:1.00

 

June 30, 2011

 

4.75:1.00

 

September 30, 2011

 

4.50:1.00

 

December 31, 2011

 

4.50:1.00

 

 

 

 

 

March 31, 2012

 

4.50:1.00

 

June 30, 2012

 

4.50:1.00

 

 

 

 

 

September 30, 2012 and the last day of each Fiscal Quarter thereafter

 

4.25:1.00

 

 

7.7                               Restriction on Fundamental Changes; Asset
Sales.

Company shall not, and shall not permit any of its Subsidiaries to, alter the
corporate, capital or legal structure of Company or any of its Subsidiaries, or
enter into any transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease or sub-lease (as lessor or sublessor), transfer or otherwise dispose of,
in one transaction or a series of transactions, all or any part of its business,
property or assets (including its notes or receivables and Capital Stock of a
Subsidiary, whether newly issued or outstanding), whether now owned or hereafter
acquired, except:

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(i)            (a) any Subsidiary of Company may be merged with or into Company
or any wholly-owned Subsidiary Guarantor, or be liquidated, wound up or
dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one transaction
or a series of transactions, to Company or any wholly-owned Subsidiary Guarantor
(or, in the case of a Foreign Subsidiary, to another Foreign Subsidiary);
provided that, in the case of such a merger, Company or such wholly-owned
Subsidiary Guarantor shall be the continuing or surviving Person; and (b) any
Foreign Subsidiary may be merged with or into any other Foreign Subsidiary;

(ii)           Company and its Subsidiaries may sell, lease or otherwise dispose
of assets in transactions that do not constitute Asset Sales; provided that the
consideration received for such assets shall be in an amount at least equal to
the fair market value thereof;

(iii)          Company and its Subsidiaries may dispose of obsolete, worn out or
surplus property in the ordinary course of business;

(iv)          Company and its Subsidiaries may make Asset Sales of assets having
a fair market value not in excess of $15,000,000 (other than any permitted Asset
Sale of Florists’ Transworld Delivery, Inc.’s headquarters located at 3113
Woodcreek Drive, Downers Grove, Illinois the value of which must not exceed
$20,000,000); provided that (a) the consideration received for such assets shall
be in an amount at least equal to the fair market value thereof; (b) 75% of the
consideration received shall be cash; and (c) the proceeds of such Asset Sales
shall be applied as required by subsection 2.4B(iii)(a) and subsection 2.4D;

(v)           in order to resolve disputes that occur in the ordinary course of
business, Company and its Subsidiaries may discount or otherwise compromise for
less than the face value thereof, notes or accounts receivable;

(vi)          Company or a Subsidiary may sell or dispose of shares of Capital
Stock of any of its Subsidiaries in order to qualify members of the Governing
Body of the Subsidiary if required by applicable law;

(vii)         any Person may be merged with or into Company or any Subsidiary if
the acquisition of the Capital Stock of such Person by Company or such
Subsidiary would have been permitted pursuant to subsection 7.3; provided that
(a) in the case of Company, Company shall be the continuing or surviving Person,
(b) if a Subsidiary is not the surviving or continuing Person, the surviving
Person becomes a Subsidiary and complies with the provisions of subsection 6.8
and subsection 6.9 and (c) no Potential Event of Default or Event of Default
shall have occurred or be continuing after giving effect thereto;

(viii)        Company or a Subsidiary may, in the ordinary course of business,
liquidate Cash Equivalents;

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(ix)                                Company and its Subsidiaries may sell or
grant licenses to use Intellectual Property to the extent such licenses do not
prohibit the licensor from using such Intellectual Property;

(x)                                   Company and its Subsidiaries may sell and
lease back property in a transaction permitted by subsection 7.10;

(xi)                                Company and its Subsidiaries may settle
accounts receivable owing to Company or any of its Subsidiaries in connection
with the making of loans permitted by subsection 7.3(xv);

(xii)                             the Acquisition may occur in accordance with
the terms and conditions of the Acquisition Agreement.

7.8                               Consolidated Capital Expenditures.

Company shall not, and shall not permit its Subsidiaries to, make or incur
Consolidated Capital Expenditures, in any Fiscal Year, in an aggregate amount in
excess of $17,500,000 (the “Maximum Consolidated Capital Expenditures Amount”);
provided that the Maximum Consolidated Capital Expenditures Amount for any
Fiscal Year shall be increased by an amount equal to the excess, if any, of the
Maximum Consolidated Capital Expenditures Amount for the previous Fiscal Year
(without giving effect to any adjustment in accordance with this proviso) over
the actual amount of Consolidated Capital Expenditures for such previous Fiscal
Year; provided, further that in no event shall the amount of such increase
exceed 50% of the Maximum Consolidated Capital Expenditures Amount for such
previous Fiscal Year (prior to any adjustment in accordance with this proviso).

7.9                               Transactions with Shareholders and Affiliates.

Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Company or with any Affiliate of Company or of any such holder, (A) in the case
of any agreement or arrangement pursuant to which any Loan Party is obligated to
pay any amounts to LGP (including any of its Affiliates other than Holdings),
without the prior written consent of Administrative Agent, Syndication Agent and
Requisite Lenders, and (B) in all other cases, on terms that are less favorable
to Company or that Subsidiary, as the case may be, than those that might be
obtained at the time from Persons who are not such a holder or Affiliate;
provided that the foregoing restriction shall not apply to (i) any transaction
between Company and any of its wholly-owned Subsidiaries or between any of its
wholly-owned Subsidiaries, (ii) reasonable and customary fees and reimbursement
of expenses paid to members of the Governing Bodies of Company and its
Subsidiaries, (iii) the transactions contemplated by this Agreement and the
Related Agreements to occur on or after the Closing Date (including, without
limitation, payment of principal and interest on the UK Loan Notes and
consummation of the Put/Call Agreements), (iv) indemnification payments to
officers or directors of Loan Parties, (v) payments or loans to employees which
are approved by a majority of the Governing Body of Company or are made pursuant
to agreements, arrangements or plans approved by a

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majority of the Governing Body of Company, (vi) any transaction as in effect as
of the date hereof and set forth on Schedule 7.9, (vii) employment agreements of
senior management of Company as in effect as of the date hereof or otherwise
approved by the Governing Body of Company and (viii) any Restricted Junior
Payment permitted by subsection 7.5.

7.10                        Sales and Lease-Backs.

Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, become or remain liable as lessee or as a guarantor or other surety
with respect to any lease, whether an Operating Lease or a Capital Lease, of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, (i) that Company or any of its Subsidiaries has sold or transferred or
is to sell or transfer to any other Person (other than Company or any of its
Subsidiaries) or (ii) that Company or any of its Subsidiaries intends to use for
substantially the same purpose as any other property that has been or is to be
sold or transferred by Company or any of its Subsidiaries to any Person (other
than Company or any of its Subsidiaries) in connection with such lease; provided
that (a) Company and its Subsidiaries may become and remain liable as lessee,
guarantor or other surety with respect to any such lease if and to the extent
that Company or any of its Subsidiaries would be permitted to enter into, and
remain liable under, such lease to the extent that the transaction would be
permitted under subsection 7.1, assuming the sale and lease back transaction
constituted Indebtedness in a principal amount equal to the gross proceeds of
the sale and (b) so long as no Event of Default has occurred and is continuing
or shall be caused thereby, Florists’ Transworld Delivery, Inc. may sell, and
become and remain liable as lessee with respect to a lease for, its headquarters
located at 3113 Woodcreek Drive, Downers Grove, Illinois, so long as the Net
Asset Sale Proceeds resulting therefrom are applied to prepay the Loans and/or
reduce permanently the Revolving Loan Commitment Amount in an amount equal to
such proceeds.

7.11                        Conduct of Business.

From and after the Closing Date, Company shall not, and shall not permit any of
its Subsidiaries to, engage in any business other than (i) the businesses
engaged in by Company and its Subsidiaries on the Closing Date and similar or
related businesses and (ii) such other lines of business as may be consented to
by Requisite Lenders.

7.12                        Amendments or Waivers of Certain Agreements;
Amendments of Documents Relating to Subordinated Indebtedness; Designation of
Designated Senior Indebtedness.

A.                                    Amendments or Waivers of Certain
Agreements.  Neither Company nor any of its Subsidiaries will agree to any
amendment to, or waive any of its rights under, any Related Agreement (other
than any agreement evidencing or governing any Subordinated Indebtedness) after
the Closing Date if such amendment or waiver would be adverse to the Lenders
without in each case obtaining the prior written consent of Requisite Lenders to
such amendment or waiver.

B.                                    Amendments of Documents Relating to
Subordinated Indebtedness.  Company shall not, and shall not permit any of its
Subsidiaries to, amend or otherwise change

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the terms of any Subordinated Indebtedness, or make any payment consistent with
an amendment thereof or change thereto, if the effect of such amendment or
change is to increase the interest rate on such Subordinated Indebtedness,
change (to earlier dates) any dates upon which payments of principal or interest
are due thereon, change any event of default or condition to an event of default
with respect thereto (other than to eliminate or waive any such event of default
or increase any grace period related thereto), change the redemption, prepayment
or defeasance provisions thereof, change the subordination provisions thereof
(or of any guaranty thereof), or change any collateral therefor (other than to
release such collateral), or if the effect of such amendment or change, together
with all other amendments or changes made, is to increase materially the
obligations of the obligor thereunder or to confer any additional rights on the
holders of such Subordinated Indebtedness (or a trustee or other representative
on their behalf) which would be adverse to Company or Lenders.

C.                                    Designation of “Designated Senior
Indebtedness.”  Company shall not designate any Indebtedness as “Designated
Senior Indebtedness” (as defined in the Subordinated Note Indenture) for
purposes of the Subordinated Note Indenture without the prior written consent of
Requisite Lenders.

7.13                        Fiscal Year.

Company shall not change its Fiscal Year-end from June 30.

Section 8.                                          EVENTS OF DEFAULT

If any of the following conditions or events (“Events of Default”) shall occur:

8.1                               Failure to Make Payments When Due.

Failure by Company to pay any installment of principal of any Loan when due,
whether at stated maturity, by acceleration, by notice of voluntary prepayment,
by mandatory prepayment or otherwise; failure by Company to pay when due any
amount payable to an Issuing Lender in reimbursement of any drawing under a
Letter of Credit; or failure by Company to pay any interest on any Loan or any
fee or any other amount due under this Agreement within five days after the date
due; or

8.2                               Default in Other Agreements.

(i)                                     Failure of Holdings, Company or any of
its Subsidiaries to pay when due any principal of or interest on or any other
amount payable in respect of one or more items of Indebtedness (other than
Indebtedness referred to in subsection 8.1) or Contingent Obligations in an
individual principal amount of $4,000,000 or more or with an aggregate principal
amount of $8,000,000 or more, in each case beyond the end of any grace period
provided therefor; or

(ii)                                  breach or default by Holdings, Company or
any of its Subsidiaries with respect to any other material term of (a) one or
more items of Indebtedness or Contingent Obligations in the individual or
aggregate principal amounts referred to in clause (i) above or (b) any loan
agreement, mortgage, indenture or other agreement relating to such

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item(s) of Indebtedness or Contingent Obligation(s), if the effect of such
breach or default is to cause, or to permit the holder or holders of that
Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such holder
or holders) to cause, that Indebtedness or Contingent Obligation(s) to become or
be declared due and payable prior to its stated maturity or the stated maturity
of any underlying obligation, as the case may be (in each case only after the
requisite giving or receiving of notice, lapse of time, both, or otherwise and
provided such breach or default has not been waived); or

8.3                               Breach of Certain Covenants.

Failure of Company to perform or comply with any term or condition contained in
subsection 2.5 or 6.2 or Section 7 of this Agreement; or

8.4                               Breach of Warranty.

Any representation, warranty, certification or other statement made by Company
or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Company or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or

8.5                               Other Defaults Under Loan Documents.

Any Loan Party shall default in the performance of or compliance with any term
contained in this Agreement or any of the other Loan Documents, other than any
such term referred to in any other subsection of this Section 8, and such
default shall not have been remedied or waived within 30 days after the earlier
of (i) an Officer of Company or such Loan Party becoming aware of such default
or (ii) receipt by Company and such Loan Party of notice from Administrative
Agent or any Lender of such default; or

8.6                               Involuntary Bankruptcy; Appointment of
Receiver, etc.

(i)                                     A court having jurisdiction in the
premises shall enter a decree or order for relief in respect of Holdings,
Company or any of its Material Subsidiaries in an involuntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, which decree or order is not stayed; or any
other similar relief shall be granted under any applicable federal or state law;
or

(ii)                                  an involuntary case shall be commenced
against Holdings, Company or any of its Material Subsidiaries under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over
Holdings, Company or any of its Material Subsidiaries, or over all or a
substantial part of its property, shall have been entered; or there shall have
occurred the involuntary appointment of an interim receiver, trustee or other
custodian of Holdings, Company or any of its Material Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial

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part of the property of Holdings, Company or any of its Material Subsidiaries,
and any such event described in this clause (ii) shall continue for 60 days
unless dismissed, bonded or discharged; or

8.7                               Voluntary Bankruptcy; Appointment of Receiver,
etc.

(i)                                     Holdings, Company or any of its Material
Subsidiaries shall have an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or
Holdings, Company or any of its Material Subsidiaries shall make any assignment
for the benefit of creditors; or

(ii)                                  Holdings, Company or any of its Material
Subsidiaries shall be unable, or shall fail generally, or shall admit in writing
its inability, to pay its debts as such debts become due; or the Governing Body
of Holdings, Company or any of its Material Subsidiaries (or any committee
thereof) shall adopt any resolution or otherwise authorize any action to approve
any of the actions referred to in clause (i) above or this clause (ii); or

8.8                               Judgments and Attachments.

Any money judgment, writ or warrant of attachment or similar process involving
in the aggregate at any time an amount in excess of $10,000,000, excluding
amounts covered by insurance as to which a solvent and unaffiliated insurance
company has acknowledged coverage, shall be entered or filed against Company or
any of its Subsidiaries or any of their respective assets and shall remain
undischarged, unvacated, unbonded or unstayed for a period of 60 days (or in any
event later than five days prior to the date of any proposed sale thereunder);
or

8.9                               Dissolution.

Any order, judgment or decree shall be entered against Holdings, Company or any
of its Material Subsidiaries decreeing the dissolution or split up of Holdings,
Company or that Material Subsidiary and such order shall remain undischarged or
unstayed for a period in excess of 30 days; or

8.10                        Employee Benefit Plans.

There shall occur one or more ERISA Events or similar events in respect of any
Foreign Plans, that individually or in the aggregate result in or might
reasonably be expected to result in a Direct Liability of Company or any of its
Subsidiaries in excess of $1,000,000 during the term of this Agreement; or there
shall exist an amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA) and unfunded liabilities in respect of Foreign Plans,
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), which could reasonably be expected to result in a Direct
Liability in excess of $1,500,000; or

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8.11                        Change in Control.

A Change in Control shall have occurred; or

8.12                        Invalidity of Loan Documents; Failure of Security;
Repudiation of Obligations.

At any time after the execution and delivery thereof, (i) any Loan Document or
any provision thereof, for any reason other than the satisfaction in full of all
Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) in any material respect or shall be declared to be
null and void, (ii) Administrative Agent shall not have or shall cease to have a
valid and perfected First Priority Lien in any material Collateral purported to
be covered by the Collateral Documents, in each case for any reason other than
the failure of Administrative Agent or any Lender to take any action within its
control, or (iii) any Loan Party shall contest the validity or enforceability of
any Loan Document or any provision thereof in writing or deny in writing that it
has any further liability, including with respect to future advances by Lenders,
under any Loan Document or any provision thereof to which it is a party; or

8.13                        Conduct of Business By Holdings.

Holdings (i) engages in any business other than entering into and performing its
obligations under and in accordance with the Loan Documents and Related
Agreements to which it is a party or (ii) owns any assets other than (a) the
Capital Stock of Company and (b) Cash and Cash Equivalents in an amount not to
exceed $5,000,000 at any one time for the purpose of paying general operating
expenses of Holdings or (iii) has any Indebtedness or other liability in respect
of Indebtedness or any material Contractual Obligation other than its
obligations under the Holdings Guaranty or any of the Related Agreements; or

8.14                        Conduct of Business By Dormant Subsidiaries.

Any of the Dormant Subsidiaries (i) engages in any business other than entering
into and performing its obligations under and in accordance with the Loan
Documents and Related Agreements to which it is a party (if any) or (ii) owns
any assets (other than Renaissance Greeting Cards, Inc. in respect of the
$1,650,000 subordinated note dated December 21, 2005 issued by Marian Heath
Greeting Cards, LLC) or (iii) has any Indebtedness or other liability in respect
of Indebtedness or any Contractual Obligation; or

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8.15                        Failure to Prepay the initial loans drawn to fund
the Acquisition Financing Requirements.

The Acquisition shall not be consummated in accordance with subsection 6.10 and
the Company shall not have prepaid the Term Loans in accordance with subsection
2.4B(iii)(h); or

8.16                        Amendment of Certain Documents of Holdings.

Holdings shall agree to any material amendment to, or waive any of its material
rights under, or otherwise change any material terms of the Holdings Certificate
of Designations, as in effect on the Closing Date, in a manner adverse to
Holdings or any of its Subsidiaries or to Lenders without the prior written
consent of Administrative Agent and Requisite Lenders:

THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Company, and the obligation of each Lender to make any Loan, the
obligation of Administrative Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon terminate,
and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request or with the
written consent of Requisite Lenders, by written notice to Company, declare all
or any portion of the amounts described in clauses (a) through (c) above to be,
and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit hereunder shall thereupon terminate; provided that the
foregoing shall not affect in any way the obligations of Revolving Lenders under
subsection 3.3C(i) or the obligations of Revolving Lenders to purchase
assignments of any unpaid Swing Line Loans as provided in subsection 2.1A(iii).

Any amounts described in clause (b) above, when received by Administrative
Agent, shall be held by Administrative Agent pursuant to the terms of the
Security Agreement and shall be applied as therein provided.

Section 9.                                          ADMINISTRATIVE AGENT

9.1                               Appointment.

A.                                    Appointment of Administrative Agent. Wells
Fargo is hereby appointed Administrative Agent hereunder and under the other
Loan Documents.  Each Lender hereby authorizes Administrative Agent to act as
its agent in accordance with the terms of this Agreement and the other Loan
Documents.  Administrative Agent agrees to act upon the express conditions
contained in this Agreement and the other Loan Documents, as applicable.  The

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provisions of this Section 9 are solely for the benefit of Administrative Agent
and Lenders and no Loan Party shall have rights as a third party beneficiary of
any of the provisions thereof.  In performing its functions and duties under
this Agreement, Administrative Agent (other than as provided in subsection 2.1D)
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or trust
with or for Company or any other Loan Party.

B.                                    Appointment of Supplemental Collateral
Agents.  It is the purpose of this Agreement and the other Loan Documents that
there shall be no violation of any law of any jurisdiction denying or
restricting the right of banking corporations or associations to transact
business as agent or trustee in such jurisdiction.  It is recognized that in
case of litigation under this Agreement or any of the other Loan Documents, and
in particular in case of the enforcement of any of the Loan Documents, or in
case Administrative Agent deems that by reason of any present or future law of
any jurisdiction it may not exercise any of the rights, powers or remedies
granted herein or in any of the other Loan Documents or take any other action
which may be desirable or necessary in connection therewith, it may be necessary
that Administrative Agent appoint an additional individual or institution as a
separate trustee, co-trustee, collateral agent or collateral co-agent (any such
additional individual or institution being referred to herein individually as a
“Supplemental Collateral Agent” and collectively as “Supplemental Collateral
Agents”).

In the event that Administrative Agent appoints a Supplemental Collateral Agent
with respect to any Collateral, (i) each and every right, power, privilege or
duty expressed or intended by this Agreement or any of the other Loan Documents
to be exercised by or vested in or conveyed to Administrative Agent with respect
to such Collateral shall be exercisable by and vest in such Supplemental
Collateral Agent to the extent, and only to the extent, necessary to enable such
Supplemental Collateral Agent to exercise such rights, powers and privileges
with respect to such Collateral and to perform such duties with respect to such
Collateral, and every covenant and obligation contained in the Loan Documents
and necessary to the exercise or performance thereof by such Supplemental
Collateral Agent shall run to and be enforceable by either Administrative Agent
or such Supplemental Collateral Agent, and (ii) the provisions of this Section 9
and of subsections 10.2 and 10.3 that refer to Administrative Agent shall inure
to the benefit of such Supplemental Collateral Agent and all references therein
to Administrative Agent shall be deemed to be references to Administrative Agent
and/or such Supplemental Collateral Agent, as the context may require.

Should any instrument in writing from Company or any other Loan Party be
required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent.  In case any Supplemental Collateral
Agent, or a successor thereto, shall die, become incapable of acting, resign or
be removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Administrative Agent until the appointment of a new Supplemental Collateral
Agent.

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C.            Control.  Each Lender and Administrative Agent hereby appoint each
other Lender as agent for the purpose of perfecting Administrative Agent’s
security interest in assets that, in accordance with the UCC, can be perfected
by possession or control.

9.2                               Powers and Duties; General Immunity.

A.            Powers; Duties Specified.  Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender’s behalf and to exercise
such powers, rights and remedies hereunder and under the other Loan Documents as
are specifically delegated or granted to Administrative Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto.  Administrative Agent shall have only those
duties and responsibilities that are expressly specified in this Agreement and
the other Loan Documents.  Administrative Agent may exercise such powers, rights
and remedies and perform such duties by or through its agents or employees. 
Administrative Agent shall not have, by reason of this Agreement or any of the
other Loan Documents, a fiduciary relationship in respect of any Lender or
Company; and nothing in this Agreement or any of the other Loan Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
Administrative Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.

B.            No Responsibility for Certain Matters.  No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by such Agent to Lenders or by or on
behalf of Company to such Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Company or any other Person liable for the
payment of any Obligations, nor shall such Agent be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or the use of the Letters of Credit or
as to the existence or possible existence of any Event of Default or Potential
Event of Default.  Anything contained in this Agreement to the contrary
notwithstanding, Administrative Agent shall not have any liability arising from
confirmations of the amount of outstanding Loans or the Letter of Credit Usage
or the component amounts thereof.

C.            Exculpatory Provisions.  No Agent or any of its officers,
directors, employees or agents shall be liable to Lenders for any action taken
or omitted by such Agent under or in connection with any of the Loan Documents
except to the extent caused by such Agent’s gross negligence or willful
misconduct.  An Agent shall be entitled to refrain from any act or the taking of
any action (including the failure to take an action) in connection with this
Agreement or any of the other Loan Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
such Agent shall have received instructions in respect thereof from Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6) and, upon receipt of such instructions from Requisite
Lenders (or such other Lenders, as the case may be), such Agent shall be
entitled to act

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or (where so instructed) refrain from acting, or to exercise such power,
discretion or authority, in accordance with such instructions.  Without
prejudice to the generality of the foregoing, (i) each Agent shall be entitled
to rely, and shall be fully protected in relying, upon any communication,
instrument or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and shall be entitled to rely
and shall be protected in relying on opinions and judgments of attorneys (who
may be attorneys for Company and its Subsidiaries), accountants, experts and
other professional advisors selected by it; and (ii) no Lender shall have any
right of action whatsoever against an Agent as a result of such Agent acting or
(where so instructed) refraining from acting under this Agreement or any of the
other Loan Documents in accordance with the instructions of Requisite Lenders
(or such other Lenders as may be required to give such instructions under
subsection 10.6).

D.            Agents Entitled to Act as Lender.  The agency hereby created shall
in no way impair or affect any of the rights and powers of, or impose any duties
or obligations upon, an Agent in its individual capacity as a Lender hereunder. 
With respect to its participation in the Loans and the Letters of Credit, an
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term “Lender” or “Lenders” or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
in its individual capacity.  An Agent and its Affiliates may accept deposits
from, lend money to, acquire equity interests in and generally engage in any
kind of commercial banking, investment banking, trust, financial advisory or
other business with Company or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from Company for services in connection with this Agreement and
otherwise without having to account for the same to Lenders.

9.3                               Independent Investigation by Lenders; No
Responsibility For Appraisal of Creditworthiness.

Each Lender agrees that it has made its own independent investigation of the
financial condition and affairs of Company and its Subsidiaries in connection
with the making of the Loans and the issuance of Letters of Credit hereunder and
that it has made and shall continue to make its own appraisal of the
creditworthiness of Company and its Subsidiaries. No Agent shall have any duty
or responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and no Agent shall have any responsibility with respect to the
accuracy of or the completeness of any information provided to Lenders.

9.4                               Right to Indemnity.

Each Lender, in proportion to its Pro Rata Share, severally agrees to indemnify
each Agent and its officers, directors, employees, agents, attorneys,
professional advisors and Affiliates to the extent that any such Person shall
not have been reimbursed by Company, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements and fees and disbursements of
any financial advisor engaged by Agents) or disbursements of any kind or nature
whatsoever which

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may be imposed on, incurred by or asserted against an Agent or such other
Persons in exercising the powers, rights and remedies of an Agent or performing
duties of an Agent hereunder or under the other Loan Documents or otherwise in
its capacity as Agent in any way relating to or arising out of this Agreement or
the other Loan Documents; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of an Agent resulting solely
from such Agent’s gross negligence or willful misconduct as determined by a
final judgment of a court of competent jurisdiction.  If any indemnity furnished
to an Agent or any other such Person for any purpose shall, in the opinion of
such Agent, be insufficient or become impaired, such Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished.

9.5                               Successor Administrative Agent and Swing Line
Lender.

A.            Successor Administrative Agent.  Any Agent may resign at any time
by giving 30 days’ prior written notice thereof to Lenders and Company.  Upon
any such notice of resignation, Requisite Lenders shall have the right, upon
five Business Days’ notice to, and, so long as no Event of Default has occurred
and is continuing, the consent of, Company (which consent shall not be
unreasonably withheld), to appoint a successor Administrative Agent.  Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent and the retiring Administrative Agent shall
be discharged from its duties and obligations under this Agreement.  After any
retiring Agent’s resignation hereunder as an Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was an Agent under this Agreement.

B.            Successor Swing Line Lender.  Any resignation of Administrative
Agent pursuant to subsection 9.5A shall also constitute the resignation of Wells
Fargo or its successor as Swing Line Lender, and any successor Administrative
Agent appointed pursuant to subsection 9.5A shall, upon its acceptance of such
appointment, become the successor Swing Line Lender for all purposes hereunder. 
In such event (i) Company shall prepay any outstanding Swing Line Loans made by
the retiring Administrative Agent in its capacity as Swing Line Lender, (ii)
upon such prepayment, the retiring Administrative Agent and Swing Line Lender
shall surrender any Swing Line Note held by it to Company for cancellation, and
(iii) if so requested by the successor Administrative Agent and Swing Line
Lender in accordance with subsection 2.1E, Company shall issue a Swing Line Note
to the successor Administrative Agent and Swing Line Lender substantially in the
form of Exhibit VII annexed hereto, in the principal amount of the Swing Line
Loan Commitment then in effect and with other appropriate insertions.

9.6                               Collateral Documents and Guaranties.

Each Lender hereby further authorizes Administrative Agent, on behalf of and for
the benefit of Lenders, to enter into each Collateral Document as secured party
and to be the agent for and representative of Lenders under each Guaranty, and
each Lender agrees to be bound by the terms of each Collateral Document and
Guaranty; provided that Administrative Agent shall not (i) enter into or consent
to any material amendment, modification, termination or

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waiver of any provision contained in any Collateral Document or Guaranty or (ii)
release any Collateral (except as otherwise expressly permitted or required
pursuant to the terms of this Agreement or the applicable Collateral Document),
in each case without the prior consent of Requisite Lenders (or, if required
pursuant to subsection 10.6, all Lenders); provided further, however, that,
without further written consent or authorization from Lenders, Administrative
Agent may execute any documents or instruments necessary to (a) release any Lien
encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted by this Agreement or to which Requisite Lenders
have otherwise consented, (b) release any Subsidiary Guarantor from the
Subsidiary Guaranty if all of the Capital Stock of such Subsidiary Guarantor is
sold to any Person (other than an Affiliate of Company) pursuant to a sale or
other disposition permitted hereunder or to which Requisite Lenders have
otherwise consented or (c) subordinate the Liens of Administrative Agent, on
behalf of Lenders, to any Liens permitted by subsection 7.2; provided that, in
the case of a sale of such item of Collateral or stock referred to in
subdivision (a) or (b), the requirements of subsection 10.14 are satisfied. 
Anything contained in any of the Loan Documents to the contrary notwithstanding,
Company, Administrative Agent and each Lender hereby agree that (1) no Lender
shall have any right individually to realize upon any of the Collateral under
any Collateral Document or to enforce any Guaranty, it being understood and
agreed that all powers, rights and remedies under the Collateral Documents and
the Guaranties may be exercised solely by Administrative Agent for the benefit
of Lenders in accordance with the terms thereof, and (2) in the event of a
foreclosure by Administrative Agent on any of the Collateral pursuant to a
public or private sale, Administrative Agent or any Lender may be the purchaser
of any or all of such Collateral at any such sale and Administrative Agent, as
agent for and representative of Lenders (but not any Lender or Lenders in its or
their respective individual capacities unless Requisite Lenders shall otherwise
agree in writing) shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any collateral payable by
Administrative Agent at such sale.

Without derogating from any other authority granted to Administrative Agent
herein or in the Collateral Documents or any other document relating thereto,
each Lender hereby specifically (i) authorizes Administrative Agent to enter
into pledge agreements pursuant to this subsection 9.6 with respect to the
Capital Stock of all existing and future first-tier Foreign Subsidiaries, which
pledge agreements may be governed by the laws of each of the jurisdictions of
formation of such Foreign Subsidiaries, as agent on behalf of each of Lenders,
with the effect that Lenders each become a secured party thereunder and (ii)
appoints Administrative Agent as its attorney-in-fact granting it the powers to
execute each such pledge agreement in its name and on its behalf, with the
effect that Lenders each become a secured party thereunder.  With respect to
each such pledge agreement, Administrative Agent has the power to sub-delegate
to third parties its powers as attorney-in-fact of each Lender.

9.7                               Duties of Other Agents.

To the extent any other Lender is identified in this Agreement as a “co-agent”,
documentation agent or syndication agent, such Lender shall not have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all

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Lenders as such.  Without limiting the foregoing, none of such Lenders shall
have or be deemed to have a fiduciary relationship with any Lender.

9.8                               Administrative Agent May File Proofs of Claim.

In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to Holdings, Company or any of the Subsidiaries of
Holdings or Company, Administrative Agent (irrespective of whether the principal
of any Loan shall then be due and payable as herein expressed or by declaration
or otherwise and irrespective of whether Administrative Agent shall have made
any demand on Company) shall be entitled and empowered, by intervention in such
proceeding or otherwise

(i)            to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Loans and any other Obligations that
are owing and unpaid and to file such other papers or documents as may be
necessary or advisable in order to have the claims of Lenders and Agents
(including any claim for the reasonable compensation, expenses, disbursements
and advances of Lenders and Agents and their agents and counsel and all other
amounts due Lenders and Agents under subsections 2.3 and 10.2) allowed in such
judicial proceeding, and

(ii)           to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Agents and their agents
and counsel, and any other amounts due Agents under subsections 2.3 and 10.2.

Nothing herein contained shall be deemed to authorize Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lenders or to authorize Administrative Agent to vote in
respect of the claim of any Lender in any such proceeding.

Section 10.            MISCELLANEOUS

10.1                        Successors and Assigns; Assignments and
Participations in Loans and Letters of Credit.

A.            General.  This Agreement shall be binding upon the parties hereto
and their respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of Lenders (it being
understood that Lenders’ rights of assignment are subject to the further
provisions of this subsection 10.1).  Neither Company’s rights or obligations
hereunder nor any interest therein may be assigned or delegated by Company
without the prior written consent of all Lenders (and any attempted assignment
or transfer by Company

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without such consent shall be null and void).  No sale, assignment or transfer
or participation of any Letter of Credit or any participation therein may be
made separately from a sale, assignment, transfer or participation of a
corresponding interest in the Revolving Loan Commitment and the Revolving Loans
of the Revolving Lender effecting such sale, assignment, transfer or
participation.  Anything contained herein to the contrary notwithstanding,
except as provided in subsection 2.1A(iii) and subsection 10.5, the Swing Line
Loan Commitment and the Swing Line Loans of Swing Line Lender may not be sold,
assigned or transferred as described below to any Person other than a successor
Administrative Agent and Swing Line Lender to the extent contemplated by
subsection 9.5.  Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Affiliates of each of Administrative Agent and Lenders
and Indemnitees) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

B.            Assignments.

(i)            Amounts and Terms of Assignments.  Any Lender may assign to one
or more Eligible Assignees all or any portion of its rights and obligations
under this Agreement; provided that (a), except (1) in the case of an assignment
of the entire remaining amount of the assigning Lender’s rights and obligations
under this Agreement or (2) in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund of a Lender, the aggregate amount of
the Revolving Loan Exposure or Term Loan Exposure, as the case may be, of the
assigning Lender and the assignee subject to each such assignment shall not be
less than $1,000,000, (b) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender’s rights and obligations
under this Agreement with respect to the Loans or Commitments assigned and any
assignment of all or any portion of a Revolving Loan Commitment, Revolving Loans
or Letter of Credit participations shall be made only as an assignment of the
same proportionate part of the assigning Lender’s Revolving Loan Commitment,
Revolving Loans and Letter of Credit participations, (c) the parties to each
assignment shall (A) electronically execute and deliver to Administrative Agent
an Assignment Agreement via an electronic settlement system acceptable to
Administrative Agent or (B) manually execute and deliver to Administrative Agent
an Assignment Agreement, together with a processing and recordation fee of
$3,500, and the Eligible Assignee, if it shall not already be a party to this
Agreement, shall deliver to Administrative Agent information reasonably
requested by Administrative Agent, including an administrative questionnaire and
such forms, certificates or other evidence, if any, with respect to United
States federal income tax withholding matters as the assignee under such
Assignment Agreement may be required to deliver to Administrative Agent pursuant
to subsection 2.7B(iii) and with respect to information requested under the
Patriot Act, and (d) Administrative Agent, if no Event of Default has occurred
and is continuing, Company, and, in the case of the assignment of Revolving
Loans or Revolving Loan Commitments, Wells Fargo, if Wells Fargo is an Issuing
Lender, shall have consented thereto (which consents shall not be unreasonably
withheld or delayed); provided that, (I) with respect to the Term Loans, no
consent of Company or Administrative Agent shall be required in the case of any
assignment to a Lender, any Affiliate of a Lender or any Approved Fund of a
Lender, (II) with respect to the Revolving Loans or any Revolving

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Loan Commitment, no consent of Company shall be required in the case of any
assignment to a Lender, any Affiliate of a Lender or any Approved Fund of a
Lender and (III) no consent of Company shall be required in connection with any
assignment relating to the primary allocation or syndication of the Term Loans
or Revolving Loans by Wells Fargo.  Upon acceptance and recording by
Administrative Agent pursuant to clause (ii) below, from and after the effective
date specified in such Assignment Agreement, (y) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment Agreement, shall have the rights
and obligations of a Lender hereunder and shall be deemed to have made all of
the agreements of a Lender contained in the Loan Documents arising out of or
otherwise related to such rights and obligations and (z) the assigning Lender
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment Agreement, relinquish its rights
(other than any rights which survive the termination of this Agreement under
subsection 10.9B) and be released from its obligations under this Agreement
(and, in the case of an Assignment Agreement covering all or the remaining
portion of an assigning Lender’s rights and obligations under this Agreement,
such Lender shall cease to be a party hereto; provided that, anything contained
in any of the Loan Documents to the contrary notwithstanding, if such Lender is
an Issuing Lender such Lender shall continue to have all rights and obligations
of an Issuing Lender until the cancellation or expiration of any Letters of
Credit issued by it and the reimbursement of any amounts drawn thereunder).  The
assigning Lender shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its Notes, if any, to Administrative Agent
for cancellation, and thereupon new Notes shall, if so requested by the assignee
and/or the assigning Lender in accordance with subsection 2.1E, be issued to the
assignee and/or to the assigning Lender, substantially in the form of Exhibit IV
or Exhibit VI annexed hereto, as the case may be, with appropriate insertions,
to reflect the new Commitments and/or outstanding Revolving Loans and/or
outstanding Term Loans, as the case may be, of the assignee and/or the assigning
Lender.  Other than as provided in subsection 2.1A(iii) and subsection 10.5, any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this subsection 10.1B shall be treated for purposes of
this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with subsection 10.1C.

(ii)           Acceptance by Administrative Agent; Recordation in Register. 
Upon its receipt of an Assignment Agreement executed by an assigning Lender and
an assignee representing that it is an Eligible Assignee, together with the
processing and recordation fee referred to in subsection 10.1B(i) and any forms,
certificates or other evidence with respect to United States federal income tax
withholding matters that such assignee may be required to deliver to
Administrative Agent pursuant to subsection 2.7B(iii), Administrative Agent
shall, if Administrative Agent and Company have consented to the assignment
evidenced thereby (in each case to the extent such consent is required pursuant
to subsection 10.1B(i)), (a) accept such Assignment Agreement by executing a
counterpart thereof as provided therein (which acceptance shall evidence any
required consent of Administrative Agent to such assignment) and (b) record the
information contained therein in the Register.  Administrative Agent shall
maintain a copy of each Assignment Agreement delivered to and accepted by it as
provided in this subsection 10.1B(ii).

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No assignment shall be effective for purposes of this Agreement unless it has
been recorded in the Register as provided in this clause (ii).  Notwithstanding
the foregoing, in the case of an assignment to an Eligible Assignee, which is,
immediately prior to such assignment, an Affiliate of the assigning Lender or an
Approved Fund with respect to the assigning Lender, such assignment shall be
effective between such assigning Lender and its Affiliate or Approved Fund (as
the case may be) immediately without compliance with the conditions for
assignment under this subsection 10.1B, but shall not be effective with respect
to Company, Administrative Agent, any Issuing Lender or any Lender, and Company,
Administrative Agent, each Issuing Lender and each Lender shall be entitled to
deal solely and directly with such assigning Lender under any such assignment,
in each case, until the conditions for assignment under this subsection 10.1B
have been complied with.

(iii)          Consent by Company.  If the consent of Company to an assignment
or to an Eligible Assignee is required hereunder (including a consent to an
assignment which does not meet the minimum assignment thresholds specified in
subsection 10.1B(i)), Company agrees to not unreasonably withhold or delay
giving its consent after the date notice thereof has been delivered by the
assigning Lender (through Administrative Agent).

(iv)          Special Purpose Funding Vehicles.  Notwithstanding anything to the
contrary contained herein, any Lender (a “Granting Lender”) may grant to a
special purpose funding vehicle (an “SPC”), identified as such in writing from
time to time by the Granting Lender to Administrative Agent and Company, the
option to provide to Company all or any part of any Loan that such Granting
Lender would otherwise be obligated to make to Company pursuant to this
Agreement; provided that (i) nothing herein shall constitute a commitment by any
SPC to make any Loan, and (ii) if an SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Loan, the Granting Lender
shall be obligated to make such Loan pursuant to the terms hereof.  The making
of a Loan by an SPC hereunder shall utilize the Commitment of the Granting
Lender to the same extent, and as if, such Loan were made by such Granting
Lender.  Each party hereto hereby agrees that no SPC shall be liable for any
indemnity or similar payment obligation under this Agreement (all liability for
which shall remain with the Granting Lender).  In furtherance of the foregoing,
each party hereto hereby agrees (which agreement shall survive the termination
of this Agreement) that, prior to the date that is one year and one day after
the payment in full of all outstanding commercial paper or other senior
indebtedness of any SPC, it will not institute against, or join any other person
in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
state thereof.  In addition, notwithstanding anything to the contrary contained
in this subsection 10.1B(iv), any SPC may (i) with notice to, but without the
prior written consent of, Company and Administrative Agent and without paying
any processing fee therefor, assign all or a portion of its interests in any
Loans to the Granting Lender or to any financial institutions (consented to by
Company and Administrative Agent) providing liquidity and/or credit support to
or for the account of such SPC to support the funding or maintenance of Loans
and (ii) disclose on a confidential basis any non-public information relating to
its Loans to any rating agency, commercial paper dealer or provider of any

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surety, guarantee or credit or liquidity enhancement to such SPC.  This
subsection 10.1B(iv) may not be amended without the written consent of the SPC. 
An SPC shall not be entitled to the benefits of subsection 2.7 unless it
complies with subsection 2.7B(iii) as though it were a Lender.

C.            Participations.  Any Lender may, without the consent of, or notice
to, Company or Administrative Agent, sell participations to one or more Persons
(other than a natural Person or Company or any of its Affiliates) in all or a
portion of such Lender’s rights and/or obligations under this Agreement;
provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) Company, Administrative
Agent and Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.  Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver directly affecting (i) the extension of the
scheduled final maturity date of any Loan allocated to such participation or
(ii) a reduction of the principal amount of or the rate of interest payable on
any Loan allocated to such participation.  Subject to the further provisions of
this subsection 10.1C, Company agrees that each Participant shall be entitled to
the benefits of subsections 2.6D and 2.7 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection
10.1B.  To the extent permitted by law, each Participant also shall be entitled
to the benefits of subsection 10.4 as though it were a Lender, provided such
Participant agrees to be subject to subsection 10.5 as though it were a Lender. 
A Participant shall not be entitled to receive any greater payment under
subsections 2.6D and 2.7 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant unless the
sale of the participation to such Participant is made with Company’s prior
written consent.  A Participant shall not be entitled to the benefits of
subsection 2.7 unless Company is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of Company, to comply
with subsection 2.7B(iii) as though it were a Lender.

D.            Pledges and Assignments.  Any Lender may at any time pledge or
assign a security interest in all or any portion of its Loans, and the other
Obligations owed to such Lender, to secure obligations of such Lender, including
without limitation any pledge or assignment to secure obligations to any Federal
Reserve Bank; provided that (i) no Lender shall be relieved of any of its
obligations hereunder as a result of any such assignment or pledge and (ii) in
no event shall any assignee or pledgee be considered to be a “Lender” or be
entitled to require the assigning Lender to take or omit to take any action
hereunder.

E.             Information.  Each Lender may furnish any information concerning
Holdings, Company or any of Company’s Subsidiaries in the possession of that
Lender from time to time to assignees and participants (including prospective
assignees and participants), subject to subsection 10.19.

F.             Agreements of Lenders.  Each Lender listed on the signature pages
hereof hereby severally agrees, and each Lender that becomes a party hereto
pursuant to an

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Assignment Agreement shall be deemed to severally agree, (i) that it is an
Eligible Assignee; (ii) that it has experience and expertise in the making of or
purchasing loans such as the Loans; and (iii) that it will make or purchase its
Loans for its own account in the ordinary course of its business and without a
present view to distribution of such Loans within the meaning of the Securities
Act or the Exchange Act or other federal securities laws (it being understood
that, subject to the provisions of this subsection 10.1, the disposition of such
Loans or any interests therein shall at all times remain within its exclusive
control).  Each Lender that becomes a party hereto pursuant to an Assignment
Agreement shall also be deemed to represent that such Assignment Agreement
constitutes a legal, valid and binding obligation of such Lender, enforceable
against such Lender in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors’ rights generally and by general
principles of equity.

10.2                        Expenses.

Whether or not the transactions contemplated hereby shall be consummated,
Company agrees to pay promptly (i) all reasonable costs and expenses of
negotiation, preparation and execution of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all costs and expenses
of furnishing all opinions by counsel for Company (including any opinions
reasonably requested by Administrative Agent or Lenders as to any legal matters
arising hereunder) and of Company’s performance of and compliance with all
agreements and conditions on its part to be performed or complied with under
this Agreement and the other Loan Documents including with respect to confirming
compliance with environmental, insurance and solvency requirements; (iii) all
reasonable fees, expenses and disbursements of counsel to Administrative Agent
in connection with the negotiation, preparation, execution and administration of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and any other documents or matters requested by Company; (iv) all costs
and expenses of creating and perfecting Liens in favor of Administrative Agent
on behalf of Lenders pursuant to any Collateral Document, including filing and
recording fees, expenses and taxes, stamp or documentary taxes, search fees, and
reasonable fees, expenses and disbursements of counsel to Administrative Agent
and of counsel providing any opinions that Administrative Agent or Requisite
Lenders may request in respect of the Collateral Documents or the Liens created
pursuant thereto; (v) all costs and expenses (including the reasonable fees,
expenses and disbursements of any auditors, accountants or appraisers and any
environmental or other consultants, advisors and agents employed or retained by
Administrative Agent or its counsel) of obtaining and reviewing any
environmental audits or reports provided for under subsection 4.1K or 6.9A;
(vi) all costs and expenses incurred by Administrative Agent in connection with
the custody or preservation of any of the Collateral; (vii) all other costs and
expenses incurred by Administrative Agent in connection with the primary
syndication of the Commitments; (viii) all costs and expenses, including
reasonable attorneys’ fees and fees, costs and expenses of accountants, advisors
and consultants, incurred by Administrative Agent and its counsel relating to
efforts to (a) evaluate or assess any Loan Party, its business or financial
condition and (b) protect, evaluate, assess or dispose of any of the Collateral;
and (ix) all costs and expenses, including reasonable attorneys’ fees, fees,
costs and expenses of accountants, advisors and consultants and costs of
settlement, incurred by Administrative Agent and Lenders in enforcing any
Obligations of or in collecting any payments due from any Loan Party hereunder
or under the other Loan Documents (including in connection

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with the sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Loan Documents) or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a “work-out” or pursuant to any insolvency or
bankruptcy proceedings.

10.3                        Indemnity.

In addition to the payment of expenses pursuant to subsection 10.2, whether or
not the transactions contemplated hereby shall be consummated, Company agrees to
defend (subject to Indemnitees’ selection of counsel), indemnify, pay and hold
harmless Agents and Lenders (including Issuing Lenders), and the officers,
directors, employees, agents, trustees, advisors and Affiliates of Agents and
Lenders (collectively called the “Indemnitees”), from and against any and all
Indemnified Liabilities (as hereinafter defined); provided that Company shall
not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction.

As used herein, “Indemnified Liabilities” means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, actions, judgments, suits, claims (including Environmental Claims),
costs (including the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or abate any Hazardous Materials Activity), expenses
and disbursements of any kind or nature whatsoever (including the reasonable
fees and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement, the
other Loan Documents or the Related Agreements or the transactions contemplated
hereby or thereby (including Lenders’ agreement to make the Loans hereunder or
the use or intended use of the proceeds thereof or the issuance of Letters of
Credit hereunder or the use or intended use of any thereof, the failure of an
Issuing Lender to honor a drawing under a Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present or future de jure
or de facto Government Authority or any enforcement of any of the Loan Documents
(including any sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Guaranties)), or (ii) any Environmental
Claim or any Hazardous Materials Activity relating to or arising from, directly
or indirectly, any past or present activity, operation, land ownership, or
practice of Company or any of its Subsidiaries.

To the extent that the undertakings to defend, indemnify, pay and hold harmless
set forth in this subsection 10.3 may be unenforceable in whole or in part
because they are violative of any law or public policy, Company shall contribute
the maximum portion that it is

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permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of
them.

10.4                        Set-Off.

In addition to any rights now or hereafter granted under applicable law and not
by way of limitation of any such rights, upon the occurrence of any Event of
Default each Lender is hereby authorized by Company at any time or from time to
time, without notice to Company or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, time or demand, provisional or final, including
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or
owing by that Lender or any Affiliate of that Lender to or for the credit or the
account of Company and each other Loan Party against and on account of the
Obligations of Company or any other Loan Party to that Lender (or any Affiliate
of that Lender) or to any other Lender (or any Affiliate of any other Lender)
under this Agreement, the Letters of Credit and participations therein and the
other Loan Documents, including all claims of any nature or description arising
out of or connected with this Agreement, the Letters of Credit and
participations therein or any other Loan Document, irrespective of whether or
not (i) that Lender shall have made any demand hereunder or (ii) the principal
of or the interest on the Loans or any amounts in respect of the Letters of
Credit or any other amounts due hereunder shall have become due and payable
pursuant to Section 8 and although said obligations and liabilities, or any of
them, may be contingent or unmatured.

10.5                        Ratable Sharing.

Lenders hereby agree among themselves that if any of them shall, whether by
voluntary or mandatory payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker’s lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the “Aggregate
Amounts Due” to such Lender) that is greater than the proportion received by any
other Lender in respect of the Aggregate Amounts Due to such other Lender, then
the Lender receiving such proportionately greater payment shall, unless such
proportionately greater payment is required by the terms of this Agreement,
(i) notify Administrative Agent and each other Lender of the receipt of such
payment and (ii) apply a portion of such payment to purchase assignments (which
it shall be deemed to have purchased from each seller of an assignment
simultaneously upon the receipt by such seller of its portion of such payment)
of the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Company or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such assignments shall be returned to such purchasing Lender ratably to the
extent

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of such recovery, but without interest.  Company expressly consents to the
foregoing arrangement and agrees that any purchaser of an assignment so
purchased may exercise any and all rights of a Lender as to such assignment as
fully as if that Lender had complied with the provisions of subsection 10.1B
with respect to such assignment.  In order to further evidence such assignment
(and without prejudice to the effectiveness of the assignment provisions set
forth above), each purchasing Lender and each selling Lender agree to enter into
an Assignment Agreement at the request of a selling Lender or a purchasing
Lender, as the case may be, in form and substance reasonably satisfactory to
each such Lender.

10.6                        Amendments and Waivers.

No amendment, modification, termination or waiver of any provision of this
Agreement or of the Notes, and no consent to any departure by Company therefrom,
shall in any event be effective without the written concurrence of Requisite
Lenders; provided that no such amendment, modification, termination, waiver or
consent shall, without the consent of (a) each Lender with Obligations directly
affected (whose consent shall be sufficient for any such amendment,
modification, termination or waiver without the consent of Requisite Lenders)
(1) reduce the principal amount of any Loan, (2) postpone the scheduled final
maturity date or the date of any scheduled installment of principal of any Loan
(excluding for the avoidance of doubt any mandatory prepayments required under
this Agreement), (3) postpone the date on which any interest or any fees are
payable, (4) decrease the interest rate borne by any Loan (other than any waiver
of any increase in the interest rate applicable to any of the Loans pursuant to
subsection 2.2E) or the amount of any fees payable hereunder (other than any
waiver of any increase in the fees applicable to Letters of Credit pursuant to
subsection 3.2 following the application of increased interest pursuant to
subsection 2.2E) excluding any change in the manner in which any financial ratio
used in determining any interest rate or fee is calculated that would result in
a reduction of any such rate or fee, (5) reduce the amount or postpone the due
date of any amount payable in respect of any Letter of Credit, (6) extend the
expiration date of any Letter of Credit beyond the Revolving Loan Commitment
Termination Date or extend the Revolving Loan Commitment Termination Date or (7)
change in any manner the obligations of Revolving Lenders relating to the
purchase of participations in Letters of Credit; (b) each Lender, (1) change in
any manner the definition of “Class” or the definition of “Pro Rata Share” or
the definition of “Requisite Class Lenders” or the definition of “Requisite
Lenders” (except for any changes resulting solely from an increase in the
aggregate amount of the Commitments approved by Requisite Lenders), (2) change
in any manner any provision of this Agreement that, by its terms, expressly
requires the approval or concurrence of all Lenders, (3) increase the maximum
duration of Interest Periods permitted hereunder, (4) release any Lien granted
in favor of Administrative Agent with respect to all or substantially all of the
Collateral or release Holdings from its obligations under the Holdings Guaranty
or release all or substantially all of the Subsidiary Guarantors from their
obligations under the Subsidiary Guaranty, in each case other than in accordance
with the terms of the Loan Documents, or (5) change in any manner or waive the
provisions contained in subsection 8.1, subsection 10.5 or this subsection
10.6.  In addition, (i) no amendment, modification, termination or waiver of any
provision of any Note shall be effective without the written concurrence of the
Lender which is the holder of that Note; (ii) no amendment, modification,
termination or waiver of any provision of subsection 2.1A(iii) or of any other
provision of this Agreement relating to the Swing Line Loan Commitment or the
Swing Line Loans shall be effective without the written concurrence of Swing
Line Lender;

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(iii) no amendment, modification, termination or waiver of any provision of
Section 3 shall be effective without the written concurrence of  Administrative
Agent and, with respect to the purchase of participations in Letters of Credit,
without the written concurrence of each Issuing Lender that has issued an
outstanding Letter of Credit or has not been reimbursed for a payment under a
Letter of Credit; (iv) no amendment, modification, termination or waiver of any
provision of Section 9 or of any other provision of this Agreement which, by its
terms, expressly requires the approval or concurrence of Administrative Agent
shall be effective without the written concurrence of Administrative Agent; (v)
no amendment, modification, termination or waiver of any provision of subsection
2.4 that has the effect of changing any interim scheduled payments, voluntary or
mandatory prepayments, or Commitment reductions applicable to a Class in a
manner that disproportionately disadvantages such Class relative to any other
Class shall be effective without the written concurrence of Requisite Class
Lenders of such affected Class (it being understood and agreed that any
amendment, modification, termination or waiver of any such provision which only
postpones or reduces any interim scheduled payment, voluntary or mandatory
prepayment, or Commitment reduction from those set forth in subsection 2.4 with
respect to one Class but not any other Class shall be deemed to
disproportionately disadvantage such one Class but not to disproportionately
disadvantage any such other Class for purposes of this clause (v)) and (vi) no
amount of a Commitment of a Lender shall be increased without the consent of
such Lender.  Administrative Agent may, but shall have no obligation to, with
the concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender.  Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given.  No notice to or demand on Company in any case shall entitle Company to
any other or further notice or demand in similar or other circumstances.  Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 10.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Company, on Company.

10.7                        Independence of Covenants.

All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.

10.8                        Notices; Effectiveness of Signatures.

Unless otherwise specifically provided herein, any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served, or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile in complete and legible form, or
three Business Days after depositing it in the United States mail with postage
prepaid and properly addressed; provided that notices to Administrative Agent,
Swing Line Lender and any Issuing Lender shall not be effective until received. 
For the purposes hereof, the address of each party hereto shall be as set forth
under such party’s name on the signature pages hereof or (i) as to Company and
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other

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party, such other address as shall be designated by such party in a written
notice delivered to Administrative Agent.  Electronic mail and Internet and
intranet websites may be used to distribute routine communications, such as
financial statements and other information as provided in subsection 6.1.

Loan Documents and notices under the Loan Documents may be transmitted and/or
signed by telefacsimile and electronic mail.  The effectiveness of any such
documents and signatures shall, subject to applicable law, have the same force
and effect as an original copy with manual signatures and shall be binding on
all Loan Parties, Agents and Lenders.  Administrative Agent may also require
that any such documents and signatures be confirmed by a manually-signed copy
thereof; provided, however, that the failure to request or deliver any such
manually-signed copy shall not affect the effectiveness of any facsimile or
electronic mail document or signature.

10.9                        Survival of Representations, Warranties and
Agreements.

A.            All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.

B.            Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Company set forth in subsections 2.6D, 2.7,
10.2, 10.3, 10.17 and 10.18 and the agreements of Lenders set forth in
subsections 9.2C, 9.4, 10.5. 10.18 and 10.19 shall survive the payment of the
Loans, the cancellation or expiration of the Letters of Credit and the
reimbursement of any amounts drawn thereunder, and the termination of this
Agreement.

10.10                 Failure or Indulgence Not Waiver; Remedies Cumulative.

No failure or delay on the part of an Agent or any Lender in the exercise of any
power, right or privilege hereunder or under any other Loan Document shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other power, right or privilege.  All rights and remedies existing under
this Agreement and the other Loan Documents are cumulative to, and not exclusive
of, any rights or remedies otherwise available.

10.11                 Marshalling; Payments Set Aside.

Neither any Agent nor any Lender shall be under any obligation to marshal any
assets in favor of Company or any other party or against or in payment of any or
all of the Obligations.  To the extent that Company makes a payment or payments
to Administrative Agent or Lenders (or to Administrative Agent for the benefit
of Lenders), or Agents or Lenders enforce any security interests or exercise
their rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, any other state
or federal law, common law or any equitable cause, then, to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor or related thereto, shall be

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revived and continued in full force and effect as if such payment or payments
had not been made or such enforcement or setoff had not occurred.

10.12                 Severability.

In case any provision in or obligation under this Agreement or the Notes shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

10.13                 Obligations Several; Independent Nature of Lenders’
Rights; Damage Waiver.

The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder. 
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders, or
Lenders and Company, as a partnership, an association, a Joint Venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and, subject to subsection 9.6, each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.

To the extent permitted by law, Company shall not assert, and hereby waives, any
claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with or as a result of this Agreement (including,
without limitation, subsection 2.1C hereof), any other Loan Document, any
transaction contemplated by the Loan Documents, any Loan or the use of proceeds
thereof.

10.14                 Release of Security Interest or Guaranty.

Upon the proposed sale or other disposition of any Collateral that is permitted
by this Agreement or to which Requisite Lenders have otherwise consented, or the
sale or other disposition of all of the Capital Stock of a Subsidiary Guarantor
to any Person (other than an Affiliate of Company) permitted by this Agreement
or to which Requisite Lenders have otherwise consented, for which a Loan Party
desires to obtain a security interest release or a release of any Guaranty from
Administrative Agent, such Loan Party shall deliver an Officer’s Certificate (i)
stating that the Collateral or the Capital Stock subject to such disposition is
being sold or otherwise disposed of in compliance with the terms hereof and (ii)
specifying the Collateral or Capital Stock being sold or otherwise disposed of
in the proposed transaction.  Upon the receipt of such Officer’s Certificate,
Administrative Agent shall, at such Loan Party’s expense, so long as
Administrative Agent (a) has no reason to believe that the facts stated in such
Officer’s Certificate are not true and correct and (b), if the sale or other
disposition of such item of Collateral or Capital Stock constitutes an Asset
Sale, shall have received evidence satisfactory to it that arrangements
satisfactory to it have been made for delivery of the Net Asset Sale Proceeds if
and as required by subsection 2.4, execute and deliver such releases of its
security

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interest in such Collateral or such Subsidiary Guaranty, as may be reasonably
requested by such Loan Party.

10.15                 Applicable Law.

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THAT WOULD REQUIRE APPLICATION OF ANOTHER LAW.

10.16                 Construction of Agreement; Nature of Relationship.

Each of the parties hereto acknowledges that (i) it has been represented by
counsel in the negotiation and documentation of the terms of this Agreement,
(ii) it has had full and fair opportunity to review and revise the terms of this
Agreement, (iii) this Agreement has been drafted jointly by all of the parties
hereto, and (iv) neither Administrative Agent nor any Lender or other Agent has
any fiduciary relationship with or duty to Company arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent, the other Agents and Lenders, on one
hand, and Company, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor.  Accordingly, each of the parties hereto
acknowledges and agrees that the terms of this Agreement shall not be construed
against or in favor of another party.

10.17                 Consent to Jurisdiction and Service of Process.

ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS HEREUNDER OR
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK.  BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY

(I)            ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;

(II)           WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

(III)         AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION
10.8;

(IV)         AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT
TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH PROCEEDING IN ANY SUCH
COURT, AND

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OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;

(V)          AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN THE COURTS OF
ANY OTHER JURISDICTION; AND

(VI)         AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT
PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.

10.18                 Waiver of Jury Trial.

EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN
THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED.  THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS.  EACH PARTY HERETO ACKNOWLEDGES THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH
HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH
WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS.  EACH
PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION
10.18 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER.  IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

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10.19                 Confidentiality.

Each Lender shall hold all non-public information obtained pursuant to the
requirements of this Agreement that has been identified in writing as
confidential by Company in accordance with such Lender’s customary procedures
for handling confidential information of this nature, it being understood and
agreed by Company that in any event a Lender may make disclosures (a) to its
Affiliates and to its own and its Affiliates’ directors, officers, employees and
agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such information and instructed to keep such
information confidential), (b) to the extent requested by any Government
Authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement
that is entitled to receive such information, (e) in connection with the
exercise of any remedies hereunder or any suit, action or proceeding relating to
this Agreement or the enforcement of rights hereunder, (f) subject to an
agreement containing provisions substantially the same as those of this
subsection 10.19, to (i) any Eligible Assignee of or Participant in, or any
prospective Eligible Assignee of or Participant in, any of its rights or
obligations under this Agreement or (ii) any direct or indirect contractual
counterparty or prospective counterparty (or such contractual counterparty’s or
prospective counterparty’s professional advisor) to any credit derivative
transaction relating to obligations of Company, (g) with the consent of Company,
(h) to the extent such information (i) becomes publicly available other than as
a result of a breach of this subsection 10.19 or (ii) becomes available to
Administrative Agent or any Lender on a non-confidential basis from a source
other than Company or (i) to the National Association of Insurance Commissioners
or any other similar organization or any nationally recognized rating agency
that requires access to information about a Lender’s or its Affiliates’
investment portfolio in connection with ratings issued with respect to such
Lender or its Affiliates; provided that, unless specifically prohibited by
applicable law or court order, each Lender shall notify Company of any request
by any Government Authority or representative thereof (other than any such
request in connection with any examination of the financial condition of such
Lender by such Government Authority) for disclosure of any such non-public
information prior to disclosure of such information; and provided, further that
in no event shall any Lender be obligated or required to return any materials
furnished by Company or any of its Subsidiaries.  In addition, Administrative
Agent and Lenders may disclose the existence of this Agreement and information
about this Agreement to market data collectors, similar service providers to the
lending industry, and service providers to Administrative Agent and Lenders, and
Administrative Agent or any of its Affiliates may place customary “tombstone”
advertisements relating hereto in publications (including publications
circulated or otherwise made available in electronic form) of its choice at its
own expense.

10.20                 Counterparts; Effectiveness.

This Agreement and any amendments, waivers, consents or supplements hereto or in
connection herewith may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.  This

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Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first written above.

 

FTD, INC.

 

 

 

 

 

By:

/S/ JON R. BURNEY

 

 

Name:

Jon R. Burney

 

 

Title:

Vice-President, General Counsel & Secretary

 

 

 

 

 

 

Notice Address:

 

 

 

3113 Woodcreek Drive

 

Downers Grove, DuPage County, Illinois 60515

 

Attention: Jon R. Burney

 

Facsimile: (630) 719 6183

 

S-1

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LENDERS:

 

 

 

 

 

 

WELLS FARGO BANK, N.A., individually as a Lender
and as Administrative Agent, Syndication Agent and
Documentation Agent

 

 

 

 

 

By:

/s/ DAVID HEMENWAY

 

 

Name:

David Hemenway

 

 

Title:

Assistant Vice President

 

 

 

 

Notice Address:

 

 

 

201 Third Street, Eighth Floor, MAC A0187-081

 

San Francisco, California 94103

 

Attention:

Vince Loomis

 

Facsimile:

415-512-7059

 

 

 

 

Payment Instructions:

 

 

 

 

Pay to:

Wells Fargo Bank, N.A.

 

ABA:

121000248

 

Address:

San Francisco, CA

 

Acct. No.:

4518151378

 

Payee Name:

SYNDIC/WFBCORP/FTD Inc.

 

Ref:

FTD Inc.

 

S-2

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EXHIBIT I

[FORM OF NOTICE OF BORROWING]

NOTICE OF BORROWING

Pursuant to that certain Credit Agreement dated as of July 28, 2006, as amended,
supplemented or otherwise modified to the date hereof (said Credit Agreement, as
so amended, supplemented or otherwise modified, being the “Credit Agreement”,
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among FTD, Inc., a Delaware corporation, as borrower
(“Company”), the lenders listed therein as Lenders (“Lenders”), Wells Fargo
Bank, N.A., as Administrative Agent (“Administrative Agent”), and the other
agents listed therein, this represents Company’s request to borrow as follows:

1.             Date of borrowing:                            ,

2.             Amount of borrowing:  $                         

3.             Lender(s):

o a.        Lenders, in accordance with their applicable Pro Rata Shares

o b.        Swing Line Lender

4.             Type of Loans:

o a.        Term Loans

o b.        Revolving Loans

o c.        Swing Line Loan

5.             Interest rate option:

o a.        Base Rate Loan(s)

o b.        Eurodollar Rate Loans with an initial Interest Period of
                month(s)

The proceeds of such Loans are to be deposited [details of the Company’s
account].

The undersigned officer, to the best of his or her knowledge and in his or her
official (and not individual) capacity, and Company certify that:

(i)            The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and complete in all
material respects on and as of the date hereof to the same extent as though made
on and as of the date hereof, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties were true, correct and complete in all material
respects on and as

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of such earlier date; provided, that, if a representation and warranty is
qualified as to materiality, with respect to such representation and warranty
the materiality qualifier set forth in this paragraph shall be disregarded for
purposes of this condition;

(ii)           No event has occurred and is continuing or would result from the
consummation of the borrowing contemplated hereby that would constitute an Event
of Default or a Potential Event of Default; and

(iii)          Each Loan Party has performed in all material respects all
agreements and satisfied all conditions which the Credit Agreement provides
shall be performed or satisfied by it on or before the date hereof.

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DATED:

 

 

 

FTD, INC.

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

 

 

Title:

 

 

 

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EXHIBIT II

[FORM OF NOTICE OF CONVERSION/CONTINUATION]

NOTICE OF CONVERSION/CONTINUATION

Pursuant to that certain Credit Agreement dated as of July 28, 2006, as amended,
supplemented or otherwise modified to the date hereof (said Credit Agreement, as
so amended, supplemented or otherwise modified, being the “Credit Agreement”,
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among FTD, Inc., a Delaware corporation, as borrower
(“Company”), the lenders listed therein as Lenders (“Lenders”), Wells Fargo
Bank, N.A., as Administrative Agent (“Administrative Agent”), and the other
agents listed therein, this represents Company’s request to convert or continue
Loans as follows:

1.                                       Date of conversion/continuation: 
                                       ,               

2.                                       Amount of Loans being
converted/continued:  $                          

3.                                       Type of Loans being
converted/continued:

o a.                        Term Loans

o b.                       Revolving Loans

4.                                       Nature of conversion/continuation:

o a.                        Conversion of Base Rate Loans to Eurodollar Rate
Loans

o b.                       Conversion of Eurodollar Rate Loans to Base Rate
Loans

o c.                        Continuation of Eurodollar Rate Loans as such

5.                                       If Loans are being continued as or
converted to Eurodollar Rate Loans, the duration of the new Interest Period that
commences on the conversion/ continuation date:                      month(s)

In the case of a conversion to or continuation of Eurodollar Rate Loans, the
undersigned officer, to the best of his or her knowledge and in his or her
official (and not individual) capacity, and Company certify that no Event of
Default or Potential Event of Default has occurred and is continuing under the
Credit Agreement.

DATED:

 

 

 

FTD, INC.

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

Title:

 

 

 

II-1

--------------------------------------------------------------------------------

EXHIBIT III

[FORM OF REQUEST FOR ISSUANCE]

REQUEST FOR ISSUANCE

Pursuant to that certain Credit Agreement dated as of July 28, 2006, as amended,
supplemented or otherwise modified to the date hereof (said Credit Agreement, as
so amended, supplemented or otherwise modified, being the “Credit Agreement”,
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among FTD, Inc., a Delaware corporation, as borrower
(“Company”), the lenders listed therein as Lenders (“Lenders”), Wells Fargo
Bank, N.A., as Administrative Agent (“Administrative Agent”), and the other
agents listed therein, this represents Company’s request for the issuance of a
Letter of Credit by [Administrative Agent][name of other Lender] as follows:

1.                                       Issuing Lender:            
[Administrative Agent]

[                                                          ]

2.                                       Date of issuance of Letter of Credit:
                                 ,

3.                                       Type of Letter of Credit:

[  ] a.                      Commercial Letter of Credit

[  ] b.                     Standby Letter of Credit

4.                                       Face amount of Letter of Credit:  $

5.                                       Expiration date of Letter of Credit:
                       ,

6.                                       Name and address of beneficiary:

 

 

 

 

7.                                       Attached hereto is:

o                                    the verbatim text of such proposed Letter
of Credit; or

o                                    a description of the proposed terms and
conditions of such Letter of Credit, including a precise description of any
documents to be presented by the beneficiary which, if presented by the
beneficiary prior to the expiration date of such Letter of Credit, would require
the Issuing Lender to make payment under such Letter of Credit.

The undersigned officer, to the best of his or her knowledge and in his or her
official (and not individual) capacity, and Company certify that:

III-1

--------------------------------------------------------------------------------

(i)                                     The representations and warranties
contained in the Credit Agreement and the other Loan Documents are true, correct
and complete in all material respects on and as of the date hereof to the same
extent as though made on and as of the date hereof, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case such representations and warranties were true, correct and complete in all
material respects on and as of such earlier date;  provided, that, if a
representation and warranty is qualified as to materiality, with respect to such
representation and warranty the materiality qualifier set in this paragraph
shall be disregarded for purposes of this condition;

(ii)                                  No event has occurred and is continuing or
would result from the issuance of the Letter of Credit contemplated hereby that
would constitute an Event of Default or a Potential Event of Default; and

(iii)                               Each Loan Party has performed in all
material respects all agreements and satisfied all conditions which the Credit
Agreement provides shall be performed or satisfied by it on or before the date
hereof.

III-2

--------------------------------------------------------------------------------

 

DATED:

 

 

 

FTD, INC.

 

 

 

 

 

By:

 

 

 

 

 

 

 

Title:

 

 

 

III-3

--------------------------------------------------------------------------------

EXHIBIT IV

[FORM OF] TERM NOTE

FTD, INC.

$

 

New York, New York

 

 

July 28, 2006

 

 

 

FOR VALUE RECEIVED, FTD, INC., a Delaware corporation (“Company”), promises to
pay to                    (“Payee”) or its registered assigns the principal
amount of                        ($             ).  The principal amount of this
Note shall be payable on the dates and in the amounts specified in the Credit
Agreement; provided that the last such installment shall be in an amount
sufficient to repay the entire unpaid principal balance of this Note, together
with all accrued and unpaid interest thereon.

Company also promises to pay interest on the unpaid principal amount hereof,
until paid in full, at the rates and at the times which shall be determined in
accordance with the provisions of that certain Credit Agreement dated as of July
28, 2006 by and among FTD, Inc., a Delaware corporation, as borrower
(“Company”), the lenders listed therein as Lenders (“Lenders”), Wells Fargo
Bank, N.A., as Administrative Agent (“Administrative Agent”), and the other
agents listed therein (said Credit Agreement, as it may be amended, supplemented
or otherwise modified from time to time, being the “Credit Agreement”, the terms
defined therein and not otherwise defined herein being used herein as therein
defined).

This Note is one of Company’s “Term Notes” and is issued pursuant to and
entitled to the benefits of the Credit Agreement, to which reference is hereby
made for a more complete statement of the terms and conditions under which the
Term Loan evidenced hereby was made and is to be repaid.

All payments of principal and interest in respect of this Note shall be made in
lawful money of the United States of America in same day funds at the Funding
and Payment Office or at such other place as shall be designated in writing for
such purpose in accordance with the terms of the Credit Agreement.  Unless and
until an Assignment Agreement effecting the assignment or transfer of this Note
shall have been accepted by Administrative Agent and recorded in the Register as
provided in the Credit Agreement, Company and Administrative Agent shall be
entitled to deem and treat Payee as the owner and holder of this Note and the
Loan evidenced hereby.  Payee hereby agrees, by its acceptance hereof, that
before disposing of this Note or any part hereof it will make a notation hereon
of all principal payments previously made hereunder and of the date to which
interest hereon has been paid; provided, however, that the failure to make, or
any error in making, a notation of any payment made on this Note shall not limit
or otherwise affect the obligations of Company hereunder with respect to
payments of principal of or interest on this Note.

Whenever any payment on this Note shall be stated to be due on a day which is
not a Business Day, such payment shall be made on the next succeeding Business
Day and such extension of time shall be included in the computation of the
payment of interest on this Note.

IV-1

--------------------------------------------------------------------------------

This Note is subject to mandatory prepayment as provided in the Credit Agreement
and to prepayment at the option of Company as provided in the Credit Agreement.

THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.

Upon the occurrence of an Event of Default, the unpaid balance of the principal
amount of this Note, together with all accrued and unpaid interest thereon, may
become, or may be declared to be, due and payable in the manner, upon the
conditions and with the effect provided in the Credit Agreement.

The terms of this Note are subject to amendment only in the manner provided in
the Credit Agreement.

This Note is subject to restrictions on transfer or assignment as provided in
the Credit Agreement.

No reference herein to the Credit Agreement and no provision of this Note or the
Credit Agreement shall alter or impair the obligations of Company, which are
absolute and unconditional, to pay the principal of and interest on this Note at
the place, at the respective times, and in the currency herein prescribed.

Company promises to pay all costs and expenses, including reasonable attorneys’
fees, all as provided in the Credit Agreement, incurred in the collection and
enforcement of this Note.  Company and any endorsers of this Note hereby consent
to renewals and extensions of time at or after the maturity hereof, without
notice, and hereby waive diligence, presentment, protest, demand and notice of
every kind and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.

IV-2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.

FTD, INC.

 

 

 

 

 

By:

 

 

 

Title:

 

 

 

IV-3

--------------------------------------------------------------------------------

EXHIBIT V

INTENTIONALLY DELETED

 

V-1

--------------------------------------------------------------------------------

EXHIBIT VI

[FORM OF] REVOLVING NOTE

FTD, INC.

$

 

New York, New York

 

 

July 28, 2006

 

 

 

FOR VALUE RECEIVED, FTD, INC., a Delaware corporation (“Company”), promises to
pay to           (“Payee”) or its registered assigns, the lesser of
(x)             ($            ) and (y) the unpaid principal amount of all
advances made by Payee to Company as Revolving Loans under the Credit Agreement
referred to below.  The principal amount of this Note shall be payable on the
dates and in the amounts specified in the Credit Agreement.

Company also promises to pay interest on the unpaid principal amount hereof,
until paid in full, at the rates and at the times which shall be determined in
accordance with the provisions of that certain Credit Agreement dated as of July
28, 2006, by and among FTD, Inc., a Delaware corporation, as borrower
(“Company”), the lenders listed therein as Lenders (“Lenders”), Wells Fargo
Bank, N.A., as Administrative Agent (“Administrative Agent”), and the other
agents listed therein (said Credit Agreement, as it may be amended, supplemented
or otherwise modified from time to time, being the “Credit Agreement”, the terms
defined therein and not otherwise defined herein being used herein as therein
defined).

This Note is one of Company’s “Revolving Notes” and is issued pursuant to and
entitled to the benefits of the Credit Agreement, to which reference is hereby
made for a more complete statement of the terms and conditions under which the
Revolving Loans evidenced hereby were made and are to be repaid.

All payments of principal and interest in respect of this Note shall be made in
lawful money of the United States of America in same day funds at the Funding
and Payment Office or at such other place as shall be designated in writing for
such purpose in accordance with the terms of the Credit Agreement.  Unless and
until an Assignment Agreement effecting the assignment or transfer of this Note
shall have been accepted by Administrative Agent and recorded in the Register as
provided in the Credit Agreement, Company and Administrative Agent shall be
entitled to deem and treat Payee as the owner and holder of this Note and the
Loans evidenced hereby.  Payee hereby agrees, by its acceptance hereof, that
before disposing of this Note or any part hereof it will make a notation hereon
of all principal payments previously made hereunder and of the date to which
interest hereon has been paid; provided, however, that the failure to make, or
any error in making, a notation of any payment made on this Note shall not limit
or otherwise affect the obligations of Company hereunder with respect to
payments of principal of or interest on this Note.

Whenever any payment on this Note shall be stated to be due on a day which is
not a Business Day, such payment shall be made on the next succeeding Business
Day and such extension of time shall be included in the computation of the
payment of interest on this Note.

VI-1

--------------------------------------------------------------------------------

This Note is subject to mandatory prepayment as provided in the Credit Agreement
and to prepayment at the option of Company as provided in the Credit Agreement.

THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.

Upon the occurrence of an Event of Default, the unpaid balance of the principal
amount of this Note, together with all accrued and unpaid interest thereon, may
become, or may be declared to be, due and payable in the manner, upon the
conditions and with the effect provided in the Credit Agreement.

The terms of this Note are subject to amendment only in the manner provided in
the Credit Agreement.

This Note is subject to restrictions on transfer or assignment as provided in
the Credit Agreement.

No reference herein to the Credit Agreement and no provision of this Note or the
Credit Agreement shall alter or impair the obligations of Company, which are
absolute and unconditional, to pay the principal of and interest on this Note at
the place, at the respective times, and in the currency herein prescribed.

Company promises to pay all costs and expenses, including reasonable attorneys’
fees, all as provided in the Credit Agreement, incurred in the collection and
enforcement of this Note.  Company and any endorsers of this Note hereby consent
to renewals and extensions of time at or after the maturity hereof, without
notice, and hereby waive diligence, presentment, protest, demand and notice of
every kind and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.

VI-2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.

FTD, INC.

 

 

 

 

 

By:

 

 

 

Title:

 

 

VI-3

--------------------------------------------------------------------------------

TRANSACTIONS

ON

REVOLVING NOTE

Date

 

Type of
Loan Made
This Date

 

Amount of
Loan Made
This Date

 

Amount of
Principal Paid
This Date

 

Outstanding
Principal
Balance
This Date

 

Notation
Made By

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VI-4

--------------------------------------------------------------------------------

EXHIBIT VII

[FORM OF] SWING LINE NOTE

FTD, INC.

$5,000,000

 

New York, New York

 

 

July 28, 2006

 

 

 

FOR VALUE RECEIVED, FTD, INC., a Delaware corporation (“Company”), promises to
pay to Wells Fargo Bank, N.A. (“Payee”) or its registered assigns, the lesser
of  (x) FIVE MILLION DOLLARS ($5,000,000) and (y) the unpaid principal amount of
all advances made by Payee to Company as Swing Line Loans under the Credit
Agreement referred to below.  The principal amount of this Note shall be payable
on the dates and in the amounts specified in the Credit Agreement.

Company also promises to pay interest on the unpaid principal amount hereof,
until paid in full, at the rates and at the times which shall be determined in
accordance with the provisions of that certain Credit Agreement dated as of July
28, 2006, by and among FTD, Inc., a Delaware corporation, as borrower
(“Company”), the lenders listed therein as Lenders (“Lenders”), Wells Fargo
Bank, N.A., as Administrative Agent (“Administrative Agent”), and the other
agents listed therein (said Credit Agreement, as it may be amended, supplemented
or otherwise modified from time to time, being the “Credit Agreement”, the terms
defined therein and not otherwise defined herein being used herein as therein
defined).

This Note is Company’s “Swing Line Note” and is issued pursuant to and entitled
to the benefits of the Credit Agreement, to which reference is hereby made for a
more complete statement of the terms and conditions under which the Swing Line
Loans evidenced hereby were made and are to be repaid.

All payments of principal and interest in respect of this Note shall be made in
lawful money of the United States of America in same day funds at the Swing Line
Funding and Payment Office or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.

Whenever any payment on this Note shall be stated to be due on a day which is
not a Business Day, such payment shall be made on the next succeeding Business
Day and such extension of time shall be included in the computation of the
payment of interest on this Note.

This Note is subject to mandatory prepayment as provided in the Credit Agreement
and to prepayment at the option of Company as provided in the Credit Agreement.

THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.

VII-1

--------------------------------------------------------------------------------

Upon the occurrence of an Event of Default, the unpaid balance of the principal
amount of this Note, together with all accrued and unpaid interest thereon, may
become, or may be declared to be, due and payable in the manner, upon the
conditions and with the effect provided in the Credit Agreement.

The terms of this Note are subject to amendment only in the manner provided in
the Credit Agreement.

This Note is subject to restrictions on transfer or assignment as provided in
the Credit Agreement.

No reference herein to the Credit Agreement and no provision of this Note or the
Credit Agreement shall alter or impair the obligations of Company, which are
absolute and unconditional, to pay the principal of and interest on this Note at
the place, at the respective times, and in the currency herein prescribed.

Company promises to pay all costs and expenses, including reasonable attorneys’
fees, all as provided in the Credit Agreement, incurred in the collection and
enforcement of this Note.  Company and any endorsers of this Note hereby consent
to renewals and extensions of time at or after the maturity hereof, without
notice, and hereby waive diligence, presentment, protest, demand and notice of
every kind and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.

VII-2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.

FTD, INC.

 

 

 

 

 

By:

 

 

 

Title:

 

 

VII-3

--------------------------------------------------------------------------------

TRANSACTIONS

ON

SWING LINE NOTE

Date

 

Amount of
Loan Made
This Date

 

Amount of
Principal Paid
This Date

 

Amount of
Principal Paid
This Date

 

Outstanding
Principal
Balance
This Date

 

Notation
Made By

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VII-4

--------------------------------------------------------------------------------

EXHIBIT VIII

[FORM OF COMPLIANCE CERTIFICATE]

COMPLIANCE CERTIFICATE

THE UNDERSIGNED HEREBY CERTIFY THAT:

(1)           We are the duly elected [Title] and [Title] of FTD, Inc., a
Delaware corporation (“Company”);

(2)           We have reviewed the terms of that certain Credit Agreement dated
as of July 28, 2006, as amended, supplemented or otherwise modified to the date
hereof (said Credit Agreement, as so amended, supplemented or otherwise
modified, being the “Credit Agreement”, the terms defined therein and not
otherwise defined in this Certificate (including Attachment No. 1 annexed hereto
and made a part hereof) being used in this Certificate as therein defined), by
and among Company, the lenders listed therein as Lenders (“Lenders”), Wells
Fargo Bank, N.A., as Administrative Agent (“Administrative Agent”), and the
other agents listed therein, and the terms of the other Loan Documents, and we
have made, or have caused to be made under our supervision, a review in
reasonable detail of the transactions and condition of Company and its
Subsidiaries during the accounting period covered by the attached financial
statements; and

(3)           The examination described in paragraph (2) above did not disclose,
and we have no knowledge of, the existence of any condition or event which
constitutes an Event of Default or Potential Event of Default during or at the
end of the accounting period covered by the attached financial statements or as
of the date of this Certificate[, except as set forth below].

[Set forth [below] [in a separate attachment to this Certificate] are all
exceptions to paragraph (3) above listing, in detail, the nature of the
condition or event, the period during which it has existed and the action which
Company has taken, is taking, or proposes to take with respect to each such
condition or event:                   ]

The foregoing certifications, together with the computations set forth in
Attachment No. 1 annexed hereto and made a part hereof and the financial
statements delivered with this Certificate in support hereof, are made and
delivered by the undersigned in their official (and not individual) capacities
this                 day of        ,       pursuant to subsection 6.1(v) of the
Credit Agreement.

FTD, INC.

 

 

 

 

 

By:

 

 

 

Title:

 

 

 

 

 

By:

 

 

 

Title:

 

 

VIII-1

--------------------------------------------------------------------------------

ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE

 

A.

 

Indebtedness

 

 

 

 

 

 

 

 

 

 

 

 

1.

 

Purchase money or other Indebtedness secured by Liens permitted by subsection
7.2A(ii) plus Indebtedness in respect of Capital Leases permitted under
subsection 7.1(iii):

 

$

 

 

 

 

 

 

 

 

 

 

 

2.

 

Maximum permitted under subsection 7.1(iii):

 

$

20,000,000

 

 

 

 

 

 

 

 

 

 

3.

 

Indebtedness of Foreign Subsidiaries to Company or any Subsidiary Guarantor
permitted under subsection 7.1(iv):

 

$

 

 

 

 

 

 

 

 

 

 

 

4.

 

Maximum permitted under subsection 7.1(iv):

 

$

20,000,000

 

 

 

 

 

 

 

 

 

 

5.

 

Indebtedness assumed by Foreign Subsidiaries in connection with permitted
acquisitions plus Indebtedness of the Person acquired in connection with any
such acquisition that becomes a Foreign Subsidiary, each as permitted under
subsection 7.1(ix):

 

$

 

 

 

 

 

 

 

 

 

 

 

6.

 

Maximum permitted under subsection 7.1(ix):

 

$

10,000,000

 

 

 

 

 

 

 

 

 

 

7.

 

Other Indebtedness of Company and its Subsidiaries permitted under subsection
7.1(x):

 

$

 

 

 

 

 

 

 

 

 

 

 

8.

 

Maximum permitted under subsection 7.1(x):

 

$

20,000,000

 

 

 

 

 

 

 

 

 

 

9.

 

Portion of Indebtedness permitted under subsection 7.1(x) incurred by Company’s
Domestic Subsidiaries:

 

$

 

 

 

 

 

 

 

 

 

 

 

10.

 

Maximum permitted under subsection 7.1(x):

 

$

10,000,000

 

 

 

 

 

 

 

 

B.

 

Liens

 

 

 

 

 

 

 

 

 

 

 

1.

 

Indebtedness secured by Liens on assets of a Person that becomes a Subsidiary
permitted under subsection 7.2A(iii):

 

$

 

 

 

 

 

 

 

 

 

 

 

2.

 

Maximum permitted under subsection 7.2A(iii):

 

$

5,000,000

 

 

 

 

 

 

 

 

 

 

3.

 

Indebtedness secured by other Liens permitted under subsection 7.2A(v):

 

$

 

 

 

 

 

 

 

 

 

 

 

4.

 

Maximum permitted under subsection 7.2A(v):

 

$

10,000,000

 

VIII-2

--------------------------------------------------------------------------------

 

C.

 

Investments

 

 

 

 

 

 

 

 

 

 

 

1.

 

Fair market value of Investments made by Company and its Domestic Subsidiaries
consisting of acquired assets (including Capital Stock) during the current
Fiscal Year permitted under subsection 7.3(vii):

 

$

 

 

 

 

 

 

 

 

 

 

 

2.

 

Maximum permitted under subsection 7.3(vii):

 

$

30,000,000

 

 

 

 

 

 

 

 

 

 

3.

 

Aggregate fair market value of all Investments made by Company and its Domestic
Subsidiaries consisting of acquired assets (including Capital Stock) permitted
under subsection 7.3(vii) (the sum of all amounts currently and previously
reported in C.1):

 

$

 

 

 

 

 

 

 

 

 

 

 

4.

 

Maximum permitted under subsection 7.3(vii):

 

$

80,000,000

 

 

 

 

 

 

 

 

 

 

5.

 

Fair market value of Investments made by Foreign Subsidiaries consisting of
acquired assets (including Capital Stock) during the current Fiscal Year
permitted under subsection 7.3(viii):

 

$

 

 

 

 

 

 

 

 

 

 

 

6.

 

Maximum permitted under subsection 7.3(viii):

 

$

15,000,000

 

 

 

 

 

 

 

 

 

 

7.

 

Aggregate fair market value of all Investments made by Foreign Subsidiaries
consisting of acquired assets (including Capital Stock) permitted under
subsection 7.3(viii) (the sum of all amounts currently and previously reported
in C.5):

 

$

 

 

 

 

 

 

 

 

 

 

 

8.

 

Maximum permitted under subsection 7.3(viii):

 

$

40,000,000

 

 

 

 

 

 

 

 

 

 

9.

 

Since the Closing Date, Investments in Foreign Subsidiaries permitted under
subsection 7.3(ix), including the amount of all Contingent Obligations of
Company permitted under subsections 7.4(viii) and (ix):

 

$

 

 

 

 

 

 

 

 

 

 

 

10.

 

Maximum Investments and Contingent Obligations permitted under subsection
7.3(ix):

 

$

(1)

 

 

 

 

 

 

 

 

 

 

11.

 

Other Investments by Company and its Domestic Subsidiaries permitted under
subsection 7.3(x):

 

$

 

 

 

 

 

 

 

 

 

 

 

12.

 

Maximum permitted under subsection 7.3(x):

 

$

10,000,000

 

 

 

 

 

 

 

 

 

 

13.

 

Investments during the current Fiscal Year by Company in respect of obligations
of employees in connection with the payment of income taxes on employee owned
stock permitted under subsection 7.3(xi):

 

$

 

 

 

 

 

 

 

 

 

 

 

14.

 

Maximum permitted under subsection 7.3(xi):

 

$

1,000,000

 

--------------------------------------------------------------------------------

(1)    The maximum Investments and Contingent Obligations permitted under
subsection 7.3(ix) of the Credit Agreement is $10,000,000 plus the amount of all
loans or advances permitted under subsection 7.1(iv) of the Credit Agreement.

VIII-3

--------------------------------------------------------------------------------

 

 

 

15.

 

Investments by Company and its Subsidiaries consisting of loans (financing
equipment sold) or equipment leases to customers permitted under subsection
7.3(xiv):

 

$

 

 

 

 

 

 

 

 

 

 

 

16.

 

Maximum permitted under subsection 7.3(xiv):

 

$

40,000,000

 

 

 

 

 

 

 

 

 

 

17.

 

Investments by Company and its Subsidiaries consisting of loans to customers in
settlement of accounts receivable permitted under subsection 7.3(xv):

 

$

 

 

 

 

 

 

 

 

 

 

 

18.

 

Maximum permitted under subsection 7.3(xv):

 

$

15,000,000

 

 

 

 

 

 

 

 

D.

 

Contingent Obligations

 

 

 

 

 

 

 

 

 

 

 

 

 

1.

 

Other Contingent Obligations permitted under subsection 7.4(ix):

 

$

 

 

 

 

 

 

 

 

 

 

 

2.

 

Maximum permitted under subsection 7.4(ix):

 

$

5,000,000

 

 

 

 

 

 

 

 

E.

 

Restricted Junior Payments

 

 

 

 

 

 

 

 

 

 

 

 

 

1.

 

Restricted Junior Payments made to Holdings for administrative costs and
expenses permitted under subsection 7.5(iii)(a):

 

$

 

 

 

 

 

 

 

 

 

 

 

2.

 

Maximum permitted under subsection 7.5(iii)(a):

 

$

3,000,000

 

 

 

 

 

 

 

 

 

 

3.

 

Since the Closing Date, the sum of Restricted Junior Payments made (i) to
repurchase Capital Stock of employees and certain other persons upon death,
disability or termination and (ii) in lieu of issuing fractional shares,
permitted under subsections 7.5(iii)(c) and (d):

 

$

 

 

 

 

 

 

 

 

 

 

 

4.

 

Maximum permitted under subsections 7.5(iii)(c) and (d):

 

$

7,500,000

 

 

 

 

 

 

 

 

 

 

5.

 

Restricted Junior Payments for other repurchases of Capital Stock of Holdings
permitted under subsection 7.5(iii)(e):

 

$

 

 

 

 

 

 

 

 

 

 

 

6.

 

Maximum permitted under subsection 7.5(iii)(e):

 

$

30,000,000

 

 

 

 

 

 

 

 

F.

 

Minimum Fixed Charge Coverage Ratio(for the four-Fiscal Quarter period
ending       ,    )

 

 

 

 

 

 

 

 

 

 

 

1.

 

Consolidated Net Income:

 

$

 

 

 

 

 

 

 

 

 

 

 

2.

 

Consolidated Interest Expense:(2)

 

$

 

 

 

 

 

 

 

 

 

 

 

3.

 

Provisions for taxes based on income:

 

$

 

 

--------------------------------------------------------------------------------

(2)    The amounts referenced in items F.2 through F.10 should only be included
to the extent deducted in determining Consolidated Net Income.

VIII-4

--------------------------------------------------------------------------------

 

 

 

4.

 

Total depreciation expense:

 

$

 

 

 

 

 

 

 

 

 

 

 

5.

 

Total amortization expense:

 

$

 

 

 

 

 

 

 

 

 

 

 

6.

 

Transaction Costs:

 

$

 

 

 

 

 

 

 

 

 

 

 

7.

 

Management or employee retention or incentive payments under Company’s cliff
bonus plan:

 

$

 

 

 

 

 

 

 

 

 

 

 

8.

 

Foreign currency translation or transaction gains or losses:

 

$

 

 

 

 

 

 

 

 

 

 

 

9.

 

All extraordinary, unusual or non-recurring losses, charges or expenses (minus
any extraordinary, unusual or non-recurring gains):

 

$

 

 

 

 

 

 

 

 

 

 

 

10.

 

Other non-cash items (other than any such non-cash item to the extent it
represents an accrual of or reserve for cash expenditures in any future period):

 

$

 

 

 

 

 

 

 

 

 

 

 

11.

 

Non-cash items added in the calculation of Consolidated Net Income (other than
any such non-cash item to the extent it will result in the receipt of cash
payments in any future period):

 

$

 

 

 

 

 

 

 

 

 

 

 

12.

 

Consolidated EBITDA (1+2+3+4+5+6+7+8+9+10+11-12):

 

$

 

 

 

 

 

 

 

 

 

 

 

13.

 

Consolidated Interest Expense (F.2 above):

 

$

 

 

 

 

 

 

 

 

 

 

 

14.

 

Interest expense not payable in cash:

 

$

 

 

 

 

 

 

 

 

 

 

 

15.

 

Consolidated Cash Interest Expense (13-14):

 

$

 

 

 

 

 

 

 

 

 

 

 

16.

 

Scheduled principal payments:

 

$

 

 

 

 

 

 

 

 

 

 

 

17.

 

Taxes based on income and paid in cash:

 

$

 

 

 

 

 

 

 

 

 

 

 

18.

 

Consolidated Fixed Charges (15+16+17):

 

$

 

 

 

 

 

 

 

 

 

 

 

19.

 

Fixed Charge Coverage Ratio (12):(18):

 

 

      :1.00

 

 

 

 

 

 

 

 

 

 

20.

 

Minimum ratio required under subsection 7.6A:

 

 

      :1.00

 

 

 

 

 

 

 

 

G.

 

Maximum Leverage Ratio (as of                             ,           )

 

 

 

 

 

 

 

 

 

 

 

 

 

1.

 

Consolidated Total Debt:

 

$

 

 

 

 

 

 

 

 

 

 

 

2.

 

Consolidated EBITDA:

 

$

 

 

 

 

 

 

 

 

 

 

 

3.

 

Leverage Ratio (1):(2):

 

 

      :1.00

 

 

 

 

 

 

 

 

 

 

4.

 

Maximum ratio permitted under subsection 7.6B:

 

 

      :1.00

 

VIII-5

--------------------------------------------------------------------------------

 

H.

 

Fundamental Changes

 

 

 

 

 

 

 

 

 

 

 

1.

 

Aggregate fair market value of assets sold in any one or more Asset Sales in the
current Fiscal Year in one or more transactions permitted under subsection
7.7(iv):

 

$

 

 

 

 

 

 

 

 

 

 

 

2.

 

Maximum permitted under subsection 7.7(iv):

 

$

15,000,000(3)

 

 

 

 

 

 

 

 

I.

 

Consolidated Capital Expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

1.

 

Consolidated Capital Expenditures for current Fiscal Year:

 

$

 

 

 

 

 

 

 

 

 

 

 

2.

 

Consolidated Capital Expenditures for prior Fiscal Year:

 

$

 

 

 

 

 

 

 

 

 

 

 

3.

 

Maximum amount of Consolidated Capital Expenditures permitted under subsection
7.8 for prior Fiscal Year without regard to any carryover amount:

 

$

17,500,000

 

 

 

 

 

 

 

 

 

 

4.

 

Excess of permitted amount of Consolidated Capital Expenditures for prior Fiscal
Year over Consolidated Capital Expenditures in prior Fiscal Year (3–2):

 

$

 

 

 

 

 

 

 

 

 

 

 

5.

 

Maximum amount of unused permitted Consolidated Capital Expenditures that can be
carried forward from prior Fiscal Year (50% of 3):

 

$

 

 

 

 

 

 

 

 

 

 

 

6.

 

Permitted carryover amount of Consolidated Capital Expenditures from prior
Fiscal Year (smaller of (4) or (5)):

 

$

 

 

 

 

 

 

 

 

 

 

 

7.

 

Maximum amount of Consolidated Capital Expenditures permitted under subsection
7.8 for Fiscal Year without regard to carryover amount:

 

$

 

 

 

 

 

 

 

 

 

 

 

8.

 

Maximum permitted under subsection 7.8 (6+7):

 

$

 

 

 

 

 

 

 

 

 

J.

 

Consolidated Excess Cash Flow (for the Fiscal Year ended             )

 

 

 

 

 

 

 

 

 

 

 

 

 

1.

 

Consolidated EBITDA:

 

$

 

 

 

 

 

 

 

 

 

 

 

2.

 

Consolidated Current Assets at beginning of Fiscal Year:

 

$

 

 

 

 

 

 

 

 

 

 

 

3.

 

Consolidated Current Liabilities at beginning of Fiscal Year:

 

$

 

 

 

 

 

 

 

 

 

 

 

4.

 

Consolidated Working Capital at beginning of Fiscal Year  (2–3) (may be negative
number):

 

$

 

 

 

 

 

 

 

 

 

 

 

5.

 

Consolidated Current Assets at end of Fiscal Year:

 

$

 

 

 

 

 

 

 

 

 

 

 

6.

 

Consolidated Current Liabilities at end of Fiscal Year:

 

$

 

 

 

 

 

 

 

 

 

 

 

7.

 

Consolidated Working Capital at end of Fiscal Year (5–6) (may be a negative
number):

 

$

 

 

--------------------------------------------------------------------------------

(3)    Other than any permitted Asset Sale of Florists’ Transworld Delivery,
Inc.’s headquarters located at 3113 Woodcreek Drive, Downers Grove, Illinois the
value of which must not exceed $20,000,000.

VIII-6

--------------------------------------------------------------------------------

 

 

 

8.

 

Consolidated Working Capital Adjustment (4–7) (may be a negative number):

 

$

 

 

 

 

 

 

 

 

 

 

 

9.

 

Voluntary and scheduled repayments of Consolidated Total Debt (excluding
voluntary repayments of the Loans and scheduled repayments of Revolving Loans
except to the extent the Revolving Loan Commitments are permanently reduced in
connection with such repayments):

 

$

 

 

 

 

 

 

 

 

 

 

 

10.

 

Consolidated Capital Expenditures (net of any proceeds of any related
financings, other than the proceeds of Revolving Loans or Swing Line Loans, with
respect to such expenditures):

 

$

 

 

 

 

 

 

 

 

 

 

 

11.

 

Consolidated Cash Interest Expense (F.4 above):

 

$

 

 

 

 

 

 

 

 

 

 

 

12.

 

Taxes based on income and paid in cash (F.6 above):

 

$

 

 

 

 

 

 

 

 

 

 

 

13.

 

To the extent expensed in a prior Fiscal Year, the amount, if any, of cliff
bonus payments made during such Fiscal Year:

 

$

 

 

 

 

 

 

 

 

 

 

 

14.

 

Restricted Junior Payments permitted by subsection 7.5:

 

$

 

 

 

 

 

 

 

 

 

 

 

15.

 

Other cash expenses incurred during such period to the extent added back in
determining Consolidated EBITDA:

 

$

 

 

 

 

 

 

 

 

 

 

 

16.

 

Cash consideration paid in connection with Investments permitted pursuant to
subsection 7.3(vii) or subsection 7.3(viii):

 

$

 

 

 

 

 

 

 

 

 

 

 

17.

 

Consolidated Excess Cash Flow ((1+8) – (9+10+11+12+13+14+15+16)):

 

$

 

 

VIII-7

--------------------------------------------------------------------------------

EXHIBIT IX

[FORMS OF OPINIONS OF COUNSEL TO LOAN PARTIES]

[see attached]

 

IX-1

--------------------------------------------------------------------------------

EXHIBIT X

INTENTIONALLY DELETED

 

X-1

--------------------------------------------------------------------------------

EXHIBIT XI

[FORM OF] ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and Assumption Agreement (the “Assignment”) is dated as of the
Effective Date set forth below and is entered into by and between [Insert name
of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). 
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), receipt of a copy
of which is hereby acknowledged by the Assignee.  The Standard Terms and
Conditions set forth in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment as if set
forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by
Administrative Agent as contemplated below, the interest in and to all of the
Assignor’s rights and obligations under the Credit Agreement and any other
documents or instruments delivered pursuant thereto that represents the amount
and percentage interest identified below of all of the Assignor’s outstanding
rights and obligations under the respective facilities identified below
(including, to the extent included in any such facilities, letters of credit and
swingline loans) (the “Assigned Interest”).  Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment,
without representation or warranty by the Assignor.

1.

Assignor:

                                                            

 

 

 

2.

Assignee:

                                                             [and is an
Affiliate/Approved Fund (1)]

 

 

 

3.

Borrower:

FTD, Inc., a Delaware corporation (“Company”)

 

 

 

4.

Administrative Agent:

Wells Fargo Bank, N.A., as Administrative Agent under the Credit Agreement

 

 

 

5.

Credit Agreement

The $225,000,000 Credit Agreement dated as of July 28, 2006 among Company, the
lenders listed therein as Lenders (“Lenders”), Administrative Agent, and the
other agents parties thereto

 

--------------------------------------------------------------------------------

(1)    Select as applicable.

 

XI-1

--------------------------------------------------------------------------------

6.             Assigned Interest:

Facility Assigned

 

Aggregate
Amount of
Commitment/Loans
for all Lenders

 

Amount of
Commitment/Loans
Assigned

 

Percentage
Assigned of
Commitment/Loans(2)

 

Revolving Loan Commitment

 

$

 

 

$

 

 

 

%

Term Loan

 

$

 

 

$

 

 

 

%

 

Effective Date:                                , 20     [TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment are hereby agreed to:

 

ASSIGNOR

 

[NAME OF ASSIGNOR]

 

 

 

By:

 

 

 

 

Title:

 

 

 

ASSIGNEE

 

[NAME OF ASSIGNEE]

 

 

 

By:

 

 

 

 

Title:

 

Consented to and Accepted:

 

WELLS FARGO BANK, N.A.,

as Administrative Agent

 

By:

 

 

 

Title:

 

 

By:

 

 

 

Title:

 

 

[Consented to:]

 

FTD, INC.

 

By:

 

 

 

Title:

 

 

--------------------------------------------------------------------------------

(2)    Set forth, to at least 9 decimals, as a percentage of the
Commitment/Loans of all Lenders thereunder.

XI-2

--------------------------------------------------------------------------------

 

[Consented to:]

[WELLS FARGO BANK, N.A.,

as Issuing Lender]

 

By:

 

 

 

Title:

 

 

By:

 

 

 

Title:

 

 

XI-3

--------------------------------------------------------------------------------

ANNEX 1

FTD, INC.
$225,000,000 CREDIT AGREEMENT

STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT
AND ASSUMPTION AGREEMENT

1.             Representations and Warranties.

1.1           Assignor.  The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with any Loan
Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other instrument or document
delivered pursuant thereto, other than this Assignment (herein collectively the
“Loan Documents”), or any collateral thereunder, (iii) the financial condition
of Company, any of its Subsidiaries or Affiliates or any other Person obligated
in respect of any Loan Document or (iv) the performance or observance by
Company, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.

1.2           Assignee.  The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and to consummate the transactions contemplated hereby
and to become a Lender under the Credit Agreement, (ii) it meets all
requirements of an Eligible Assignee under the Credit Agreement, (iii) from and
after the Effective Date, it shall be bound by the provisions of the Credit
Agreement and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to subsection 6.1 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and to purchase the Assigned
Interest on the basis of which it has made such analysis and decision, and
(v) if it is a Non-US Lender, attached to the Assignment is any documentation
required to be delivered by it pursuant to the terms of the Credit Agreement,
duly completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on Administrative Agent, the Assignor or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

2.             Payments.  From and after the Effective Date, Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for
amounts which have accrued to but excluding the Effective Date and to the
Assignee for amounts which have accrued from and after the Effective Date.

XI-ANNEX 1-1

--------------------------------------------------------------------------------

3.             General Provisions.  This Assignment shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns.  This Assignment may be executed in any number of counterparts, which
together shall constitute one instrument.  Delivery of an executed counterpart
of a signature page of this Assignment by telecopy or electronic mail shall be
effective as delivery of a manually executed counterpart of this Assignment. 
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.

XI-ANNEX 1-2

--------------------------------------------------------------------------------

EXHIBIT XII

[FORM OF] SOLVENCY CERTIFICATE

This SOLVENCY CERTIFICATE (this “Certificate”) is delivered in connection with
that certain Credit Agreement dated as of July 28, 2006 (the “Credit
Agreement”), by and among FTD, Inc., a Delaware corporation, as borrower
(“Company”), the lenders listed therein as Lenders (“Lenders”), Wells Fargo
Bank, N.A., as Administrative Agent (“Administrative Agent”), and the other
agents listed therein.  Capitalized terms used herein without definition have
the same meanings as in the Credit Agreement.

This Solvency Certificate is being delivered pursuant to subsection 4.1O of the
Credit Agreement.  The undersigned is the [Vice President Finance] of Company
and hereby further certifies as of the date hereof, in [his] [her] capacity as
an officer of Company, and not individually, as follows:

1.             I have responsibility for (a) the management of the financial
affairs of Company and the preparation of financial statements of Company, and
(b) reviewing the financial and other aspects of the transactions contemplated
by the Credit Agreement.

2.             I have carefully prepared and/or reviewed the contents of this
Solvency Certificate and have conferred with counsel for Company for the purpose
of discussing the meaning of any provisions hereof that I desired to have
clarified.

3.             Based upon the foregoing and upon the best of my knowledge after
due diligence, I have concluded as follows:

a.             The “fair value” and “present fair saleable value” of the assets
of Company exceeds:  (x) the total liabilities of Company (including its
probable liability in respect of contingent and unliquidated liabilities and its
unmatured liabilities), and (y) the amount required to pay such liabilities as
they become absolute and matured in the normal course of business.

b.             Company has the ability to pay its debts and liabilities
(including its probable liability in respect of contingent and unliquidated
liabilities and its unmatured liabilities) as they become absolute and matured
in the normal course of business.

c.             Company does not have an unreasonably small amount of capital
with which to conduct its business after giving due consideration to the
industry in which it is engaged.

d.             Company has not executed the Loan Documents or made any transfer
or incurred any obligations thereunder, with actual intent to hinder, delay or
defraud either present or future creditors.

In computing the amount of such contingent and unliquidated liabilities as of
the date hereof, such liabilities have been computed at the amount that, in the
light of all the facts

XII-1

--------------------------------------------------------------------------------

and circumstances existing as of the date hereof, represents the amount that can
reasonably be expected to become an actual or matured liability.

For the purpose of the above analysis, the values of Company’s assets have been
computed by considering Company as a going concern entity.  References to
“Company” in this paragraph 3 shall mean and refer to Company and the Subsidiary
Guarantors on a consolidated basis.

I understand that Administrative Agent and Lenders are relying on this Solvency
Certificate in extending credit to Company pursuant to the Credit Agreement.

XII-2

--------------------------------------------------------------------------------

The undersigned has executed this Solvency Certificate, in [his] [her] capacity
as an officer of Company and not individually, as of the 28th day of July, 2006.

Name:

 

 

 

Title:

 

 

 

XII-3

--------------------------------------------------------------------------------

EXHIBIT XIII

[FORM OF] SUBSIDIARY GUARANTY

This SUBSIDIARY GUARANTY is entered into as of July 28, 2006, by the undersigned
(each a “Guarantor”, and together with any future Subsidiaries executing this
Guaranty, being collectively referred to herein as the “Guarantors”) in favor of
and for the benefit of WELLS FARGO BANK, N.A., as agent for and representative
of (in such capacity herein called “Guarantied Party”) the lenders (“Lenders”)
party to the Credit Agreement referred to below and any Swap Counterparties (as
hereinafter defined), and in favor of and for the benefit of the other
Beneficiaries (as hereinafter defined).

RECITALS.

A.            FTD, Inc., a Delaware corporation (“Company”), has entered into
that certain Credit Agreement dated as of July 28, 2006, with Lenders,
Guarantied Party, as Administrative Agent for Lenders, and the other agents
listed therein (said Credit Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the “Credit
Agreement”; capitalized terms defined therein and not otherwise defined herein
being used herein as therein defined).

B.            Company may from time to time enter, or may from time to time have
entered, into one or more Interest Rate Agreements, Currency Agreements or other
swap agreements (collectively, the “Lender Swap Agreements”) with one or more
Persons that are Lenders or Affiliates of Lenders at the time such Lender Swap
Agreements are entered into (in such capacity, collectively, “Swap
Counterparties”) in accordance with the terms of the Credit Agreement, and it is
desired that the obligations of Company under the Lender Swap Agreements,
including without limitation the obligation of Company to make payments
thereunder in the event of early termination thereof, together with all
obligations of Company under the Credit Agreement and the other Loan Documents,
be guarantied hereunder.

C.            Guarantied Party, Lenders and each Swap Counterparty for which
Guarantied Party has received the notice required by Section 18 hereof are
sometimes referred to herein as “Beneficiaries”.

D.            A portion of the proceeds of the Loans may be advanced to other
Guarantors that are Subsidiaries of Company, and thus the Guarantied Obligations
(as hereinafter defined) are being incurred for and will inure to the benefit of
Guarantors (which benefits are hereby acknowledged).

E.             It is a condition precedent to the making of Loans under the
Credit Agreement (other than the initial Term Loans to be made on the Closing
Date) that Company’s obligations thereunder be guarantied by Guarantors.

F.             Guarantors are willing irrevocably and unconditionally to
guaranty such obligations of Company.

XIII-1

--------------------------------------------------------------------------------

NOW, THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce Lenders and Guarantied Party to enter into the Credit
Agreement and to make Loans and other extensions of credit thereunder and to
induce Swap Counterparties to enter into the Lender Swap Agreements, Guarantors
hereby agree as follows:

1.             Guaranty.              (a) Guarantors jointly and severally
irrevocably and unconditionally guaranty, as primary obligors and not merely as
sureties, the due and punctual payment in full of all Guarantied Obligations (as
hereinafter defined) when the same shall become due, whether at stated maturity,
by acceleration, demand or otherwise (including amounts that would become due
but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. § 362(a)).  The term “Guarantied Obligations” is used
herein in its most comprehensive sense and includes any and all Obligations of
Company and all obligations of Company under Lender Swap Agreements, now or
hereafter made, incurred or created, whether absolute or contingent, liquidated
or unliquidated, whether due or not due, and however arising under or in
connection with the Credit Agreement, the Lender Swap Agreements, this Guaranty
and the other Loan Documents, including those arising under successive borrowing
transactions under the Credit Agreement which shall either continue such
obligations of Company or from time to time renew them after they have been
satisfied.

Each Guarantor acknowledges that a portion of the Loans may be advanced to it,
that Letters of Credit may be issued for the benefit of its business and that
the Guarantied Obligations are being incurred for and will inure to its benefit.

Any interest on any portion of the Guarantied Obligations that accrues after the
commencement of any proceeding, voluntary or involuntary, involving the
bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement
of Company (or, if interest on any portion of the Guarantied Obligations ceases
to accrue by operation of law by reason of the commencement of said proceeding,
such interest as would have accrued on such portion of the Guarantied
Obligations if said proceeding had not been commenced) shall be included in the
Guarantied Obligations because it is the intention of each Guarantor and
Guarantied Party that the Guarantied Obligations should be determined without
regard to any rule of law or order that may relieve Company of any portion of
such Guarantied Obligations.

In the event that all or any portion of the Guarantied Obligations is paid by
Company, the obligations of each Guarantor hereunder shall continue and remain
in full force and effect or be reinstated, as the case may be, in the event that
all or any part of such payment(s) is rescinded or recovered directly or
indirectly from Guarantied Party or any other Beneficiary as a preference,
fraudulent transfer or otherwise, and any such payments that are so rescinded or
recovered shall constitute Guarantied Obligations.

Subject to the other provisions of this Section 1, upon the failure of Company
to pay any of the Guarantied Obligations when and as the same shall become due,
each Guarantor will upon demand pay, or cause to be paid, in cash, to Guarantied
Party for the ratable benefit of Beneficiaries, an amount equal to the aggregate
of the unpaid Guarantied Obligations.

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(b)           Anything contained in this Guaranty to the contrary
notwithstanding, the obligations of each Guarantor under this Guaranty and the
other Loan Documents shall be limited to a maximum aggregate amount equal to the
largest amount that would not render its obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11
of the United States Code or any applicable provisions of comparable state law
(collectively, the “Fraudulent Transfer Laws”), in each case after giving effect
to all other liabilities of such Guarantor, contingent or otherwise, that are
relevant under the Fraudulent Transfer Laws (specifically excluding, however,
any liabilities of such Guarantor (x) in respect of intercompany indebtedness to
Company or other affiliates of Company to the extent that such indebtedness
would be discharged in an amount equal to the amount paid by such Guarantor
hereunder and (y) under any guaranty of Subordinated Indebtedness which guaranty
contains a limitation as to maximum amount similar to that set forth in this
Section 1(b), pursuant to which the liability of such Guarantor hereunder is
included in the liabilities taken into account in determining such maximum
amount) and after giving effect as assets to the value (as determined under the
applicable provisions of the Fraudulent Transfer Laws) of any rights to
subrogation, reimbursement, indemnification or contribution of such Guarantor
pursuant to applicable law or pursuant to the terms of any agreement.

(c)           Each Guarantor under this Guaranty, and each guarantor under other
guaranties, if any, relating to the Credit Agreement (the “Related Guaranties”)
that contain a contribution provision similar to that set forth in this Section
1(c), together desire to allocate among themselves (collectively, the
“Contributing Guarantors”), in a fair and equitable manner, their obligations
arising under this Guaranty and the Related Guaranties.  Accordingly, in the
event any payment or distribution is made on any date by a Guarantor under this
Guaranty or a guarantor under a Related Guaranty, each such Guarantor or such
other guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in the maximum amount permitted by law so as to maximize
the aggregate amount of the Guarantied Obligations paid to Beneficiaries.

2.             Guaranty Absolute; Continuing Guaranty.  The obligations of each
Guarantor hereunder are irrevocable, absolute, independent and unconditional and
shall not be affected by any circumstance which constitutes a legal or equitable
discharge of a guarantor or surety other than payment in full of the Guarantied
Obligations.  In furtherance of the foregoing and without limiting the
generality thereof, each Guarantor agrees that:  (a) this Guaranty is a guaranty
of payment when due and not of collectibility; (b) Guarantied Party may enforce
this Guaranty upon the occurrence and during the continuance of an Event of
Default under the Credit Agreement or the occurrence of an early termination
date or similar event under any Lender Swap Agreements notwithstanding the
existence of any dispute between Company and any Beneficiary with respect to the
existence of such event; (c) the obligations of each Guarantor hereunder are
independent of the obligations of Company under the Loan Documents or the Lender
Swap Agreements and the obligations of any other guarantor of obligations of
Company and a separate action or actions may be brought and prosecuted against
each Guarantor whether or not any action is brought against Company or any of
such other guarantors and whether or not Company is joined in any such action or
actions; and (d) a payment of a portion, but not all, of the Guarantied
Obligations by one or more Guarantors shall in no way limit, affect, modify or
abridge the liability of such or any other Guarantor for any portion of the
Guarantied Obligations that has not been paid.  This Guaranty is a continuing
guaranty and shall be binding upon each

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Guarantor and its successors and assigns, and each Guarantor irrevocably waives
any right to revoke this Guaranty as to future transactions giving rise to any
Guarantied Obligations.

3.             Actions by Beneficiaries.  Any Beneficiary may from time to time,
without notice or demand and without affecting the validity or enforceability of
this Guaranty or giving rise to any limitation, impairment or discharge of any
Guarantor’s liability hereunder, (a) renew, extend, accelerate or otherwise
change the time, place, manner or terms of payment of the Guarantied
Obligations, (b) settle, compromise, release or discharge, or accept or refuse
any offer of performance with respect to, or substitutions for, the Guarantied
Obligations or any agreement relating thereto and/or subordinate the payment of
the same to the payment of any other obligations, (c) request and accept other
guaranties of the Guarantied Obligations and take and hold security for the
payment of this Guaranty or the Guarantied Obligations, (d) release, exchange,
compromise, subordinate or modify, with or without consideration, any security
for payment of the Guarantied Obligations, any other guaranties of the
Guarantied Obligations, or any other obligation of any Person with respect to
the Guarantied Obligations, (e) enforce and apply any security now or hereafter
held by or for the benefit of any Beneficiary in respect of this Guaranty or the
Guarantied Obligations and direct the order or manner of sale thereof, or
exercise any other right or remedy that Guarantied Party or the other
Beneficiaries, or any of them, may have against any such security, as Guarantied
Party in its discretion may determine consistent with the Credit Agreement, the
Lender Swap Agreements and any applicable security agreement, including
foreclosure on any such security pursuant to one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially reasonable,
and (f) exercise any other rights available to Guarantied Party or the other
Beneficiaries, or any of them, under the Loan Documents or the Lender Swap
Agreements.

4.             No Discharge.  This Guaranty and the obligations of Guarantors
hereunder shall be valid and enforceable and shall not be subject to any
limitation, impairment or discharge for any reason (other than payment in full
of the Guarantied Obligations), including without limitation the occurrence of
any of the following, whether or not any Guarantor shall have had notice or
knowledge of any of them:  (a) any failure to assert or enforce or agreement not
to assert or enforce, or the stay or enjoining, by order of court, by operation
of law or otherwise, of the exercise or enforcement of, any claim or demand or
any right, power or remedy with respect to the Guarantied Obligations or any
agreement relating thereto, or with respect to any other guaranty of or security
for the payment of the Guarantied Obligations, (b) any waiver or modification
of, or any consent to departure from, any of the terms or provisions of the
Credit Agreement, any of the other Loan Documents, the Lender Swap Agreements or
any agreement or instrument executed pursuant thereto, or of any other guaranty
or security for the Guarantied Obligations, (c) the Guarantied Obligations, or
any agreement relating thereto, at any time being found to be illegal, invalid
or unenforceable in any respect, (d) the application of payments received from
any source to the payment of indebtedness other than the Guarantied Obligations,
even though Guarantied Party or the other Beneficiaries, or any of them, might
have elected to apply such payment to any part or all of the Guarantied
Obligations, (e) any failure to perfect or continue perfection of a security
interest in any collateral which secures any of the Guarantied Obligations,
(f) any defenses, set-offs or counterclaims which Company may assert against
Guarantied Party or any Beneficiary in respect of the Guarantied Obligations,
including but not limited to failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and satisfaction and
usury, and (g) any other act or thing or omission, or delay

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to do any other act or thing, which may or might in any manner or to any extent
vary the risk of a Guarantor as an obligor in respect of the Guarantied
Obligations.

5.             Waivers.  Each Guarantor waives, for the benefit of
Beneficiaries:  (a) any right to require Guarantied Party or the other
Beneficiaries, as a condition of payment or performance by such Guarantor, to
(i) proceed against Company, any other guarantor of the Guarantied Obligations
or any other Person, (ii) proceed against or exhaust any security held from
Company, any other guarantor of the Guarantied Obligations or any other Person,
(iii) proceed against or have resort to any balance of any deposit account or
credit on the books of any Beneficiary in favor of Company or any other Person,
or (iv) pursue any other remedy in the power of  any Beneficiary; (b) any
defense arising by reason of the incapacity, lack of authority or any disability
or other defense of Company including, without limitation, any defense based on
or arising out of the lack of validity or the unenforceability of the Guarantied
Obligations or any agreement or instrument relating thereto or by reason of the
cessation of the liability of Company from any cause other than payment in full
of the Guarantied Obligations; (c) any defense based upon any statute or rule of
law which provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal; (d) any
defense based upon Guarantied Party’s or any other Beneficiary’s errors or
omissions in the administration of the Guarantied Obligations, except behavior
that amounts to bad faith; (e) (i) any principles or provisions of law,
statutory or otherwise, that are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of such Guarantor’s obligations
hereunder, (ii) the benefit of any statute of limitations affecting such
Guarantor’s liability hereunder or the enforcement hereof, (iii) any rights to
set-offs, recoupments and counterclaims, and (iv) promptness, diligence and any
requirement that any Beneficiary protect, secure, perfect or insure any Lien or
any property subject thereto; (f) except as expressly provided in the Loan
Documents, notices, demands, presentments, protests, notices of protest, notices
of dishonor and notices of any action or inaction, including acceptance of this
Guaranty, notices of default under the Credit Agreement, notices of default or
early termination under any Lender Swap Agreement or any agreement or instrument
related thereto, notices of any renewal, extension or modification of the
Guarantied Obligations or any agreement related thereto, notices of any
extension of credit to Company and notices of any of the matters referred to in
Sections 3 and 4 and any right to consent to any thereof; and (g) to the fullest
extent permitted by law, any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Guaranty.

6.             Guarantors’ Rights of Subrogation, Contribution, Etc.;
Subordination of Other Obligations.  Until the Guarantied Obligations shall have
been paid in full and the Commitments shall have terminated and all Letters of
Credit shall have expired or been cancelled or collateralized with cash or a
letter of credit, each Guarantor shall withhold exercise of (a) any claim, right
or remedy, direct or indirect, that such Guarantor now has or may hereafter have
against Company or any of its assets in connection with this Guaranty or the
performance by such Guarantor of its obligations hereunder, in each case whether
such claim, right or remedy arises in equity, under contract, by statute, under
common law or otherwise and including without limitation (i) any right of
subrogation, reimbursement or indemnification that such Guarantor now has or may
hereafter have against Company, (ii) any right to enforce, or to participate in,
any claim, right or remedy that any Beneficiary now has or may hereafter have

XIII-5

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against Company, and (iii) any benefit of, and any right to participate in, any
collateral or security now or hereafter held by any Beneficiary and (b) any
right of contribution such Guarantor now has or may hereafter have against any
other guarantor of any of the Guarantied Obligations.  Each Guarantor further
agrees that, to the extent the agreement to withhold the exercise of its rights
of subrogation, reimbursement, indemnification and contribution as set forth
herein is found by a court of competent jurisdiction to be void or voidable for
any reason, any rights of subrogation, reimbursement or indemnification such
Guarantor may have against Company or against any collateral or security, and
any rights of contribution such Guarantor may have against any such other
guarantor, shall be junior and subordinate to any rights Guarantied Party or the
other Beneficiaries may have against Company, to all right, title and interest
Guarantied Party or the other Beneficiaries may have in any such collateral or
security, and to any right Guarantied Party or the other Beneficiaries may have
against such other guarantor.

Any indebtedness of Company now or hereafter held by any Guarantor is
subordinated in right of payment to the Guarantied Obligations, and any such
indebtedness of Company to a Guarantor collected or received by such Guarantor
after an Event of Default has occurred and is continuing, and any amount paid to
a Guarantor on account of any subrogation, reimbursement, indemnification or
contribution rights referred to in the preceding paragraph when all Guarantied
Obligations have not been paid in full, any Lender shall have any Commitment or
any Swap Counterparty shall have any obligation under any Lender Swap Agreement,
shall be held for Guarantied Party on behalf of Beneficiaries and shall
forthwith be paid over to Guarantied Party for the benefit of Beneficiaries to
be credited and applied against the Guarantied Obligations.

7.             Expenses.  Guarantors jointly and severally agree to pay, or
cause to be paid, on demand, and to save Guarantied Party and the other
Beneficiaries harmless against liability for, (i) any and all costs and expenses
(including reasonable fees, costs of settlement, and disbursements of counsel
and allocated costs of internal counsel) incurred or expended by Guarantied
Party or any other Beneficiary in connection with the enforcement of or
preservation of any rights under this Guaranty and (ii) any and all costs and
expenses (including those arising from rights of indemnification) required to be
paid by Guarantors under the provisions of any other Loan Document.

8.             Financial Condition of Company.  No Beneficiary shall have any
obligation, and each Guarantor waives any duty on the part of any Beneficiary,
to disclose or discuss with such Guarantor its assessment, or such Guarantor’s
assessment, of the financial condition of Company or any matter or fact relating
to the business, operations or condition of Company.  Each Guarantor has
adequate means to obtain information from Company on a continuing basis
concerning the financial condition of Company and its ability to perform its
obligations under the Loan Documents and the Lender Swap Agreements, and each
Guarantor assumes the responsibility for being and keeping informed of the
financial condition of Company and of all circumstances bearing upon the risk of
nonpayment of the Guarantied Obligations.

9.             Representations and Warranties.  Each Guarantor makes, for the
benefit of Beneficiaries, each of the representations and warranties made in the
Credit Agreement by Company as to such Guarantor, its assets, financial
condition, operations, organization, legal status, business and the Loan
Documents to which it is a party.

XIII-6

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10.          Covenants.  Each Guarantor agrees that, so long as any part of the
Guarantied Obligations shall remain unpaid, any Letter of Credit shall be
outstanding and not collateralized by cash or a letter of credit, or any Lender
shall have any Commitment or any Swap Counterparty shall have any obligation
under any Lender Swap Agreement, such Guarantor will, unless Requisite Obligees
(as such term is defined in Section 17(a)) shall otherwise consent in writing,
perform or observe, and cause its Subsidiaries, if any, to perform or observe,
all of the terms, covenants and agreements that the Loan Documents state that
Company is to cause a Guarantor and such Subsidiaries to perform or observe.

11.          Set Off.  In addition to any other rights any Beneficiary may have
under law or in equity, if any amount shall at any time be due and owing by a
Guarantor to any Beneficiary under this Guaranty, such Beneficiary is authorized
at any time or from time to time, without notice (any such notice being
expressly waived), to set off and to appropriate and to apply any and all
deposits (general or special, including but not limited to indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness of such Beneficiary owing to a Guarantor and any other
property of such Guarantor held by a Beneficiary to or for the credit or the
account of such Guarantor against and on account of the Guarantied Obligations
and liabilities of such Guarantor to any Beneficiary under this Guaranty.

12.          Discharge of Guaranty Upon Sale of Guarantor.  If all of the stock
of a Guarantor or any of its successors in interest under this Guaranty shall be
sold or otherwise disposed of (including by merger or consolidation) in a sale
or other disposition not prohibited by the Credit Agreement or otherwise
consented to by Requisite Obligees (as such term is defined in Section 17(a)),
such Guarantor or such successor in interest, as the case may be, may request
Guarantied Party to, and Guarantied Party shall, execute and deliver documents
or instruments necessary to evidence the release and discharge of this Guaranty
as provided in subsection 10.14 of the Credit Agreement.

13.          Amendments and Waivers.  No amendment, modification, termination or
waiver of any provision of this Guaranty, and no consent to any departure by any
Guarantor therefrom, shall in any event be effective without the written
concurrence of Guarantied Party and, in the case of any such amendment or
modification, Guarantors.  Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given.

14.          Miscellaneous.  It is not necessary for Beneficiaries to inquire
into the capacity or powers of any Guarantor or Company or the officers,
directors or any agents acting or purporting to act on behalf of any of them.

The rights, powers and remedies given to Beneficiaries by this Guaranty are
cumulative and shall be in addition to and independent of all rights, powers and
remedies given to Beneficiaries by virtue of any statute or rule of law or in
any of the Loan Documents or the Lender Swap Agreements or any agreement between
one or more Guarantors and one or more Beneficiaries or between Company and one
or more Beneficiaries.  Any forbearance or failure to exercise, and any delay by
any Beneficiary in exercising, any right, power or remedy hereunder shall not
impair any such right, power or remedy or be construed to be a waiver thereof,
nor shall it preclude the further exercise of any such right, power or remedy.

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In case any provision in or obligation under this Guaranty shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.

THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTORS, GUARANTIED PARTY AND
THE OTHER BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

This Guaranty shall inure to the benefit of Beneficiaries and their respective
successors and assigns.

ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR ARISING OUT OF OR
RELATING TO THIS GUARANTY MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY
OF THIS GUARANTY EACH GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
GUARANTY.  Each Guarantor agrees that service of all process in any such
proceeding in any such court may be made by registered or certified mail, return
receipt requested, to such Guarantor at its address set forth below its
signature hereto, such service being acknowledged by such Guarantor to be
sufficient for personal jurisdiction in any action against such Guarantor in any
such court and to be otherwise effective and binding service in every respect. 
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of Guarantied Party or any Beneficiary
to bring proceedings against such Guarantor in the courts of any other
jurisdiction.

EACH GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, GUARANTIED PARTY
EACH AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY.  THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS. EACH GUARANTOR AND, BY ITS ACCEPTANCE OF
THE BENEFITS HEREOF, GUARANTIED PARTY EACH (I) ACKNOWLEDGES THAT THIS WAIVER IS
A MATERIAL INDUCEMENT FOR SUCH GUARANTOR AND GUARANTIED PARTY TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT SUCH GUARANTOR AND GUARANTIED PARTY HAVE

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ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS GUARANTY OR ACCEPTING THE
BENEFITS THEREOF, AS THE CASE MAY BE, AND THAT EACH WILL CONTINUE TO RELY ON
THIS WAIVER IN THEIR RELATED FUTURE DEALINGS, AND (II) FURTHER WARRANTS AND
REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT
EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS OF THIS
GUARANTY.  In the event of litigation, this Guaranty may be filed as a written
consent to a trial by the court.

15.          Additional Guarantors.  The initial Guarantor(s) hereunder shall be
such of the Subsidiaries of Company as are signatories hereto on the date
hereof.  From time to time subsequent to the date hereof, Subsidiaries of
Company may become parties hereto, as additional Guarantors (each an “Additional
Guarantor”), by executing a counterpart of this Guaranty.  A form of such a
counterpart is attached as Exhibit A.  Upon delivery of any such counterpart to
Guarantied Party, notice of which is hereby waived by Guarantors, each such
Additional Guarantor shall be a Guarantor and shall be as fully a party hereto
as if such Additional Guarantor were an original signatory hereof.  Each
Guarantor expressly agrees that its obligations arising hereunder shall not be
affected or diminished by the addition or release of any other Guarantor
hereunder, nor by any election of the Guarantied Party not to cause any
Subsidiary of Company to become an Additional Guarantor hereunder.  This
Guaranty shall be fully effective as to any Guarantor that is or becomes a party
hereto regardless of whether any other Person becomes or fails to become or
ceases to be a Guarantor hereunder.

16.          Counterparts; Effectiveness.  This Guaranty may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original for all purposes; but all such counterparts together shall
constitute but one and the same instrument.  This Guaranty shall become
effective as to each Guarantor upon the execution of a counterpart hereof by
such Guarantor (whether or not a counterpart hereof shall have been executed by
any other Guarantor) and receipt by the Guaranteed Party of written or
telephonic notification of such execution and authorization of delivery thereof.

17.          Guarantied Party as Agent.

(a)           Guarantied Party has been appointed to act as Guarantied Party
hereunder by Lenders and, by acceptance of any of the benefits hereunder, each
Swap Counterparty.  Guarantied Party shall be obligated, and shall have the
right hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action, solely in
accordance with this Guaranty and the Credit Agreement; provided that Guarantied
Party shall exercise, or refrain from exercising, any remedies under or with
respect to this Guaranty in accordance with the instructions of (i) Requisite
Lenders, or (ii) after payment in full of all Obligations under the Credit
Agreement and the other Loan Documents, the cancellation, expiration or
collateralization with cash or a letter of credit of all Letters of Credit

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and the termination of the Commitments, the holders of a majority of (A) the
aggregate notional amount under all Lender Swap Agreements (including Lender
Swap Agreements that have been terminated) or (B) if all Lender Swap Agreements
have been terminated in accordance with their terms, the aggregate amount then
due and payable (exclusive of expenses and similar payments but including any
early termination payments then due) under such Lender Swap Agreements
(Requisite Lenders or, if applicable, such holders being referred to herein as
“Requisite Obligees”).

(b)           Guarantied Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement.  Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Guarantied Party under this Guaranty;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor
Guarantied Party under this Guaranty.  Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Guarantied Party under this Guaranty, and the retiring
Guarantied Party under this Guaranty shall promptly (i) transfer to such
successor Guarantied Party all sums held hereunder, together with all records
and other documents necessary or appropriate in connection with the performance
of the duties of the successor Guarantied Party under this Guaranty, and
(ii) take such other actions as may be necessary or appropriate in connection
with the assignment to such successor Guarantied Party of the rights created
hereunder, whereupon such retiring Guarantied Party shall be discharged from its
duties and obligations under this Guaranty.  After any retiring Guarantied
Party’s resignation hereunder as Guarantied Party, the provisions of this
Guaranty shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Guaranty while it was Guarantied Party hereunder.

18.          Notice of Lender Swap Agreements.  Guarantied Party shall not be
deemed to have any duty whatsoever with respect to any Swap Counterparty until
it shall have received written notice in form and substance satisfactory to
Guarantied Party from Company, a Guarantor or the Swap Counterparty as to the
existence and terms of the applicable Lender Swap Agreement.

[Remainder of page intentionally left blank.]

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IN WITNESS WHEREOF, each Guarantor and Guarantied Party, solely for the purposes
of the waiver of the right to jury trial contained in Section 14, have caused
this Guaranty to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.

FTD.COM INC.

 

 

 

 

 

By:

 

 

 

Title:

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FLORISTS’ TRANSWORLD DELIVERY, INC.

 

 

 

 

 

By:

 

 

 

Title:

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

XIII-S-1

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WELLS FARGO BANK, N.A., as Administrative
Agent, as Guarantied Party

 

 

 

 

 

By:

 

 

 

Title:

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

XIII-S-2

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EXHIBITA

[FORM OF COUNTERPART FOR ADDITIONAL GUARANTORS]

This COUNTERPART (this “Counterpart”), dated               , 20    , is
delivered pursuant to Section 15 of the Guaranty referred to below.  The
undersigned hereby agrees that this Counterpart may be attached to the Guaranty,
dated as of July 28, 2006 (as it may be from time to time amended, modified or
supplemented, the “Guaranty”; capitalized terms used herein not otherwise
defined herein shall have the meanings ascribed therein), among the Guarantors
named therein and Wells Fargo Bank, N.A., as Guarantied Party.  The undersigned,
by executing and delivering this Counterpart, hereby becomes an Additional
Guarantor under the Guaranty in accordance with Section 15 thereof and agrees to
be bound by all of the terms thereof.

IN WITNESS WHEREOF, the undersigned has caused this Counterpart to be duly
executed and delivered by its officer thereunto duly authorized as of
                               , 20     .

[NAME OF ADDITIONAL GUARANTOR]

 

 

 

By:

 

 

Title:

 

 

 

Address:

 

 

 

 

 

 

 

 

XIII-Exhibit A-1

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EXHIBIT XIV

[FORM OF] SECURITY AGREEMENT

This SECURITY AGREEMENT (this “Agreement”) is dated as of July 28, 2006, and
entered into by and among FTD, INC., a Delaware corporation (“Company”), FTD
GROUP, INC., a Delaware corporation (“Holdings”), each of THE UNDERSIGNED DIRECT
AND INDIRECT SUBSIDIARIES of Company (each of such undersigned Subsidiaries
being a “Subsidiary Grantor” and collectively “Subsidiary Grantors”) and each
ADDITIONAL GRANTOR that may become a party hereto after the date hereof in
accordance with Section 21 hereof (each of Company, Holdings, each Subsidiary
Grantor, and each Additional Grantor being a “Grantor” and collectively the
“Grantors”) and WELLS FARGO BANK, N.A., as Administrative Agent for and
representative of (in such capacity herein called “Secured Party”) the
Beneficiaries (as hereinafter defined).

PRELIMINARY STATEMENTS

A.            Pursuant to the Credit Agreement dated as of July 28, 2006 (said
Credit Agreement, as it may hereafter be amended, restated, supplemented or
otherwise modified from time to time, being the “Credit Agreement”; the terms
defined therein and not otherwise defined in Section 32 or elsewhere herein
being used herein as therein defined), by and among Company, the lenders listed
therein as Lenders, Wells Fargo Bank, N.A., as Administrative Agent (in such
capacity, “Administrative Agent”), and the other agents listed therein, Lenders
have made certain commitments, subject to the terms and conditions set forth in
the Credit Agreement, to extend certain credit facilities to Company.

B.            Company may from time to time enter, or may from time to time have
entered, into one or more Lender Swap Agreements with one or more Swap
Counterparties in accordance with the terms of the Credit Agreement, and it is
desired that the obligations of Company under the Lender Swap Agreements,
including, without limitation, the obligation of Company to make payments
thereunder in the event of early termination thereof, together with all
obligations of Company under the Credit Agreement and the other Loan Documents,
be secured hereunder.

C.            Holdings has executed and delivered the Holdings Guaranty, and
Subsidiary Grantors have executed and delivered the Subsidiary Guaranty, in each
case in favor of Secured Party for the benefit of Lenders and any Swap
Counterparties, pursuant to which Holdings and each Subsidiary Grantor have
guarantied the prompt payment and performance when due of all obligations of
Company under the Credit Agreement and all obligations of Company under the
Lender Swap Agreements.

D.            It is a condition precedent to the initial extensions of credit by
Lenders under the Credit Agreement that Grantors listed on the signature pages
hereof shall have granted the security interests and undertaken the obligations
contemplated by this Agreement.

NOW, THEREFORE, in consideration of the agreements set forth herein and in the
Credit Agreement and in order to induce Lenders to make Loans and other
extensions of

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credit under the Credit Agreement and to induce Swap Counterparties to enter
into the Lender Swap Agreements, each Grantor hereby agrees with Secured Party
as follows:

SECTION 1.                                               Grant of Security.

Each Grantor hereby assigns to Secured Party, and hereby grants to Secured Party
a security interest in, all of such Grantor’s right, title and interest in and
to all of the personal property of such Grantor, in each case whether now or
hereafter existing, whether tangible or intangible, whether now owned or
hereafter acquired, wherever the same may be located and whether or not subject
to the Uniform Commercial Code as it exists on the date of this Agreement, or as
it may hereafter be amended in the State of New York (the “UCC”), including all
Assigned Agreements and the following (the “Collateral”):

(a)           all Accounts;

(b)           all Chattel Paper;

(c)           all Money and all Deposit Accounts, together with all amounts on
deposit from time to time in such Deposit Accounts;

(d)           all Documents;

(e)           all General Intangibles, including all intellectual property,
Payment Intangibles and Software;

(f)            all Goods, including Inventory, Equipment and Fixtures;

(g)           all Instruments;

(h)           all Investment Property;

(i)            all Letter-of-Credit Rights and other Supporting Obligations;

(j)            all Records;

(k)           all Commercial Tort Claims, including those set forth on Schedule
1 annexed hereto; and

(l)            all Proceeds and Accessions with respect to any of the foregoing
Collateral.

Each category of Collateral set forth above shall have the meaning set forth in
the UCC (to the extent such term is defined in the UCC), it being the intention
of Grantors that the description of the Collateral set forth above be construed
to include the broadest possible range of assets.

Notwithstanding anything herein to the contrary, in no event shall the
Collateral include, and no Grantor shall be deemed to have granted a security
interest in, any of such Grantor’s rights or interests in or under, (a) any
license, contract, permit, Instrument, Security or

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franchise to which such Grantor is a party or any of its rights or interests
thereunder to the extent, but only to the extent, that such a grant would, under
the terms of such license, contract, permit, Instrument, Security or franchise,
result in a breach of the terms of, or constitute a default under, such license,
contract, permit, Instrument, Security or franchise (other than to the extent
that any such term would be rendered ineffective pursuant to the UCC or any
other applicable law (including the Bankruptcy Code) or principles of equity);
provided, that immediately upon the ineffectiveness, lapse or termination of any
such provision the Collateral shall include, and such Grantor shall be deemed to
have granted a security interest in, all such rights and interests as if such
provision had never been in effect, or (b)  any property or asset hereafter
acquired by any Grantor that is subject to a Lien permitted to be incurred
pursuant to the Credit Agreement solely to the extent that the documents
evidencing such Lien prohibit the grant of a security interest in or Lien on
such property or asset; provided that, upon such property or asset no longer
being subject to such Lien or prohibition, such property or asset shall (without
any act or delivery by any Person) constitute Collateral hereunder.

Notwithstanding anything herein to the contrary, the Collateral shall not
include any equity interests issued by a Person if such Person is a controlled
foreign corporation (used hereinafter as such term is defined in Section 957(a)
or any successor provision of the Internal Revenue Code), in excess of the
amount of such equity interests possessing up to but not exceeding 66% of the
voting power of all classes of such equity interests entitled to vote of such
Person.

SECTION 2.                                               Security for
Obligations.

This Agreement secures, and the Collateral is collateral security for, the
prompt payment or performance in full when due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise, of all
Secured Obligations of each Grantor.  “Secured Obligations” means:

(a)           with respect to Company, all obligations and liabilities of every
nature of Company now or hereafter existing under or arising out of or in
connection with the Credit Agreement and the other Loan Documents and any Lender
Swap Agreement;

(b)           with respect to each Subsidiary Grantor and Additional Grantor,
all obligations and liabilities of every nature of such Subsidiary Grantor now
or hereafter existing under or arising out of or in connection with the
Subsidiary Guaranty; and

(c)           with respect to Holdings, all obligations and liabilities of every
nature of Holdings now or hereafter existing under or arising out of or in
connection with the Holdings Guaranty;

in each case together with all extensions or renewals thereof, whether for
principal, interest, reimbursement of amounts drawn under Letters of Credit,
payments for early termination of Lender Swap Agreements, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such obligations
or liabilities that

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are paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Secured Party or any Lender or Swap Counterparty as
a preference, fraudulent transfer or otherwise, and all obligations of every
nature of Grantors now or hereafter existing under this Agreement (including,
without limitation, interest and other amounts that, but for the filing of a
petition in bankruptcy with respect to Company or any other Grantor, would
accrue on such obligations, whether or not a claim is allowed against Company or
such Grantor for such amounts in the related bankruptcy proceeding).

SECTION 3.                                               Grantors Remain Liable.

Anything contained herein to the contrary notwithstanding, (a) each Grantor
shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Party of any of its rights hereunder shall
not release any Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, and (c) Secured Party shall
not have any obligation or liability under any contracts, licenses, and
agreements included in the Collateral by reason of this Agreement, nor shall
Secured Party be obligated to perform any of the obligations or duties of any
Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.

SECTION 4.                                               Representations and
Warranties.

Each Grantor represents and warrants as follows:

(a)           Ownership of Collateral.  Except as expressly permitted by the
Credit Agreement, such Grantor owns its interests in the Collateral free and
clear of any Lien and no effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is on file in any
filing or recording office, in the PTO (to such Grantor’s knowledge) or in the
Copyright Office, except for which proper terminations have been delivered to
Secured Party for filing.

(b)           Perfection.  The security interests in the Collateral granted to
Secured Party for the ratable benefit of Lenders and Swap Counterparties
hereunder constitute valid security interests in the Collateral, securing the
payment of the Secured Obligations.  Upon (i) the filing of UCC financing
statements naming each Grantor as “debtor”, naming Secured Party as “secured
party” and describing the Collateral in the filing offices with respect to such
Grantor set forth on Schedule 2 annexed hereto, (ii) in the case of the
Securities Collateral consisting of certificated Securities or evidenced by
Instruments, in addition to filing of such UCC financing statements, delivery of
the certificates representing such certificated Securities and delivery of such
Instruments to Secured Party, in each case duly endorsed or accompanied by duly
executed instruments of assignment or transfer in blank, (iii) in the case of
the Intellectual Property Collateral, in addition to the filing of such UCC
financing statements, the recordation of a Grant with the PTO or with the
Copyright Office, as applicable, (iv) in the case of Equipment that is covered
by a certificate of title, to the extent requested by Secured Party, the filing
with the registrar of motor vehicles or other appropriate authority in the
applicable jurisdiction of an application requesting the notation of the
security interest created hereunder on

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such certificate of title, and (v), in the case of any Deposit Account and any
Investment Property constituting a Security Entitlement, Securities Account,
Commodity Contract or Commodity Account, to the extent requested by Secured
Party, the execution and delivery to Secured Party of an agreement providing for
control by Secured Party thereof, the security interests in the Collateral
granted to Secured Party for the ratable benefit of Lenders and Swap
Counterparties will constitute perfected security interests therein prior to all
other Liens (except for Permitted Encumbrances and Liens permitted by subsection
7.2(A) of the Credit Agreement), and all filings and other actions necessary or
desirable to perfect and protect such security interests have been, or promptly
after the Closing Date will be, duly made or taken.

(c)           Office Locations; Type and Jurisdiction of Organization; Locations
of Equipment and Inventory.  As of the Closing Date or, in the case of an
Additional Grantor, the date of the applicable Counterpart, the office where
such Grantor keeps its Records regarding the Accounts and all Intellectual
Property and all originals of all Chattel Paper that evidence Accounts are
located at the locations set forth on Schedule 3 annexed hereto; such Grantor’s
name as it appears in official filings in the jurisdiction of its organization,
type of organization (i.e. corporation, limited partnership, etc.), jurisdiction
of organization and organization number provided by the applicable Government
Authority of the jurisdiction of organization are set forth on Schedule 3
annexed hereto.  All of the Equipment and Inventory is, as of the date hereof,
or in the case of an Additional Grantor, the date of the applicable Counterpart,
located at the places set forth on Schedule 4 annexed hereto, except for
Inventory which, in the ordinary course of business, is in transit either
(i) from a supplier to a Grantor, (ii) between the locations set forth on
Schedule 4 annexed hereto, or (iii) to customers of a Grantor.

(d)           Reserved.

(e)           Delivery of Certain Collateral.  As of the Closing Date, all
certificates or Instruments (excluding checks) evidencing, comprising or
representing the Collateral have been delivered to Secured Party duly endorsed
or accompanied by duly executed instruments of transfer or assignment in blank.

(f)            Securities Collateral.  All of the Pledged Subsidiary Equity set
forth on Schedule 6 annexed hereto has been duly authorized and validly issued
and is fully paid and non-assessable; all of the Pledged Subsidiary Debt set
forth on Schedule 7 annexed hereto has been duly authorized and is the legally
valid and binding obligation of the issuers thereof and is not in default; there
are no outstanding warrants, options or other rights to purchase, or other
agreements outstanding with respect to, or property that is now or hereafter
convertible into, or that requires the issuance or sale of, any Pledged
Subsidiary Equity, other than the Put/Call Agreements; Schedule 6 annexed hereto
sets forth all of the Equity Interests and the Pledged Equity owned by each
Grantor, and the percentage ownership in each issuer thereof, on the date
hereof; and Schedule 7 annexed hereto sets forth all of the Pledged Debt in
existence on the date hereof.

(g)           Intellectual Property Collateral.  As of the Closing Date, a true
and complete list of all material Trademark Registrations and applications for
any material Trademark owned, held (whether pursuant to a license or otherwise)
or used by such Grantor, in whole or in part, is set forth on Schedule 8 annexed
hereto; as of the Closing Date, a true and

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complete list of all material Patents owned, held (whether pursuant to a license
or otherwise) or used by such Grantor, in whole or in part, is set forth on
Schedule 9 annexed hereto; as of the Closing Date, a true and complete list of
all material Copyright Registrations and applications for Copyright
Registrations held (whether pursuant to a license or otherwise) by such Grantor,
in whole or in part, is set forth on Schedule 10 annexed hereto; and after
reasonable inquiry, such Grantor is not aware of any pending or threatened claim
by any third party that any of the Intellectual Property Collateral owned, held
or used by such Grantor is invalid or unenforceable that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.

(h)           Deposit Accounts, Security Accounts, Commodity Accounts. 
Schedule 11 annexed hereto lists all Deposit Accounts, Security Accounts and
Commodity Accounts owned by each Grantor as of the Closing Date  and indicates
the institution or intermediary at which the account is held and the account
number.

(i)            Chattel Paper.  As of the date hereof, such Grantor has no
interest in any Chattel Paper, except as set forth in Schedule 12 annexed
hereto.

(j)            Letter-of-Credit Rights.  As of the date hereof, such Grantor has
no interest in any Letter-of-Credit Rights, except as set forth on Schedule 13
annexed hereto.

(k)           Documents.  As of the date hereof, no negotiable Documents are
outstanding with respect to any of the Inventory, except as set forth on
Schedule 14 annexed hereto.

(l)            Assigned Agreements.  As of the date hereof, to the applicable
Grantor’s knowledge, each Assigned Agreement is in full force and effect and is
enforceable against the parties thereto in accordance with its terms.

(m)          Motor Vehicles. As of the date hereof, such Grantor owns no motor
vehicles.

SECTION 5.                                               Further Assurances.

(a)           Generally.  Each Grantor agrees that from time to time, at the
expense of Grantors, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that Secured Party may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable Secured Party to exercise and enforce its rights and remedies hereunder
with respect to any Collateral.  Without limiting the generality of the
foregoing, each Grantor will:  (i) (A) notify Secured Party in writing of
receipt by such Grantor of any interest in Chattel Paper (other than Chattel
Paper received by such Grantor in connection with the making of loans (financing
equipment sold) or equipment leases to customers permitted by subsection
7.3(xiv) of the Credit Agreement), (B) at the reasonable request of Secured
Party, notify Secured Party in writing of receipt by such Grantor of any
interest in Chattel Paper received in connection with the making of loans
(financing equipment sold) or equipment leases to customers permitted by
subsection 7.3(xiv) of the Credit Agreement and (C) at the reasonable request of
Secured Party, mark conspicuously each item of Chattel Paper, with a legend, in
form and substance

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reasonably satisfactory to Secured Party, indicating that such Chattel Paper is
subject to the security interest granted hereby, (ii) deliver to Secured Party
all promissory notes and other Instruments with a principal amount in excess of
$100,000 and, at the reasonable request of Secured Party, all original
counterparts of Chattel Paper, duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
Secured Party, (iii) (A) execute (if necessary) and file such financing or
continuation statements, or amendments thereto, (B) at the reasonable request of
Secured Party, execute and deliver, and cause to be executed and delivered,
agreements establishing that Secured Party has control of electronic Chattel
Paper, Deposit Accounts, Investment Property and Letter-of-Credit Rights of such
Grantor and (C) deliver such other instruments or notices, in each case, as may
be necessary or desirable, or as Secured Party may reasonably request, in order
to perfect and preserve the security interests granted or purported to be
granted hereby, (iv) furnish to Secured Party from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Secured Party may reasonably
request, all in reasonable detail, (v) promptly after the acquisition by such
Grantor of any item of Equipment with a value in excess of $100,000 that is
covered by a certificate of title under a statute of any jurisdiction under the
law of which indication of a security interest on such certificate is required
as a condition of perfection thereof, execute and file with the registrar of
motor vehicles or other appropriate authority in such jurisdiction an
application or other document requesting the notation or other indication of the
security interest created hereunder on such certificate of title, (vi) within 30
days after the end of each calendar quarter, deliver to Secured Party copies of
all such applications or other documents filed during such calendar quarter and
copies of all such certificates of title issued during such calendar quarter
indicating the security interest created hereunder in the items of Equipment
covered thereby, (vii) at any reasonable time, upon request and reasonable prior
notice by Secured Party, exhibit the Collateral to and allow inspection of the
Collateral by Secured Party, or persons designated by Secured Party, (viii) at
Secured Party’s reasonable request, appear in and defend any action or
proceeding that may affect such Grantor’s title to or Secured Party’s security
interest in all or any material part of the Collateral, and (ix) at Secured
Party’s reasonable request, use commercially reasonable efforts to obtain any
necessary consents of third parties to the creation and perfection of a security
interest in favor of Secured Party with respect to any Collateral.  Each Grantor
hereby authorizes Secured Party to file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the
Collateral (including any financing statement indicating that it covers “all
assets” or “all personal property” of such Grantor) without the signature of any
Grantor.

(b)           Securities Collateral.  Without limiting the generality of the
foregoing Section 5(a), each Grantor agrees that (i) all certificates or
Instruments with a principal amount in excess of $100,000 representing or
evidencing the Securities Collateral shall be delivered to and held by or on
behalf of Secured Party pursuant hereto and shall be in suitable form for
transfer by delivery or, as applicable, shall be accompanied by such Grantor’s
endorsement, where necessary, or duly executed instruments of transfer or
assignment in blank, all in form and substance reasonably satisfactory to
Secured Party and (ii) it will, upon obtaining any additional Equity Interests
or Indebtedness, promptly (and in any event within ten Business Days) deliver to
Secured Party a Pledge Supplement, duly executed by such Grantor, in respect of
such additional Pledged Equity or Pledged Debt; provided, that the failure of
any Grantor to execute a Pledge Supplement with respect to any additional
Pledged Equity or Pledged Debt shall not impair the security interest of Secured
Party therein or otherwise adversely affect the rights and remedies of

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Secured Party hereunder with respect thereto.  Upon each such acquisition, the
representations and warranties contained in
Section 4(f) hereof shall be deemed to have been made by such Grantor as to such
Pledged Equity or Pledged Debt, whether or not such Pledge Supplement is
delivered.

(c)           Intellectual Property Collateral.  Without limiting the generality
of the foregoing Section 5(a), if any Grantor shall hereafter obtain rights to
any new Intellectual Property Collateral or become entitled to the benefit of
(i) any Patent or any reissue, division, continuation, renewal, extension or
continuation-in-part of any Patent or any improvement of any Patent or (ii) any
Copyright Registration, application for Copyright Registration or renewals or
extension of any Copyright, then in any such case, the provisions of this
Agreement shall automatically apply thereto.  At least quarterly, within 20
Business Days after the end of each calendar quarter, each Grantor shall notify
Secured Party in writing of any of the foregoing rights acquired by such Grantor
after the date hereof and of any Trademark Registrations issued or application
for a Trademark Registration made, any Patent issued or application for a Patent
made, and any Copyright Registrations issued or application for Copyright
Registration made, in any such case, after the date hereof.  At least quarterly,
within 20 Business Days after the end of each calendar quarter, each Grantor
shall execute and deliver to Secured Party an IP Supplement, and submit a Grant
for recordation with respect thereto in the PTO or Copyright Office, as
applicable; provided, the failure of any Grantor to execute an IP Supplement or
submit a Grant for recordation with respect to any additional Intellectual
Property Collateral shall not impair the security interest of Secured Party
therein or otherwise adversely affect the rights and remedies of Secured Party
hereunder with respect thereto.  Upon delivery to Secured Party of an IP
Supplement, Schedules 8, 9 and 10 annexed hereto and Schedule A to each Grant,
as applicable, shall be deemed modified to include reference to any right, title
or interest in any existing Intellectual Property Collateral or any Intellectual
Property Collateral set forth on Schedule A to such IP Supplement.  Upon each
such acquisition, the representations and warranties contained in Section 4(g)
hereof shall be deemed to have been made by such Grantor as to such Intellectual
Property Collateral, whether or not such IP Supplement is delivered.

(d)           Commercial Tort Claims.  Grantors have no Commercial Tort Claims
as of the date hereof, except as set forth on Schedule 1 annexed hereto.  In the
event that a Grantor shall at any time after the date hereof have any Commercial
Tort Claims, such Grantor shall promptly notify Secured Party thereof in
writing, which notice shall (i) set forth in reasonable detail the basis for and
nature of such Commercial Tort Claim and (ii) constitute an amendment to this
Agreement by which such Commercial Tort Claim shall constitute part of the
Collateral.

SECTION 6.                                               Certain Covenants of
Grantors.

Each Grantor shall:

(a)           not use or knowingly permit any Collateral to be used unlawfully
or in violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;

(b)           give Secured Party at least 10 days’ prior written notice of
(i) any change in such Grantor’s name, identity or corporate structure and
(ii) any reincorporation,

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reorganization or other action that results in a change of the jurisdiction of
organization of such Grantor;

(c)           if Secured Party gives value to enable such Grantor to acquire
rights in or the use of any Collateral, use such value for such purposes;

(d)           keep correct and accurate (in all material respects) Records of
Collateral at the locations described in Schedule 3 annexed hereto;

(e)           permit representatives of Secured Party at any time upon
reasonable prior notice during normal business hours to inspect and make
abstracts from such Records, and each Grantor agrees to render to Secured Party,
at Grantor’s cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto;

(f)            not permit any Person other than Secured Party or such Grantor to
have possession or control of any Chattel Paper; and

(g)           not enter into any Control Agreement covering any Collateral with
any Person unless such Control Agreement is in favor of Secured Party.

SECTION 7.                                               Special Covenants With
Respect to Equipment and Inventory.

Each Grantor shall:

(a)           if any Inventory is in possession or control of any of such
Grantor’s agents or processors, if the aggregate book value of all such
Inventory exceeds $250,000, and in any event upon the occurrence of an Event of
Default and at the written request of Secured Party, instruct such agent or
processor to hold all such Inventory for the account of Secured Party and
subject to the instructions of Secured Party;

(b)           if any Inventory is located on premises leased by such Grantor, at
the written request of Secured Party, use commercially reasonable efforts to
deliver to Secured Party a fully executed Collateral Access Agreement; and

(c)           promptly upon the issuance and delivery to such Grantor of any
negotiable Document with a value in excess of $100,000, deliver such Document to
Secured Party.

SECTION 8.                                               Special Covenants with
respect to Accounts and Assigned Agreements.

(a)           Each Grantor shall, for not less than two years from the date on
which each Account of such Grantor arose, maintain (i) complete Records of such
Account, including records of all payments received, credits granted and
merchandise returned, and (ii) all documentation relating thereto.

(b)           Except as otherwise provided in this subsection (b), each Grantor
shall continue to collect, at its own expense, all amounts due or to become due
to such Grantor under the Accounts.  In connection with such collections, each
Grantor may take (and, at Secured Party’s direction, shall take) such action as
such Grantor or Secured Party may deem necessary

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or advisable to enforce collection of amounts due or to become due under the
Accounts; provided, however, that Secured Party shall have the right at any
time, upon the occurrence and during the continuation of an Event of Default and
upon written notice to such Grantor of its intention to do so, to (i) notify the
account debtors or obligors under any Accounts of the assignment of such
Accounts to Secured Party and to direct such account debtors or obligors to make
payment of all amounts due or to become due to such Grantor thereunder directly
to Secured Party, (ii) notify each Person maintaining a lockbox or similar
arrangement to which account debtors or obligors under any Accounts have been
directed to make payment to remit all amounts representing collections on checks
and other payment items from time to time sent to or deposited in such lockbox
or other arrangement directly to Secured Party, (iii) enforce collection of any
such Accounts at the expense of Grantors, and (iv) adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same extent as such
Grantor might have done.  After receipt by such Grantor of the notice from
Secured Party referred to in the proviso to the preceding sentence, (A) all
amounts and proceeds (including checks and other Instruments) received by such
Grantor in respect of the Accounts shall be received for the benefit of Secured
Party hereunder, shall be segregated from other funds of such Grantor and shall
be forthwith paid over or delivered to Secured Party in the same form as so
received (with any necessary endorsement) to be held as cash Collateral and
applied as provided by Section 17 hereof, and (B) such Grantor shall not,
without the written consent of Secured Party, adjust, settle or compromise the
amount or payment of any Account, or release wholly or partly any account debtor
or obligor thereof, or allow any credit or discount thereon except to the extent
not prohibited by the terms of the Credit Agreement.

(c)           Each Grantor shall at its expense:

(i)            if consistent with sound business practices, perform and observe
all terms and provisions of the Assigned Agreements to be performed or observed
by it, maintain the Assigned Agreements in full force and effect, enforce the
Assigned Agreements in accordance with their terms, and take all such action to
such end as may be from time to time requested by Secured Party; and

(ii)           upon request of Secured Party, (A) furnish to Secured Party,
promptly upon receipt thereof, copies of all notices, requests and other
documents received by such Grantor under or pursuant to the Assigned Agreements
and from time to time such information and reports regarding the Assigned
Agreements as Secured Party may reasonably request and (B) make to the parties
to such Assigned Agreements such demands and requests for information and
reports or for action as such Grantor is entitled to make under the Assigned
Agreements.

(d)           Upon the occurrence and during the continuance of an Event of
Default, no Grantor shall (i) cancel or terminate any of the Assigned Agreements
or consent to or accept any cancellation or termination thereof; (ii) amend or
otherwise modify the Assigned Agreements or give any consent, waiver or approval
thereunder that could reasonably be expected to materially impair the interest
or rights of Secured Party; (iii) waive any default under or breach of the
Assigned Agreements; (iv) consent to or permit or accept any prepayment of
amounts to become due under or in connection with the Assigned Agreements,
except as expressly provided therein; or (v) take any other action in connection
with the Assigned

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Agreements that could reasonably be expected to materially impair the value of
the interest or rights of such Grantor thereunder or that could reasonably be
expected to materially impair the interest or rights of Secured Party.

SECTION 9.                                               Special Covenants With
Respect to the Securities Collateral.

(a)           Form of Securities Collateral.  Secured Party shall have the right
at any time to exchange certificates or instruments representing or evidencing
Securities Collateral for certificates or instruments of smaller or larger
denominations.  If any Securities Collateral is not a security pursuant to
Section 8-103 of the UCC, no Grantor shall take any action that, under such
Section, converts such Securities Collateral into a security without causing the
issuer thereof to issue to it certificates or instruments evidencing such
Securities Collateral, which it shall promptly deliver to Secured Party as
provided in this Section 9(a).

(b)           Covenants.  Each Grantor shall (i) not, except as expressly
permitted by the Credit Agreement, permit any issuer of Pledged Subsidiary
Equity to merge or consolidate unless all the outstanding Equity Interests of
the surviving or resulting Person are, upon such merger or consolidation,
pledged hereunder and no cash, securities or other property is distributed in
respect of the outstanding Equity Interests of any other constituent
corporation; provided that, if the surviving or resulting Person upon any such
merger or consolidation is a controlled foreign corporation, then such Grantor
shall only be required to pledge outstanding Equity Interests of such surviving
or resulting Person possessing up to but not exceeding 66% of the voting power
of all classes of Equity Interests of such issuer entitled to vote; (ii) cause
each issuer of Pledged Subsidiary Equity not to issue Equity Interests in
addition to or in substitution for the Pledged Subsidiary Equity issued by such
issuer, except to such Grantor; (iii) immediately upon its acquisition (directly
or indirectly) of any Equity Interests, including additional Equity Interests in
each issuer of Pledged Equity, comply with Section 5(b); provided that,
notwithstanding anything contained in this clause (iii) to the contrary, such
Grantor shall only be required to pledge the outstanding Equity Interests of a
controlled foreign corporation possessing up to but not exceeding 66% of the
voting power of all classes of capital stock of such controlled foreign
corporation entitled to vote; (iv) immediately upon issuance of any and all
Instruments or other evidences of additional Indebtedness from time to time owed
to such Grantor by any obligor on the Pledged Debt, comply with Sections 5(a)
and (b); (v) promptly deliver to Secured Party all written notices received by
it with respect to the Securities Collateral; (vi) at its expense (A) perform
and comply in all material respects with all terms and provisions of any
agreement related to the Securities Collateral required to be performed or
complied with by it, (B) maintain all such agreements in full force and effect
and (C) enforce all such agreements in accordance with their terms; and (vii),
at the request of Secured Party, promptly execute and deliver to Secured Party
an agreement providing for control by Secured Party of all Securities
Entitlements, Securities Accounts, Commodity Contracts and Commodity Accounts of
such Grantor.

(c)           Voting and Distributions.  So long as no Event of Default shall
have occurred and be continuing, (i) each Grantor shall be entitled to exercise
any and all voting and other consensual rights pertaining to the Securities
Collateral or any part thereof for any purpose not prohibited by the terms of
this Agreement or the Credit Agreement; provided, no Grantor shall exercise or
refrain from exercising any such right if Secured Party shall have notified such

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Grantor that, in Secured Party’s reasonable judgment, such action would have a
material adverse effect on the value of the Securities Collateral or any part
thereof; and (ii) each Grantor shall be entitled to receive and retain any and
all dividends, other distributions and interest paid in respect of the
Securities Collateral.

Upon the occurrence and during the continuation of an Event of Default, (x) upon
written notice from Secured Party to any Grantor, all rights of such Grantor to
exercise the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant hereto shall cease, and all such rights shall
thereupon become vested in Secured Party who shall thereupon have the sole right
to exercise such voting and other consensual rights; (y) except as otherwise
specified in the Credit Agreement, all rights of such Grantor to receive the
dividends, other distributions, principal and interest payments which it would
otherwise be authorized to receive and retain pursuant hereto shall cease, and
all such rights shall thereupon become vested in Secured Party who shall
thereupon have the sole right to receive and hold as Collateral such dividends,
other distributions and interest payments; and (z) all dividends, principal,
interest payments and other distributions which are received by such Grantor
contrary to the provisions of clause (y) above shall be received for the benefit
of Secured Party, shall be segregated from other funds of such Grantor and shall
forthwith be paid over to Secured Party as Collateral in the same form as so
received (with any necessary endorsements).

In order to permit Secured Party to exercise the voting and other consensual
rights which it may be entitled to exercise pursuant hereto and to receive all
dividends and other distributions which it may be entitled to receive hereunder,
(I) each Grantor shall promptly execute and deliver (or cause to be executed and
delivered) to Secured Party all such proxies, dividend payment orders and other
instruments as Secured Party may from time to time reasonably request, and (II)
without limiting the effect of clause (I) above, each Grantor hereby grants to
Secured Party an irrevocable proxy to vote the Pledged Equity and to exercise
all other rights, powers, privileges and remedies to which a holder of the
Pledged Equity would be entitled (including giving or withholding written
consents of holders of Equity Interests, calling special meetings of holders of
Equity Interests and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of
any Pledged Equity on the record books of the issuer thereof) by any other
Person (including the issuer of the Pledged Equity or any officer or agent
thereof), upon the occurrence of an Event of Default and which proxy shall only
terminate upon the payment in full of the Secured Obligations, the cure of such
Event of Default or waiver thereof as evidenced by a writing executed by Secured
Party.

SECTION 10.                                             Special Covenants With
Respect to the Intellectual Property Collateral.

(a)           Each Grantor shall:

(i)            use commercially reasonable efforts so as not to permit the
inclusion in any contract to which it hereafter becomes a party of any provision
that could reasonably be expected to impair or prevent the creation of a
security interest in, or the assignment of, such Grantor’s rights and interests
in any property included within the definitions of any Intellectual Property
Collateral acquired under such contracts;

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(ii)           use commercially reasonable efforts to protect the secrecy of all
trade secrets that constitute Intellectual Property Collateral, including,
without limitation, where appropriate entering into confidentiality agreements
with employees and labeling and restricting access to secret information and
documents;

(iii)          use proper statutory notice in connection with its use of any of
the Intellectual Property Collateral and products and services covered by the
Intellectual Property Collateral; and

(iv)          use a commercially appropriate standard of quality (which may be
consistent with such Grantor’s past practices) in the manufacture, sale and
delivery of products and services sold or delivered under or in connection with
the Trademarks.

(b)           Except as otherwise provided in this Section 10, each Grantor
shall continue to collect, at its own expense, all amounts due or to become due
to such Grantor in respect of the Intellectual Property Collateral or any
portion thereof.  In connection with such collections, each Grantor may take
such action as such Grantor may reasonably deem necessary or advisable to
enforce collection of such amounts; provided, Secured Party shall have the right
at any time, upon the occurrence and during the continuation of an Event of
Default and upon written notice to such Grantor of its intention to do so, to
notify the obligors with respect to any such amounts of the existence of the
security interest created hereby and to direct such obligors to make payment of
all such amounts directly to Secured Party, and, upon such notification and at
the expense of such Grantor, to enforce collection of any such amounts and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as such Grantor might have done.  After receipt by any
Grantor of the notice from Secured Party referred to in the proviso to the
preceding sentence and upon the occurrence and during the continuance of any
Event of Default, (i) all amounts and proceeds (including checks and
Instruments) received by each Grantor in respect of amounts due to such Grantor
in respect of the Intellectual Property Collateral or any portion thereof shall
be received for the benefit of Secured Party hereunder, shall be segregated from
other funds of such Grantor and shall be forthwith paid over or delivered to
Secured Party in the same form as so received (with any necessary endorsement)
to be held as cash Collateral and applied as provided by Section 17 hereof, and
(ii) such Grantor shall not adjust, settle or compromise the amount or payment
of any such amount or release wholly or partly any obligor with respect thereto
or allow any credit or discount thereon.

(c)           Each Grantor shall have the duty diligently, through counsel
reasonably acceptable to such Grantor and Secured Party, to prosecute, file
and/or make, unless and until such Grantor, in its commercially reasonable
judgment, decides otherwise, (i) any application for registration relating to
any of the Intellectual Property Collateral owned, held or used by such Grantor
and set forth on Schedules 8, 9 or 10 annexed hereto, as applicable, that is
pending as of the date of this Agreement, (ii) any Copyright Registration on any
existing or future unregistered but copyrightable works (except for works of
nominal commercial value or with respect to which such Grantor has determined in
the exercise of its commercially reasonable judgment that it shall not seek
registration), (iii) any application on any future patentable but unpatented
innovation or invention comprising Intellectual Property Collateral, and
(iv) any Trademark opposition and cancellation proceedings, renew Trademark
Registrations and Copyright Registrations and do any and all acts which are
necessary or desirable to preserve and maintain all rights in all

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Intellectual Property Collateral.  Any expenses incurred in connection therewith
shall be borne solely by Grantors.

(d)           Except as provided herein, each Grantor shall have the right to
commence and prosecute in its own name, as real party in interest, for its own
benefit and at its own expense, such suits, proceedings or other actions for
infringement, unfair competition, dilution, misappropriation or other damage, or
reexamination or reissue proceedings as are necessary to protect the
Intellectual Property Collateral.  Each Grantor shall promptly, following its
becoming aware thereof, notify Secured Party of the institution of, or of any
adverse determination in, any proceeding (whether in the PTO, the Copyright
Office or any federal, state, local or foreign court) or regarding such
Grantor’s ownership, right to use, or interest in any Intellectual Property
Collateral material to such Grantor’s business.  Each Grantor shall provide to
Secured Party any information with respect thereto reasonably requested by
Secured Party and of which such Grantor has knowledge.

(e)           In addition to, and not by way of limitation of, the granting of a
security interest in the Collateral pursuant hereto, each Grantor, effective
upon the occurrence and during the continuance of an Event of Default, hereby
grants to Secured Party the nonexclusive right and license to use all
Trademarks, tradenames, Copyrights, Patents or technical processes included
within the Intellectual Property Collateral owned or used by such Grantor that
relate to the Collateral, together with any goodwill associated therewith, all
to the extent necessary to enable Secured Party to realize on the Collateral in
accordance with this Agreement and to enable any transferee or assignee of the
Collateral to enjoy the benefits of the Collateral.  This right shall inure to
the benefit of all successors, assigns and transferees of Secured Party and its
successors, assigns and transferees, whether by voluntary conveyance, operation
of law, assignment, transfer, foreclosure, deed in lieu of foreclosure or
otherwise.  Such right and license shall be granted free of charge, without
requirement that any monetary payment whatsoever be made to such Grantor.  If
and to the extent that any Grantor is permitted to license the Intellectual
Property Collateral, Secured Party shall promptly enter into a non-disturbance
agreement or other similar arrangement, at such Grantor’s request and expense,
with such Grantor and any licensee of any Intellectual Property Collateral
permitted hereunder in form and substance reasonably satisfactory to such
licensee, such Grantor and Secured Party pursuant to which (i) Secured Party
shall agree not to disturb or interfere with such licensee’s rights under its
license agreement with such Grantor so long as such licensee is not in default
thereunder, and (ii) such licensee shall acknowledge and agree that the
Intellectual Property Collateral licensed to it is subject to the security
interest created in favor of Secured Party and the other terms of this
Agreement.

(f)            The parties hereto acknowledge and agree that, subject to the
other terms and provisions of this Agreement and of the Credit Agreement,
including Secured Party’s rights upon the occurrence and during the continuance
of an Event of Default, the grant of a security interest in each Grantor’s
Intellectual Property contained herein shall not diminish such Grantor’s
exclusive right and license to use, or grant to other Persons licenses or
sublicenses in, such Intellectual Property, except to the extent such actions by
any Grantor would inhibit or prevent Secured Party from enforcing its rights
hereunder or under the Credit Agreement.

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SECTION 11.                                        Collateral Account.

Secured Party is hereby authorized to establish and maintain as a blocked
account under the sole dominion and control of Secured Party, a restricted
Deposit Account designated as “FTD, Inc. Collateral Account” (the “Collateral
Account”).  All amounts at any time held in the Collateral Account shall be
beneficially owned by Grantors but shall be held in the name of Secured Party
hereunder, for the benefit of Beneficiaries, as collateral security for the
Secured Obligations upon the terms and conditions set forth herein.  Grantors
shall have no right to withdraw, transfer or, except as expressly set forth
herein, otherwise receive any funds deposited into the Collateral Account. 
Notwithstanding the foregoing, amounts deposited by Company into the Collateral
Account pursuant to subsection 3.3E of the Credit Agreement shall be released to
Company upon satisfaction of the conditions specified in such subsection. 
Anything contained herein to the contrary notwithstanding, the Collateral
Account shall be subject to such applicable laws, and such applicable
regulations of the Board of Governors of the Federal Reserve System and of any
other appropriate banking or Government Authority, as may now or hereafter be in
effect.  All deposits of funds in the Collateral Account shall be made by wire
transfer (or, if applicable, by intra-bank transfer from another account of a
Grantor) of immediately available funds, in each case addressed in accordance
with instructions of Secured Party.  Each Grantor shall, promptly after
initiating a transfer of funds to the Collateral Account, give notice to Secured
Party by telefacsimile of the date, amount and method of delivery of such
deposit.  Cash held by Secured Party in the Collateral Account shall not be
invested by Secured Party but instead shall be maintained as a cash deposit in
the Collateral Account pending application thereof as elsewhere provided in this
Agreement.  To the extent permitted under Regulation Q of the Board of Governors
of the Federal Reserve System, any cash held in the Collateral Account shall
bear interest at the standard rate paid by Secured Party to its customers for
deposits of like amounts and terms.  Subject to Secured Party’s rights
hereunder, any interest earned on deposits of cash in the Collateral Account
shall be deposited directly in, and held in the Collateral Account.

SECTION 12.                                        Secured Party Appointed
Attorney-in-Fact.

Each Grantor hereby irrevocably appoints Secured Party as such Grantor’s
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor, Secured Party or otherwise, from time to time in
Secured Party’s discretion to take any action and to execute any instrument that
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation:

(a)           upon the occurrence and during the continuance of an Event of
Default, to obtain and adjust insurance required to be maintained by such
Grantor or paid to Secured Party pursuant to the Credit Agreement;

(b)           upon the occurrence and during the continuance of an Event of
Default, to ask for, demand, collect, sue for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;

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(c)           upon the occurrence and during the continuance of an Event of
Default, to receive, endorse and collect any drafts or other Instruments,
Documents, Chattel Paper and other documents in connection with clauses (a) and
(b) above;

(d)           upon the occurrence and during the continuance of an Event of
Default, to file any claims or take any action or institute any proceedings that
Secured Party may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce or protect the rights of Secured Party with
respect to any of the Collateral;

(e)           to pay or discharge taxes or Liens (other than taxes not required
to be discharged pursuant to the Credit Agreement and Liens permitted under this
Agreement or the Credit Agreement) levied or placed upon or threatened against
the Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by Secured Party in its sole discretion, any
such payments made by Secured Party to become obligations of such Grantor to
Secured Party, due and payable immediately without demand;

(f)            upon the occurrence and during the continuance of an Event of
Default, to sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with Accounts and other documents
relating to the Collateral; and

(g)           upon the occurrence and during the continuance of an Event of
Default, generally to sell, transfer, pledge, make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
Secured Party were the absolute owner thereof for all purposes, and to do, at
Secured Party’s option and Grantors’ expense, at any time or from time to time,
all acts and things that Secured Party deems necessary to protect, preserve or
realize upon the Collateral and Secured Party’s security interest therein in
order to effect the intent of this Agreement, all as fully and effectively as
such Grantor might do.

SECTION 13.                                        Secured Party May Perform.

If any Grantor fails to perform any agreement contained herein, Secured Party
may itself perform, or cause performance of, such agreement, and the expenses of
Secured Party incurred in connection therewith shall be payable by Grantors
under Section 18(b) hereof.

SECTION 14.                                        Standard of Care.

The powers conferred on Secured Party hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers.  Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Secured Party shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral.  Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which Secured Party accords its own property.

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SECTION 15.                                        Remedies.

(a)           Generally.  If any Event of Default shall have occurred and be
continuing, Secured Party may, subject to Section 20 hereof,  exercise in
respect of the Collateral, in addition to all other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of a
secured party on default under the UCC (whether or not the UCC applies to the
affected Collateral), and also may (i) require each Grantor to, and each Grantor
hereby agrees that it will at its expense and upon request of Secured Party
forthwith, assemble all or part of the Collateral as directed by Secured Party
and make it available to Secured Party at a place to be designated by Secured
Party that is reasonably convenient to both parties, (ii) enter onto the
property where any Collateral is located and take possession thereof with or
without judicial process, (iii) prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Secured Party deems
appropriate, (iv) take possession of any Grantor’s premises or place custodians
in exclusive control thereof, remain on such premises and use the same and any
of such Grantor’s equipment for the purpose of completing any work in process,
taking any actions described in the preceding clause (iii) and collecting any
Secured Obligation, (v) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Secured Party’s offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Secured Party may deem commercially reasonable, (vi) exercise
dominion and control over and refuse to permit further withdrawals from any
Deposit Account maintained with Secured Party or any Lender and provide
instructions directing the disposition of funds in Deposit Accounts not
maintained with Secured Party or any Lender and (vii) provide entitlement orders
with respect to Security Entitlements and other Investment Property constituting
a part of the Collateral and, without notice to any Grantor, transfer to or
register in the name of Secured Party or any of its nominees any or all of the
Securities Collateral.  To the extent permitted by law, Secured Party or any
Lender or Swap Counterparty may be the purchaser of any or all of the Collateral
at any such sale and Secured Party, as agent for and representative of Lenders
and Swap Counterparties (but not any Lender or Swap Counterparty in its
individual capacity unless Requisite Obligees shall otherwise agree in writing),
shall be entitled, for the purpose of bidding and making settlement or payment
of the purchase price for all or any portion of the Collateral sold at any such
public sale, to use and apply any of the Secured Obligations as a credit on
account of the purchase price for any Collateral payable by Secured Party at
such sale.  Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of any Grantor, and each
Grantor hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted. 
Each Grantor agrees that, to the extent notice of sale shall be required by law,
at least ten days’ notice to such Grantor of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification.  Secured Party shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given.  Secured Party may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.  Each Grantor hereby waives any
claims against Secured Party arising by reason of the fact that the price at
which any Collateral may have been sold at such a private sale was less than the
price which might have been obtained at a public sale, even if Secured Party
accepts the first offer received and does not

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offer such Collateral to more than one offeree.  If the proceeds of any sale or
other disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantors shall be jointly and severally liable for the deficiency
and the fees of any attorneys employed by Secured Party to collect such
deficiency.  Each Grantor further agrees that a breach of any of the covenants
contained in this Section 15 will cause irreparable injury to Secured Party,
that Secured Party has no adequate remedy at law in respect of such breach and,
as a consequence, that each and every covenant contained in this Section shall
be specifically enforceable against such Grantor, and each Grantor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no default has occurred giving rise
to the Secured Obligations becoming due and payable prior to their stated
maturities.

(b)           Securities Collateral.  Each Grantor recognizes that, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws, Secured Party may be compelled, with respect to any sale of all
or any part of the Securities Collateral conducted without prior registration or
qualification of such Securities Collateral under the Securities Act and/or such
state securities laws, to limit purchasers to those who will agree, among other
things, to acquire the Securities Collateral for their own account, for
investment and not with a view to the distribution or resale thereof.  Each
Grantor acknowledges that any such private placement may be at prices and on
terms less favorable than those obtainable through a sale without such
restrictions (including an offering made pursuant to a registration statement
under the Securities Act) and, notwithstanding such circumstances, each Grantor
agrees that any such private placement shall not be deemed, in and of itself, to
be commercially unreasonable and that Secured Party shall have no obligation to
delay the sale of any Securities Collateral for the period of time necessary to
permit the issuer thereof to register it for a form of sale requiring
registration under the Securities Act or under applicable state securities laws,
even if such issuer would, or should, agree to so register it.  If Secured Party
determines to exercise its right to sell any or all of the Securities
Collateral, upon written request, each Grantor shall and shall cause each issuer
of any Securities Collateral to be sold hereunder from time to time to furnish
to Secured Party all such information as Secured Party may request in order to
determine the amount of Securities Collateral which may be sold by Secured Party
in exempt transactions under the Securities Act and the rules and regulations of
the Securities and Exchange Commission thereunder, as the same are from time to
time in effect.

(c)           Collateral Account.  If an Event of Default has occurred and is
continuing and, in accordance with Section 8 of the Credit Agreement, Company is
required to pay to Secured Party an amount (the “Aggregate Available Amount”)
equal to the maximum amount that may at any time be drawn under all Letters of
Credit then outstanding under the Credit Agreement, Company shall deliver funds
in such an amount for deposit in the Collateral Account.  In the event a Letter
of Credit is denominated in a currency other than Dollars, the portion of the
Aggregate Available Amount related to such Letter of Credit shall be calculated
based upon the applicable Exchange Rate for such currency as of the applicable
date of determination.  If for any reason the aggregate amount delivered by
Company for deposit in the Collateral Account as aforesaid is less than the
Aggregate Available Amount, the aggregate amount so delivered by Company shall
be apportioned among all outstanding Letters of Credit for purposes of this
Section in accordance with the ratio of the maximum amount available for drawing
under each such Letter of Credit (as to such Letter of Credit, the “Maximum
Available Amount”) to the Aggregate Available Amount.  Upon any drawing under
any outstanding Letter

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of Credit in respect of which Company has deposited in the Collateral Account an
amount described above, Secured Party shall apply the amount apportioned to such
Letter of Credit to reimburse the Issuing Lender for the amount of such
drawing.  In the event of cancellation or expiration of any Letter of Credit in
respect of which Company has deposited in the Collateral Account any amounts
described above, or in the event of any reduction in the Maximum Available
Amount under such Letter of Credit, Secured Party shall apply the amount then on
deposit in the Collateral Account in respect of such Letter of Credit (less, in
the case of such a reduction, the Maximum Available Amount under such Letter of
Credit immediately after such reduction) first, to the payment of any amounts
payable to Secured Party pursuant to Section 17 hereof, second, to the extent of
any excess, to the cash collateralization pursuant to the terms of this
Agreement of any outstanding Letters of Credit in respect of which Company has
failed to pay all or a portion of the amounts described above (such cash
collateralization to be apportioned among all such Letters of Credit in the
manner described above), third, to the extent of any further excess, to the
payment of any other outstanding Secured Obligations in such order as Secured
Party shall elect, and fourth, to the extent of any further excess, to the
payment to whomsoever shall be lawfully entitled to receive such funds.

SECTION 16.                                        Additional Remedies for
Intellectual Property Collateral.

(a)           Anything contained herein to the contrary notwithstanding, upon
the occurrence and during the continuation of an Event of Default, (i) Secured
Party shall have the right (but not the obligation) to bring suit, in the name
of any Grantor, Secured Party or otherwise, to enforce any Intellectual Property
Collateral, in which event each Grantor shall, at the reasonable request of
Secured Party, do any and all lawful acts and execute any and all documents
required by Secured Party in aid of such enforcement and each Grantor shall
promptly, upon demand, reimburse and indemnify Secured Party as provided in
subsections 10.2 and 10.3 of the Credit Agreement and Section 18 hereof, as
applicable, in connection with the exercise of its rights under this Section 16,
and, to the extent that Secured Party shall elect not to bring suit to enforce
any such Intellectual Property Collateral as provided in this Section, each
Grantor agrees to use all reasonable measures, whether by action, suit,
proceeding or otherwise, which, in such Grantor’s reasonable judgment are
necessary to prevent the infringement of any of the Intellectual Property
Collateral material to such Grantor’s business by others and for that purpose
agrees to use its commercially reasonable judgment in maintaining any action,
suit or proceeding against any Person so infringing reasonably necessary to
prevent such infringement; (ii) upon written demand from Secured Party, each
Grantor shall execute and deliver to Secured Party an assignment or assignments
of the Intellectual Property Collateral and such other documents as are
necessary or appropriate to carry out the intent and purposes of this Agreement;
(iii) each Grantor agrees that such an assignment and/or recording shall be
applied to reduce the Secured Obligations outstanding only to the extent that
Secured Party (or any Lender) receives cash proceeds in respect of the sale of,
or other realization upon, the Intellectual Property Collateral; and (iv) within
five Business Days after written notice from Secured Party, each Grantor shall
make available to Secured Party, to the extent within such Grantor’s power and
authority, such personnel in such Grantor’s employ as Secured Party may
reasonably designate, by name, title or job responsibility, to permit such
Grantor to continue, directly or indirectly, to produce, advertise and sell the
products and services sold or delivered by such Grantor under or in connection
with the Trademarks, Trademark Registrations and Trademark Rights, such persons
to be available to perform their prior functions on Secured Party’s behalf

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and to be compensated by Secured Party at such Grantor’s expense on a per diem,
pro-rata basis consistent with the salary and benefit structure applicable to
each as of the date of such Event of Default.

(b)           If (i) an Event of Default shall have occurred and, by reason of
cure, waiver, modification, amendment or otherwise, no longer be continuing,
(ii) no other Event of Default shall have occurred and be continuing, (iii) an
assignment to Secured Party of any rights, title and interests in and to the
Intellectual Property Collateral shall have been previously made, and (iv) the
Secured Obligations shall not have become immediately due and payable, upon the
written request of any Grantor, Secured Party shall promptly execute and deliver
to such Grantor such assignments as may be necessary to reassign to such Grantor
any such rights, title and interests as may have been assigned to Secured Party
as aforesaid, subject to any disposition thereof that may have been made by
Secured Party; provided, after giving effect to such reassignment, Secured
Party’s security interest granted pursuant hereto, as well as all other rights
and remedies of Secured Party granted hereunder, shall continue to be in full
force and effect; and provided further, the rights, title and interests so
reassigned shall be free and clear of all Liens other than Liens (if any)
encumbering such rights, title and interest at the time of their assignment to
Secured Party and Permitted Encumbrances.

SECTION 17.                                        Application of Proceeds.

Except as expressly provided elsewhere in this Agreement, all proceeds received
by Secured Party in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied as provided
in the Credit Agreement.

SECTION 18.                                        Indemnity and Expenses.

(a)           Grantors jointly and severally agree to indemnify Secured Party,
each Lender and each Swap Counterparty from and against any and all claims,
losses and liabilities in any way relating to, growing out of or resulting from
this Agreement and the transactions contemplated hereby (including, without
limitation, enforcement of this Agreement), except to the extent such claims,
losses or liabilities result solely from Secured Party’s or such Lender’s or
Swap Counterparty’s gross negligence or willful misconduct as finally determined
by a court of competent jurisdiction.

(b)           Grantors jointly and severally agree to pay to Secured Party upon
demand the amount of any and all costs and expenses in accordance with
subsection 10.2 of the Credit Agreement.

(c)           The obligations of Grantors in this Section 18 shall (i) survive
the termination of this Agreement and the discharge of Grantors’ other
obligations under this Agreement, the Lender Swap Agreements, the Credit
Agreement and the other Loan Documents and (ii), as to any Grantor that is a
party to a Guaranty, be subject to the provisions of Section 1(b) thereof.

XIV-20

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SECTION 19.                                        Continuing Security Interest;
Transfer of Loans; Termination and Release.

(a)           This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the payment in
full of the Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit (or the collateralization thereof with cash or a letter of credit),
(ii) be binding upon Grantors and their respective successors and assigns, and
(iii) inure, together with the rights and remedies of Secured Party hereunder,
to the benefit of Secured Party, each of the Lenders and the Swap Counterparties
and its successors, transferees and assigns.  Without limiting the generality of
the foregoing clause (iii), (A) but subject to the provisions of subsection 10.1
of the Credit Agreement, any Lender may assign or otherwise transfer any Loans
held by it to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to Lenders herein or
otherwise and (B) any Swap Counterparty may assign or otherwise transfer any
Lender Swap Agreement to which it is a party to any other Person in accordance
with the terms of such Lender Swap Agreement, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to Swap
Counterparties herein or otherwise.

(b)           Upon the payment in full of all Secured Obligations (other than
contingent obligations as to which no claim has been made), the cancellation or
termination of the Commitments and the cancellation or expiration of all
outstanding Letters of Credit (or the collateralization thereof with cash or a
letter of credit), the security interest granted hereby (other than with respect
to any cash collateral in respect of Letters of Credit) shall terminate and all
rights to the Collateral shall revert to the applicable Grantors.  Upon any such
termination Secured Party will, at Grantors’ expense, execute and deliver to
Grantors such documents as Grantors shall reasonably request to evidence such
termination.  In addition, upon the proposed sale or other disposition of any
Collateral by a Grantor in accordance with, or not prohibited by, the Credit
Agreement for which such Grantor desires a security interest release from
Secured Party, such a release may be obtained pursuant to the provisions of
subsection 10.14 of the Credit Agreement.

SECTION 20.                                        Secured Party as Agent.

(a)           Secured Party has been appointed to act as Secured Party hereunder
by Lenders and, by their acceptance of the benefits hereof, Swap
Counterparties.  Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 15 hereof in accordance with the instructions of Requisite Obligees.  In
furtherance of the foregoing provisions of this Section 20(a), each Swap
Counterparty, by its acceptance of the benefits hereof, agrees that it shall
have no right individually to realize upon any of the Collateral hereunder, it
being understood and agreed by such Swap Counterparty that all rights and
remedies hereunder may be exercised solely by Secured Party for the benefit of
Lenders and Swap Counterparties in accordance with the terms of this Section
20(a).

XIV-21

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(b)           Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement.  Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement; and
appointment of a successor Administrative Agent pursuant to subsection 9.5 of
the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement.  Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Secured Party under this Agreement, and the retiring Secured
Party under this Agreement shall promptly (i) transfer to such successor Secured
Party all sums, securities and other items of Collateral held hereunder,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Secured Party
under this Agreement, and (ii) execute (if necessary) and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring Secured Party shall be discharged from its
duties and obligations under this Agreement.  After any retiring Administrative
Agent’s resignation hereunder as Secured Party, the provisions of this Agreement
shall inure to its benefit as to any actions taken or omitted to be taken by it
under this Agreement while it was Secured Party hereunder.

(c)           Secured Party shall not be deemed to have any duty whatsoever with
respect to any Swap Counterparty until it shall have received written notice in
form and substance satisfactory to Secured Party from a Grantor or the Swap
Counterparty as to the existence and terms of the applicable Lender Swap
Agreement.

SECTION 21.                                        Additional Grantors.

The initial Grantors hereunder shall be Company, Holdings and such of the
Subsidiaries of Company as are signatories hereto on the date hereof.  From time
to time subsequent to the date hereof, additional Subsidiaries of Company may
become Additional Grantors, by executing a Counterpart.  Upon delivery of any
such Counterpart to Secured Party, notice of which is hereby waived by Grantors,
each such Additional Grantor shall be a Grantor and shall be as fully a party
hereto as if such Additional Grantor were an original signatory hereto.  Each
Grantor expressly agrees that its obligations arising hereunder shall not be
affected or diminished by the addition or release of any other Grantor
hereunder, nor by any election of Secured Party not to cause any Subsidiary of
Company to become an Additional Grantor hereunder.  This Agreement shall be
fully effective as to any Grantor that is or becomes a party hereto regardless
of whether any other Person becomes or fails to become or ceases to be a Grantor
hereunder.

SECTION 22.                                        Amendments; Etc.

No amendment, modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by any Grantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by Secured
Party and, in the case of any

XIV-22

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such amendment or modification, by Grantors; provided this Agreement may be
modified by the execution of a Counterpart by an Additional Grantor in
accordance with Section 21 hereof and Grantors hereby waive any requirement of
notice of or consent to any such amendment.  Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.

SECTION 23.                                        Notices.

Any notice or other communication herein required or permitted to be given shall
be in writing and may be personally served or sent by telefacsimile or United
States mail or courier service and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of telefacsimile, or
three Business Days after depositing it in the United States mail with postage
prepaid and properly addressed; provided that notices to Secured Party shall not
be effective until received.  For the purposes hereof, the address of each party
hereto shall be as provided in subsection 10.8 of the Credit Agreement or as set
forth under such party’s name on the signature pages hereof or such other
address as shall be designated by such party in a written notice delivered to
the other parties hereto.

SECTION 24.                                        Failure or Indulgence Not
Waiver; Remedies Cumulative.

No failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude any
other or further exercise thereof or of any other power, right or privilege. 
All rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.

SECTION 25.                                        Severability.

In case any provision in or obligation under this Agreement shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.

SECTION 26.                                        Headings.

Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.

SECTION 27.                                        Governing Law; Rules of
Construction.

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC

XIV-23

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PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK, IN WHICH CASE THE LAWS OF SUCH
JURISDICTION SHALL GOVERN WITH RESPECT TO THE PERFECTION OF THE SECURITY
INTEREST IN, OR THE REMEDIES WITH RESPECT TO, SUCH PARTICULAR COLLATERAL.  The
rules of construction set forth in subsection 1.3 of the Credit Agreement shall
be applicable to this Agreement mutatis mutandis.

SECTION 28.                                        Consent to Jurisdiction and
Service of Process.

ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF OR RELATING
TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW
YORK.  BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR ITSELF AND
IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF
ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH GRANTOR AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SECTION 23 HEREOF; (IV) AGREES THAT SERVICE AS
PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION
OVER SUCH GRANTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT
SECURED PARTY RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO BRING PROCEEDINGS AGAINST SUCH GRANTOR IN THE COURTS OF ANY OTHER
JURISDICTION; AND (VI) AGREES THAT THE PROVISIONS OF THIS SECTION 28 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT
PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.

SECTION 29.                                        Waiver of Jury Trial.

GRANTORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY
AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. 
EACH GRANTOR AND SECURED PARTY ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT FOR GRANTORS AND SECURED PARTY TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT GRANTORS AND SECURED PARTY HAVE ALREADY RELIED ON THIS

XIV-24

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WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON
THIS WAIVER IN THEIR RELATED FUTURE DEALINGS.  EACH GRANTOR AND SECURED PARTY
FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL
WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 29 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.  In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.

SECTION 30.                                        Counterparts.

This Agreement may be executed in one or more counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument; signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document.

SECTION 31.               Security Agreement To Govern Grants.

Each Grantor and Secured Party hereby acknowledge and agree that the rights,
obligations and remedies of each Grantor and Secured Party set forth in this
Agreement with respect any Intellectual Property Collateral shall be applicable
to each Grant (and any supplement thereof) executed by any Grantor as if the
terms and provisions of this Agreement were incorporated into each such Grant
(and any supplement thereof).

SECTION 32.                                        Definitions.

(a)           Each capitalized term utilized in this Agreement that is not
defined in the Credit Agreement or in this Agreement, but that is defined in the
UCC, including the categories of Collateral listed in Section 1 hereof, shall
have the meaning set forth in Articles 1, 8 or 9 of the UCC.

(b)           In addition, the following terms used in this Agreement shall have
the following meanings:

“Additional Grantor” means a Subsidiary of Company that becomes a party hereto
after the date hereof as an additional Grantor by executing a Counterpart.

“Assigned Agreements” means, with respect to any Grantor, the agreements set
forth on Schedule 15 annexed hereto, as each such agreement may be amended,
restated, supplemented or otherwise modified from time to time, including,
without limitation, (a) all rights of such Grantor to receive moneys due or to
become due under or pursuant to the Assigned Agreements, (b) all rights of such
Grantor to receive proceeds of any Supporting Obligations with respect to the
Assigned Agreements, (c) all claims of such Grantor for damages arising out of
any breach of or

XIV-25

--------------------------------------------------------------------------------

default under the Assigned Agreements, and (d) all rights of such Grantor to
terminate, amend, supplement, modify or exercise rights or options under the
Assigned Agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder.

“Beneficiary” means Administrative Agent, each Lender and each Swap
Counterparty.

“Collateral” has the meaning set forth in Section 1 hereof.

“Copyright Office” means the United States Copyright Office or any successor or
substitute office in which it is necessary or, in the reasonable opinion of
Secured Party, advisable to record a Grant in order to create or perfect Liens
on Copyrights, Copyright Registrations and Copyright Rights.

“Copyrights” means all items under copyright in various published and
unpublished works of authorship including, without limitation, computer
programs, computer data bases, other computer software layouts, trade dress,
drawings, designs, writings, and formulas (including, without limitation, the
works set forth on Schedule 10 annexed hereto, as the same may be amended
pursuant hereto from time to time).

“Copyright Registrations” means all copyright registrations issued to any
Grantor and applications for copyright registration that have been or may
hereafter be issued or assigned to a Grantor or applied for by a Grantor thereon
in the United States and any state thereof and in foreign countries (including,
without limitation, the registrations set forth on Schedule 10 annexed hereto,
as the same may be amended pursuant hereto from time to time).

“Copyright Rights” means all common law and other rights in and to the
Copyrights in the United States and any state thereof and in foreign countries
including all copyright licenses (but with respect to such copyright licenses,
only to the extent permitted by such licensing arrangements), the right (but not
the obligation) to renew and extend Copyright Registrations and any such rights
and to register works protectable by copyright and the right (but not the
obligation) to sue in the name of any Grantor or in the name of Secured Party or
Lenders for past, present and future infringements of such Copyrights and any
such rights.

“Counterpart” means a counterpart to this Agreement entered into by a Subsidiary
of Company pursuant to Section 21 hereof.

“Credit Agreement” has the meaning set forth in the Preliminary Statements of
this Agreement.

“Equity Interests” means all shares of stock, partnership interests, interests
in Joint Ventures, limited liability company interests and all other equity
interests in a Person, whether such stock or interests are classified as
Investment Property or General Intangibles under the UCC.

“Event of Default” means any Event of Default as defined in the Credit Agreement
or, after payment in full of all Obligations under the Credit Agreement and the
other Loan Documents, the cancellation, expiration or collateralization with
cash or a letter of credit of all Letters of Credit and the termination of the
Commitments, the occurrence of an Early

XIV-26

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Termination Date (as defined in a Master Agreement in the form prepared by the
International Swap and Derivatives Association, Inc. or a similar event under
any similar swap agreement) under any Lender Swap Agreement.

“Grant” means a Grant of Trademark Security Interest, substantially in the form
of Exhibit I annexed hereto, and a Grant of Patent Security Interest,
substantially in the form of Exhibit II annexed hereto, and a Grant of Copyright
Security Interest, substantially in the form of Exhibit III annexed hereto.

“Intellectual Property Collateral” means, with respect to any Grantor all right,
title and interest (including rights acquired pursuant to a license or otherwise
but only to the extent permitted by agreements governing such license or other
use) of such Grantor in and to all:

(a)           Copyrights, Copyright Registrations and Copyright Rights,
including, without limitation, each of the Copyrights, rights, titles and
interests in and to the Copyrights, all derivative works and other works
protectable by copyright, which are presently, or in the future may be, owned,
created (as a work for hire for the benefit of such Grantor), authored (as a
work for hire for the benefit of such Grantor), or acquired by such Grantor, in
whole or in part, and all Copyright Rights with respect thereto and all
Copyright Registrations therefor, heretofore or hereafter granted or applied
for, and all renewals and extensions thereof, throughout the world, including
all proceeds thereof (such as, by way of example and not by limitation, license
royalties and proceeds of infringement suits),

(b)           Patents;

(c)           Trademarks, Trademark Registrations, the Trademark Rights and
goodwill of such Grantor’s business symbolized by the Trademarks and associated
therewith; and

(d)           all trade secrets, trade secret rights, know-how, customer lists,
processes of production, ideas, confidential business information, techniques,
processes, formulas, and all other proprietary information.

“IP Supplement” means an IP Supplement, substantially in the form of Exhibit V
annexed hereto.

“Lender Swap Agreement” means an Interest Rate Agreement, Currency Agreement or
other swap agreement between Company or a Subsidiary of Company and a Swap
Counterparty.

“Patents” means all patents and patent applications and rights and interests in
patents and patent applications under any domestic or foreign law that are
presently, or in the future may be, owned or held by a Grantor and all patents
and patent applications and rights, title and interests in patents and patent
applications under any domestic or foreign law that are presently, or in the
future may be, owned by such Grantor in whole or in part (including, without
limitation, the patents and patent applications set forth on Schedule 9 annexed
hereto), all rights (but not obligations) corresponding thereto to sue for past,
present and future infringements and all re-issues, divisions, continuations,
renewals, extensions and continuations-in-part thereof.

XIV-27

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“Pledged Debt” means the Indebtedness from time to time owed to a Grantor,
including the Indebtedness set forth on Schedule 7 annexed hereto and issued by
the obligors named therein, the Instruments and certificates evidencing such
Indebtedness and all interest, cash or other property received, receivable or
otherwise distributed in respect of or exchanged therefor.

“Pledged Equity” means all Equity Interests now or hereafter owned by a Grantor,
including all securities convertible into, and rights, warrants, options and
other rights to purchase or otherwise acquire, any of the foregoing, including
those owned on the date hereof and set forth on Schedule 6 annexed hereto, the
certificates or other instruments representing any of the foregoing and any
interest of such Grantor in the entries on the books of any securities
intermediary pertaining thereto and all distributions, dividends and other
property received, receivable or otherwise distributed in respect of or
exchanged therefor.

“Pledged Subsidiary Debt” means Pledged Debt owed to a Grantor by any obligor
that is, or becomes, a direct or indirect Subsidiary of such Grantor, of which
such Grantor is a direct or indirect Subsidiary or that controls, is controlled
by or under common control with such Grantor.

“Pledged Subsidiary Equity” means Pledged Equity in a Person that is, or becomes
a direct Subsidiary of a Grantor.

“Pledge Supplement” means a Pledge Supplement, in substantially the form of
Exhibit IV annexed hereto, in respect of the additional Pledged Equity or
Pledged Debt pledged pursuant to this Agreement.

“Requisite Obligees” means either (i) Requisite Lenders or (ii), after payment
in full of all Obligations under the Credit Agreement and the other Loan
Documents, the cancellation, expiration or collateralization with cash or a
letter of credit of all Letters of Credit and the termination of the
Commitments, the holders of a majority of (A) the aggregate notional amount
under all Lender Swap Agreements (including Lender Swap Agreements that have
been terminated) or (B) if all Lender Swap Agreements have been terminated in
accordance with their terms, the aggregate amount then due and payable
(exclusive of expenses and similar payments but including any early termination
payments then due) under such Lender Swap Agreements.

“Secured Obligations” has the meaning set forth in Section 2 hereof.

“Securities Collateral” means, with respect to any Grantor, the Pledged Equity,
the Pledged Debt and any other Investment Property in which such Grantor has an
interest.

“Swap Counterparty” means a Person that enters into a swap agreement with
Company or a Subsidiary and is a Lender or an Affiliate of a Lender at the time
such agreement is entered into.

“Trademarks” means all trademarks, service marks, designs, logos, indicia,
tradenames, trade dress, corporate names, company names, business names,
fictitious business names, trade styles and/or other source and/or business
identifiers and applications pertaining thereto, owned by such Grantor, or
hereafter adopted and used by a Grantor, in its business (including, without
limitation, the trademarks specifically set forth on Schedule 10 annexed
hereto).

XIV-28

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“Trademark Registrations” means all registrations that have been or may
hereafter be issued or assigned to a Grantor or applied for by a Grantor thereon
in the United States and any state thereof and in foreign countries (including,
without limitation, the registrations and applications set forth on Schedule 10
annexed hereto).

“Trademark Rights” means all common law and other rights (but in no event any of
the obligations) in and to the Trademarks in the United States and any state
thereof and in foreign countries.

“UCC” means the Uniform Commercial Code, as it exists on the date of this
Agreement or as it may hereafter be amended, in the State of New York.

 [Remainder of page intentionally left blank]

XIV-29

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IN WITNESS WHEREOF, Grantors and Secured Party have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.

HOLDINGS:

 

FTD GROUP, INC.

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

Notice Address:

 

 

 

 

11111 Santa Monica Blvd., Suite 2000

 

 

Los Angeles, California  90025

 

 

Attention:

 

 

 

 

Facsimile:

 

 

 

XIV-S-1

--------------------------------------------------------------------------------

 

FTD, INC.

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

Notice Address:

 

 

 

 

3113 Woodcreek Drive

 

 

Downers Grover, DuPage County, Illinois  60515

 

 

Attention:

 

 

 

 

Facsimile:

 

 

 

XIV-S-2

--------------------------------------------------------------------------------

 

SUBSIDIARY GRANTORS:

 

 

 

 

FTD.COM INC.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

Notice Address:

 

 

 

 

3113 Woodcreek Drive

 

 

Downers Grove, DuPage County, Illinois  60515

 

 

Attention:

 

 

 

 

Facsimile:

 

 

 

 

 

 

 

 

 

 

 

 

 

FLORISTS’ TRANSWORLD DELIVERY, INC.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

Notice Address:

 

 

 

 

3113 Woodcreek Drive

 

 

Downers Grove, DuPage County, Illinois  60515

 

 

Attention:

 

 

 

 

Facsimile:

 

 

 

XIV-S-3

--------------------------------------------------------------------------------

 

WELLS FARGO BANK, N.A., as Administrative
Agent, as Secured Party

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

 

 

Notice Address:

 

 

 

 

201 Third Street, Eighth Floor, MAC A0187-081

 

 

San Francisco, California  94103

 

 

Attention:

 

 

 

 

Facsimile:

 

 

 

XIV-S-4

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SCHEDULE A
TO
SECURITY AGREEMENT

Name

 

Notice Address for each Grantor

 

 

 

 

 

 

 

 

 

 

XIV-Schedule A-1

--------------------------------------------------------------------------------

SCHEDULE 1
TO
SECURITY AGREEMENT

Commercial Tort Claims

XIV-Schedule 1-1

--------------------------------------------------------------------------------

SCHEDULE 2
TO
SECURITY AGREEMENT

Filing Offices

 

Grantor

 

Filing Offices

 

 

 

 

 

 

 

 

 

 

XIV-Schedule 2-1

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SCHEDULE 3
TO
SECURITY AGREEMENT

Office Locations, Type and Jurisdiction of Organization

 

Name of
Grantor

 

Type of
Organization

 

Office Locations

 

Jurisdiction of
Organization

 

Organization
Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

XIV-Schedule 3-1

--------------------------------------------------------------------------------

SCHEDULE 4
TO
SECURITY AGREEMENT

Locations of Equipment and Inventory

 

Name of Grantor

 

Locations of Equipment and Inventory

 

 

 

 

 

 

 

 

 

 

XIV-Schedule 4-1

--------------------------------------------------------------------------------

SCHEDULE 5
TO
SECURITY AGREEMENT

[Reserved]

XIV-Schedule 5-1

--------------------------------------------------------------------------------

SCHEDULE 6
TO
SECURITY AGREEMENT

 

Equity Issuer

 

Class
of
Equity

 

Equity
Certificate Nos.

 

Par
Value

 

Amount of
Equity Interests

 

Percentage of
Outstanding
Equity Pledged

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

XIV-Schedule 6-1

--------------------------------------------------------------------------------

SCHEDULE 7
TO
SECURITY AGREEMENT

Debt Issuer

 

Amount of
Indebtedness

 

 

 

 

 

 

 

 

 

 

 

 

 

 

XIV-Schedule 7-1

--------------------------------------------------------------------------------

SCHEDULE 8
TO
SECURITY AGREEMENT

U.S. Trademarks:

Registered Owner

 

Trademark
Description

 

Registration
Number

 

Registration
Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Trademarks:

Registered Owner

 

Trademark
Description

 

Registration
Number

 

Registration
Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

XIV-Schedule 8-1

--------------------------------------------------------------------------------

SCHEDULE 9
TO
SECURITY AGREEMENT

U.S. Patents Issued:

Patent No.

 

Issue Date

 

Title

 

Inventor(s)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Patents Pending:

Date
Filed

 

Application
Number

 

Title

 

Inventor(s)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Patents Issued:

Country

 

Patent No.

 

Issue Date

 

Title

 

Inventor(s)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Patents Pending:

Country

 

Applicant’s
Name

 

Date
Filed

 

Application
Number

 

Title

 

Inventor(s)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

XIV-Schedule 9-1

--------------------------------------------------------------------------------

SCHEDULE 10
TO
SECURITY AGREEMENT

U.S. Copyright Registrations:

Title

 

Registration No.

 

Date of Issue

 

Registered Owner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Copyright Registrations:

Country

 

Title

 

Registration No.

 

Date of Issue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pending U.S. Copyright Registration Applications:

Title

 

Appl. No.

 

Date of Application

 

Copyright Claimant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pending Foreign Copyright Registration Applications:

Country

 

Title

 

Appl. No.

 

Date of Application

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

XIV-Schedule 10-1

--------------------------------------------------------------------------------

SCHEDULE 11
TO
SECURITY AGREEMENT

Deposit Accounts, Security Accounts, Commodity Accounts

Type of Account

 

Depository Bank or
Securities Intermediary

 

Address of Depository Bank
or Securities Intermediary

 

Account Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

XIV-Schedule 11-1

--------------------------------------------------------------------------------

SCHEDULE 12
TO
SECURITY AGREEMENT

Chattel Paper

XIV-Schedule 12-1

--------------------------------------------------------------------------------

SCHEDULE 13
TO
SECURITY AGREEMENT

Letter-of-Credit Rights

XIV-Schedule 13-1

--------------------------------------------------------------------------------

SCHEDULE 14
TO
SECURITY AGREEMENT

Documents

XIV-Schedule 14-1

--------------------------------------------------------------------------------

SCHEDULE 15
TO
SECURITY AGREEMENT

Assigned Agreements

XIV-Schedule 15-1

--------------------------------------------------------------------------------

EXHIBIT I TO
SECURITY AGREEMENT

[FORM OF GRANT OF TRADEMARK SECURITY INTEREST]

GRANT OF TRADEMARK SECURITY INTEREST

WHEREAS, [NAME OF GRANTOR], a                          corporation (“Grantor”),
owns and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Trademark Collateral (as defined below); and

WHEREAS, FTD, Inc., a Delaware corporation (“Company”), has entered into a
Credit Agreement dated as of July 28, 2006 (said Credit Agreement, as it may
heretofore have been and as it may hereafter be further amended, restated,
supplemented or otherwise modified from time to time, being the “Credit
Agreement”), with the lenders named therein (collectively, together with their
respective successors and assigns party to the Credit Agreement from time to
time, the “Lenders”), Wells Fargo Bank, N.A., as Administrative Agent for the
Lenders (in such capacity, “Secured Party”), and the other agents listed therein
pursuant to which Lenders have made certain commitments, subject to the terms
and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company; and

WHEREAS, Company may from time to time enter, or may from time to time have
entered, into one or more swap agreements (collectively, the “Lender Swap
Agreements”) with one or more Persons that are Lenders or Affiliates of Lenders
at the time such Lender Swap Agreements are entered into (in such capacity,
collectively, “Swap Counterparties”); and

[Insert if Grantor is a Subsidiary:] [WHEREAS, Grantor has executed and
delivered that certain Subsidiary Guaranty dated as of July 28, 2006 (said
Subsidiary Guaranty, as it may heretofore have been and as it may hereafter be
further amended, restated, supplemented or otherwise modified from time to time,
being the “Guaranty”), in favor of Secured Party for the benefit of Lenders and
any Swap Counterparties, pursuant to which Grantor has guarantied the prompt
payment and performance when due of all obligations of Company under the Credit
Agreement and the other Loan Documents and all obligations of Company under the
Lender Swap Agreements, including, without limitation, the obligation of Company
to make payments thereunder in the event of early termination thereof; and]

WHEREAS, pursuant to the terms of a Security Agreement dated as of July 28, 2006
(said Security Agreement, as it may heretofore have been and as it may hereafter
be further amended, restated, supplemented or otherwise modified from time to
time, being the “Security Agreement”), among Grantor, Secured Party and the
other grantors named therein, Grantor has created in favor of Secured Party a
security interest in, and Secured Party  has become a secured creditor with
respect to, the Trademark Collateral;

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, subject to the terms and conditions of the
Security Agreement, to evidence further the security interest granted by Grantor
to Secured Party pursuant to the Security Agreement, Grantor hereby grants to
Secured Party a security interest in all of

XIV-I-1

--------------------------------------------------------------------------------

Grantor’s right, title and interest in and to the following, in each case
whether now or hereafter existing or in which Grantor now has or hereafter
acquires an interest and wherever the same may be located (the “Trademark
Collateral”):

(i)            all rights, title and interest (including rights acquired
pursuant to a license or otherwise) in and to all trademarks, service marks,
designs, logos, indicia, tradenames, trade dress, corporate names, company
names, business names, fictitious business names, trade styles and/or other
source and/or business identifiers and applications pertaining thereto, owned by
such Grantor, or hereafter adopted and used, in its business (including, without
limitation, the trademarks set forth on Schedule A annexed hereto)
(collectively, the “Trademarks”), all registrations that have been or may
hereafter be issued or applied for thereon in the United States and any state
thereof and in foreign countries (including, without limitation, the
registrations and applications set forth on Schedule A annexed hereto), all
common law and other rights (but in no event any of the obligations) in and to
the Trademarks in the United States and any state thereof and in foreign
countries, and all goodwill of such Grantor’s business symbolized by the
Trademarks and associated therewith; and

(ii)           all proceeds, products, rents and profits of or from any and all
of the foregoing Trademark Collateral and, to the extent not otherwise included,
all payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Trademark
Collateral.  For purposes of this Grant of Trademark Security Interest, the term
“proceeds” includes whatever is receivable or received when Trademark Collateral
or proceeds are sold, licensed, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.

Notwithstanding anything herein to the contrary, in no event shall the Trademark
Collateral include, and Grantor shall not be deemed to have granted a security
interest in, any of such Grantor’s rights or interests in the Trademark
Collateral to the extent that such a grant would, under the terms of any
agreement related to the Trademark Collateral to which Grantor is a party
(including any license ) result in a breach of the terms of, or constitute a
default under, such agreement (other than to the extent that any such term would
be rendered ineffective pursuant to the UCC or any other applicable law
(including the Bankruptcy Code) or principles of equity); provided, that
immediately upon the ineffectiveness, lapse or termination of any such
provision, the Trademark Collateral shall include, and Grantor shall be deemed
to have granted a security interest in, all such rights and interests as if such
provision had never been in effect.

In the event that any asset of a Grantor is excluded from the Trademark
Collateral by virtue of the foregoing paragraph, Grantor agrees to use all
commercially reasonable efforts to obtain all requisite consents to enable such
Grantor to provide a security interest in such asset pursuant hereto as promptly
as practicable.

Grantor does hereby further acknowledge and affirm that the rights, obligations
and remedies of Secured Party with respect to the security interest in the
Trademark Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.

XIV-I-2

--------------------------------------------------------------------------------

[The remainder of this page is intentionally left blank.]

XIV-I-3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark Security Interest
to be duly executed and delivered by its officer thereunto duly authorized as of
the     day of               ,             .

[NAME OF GRANTOR]

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

XIV-I-4

--------------------------------------------------------------------------------

SCHEDULE A
TO
GRANT OF TRADEMARK SECURITY INTEREST

Owner

 

Trademark
Description

 

Registration/
Appl. Number

 

Registration/
Appl. Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

XIV-I-A-1

--------------------------------------------------------------------------------

EXHIBIT II TO
SECURITY AGREEMENT

[FORM OF GRANT OF PATENT SECURITY INTEREST]

GRANT OF PATENT SECURITY INTEREST

WHEREAS, [NAME OF GRANTOR], a                         corporation (“Grantor”),
owns and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Patent Collateral (as defined below); and

WHEREAS, FTD, Inc., a Delaware corporation (“Company”), has entered into a
Credit Agreement dated as of July 28, 2006 (said Credit Agreement, as it may
heretofore have been and as it may hereafter be further amended, restated,
supplemented or otherwise modified from time to time, being the “Credit
Agreement”), with the lenders named therein (collectively, together with their
respective successors and assigns party to the Credit Agreement from time to
time, the “Lenders”), Wells Fargo Bank, N.A., as Administrative Agent for the
Lenders (in such capacity, “Secured Party”), and the other agents listed
therein, pursuant to which Lenders have made certain commitments, subject to the
terms and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company; and

WHEREAS, Company may from time to time enter, or may from time to time have
entered, into one or more swap agreements (collectively, the “Lender Swap
Agreements”) with one or more Persons that are Lenders or Affiliates of Lenders
at the time such Lender Swap Agreements are entered into (in such capacity,
collectively, “Swap Counterparties”); and

[Insert if Grantor is a Subsidiary:] [WHEREAS, Grantor has executed and
delivered that certain Subsidiary Guaranty dated as of July 28, 2006 (said
Subsidiary Guaranty, as it may heretofore have been and as it may hereafter be
further amended, restated, supplemented or otherwise modified from time to time,
being the “Guaranty”), in favor of Secured Party for the benefit of Lenders and
any Swap Counterparties, pursuant to which Grantor has guarantied the prompt
payment and performance when due of all obligations of Company under the Credit
Agreement and the other Loan Documents and all obligations of Company under the
Lender Swap Agreements, including, without limitation, the obligation of Company
to make payments thereunder in the event of early termination thereof; and]

WHEREAS, pursuant to the terms of a Security Agreement dated as of July 28, 2006
(said Security Agreement, as it may heretofore have been and as it may hereafter
be further amended, restated, supplemented or otherwise modified from time to
time, being the “Security Agreement”), among Grantor, Secured Party and the
other grantors named therein, Grantor created in favor of Secured Party a
security interest in, and Secured Party has become a secured creditor with
respect to, the Patent Collateral;

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, subject to the terms and conditions of the
Security Agreement, to evidence further the security interest granted by Grantor
to Secured Party pursuant to the Security Agreement, Grantor hereby grants to
Secured Party a security interest in all of

XIV-II-1

--------------------------------------------------------------------------------

Grantor’s right, title and interest in and to the following, in each case
whether now or hereafter existing or in which Grantor now has or hereafter
acquires an interest and wherever the same may be located (the “Patent
Collateral”):

(i)            all rights, title and interest (including rights acquired
pursuant to a license or otherwise) in and to all patents and patent
applications and rights and interests in patents and patent applications under
any domestic or foreign law that are presently, or in the future may be, owned
or held by such Grantor and all patents and patent applications and rights,
title and interests in patents and patent applications under any domestic or
foreign law that are presently, or in the future may be, owned by such Grantor
in whole or in part (including, without limitation, the patents and patent
applications set forth on Schedule A annexed hereto), all rights (but not
obligations) corresponding thereto to sue for past, present and future
infringements and all re-issues, divisions, continuations, renewals, extensions
and continuations-in-part thereof; and

(ii)           all proceeds, products, rents and profits of or from any and all
of the foregoing Patent Collateral and, to the extent not otherwise included,
all payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Patent Collateral. 
For purposes of this Grant of Patent Security Interest, the term “proceeds”
includes whatever is receivable or received when Patent Collateral or proceeds
are sold, licensed, exchanged, collected or otherwise disposed of, whether such
disposition is voluntary or involuntary.

Notwithstanding anything herein to the contrary, in no event shall the Patent
Collateral include, and Grantor shall not be deemed to have granted a security
interest in, any of such Grantor’s rights or interests in the Patent Collateral
to the extent that such a grant would, under the terms of any agreement related
to the Patent Collateral to which Grantor is a party (including any license )
result in a breach of the terms of, or constitute a default under, such
agreement (other than to the extent that any such term would be rendered
ineffective pursuant to the UCC or any other applicable law (including the
Bankruptcy Code) or principles of equity); provided, that immediately upon the
ineffectiveness, lapse or termination of any such provision, the Patent
Collateral shall include, and Grantor shall be deemed to have granted a security
interest in, all such rights and interests as if such provision had never been
in effect.

In the event that any asset of a Grantor is excluded from the Patent Collateral
by virtue of the foregoing paragraph, Grantor agrees to use all commercially
reasonable efforts to obtain all requisite consents to enable such Grantor to
provide a security interest in such asset pursuant hereto as promptly as
practicable.

Grantor does hereby further acknowledge and affirm that the rights, obligations
and remedies of Secured Party with respect to the security interest in the
Patent Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.

[The remainder of this page intentionally left blank.]

XIV-II-2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security Interest to
be duly executed and delivered by its officer thereunto duly authorized as of
the        day of                     ,          .

[NAME OF GRANTOR]

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

XIV-II-3

--------------------------------------------------------------------------------

SCHEDULE A
TO
GRANT OF PATENT SECURITY INTEREST

Patents Issued:

Patent No.

 

Issue Date

 

Title

 

Inventor(s)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Patents Pending:

Applicant’s
Name

 

Date
Filed

 

Application
Number

 

Invention

 

Inventor(s)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

XIV-II-A-1

--------------------------------------------------------------------------------

EXHIBIT III TO
SECURITY AGREEMENT

[FORM OF GRANT OF COPYRIGHT SECURITY INTEREST]

GRANT OF COPYRIGHT SECURITY INTEREST

WHEREAS, [NAME OF GRANTOR], a                      corporation (“Grantor”), owns
and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Copyright Collateral (as defined below); and

WHEREAS, FTD, Inc., a Delaware corporation (“Company”), has entered into a
Credit Agreement dated as of July 28, 2006 (said Credit Agreement, as it may
heretofore have been and as it may hereafter be further amended, restated,
supplemented or otherwise modified from time to time, being the “Credit
Agreement”), with the lenders named therein (collectively, together with their
respective successors and assigns party to the Credit Agreement from time to
time, the “Lenders”), Wells Fargo Bank, N.A., as Administrative Agent for the
Lenders (in such capacity, “Secured Party”), and the other agents listed therein
pursuant to which Lenders have made certain commitments, subject to the terms
and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company; and

WHEREAS, Company may from time to time enter, or may from time to time have
entered, into one or more swap agreements (collectively, the “Lender Swap
Agreements”) with one or more Persons that are Lenders or Affiliates of Lenders
at the time such Lender Swap Agreements are entered into (in such capacity,
collectively, “Swap Counterparties”); and

[Insert if Grantor is a Subsidiary:] [WHEREAS, Grantor has executed and
delivered that certain Subsidiary Guaranty dated as of July 28, 2006 (said
Subsidiary Guaranty, as it may heretofore have been and as it may hereafter be
further amended, restated, supplemented or otherwise modified from time to time,
being the “Guaranty”), in favor of Secured Party for the benefit of Lenders and
any Swap Counterparties, pursuant to which Grantor has guarantied the prompt
payment and performance when due of all obligations of Company under the Credit
Agreement and the other Loan Documents and all obligations of Company under the
Lender Swap Agreements, including, without limitation, the obligation of Company
to make payments thereunder in the event of early termination thereof; and]

WHEREAS, pursuant to the terms of a Security Agreement dated as of July 28, 2006
(said Security Agreement, as it may heretofore have been and as it may hereafter
be further amended, restated, supplemented or otherwise modified from time to
time, being the “Security Agreement”), among Grantor, Secured Party and the
other grantors named therein, Grantor created in favor of Secured Party a
security interest in, and Secured Party has become a secured creditor with
respect to, the Copyright Collateral;

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, subject to the terms and conditions of the
Security Agreement, to evidence further the security interest granted by Grantor
to Secured Party pursuant to the Security Agreement, Grantor hereby grants to
Secured Party a security interest in all of

XIV-III-1

--------------------------------------------------------------------------------

Grantor’s right, title and interest in and to the following, in each case
whether now or hereafter existing or in which Grantor now has or hereafter
acquires an interest and wherever the same may be located (the “Copyright
Collateral”):

(i)            all rights, title and interest (including rights acquired
pursuant to a license or otherwise) under copyright in various published and
unpublished works of authorship including, without limitation, computer
programs, computer data bases, other computer software layouts, trade dress,
drawings, designs, writings, and formulas (including, without limitation, the
works set forth on Schedule A annexed hereto, as the same may be amended
pursuant hereto from time to time) (collectively, the “Copyrights”), all
copyright registrations issued to Grantor and applications for copyright
registration that have been or may hereafter be issued or applied for thereon in
the United States and any state thereof and in foreign countries (including,
without limitation, the registrations set forth on Schedule A annexed hereto, as
the same may be amended pursuant hereto from time to time) (collectively, the
“Copyright Registrations”), all common law and other rights in and to the
Copyrights in the United States and any state thereof and in foreign countries
including all copyright licenses (but with respect to such copyright licenses,
only to the extent permitted by such licensing arrangements) (the “Copyright
Rights”), including, without limitation, each of the Copyrights, rights, titles
and interests in and to the Copyrights, all derivative works and other works
protectable by copyright, which are presently, or in the future may be, owned,
created (as a work for hire for the benefit of Grantor), authored (as a work for
hire for the benefit of Grantor), or acquired by Grantor, in whole or in part,
and all Copyright Rights with respect thereto and all Copyright Registrations
therefor, heretofore or hereafter granted or applied for, and all renewals and
extensions thereof, throughout the world, including all proceeds thereof (such
as, by way of example and not by limitation, license royalties and proceeds of
infringement suits), the right (but not the obligation) to renew and extend such
Copyright Registrations and Copyright Rights and to register works protectable
by copyright and the right (but not the obligation) to sue in the name of such
Grantor or in the name of Secured Party or Lenders for past, present and future
infringements of the Copyrights and Copyright Rights; and

(ii)           all proceeds, products, rents and profits of or from any and all
of the foregoing Copyright Collateral and, to the extent not otherwise included,
all payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Copyright
Collateral.  For purposes of this Grant of Copyright Security Interest, the term
“proceeds” includes whatever is receivable or received when Copyright Collateral
or proceeds are sold, licensed, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.

Notwithstanding anything herein to the contrary, in no event shall the Copyright
Collateral include, and Grantor shall not be deemed to have granted a security
interest in, any of such Grantor’s rights or interests in the Copyright
Collateral to the extent that such a grant would, under the terms of any
agreement related to the Copyright Collateral to which Grantor is a party
(including any license ) result in a breach of the terms of, or constitute a
default under, such agreement (other than to the extent that any such term would
be rendered ineffective pursuant to the UCC or any other applicable law
(including the Bankruptcy Code) or principles

XIV-III-2

--------------------------------------------------------------------------------

of equity); provided, that immediately upon the ineffectiveness, lapse or
termination of any such provision, the Copyright Collateral shall include, and
Grantor shall be deemed to have granted a security interest in, all such rights
and interests as if such provision had never been in effect.

In the event that any asset of a Grantor is excluded from the Copyright
Collateral by virtue of the foregoing paragraph, Grantor agrees to use all
commercially reasonable efforts to obtain all requisite consents to enable such
Grantor to provide a security interest in such asset pursuant hereto as promptly
as practicable.

Grantor does hereby further acknowledge and affirm that the rights, obligations
and remedies of Secured Party with respect to the security interest in the
Copyright Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.

XIV-III-3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright Security Interest
to be duly executed and delivered by its officer thereunto duly authorized as of
the       day of                    ,            .

[NAME OF GRANTOR]

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

XIV-III-4

--------------------------------------------------------------------------------

SCHEDULE A
TO
GRANT OF COPYRIGHT SECURITY INTEREST

U.S. Copyright Registrations:

Title

 

Registration No.

 

Date of Issue

 

Registered Owner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Copyright Registrations:

Country

 

Title

 

Registration No.

 

Date of Issue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pending U.S. Copyright Registration Applications:

Title

 

Appl. No.

 

Date of Application

 

Copyright Claimant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pending Foreign Copyright Registration Applications:

Country

 

Title

 

Appl. No.

 

Date of Application

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

XIV-III-A-1

--------------------------------------------------------------------------------

EXHIBIT IV TO
SECURITY AGREEMENT

PLEDGE SUPPLEMENT

This Pledge Supplement, dated as of                                     , is
delivered pursuant to the Security Agreement, dated as of July 28, 2006, between
                                  , a                            (“Grantor”),
the other Grantors named therein, and Wells Fargo Bank, N.A., as Secured Party
(said Security Agreement, as it may heretofore have been and as it may hereafter
be further amended, restated, supplemented or otherwise modified from time to
time, being the “Security Agreement”).  Capitalized terms used herein not
otherwise defined herein shall have the meanings ascribed thereto in the
Security Agreement.

Grantor hereby agrees that the [Pledged Equity] [Pledged Debt] set forth on
Schedule A annexed hereto shall be deemed to be part of the [Pledged Equity]
[Pledged Debt] and shall become part of the Securities Collateral and shall
secure all Secured Obligations.

IN WITNESS WHEREOF, Grantor has caused this Pledge Supplement to be duly
executed and delivered by its duly authorized officer as of
                                .

[GRANTOR]

 

 

 

 

 

By:

 

 

 

 

Title:

 

 

 

XIV-IV-1

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SCHEDULE A
TO
PLEDGE SUPPLEMENT

XIV-IV-A-1

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EXHIBIT V TO
SECURITY AGREEMENT

IP SUPPLEMENT

This IP SUPPLEMENT, dated as of              , is delivered pursuant to and
supplements (i) the Security Agreement, dated as of July 28, 2006 (said Security
Agreement, as it may heretofore have been and as it may hereafter be further
amended, restated, supplemented or otherwise modified from time to time, being
the “Security Agreement”), among [FTD, Inc.], [Insert Name of Grantor]
(“Grantor”), the other grantors named therein, and Wells Fargo Bank, N.A., as
Secured Party, and (ii) the [Grant of Trademark Security Interest] [Grant of
Patent Security Interest] [Grant of Copyright Security Interest] dated as of
                         ,           (the “Grant”) executed by Grantor. 
Capitalized terms used herein not otherwise defined herein shall have the
meanings ascribed thereto in the Grant.

Grantor grants to Secured Party a security interest in all of Grantor’s right,
title and interest in and to the [Trademark Collateral] [Patent Collateral]
[Copyright Collateral] set forth on Schedule A annexed hereto.  All such
[Trademark Collateral] [Patent Collateral] [Copyright Collateral] shall be
deemed to be part of the [Trademark Collateral] [Patent Collateral] [Copyright
Collateral] and shall be hereafter subject to each of the terms and conditions
of the Security Agreement and the Grant.

IN WITNESS WHEREOF, Grantor has caused this IP Supplement to be duly executed
and delivered by its duly authorized officer as of
                              .

[GRANTOR]

 

 

 

 

 

By:

 

 

 

 

Title:

 

 

 

XIV-V-1

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EXHIBIT VI TO
SECURITY AGREEMENT

[FORM OF COUNTERPART]

COUNTERPART (this “Counterpart”), dated as of                , is delivered
pursuant to Section 21 of the Security Agreement referred to below.  The
undersigned hereby agrees that this Counterpart may be attached to the Security
Agreement, dated as of July 28, 2006 (said Security Agreement, as it may
heretofore have been and as it may hereafter be further amended, restated,
supplemented or otherwise modified from time to time being the “Security
Agreement”; capitalized terms used herein not otherwise defined herein shall
have the meanings ascribed therein), among [FTD, Inc.], [Insert Name of Grantor]
(“Grantor”), the other Grantors named therein, and Wells Fargo Bank, N.A., as
Secured Party.  The undersigned by executing and delivering this Counterpart
hereby becomes a Grantor under the Security Agreement in accordance with Section
21 thereof and agrees to be bound by all of the terms thereof.  Without limiting
the generality of the foregoing, the undersigned hereby:

(i)            authorizes the Secured Party to add the information set forth on
the Schedules to this Agreement to the correlative Schedules attached to the
Security Agreement;(1)

(ii)           agrees that all Collateral of the undersigned, including the
items of property described on the Schedules hereto, shall become part of the
Collateral and shall secure all Secured Obligations; and

(iii)          makes the representations and warranties set forth in the
Security Agreement, as amended hereby, to the extent relating to the undersigned
as of the date hereof.

[NAME OF ADDITIONAL GRANTOR]

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

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(1)                                  The Schedules to the Counterpart should
include copies of all Schedules that identify collateral to be granted by the
Additional Grantor.

XIV-VI-1

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EXHIBIT XV

[FORM OF] HOLDINGS GUARANTY

This HOLDINGS GUARANTY is entered into as of July 28, 2006, by the undersigned
(the “Guarantor”), in favor of and for the benefit of WELLS FARGO BANK, N.A., 
as agent for and representative of (in such capacity herein called “Guarantied
Party”) the lenders (“Lenders”) party to the Credit Agreement referred to below
and any Swap Counterparties (as hereinafter defined), and in favor of and for
the benefit of the Beneficiaries (as hereinafter defined).

RECITALS.

A.            FTD, Inc., a Delaware corporation (“Company”), has entered into
that certain Credit Agreement dated as of July 28, 2006, with Lenders and
Guarantied Party, as Administrative Agent for Lenders (said Credit Agreement, as
it may hereafter be amended, supplemented or otherwise modified from time to
time, being the “Credit Agreement”; capitalized terms defined therein and not
otherwise defined herein being used herein as therein defined).

B.            Company may from time to time enter, or may from time to time have
entered, into one or more Interest Rate Agreements, Currency Agreements and
other swap agreements (collectively, the “Lender Swap Agreements”) with one or
more Persons that are Lenders or Affiliates of Lenders at the time such Lender
Swap Agreements are entered into (in such capacity, collectively, “Swap
Counterparties”) in accordance with the terms of the Credit Agreement, and it is
desired that the obligations of Company under the Lender Swap Agreements,
including without limitation the obligation of Company to make payments
thereunder in the event of early termination thereof, together with all
obligations of Company under the Credit Agreement and the other Loan Documents,
be guarantied hereunder.

C.            Guarantied Party, Lenders and each Swap Counterparty for which
Guarantied Party has received the notice required by Section 16 hereof  are
sometimes referred to herein as “Beneficiaries”.

D.            Company is a wholly owned Subsidiary of Guarantor and thus the
Guarantied Obligations (as hereinafter defined) are being incurred for and will
inure to the benefit of Guarantor (which benefits are hereby acknowledged).

E.             It is a condition precedent to the making of the initial Loans
under the Credit Agreement that Company’s obligations thereunder be guarantied
by Guarantor.

F.             Guarantor is willing irrevocably and unconditionally to guaranty
such obligations of Company.

1.             Guaranty.  (a) In order to induce Lenders to extend credit to
Company pursuant to the Credit Agreement and Swap Counterparties to enter into
the Lender Swap Agreements, Guarantor irrevocably and unconditionally
guaranties, as primary obligor and not merely as surety, the due and punctual
payment in full of all Guarantied Obligations (as

XV-1

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hereinafter defined) when the same shall become due, whether at stated maturity,
by acceleration, demand or otherwise (including amounts that would become due
but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. § 362(a)).  The term “Guarantied Obligations” is used
herein in its most comprehensive sense and includes any and all Obligations of
Company and all obligations of Company under Lender Swap Agreements, now or
hereafter made, incurred or created, whether absolute or contingent, liquidated
or unliquidated, whether due or not due, and however arising under or in
connection with the Credit Agreement, the Lender Swap Agreements, this Guaranty
and the other Loan Documents, including those arising under successive borrowing
transactions under the Credit Agreement which shall either continue such
obligations of Company or from time to time renew them after they have been
satisfied.

Any interest on any portion of the Guarantied Obligations that accrues after the
commencement of any proceeding, voluntary or involuntary, involving the
bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement
of Company (or, if interest on any portion of the Guarantied Obligations ceases
to accrue by operation of law by reason of the commencement of said proceeding,
such interest as would have accrued on such portion of the Guarantied
Obligations if said proceeding had not been commenced) shall be included in the
Guarantied Obligations because it is the intention of Guarantor and Guarantied
Party that the Guarantied Obligations should be determined without regard to any
rule of law or order that may relieve Company of any portion of such Guarantied
Obligations.

In the event that all or any portion of the Guarantied Obligations is paid by
Company, the obligations of Guarantor hereunder shall continue and remain in
full force and effect or be reinstated, as the case may be, in the event that
all or any part of such payment(s) is rescinded or recovered directly or
indirectly from Guarantied Party or any other Beneficiary as a preference,
fraudulent transfer or otherwise, and any such payments that are so rescinded or
recovered shall constitute Guarantied Obligations.

Subject to the other provisions of this Section 1, upon the failure of Company
to pay any of the Guarantied Obligations when and as the same shall become due,
Guarantor will upon demand pay, or cause to be paid, in cash, to Guarantied
Party for the ratable benefit of Beneficiaries, an amount equal to the aggregate
of the unpaid Guarantied Obligations.

(b)           Guarantor under this Guaranty, and each guarantor under other
guaranties, if any, relating to the Credit Agreement (the “Related Guaranties”)
that contain a contribution provision similar to that set forth in this Section
1(b), together desire to allocate among themselves (collectively, the
“Contributing Guarantors”), in a fair and equitable manner, their obligations
arising under this Guaranty and the Related Guaranties.  Accordingly, in the
event any payment or distribution is made on any date by Guarantor under this
Guaranty or a guarantor under a Related Guaranty, Guarantor or such other
guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in the maximum amount permitted by law so as to maximize
the aggregate amount of the Guarantied Obligations paid to Beneficiaries.

2.             Guaranty Absolute; Continuing Guaranty.  The obligations of
Guarantor hereunder are irrevocable, absolute, independent and unconditional and
shall not be affected by any circumstance which constitutes a legal or equitable
discharge of a guarantor or

XV-2

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surety other than payment in full of the Guarantied Obligations.  In furtherance
of the foregoing and without limiting the generality thereof, Guarantor agrees
that:  (a) this Guaranty is a guaranty of payment when due and not of
collectibility; (b) Guarantied Party may enforce this Guaranty upon the
occurrence and during the continuance of an Event of Default under the Credit
Agreement or the occurrence of an early termination date or similar event under
any Lender Swap Agreements notwithstanding the existence of any dispute between
Company and any Beneficiary with respect to the existence of such event; (c) the
obligations of Guarantor hereunder are independent of the obligations of Company
under the Loan Documents or the Lender Swap Agreements and the obligations of
any other guarantor of the obligations of Company and a separate action or
actions may be brought and prosecuted against Guarantor whether or not any
action is brought against Company or any of such other guarantors and whether or
not Company is joined in any such action or actions; and (d) Guarantor’s payment
of a portion, but not all, of the Guarantied Obligations shall in no way limit,
affect, modify or abridge Guarantor’s liability for any portion of the
Guarantied Obligations that has not been paid.  This Guaranty is a continuing
guaranty and shall be binding upon Guarantor and its successors and assigns, and
Guarantor irrevocably waives any right to revoke this Guaranty as to future
transactions giving rise to any Guarantied Obligations.

3.             Actions by Beneficiaries.  Any Beneficiary may from time to time,
without notice or demand and without affecting the validity or enforceability of
this Guaranty or giving rise to any limitation, impairment or discharge of
Guarantor’s liability hereunder, (a) renew, extend, accelerate or otherwise
change the time, place, manner or terms of payment of the Guarantied
Obligations, (b) settle, compromise, release or discharge, or accept or refuse
any offer of performance with respect to, or substitutions for, the Guarantied
Obligations or any agreement relating thereto and/or subordinate the payment of
the same to the payment of any other obligations, (c) request and accept other
guaranties of the Guarantied Obligations and take and hold security for the
payment of this Guaranty or the Guarantied Obligations, (d) release, exchange,
compromise, subordinate or modify, with or without consideration, any security
for payment of the Guarantied Obligations, any other guaranties of the
Guarantied Obligations, or any other obligation of any Person with respect to
the Guarantied Obligations, (e) enforce and apply any security now or hereafter
held by or for the benefit of any Beneficiary in respect of this Guaranty or the
Guarantied Obligations and direct the order or manner of sale thereof, or
exercise any other right or remedy that Guarantied Party or the other
Beneficiaries, or any of them, may have against any such security, as Guarantied
Party in its discretion may determine consistent with the Credit Agreement, the
Lender Swap Agreements and any applicable security agreement, including
foreclosure on any such security pursuant to one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially reasonable,
and (f) exercise any other rights available to Guarantied Party or the other
Beneficiaries, or any of them, under the Loan Documents or the Lender Swap
Agreements.

4.             No Discharge.  This Guaranty and the obligations of Guarantor
hereunder shall be valid and enforceable and shall not be subject to any
limitation, impairment or discharge for any reason (other than payment in full
of the Guarantied Obligations), including without limitation the occurrence of
any of the following, whether or not Guarantor shall have had notice or
knowledge of any of them:  (a) any failure to assert or enforce or agreement not
to assert or enforce, or the stay or enjoining, by order of court, by operation
of law or otherwise, of the exercise or enforcement of, any claim or demand or
any right, power or remedy with respect to

XV-3

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the Guarantied Obligations or any agreement relating thereto, or with respect to
any other guaranty of or security for the payment of the Guarantied Obligations,
(b) any waiver or modification of, or any consent to departure from, any of the
terms or provisions of the Credit Agreement, any of the other Loan Documents,
the Lender Swap Agreements or any agreement or instrument executed pursuant
thereto, or of any other guaranty or security for the Guarantied Obligations,
(c) the Guarantied Obligations, or any agreement relating thereto, at any time
being found to be illegal, invalid or unenforceable in any respect, (d) the
application of payments received from any source to the payment of indebtedness
other than the Guarantied Obligations, even though Guarantied Party or the other
Beneficiaries, or any of them, might have elected to apply such payment to any
part or all of the Guarantied Obligations, (e) any failure to perfect or
continue perfection of a security interest in any collateral which secures any
of the Guarantied Obligations, (f) any defenses, set-offs or counterclaims which
Company may assert against Guarantied Party or any Beneficiary in respect of the
Guarantied Obligations, including but not limited to failure of consideration,
breach of warranty, payment, statute of frauds, statute of limitations, accord
and satisfaction and usury, and (g) any other act or thing or omission, or delay
to do any other act or thing, which may or might in any manner or to any extent
vary the risk of Guarantor as an obligor in respect of the Guarantied
Obligations.

5.             Waivers.  Guarantor waives, for the benefit of Beneficiaries: 
(a) any right to require Guarantied Party or the other Beneficiaries, as a
condition of payment or performance by Guarantor, to (i) proceed against
Company, any other guarantor of the Guarantied Obligations or any other Person,
(ii) proceed against or exhaust any security held from Company, any other
guarantor of the Guarantied Obligations or any other Person, (iii) proceed
against or have resort to any balance of any deposit account or credit on the
books of any Beneficiary in favor of Company or any other Person, or (iv) pursue
any other remedy in the power of  any Beneficiary; (b) any defense arising by
reason of the incapacity, lack of authority or any disability or other defense
of Company including, without limitation, any defense based on or arising out of
the lack of validity or the unenforceability of the Guarantied Obligations or
any agreement or instrument relating thereto or by reason of the cessation of
the liability of Company from any cause other than payment in full of the
Guarantied Obligations; (c) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than that of the principal; (d) any
defense based upon Guarantied Party’s or any other Beneficiary’s errors or
omissions in the administration of the Guarantied Obligations, except behavior
that amounts to bad faith; (e) (i) any principles or provisions of law,
statutory or otherwise, that are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of Guarantor’s obligations
hereunder, (ii) the benefit of any statute of limitations affecting Guarantor’s
liability hereunder or the enforcement hereof, (iii) any rights to set-offs,
recoupments and counterclaims, and (iv) promptness, diligence and any
requirement that any Beneficiary protect, secure, perfect or insure any Lien or
any property subject thereto; (f) except as expressly provided in the Loan
Documents, notices, demands, presentments, protests, notices of protest, notices
of dishonor and notices of any action or inaction, including acceptance of this
Guaranty, notices of default under the Credit Agreement, notices of default or
early termination under any Lender Swap Agreement or any agreement or instrument
related thereto, notices of any renewal, extension or modification of the
Guarantied Obligations or any agreement related thereto, notices of any
extension of credit to Company and notices of any of the matters referred to in
Sections 3 and 4 and any right to consent to any thereof; and (g) to the fullest
extent permitted by law, any defenses or benefits

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that may be derived from or afforded by law which limit the liability of or
exonerate guarantors or sureties, or which may conflict with the terms of this
Guaranty.

6.             Guarantor’s Rights of Subrogation, Contribution, Etc.;
Subordination of Other Obligations. Until the Guarantied Obligations shall have
been paid in full and the Commitments shall have terminated and all Letters of
Credit shall have expired or been cancelled or collateralized with cash or a
letter of credit, Guarantor shall withhold exercise of (a) any claim, right or
remedy, direct or indirect, that Guarantor now has or may hereafter have against
Company or any of its assets in connection with this Guaranty or the performance
by Guarantor of its obligations hereunder, in each case whether such claim,
right or remedy arises in equity, under contract, by statute, under common law
or otherwise and including without limitation (i) any right of subrogation,
reimbursement or indemnification that Guarantor now has or may hereafter have
against Company, (ii) any right to enforce, or to participate in, any claim,
right or remedy that any Beneficiary now has or may hereafter have against
Company, and (iii) any benefit of, and any right to participate in, any
collateral or security now or hereafter held by any Beneficiary and (b) any
right of contribution Guarantor may have against any other guarantor of any of
the Guarantied Obligations.  Guarantor further agrees that, to the extent the
agreement to withhold exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification Guarantor may have against Company
or against any collateral or security, and any rights of contribution Guarantor
may have against any such other guarantor, shall be junior and subordinate to
any rights Guarantied Party or the other Beneficiaries may have against Company,
to all right, title and interest Guarantied Party or the other Beneficiaries may
have in any such collateral or security, and to any right Guarantied Party or
the other Beneficiaries may have against such other guarantor.

Any indebtedness of Company now or hereafter held by Guarantor is subordinated
in right of payment to the Guarantied Obligations, and any such indebtedness of
Company to Guarantor collected or received by Guarantor after an Event of
Default has occurred and is continuing, and any amount paid to Guarantor on
account of any subrogation, reimbursement, indemnification or contribution
rights referred to in the preceding paragraph when all Guarantied Obligations
have not been paid in full, any Lender shall have any Commitment or any Swap
Counterparty shall have any obligation under any Lender Swap Agreement, shall be
held for Guarantied Party on behalf of Beneficiaries and shall forthwith be paid
over to Guarantied Party for the benefit of Beneficiaries to be credited and
applied against the Guarantied Obligations.

7.             Expenses.  Guarantor agrees to pay, or cause to be paid, on
demand, and to save Guarantied Party and the other Beneficiaries harmless
against liability for, (i) any and all costs and expenses (including reasonable
fees, costs of settlement and disbursements of counsel and allocated costs of
internal counsel) incurred or expended by Guarantied Party or any other
Beneficiary in connection with the enforcement of or preservation of any rights
under this Guaranty and (ii) any and all costs and expenses (including those
arising from rights of indemnification) required to be paid by Guarantor under
the provisions of any other Loan Document.

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8.             Financial Condition of Company.  No Beneficiary shall have any
obligation, and Guarantor waives any duty on the part of any Beneficiary, to
disclose or discuss with Guarantor its assessment, or Guarantor’s assessment, of
the financial condition of Company or any matter or fact relating to the
business, operations or condition of Company.  Guarantor has adequate means to
obtain information from Company on a continuing basis concerning the financial
condition of Company and its ability to perform its obligations under the Loan
Documents and the Lender Swap Agreements, and Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Guarantied Obligations.

9.             Representations and Warranties.  Guarantor makes, for the benefit
of Beneficiaries, each of the representations and warranties made in the Credit
Agreement by Company as to Guarantor, its assets, financial condition,
operations, organization, legal status, business and the Loan Documents to which
it is a party.

10.          Covenants.  Guarantor agrees that, so long as any part of the
Guarantied Obligations shall remain unpaid, any Letter of Credit shall be
outstanding and not collateralized with cash or a letter of credit, or any
Lender shall have any Commitment or any Swap Counterparty shall have any
obligation under any Lender Swap Agreement, Guarantor will, unless Requisite
Obligees (as that term is defined in Section 15) shall otherwise consent in
writing, perform or observe, and cause its Subsidiaries to perform or observe,
all of the terms, covenants and agreements that the Loan Documents state that
Company is to cause Guarantor and such Subsidiaries to perform or observe.

11.          Set Off.  In addition to any other rights any Beneficiary may have
under law or in equity, if any amount shall at any time be due and owing by
Guarantor to any Beneficiary under this Guaranty, such Beneficiary is authorized
at any time or from time to time, without notice (any such notice being
expressly waived), to set off and to appropriate and to apply any and all
deposits (general or special, including but not limited to indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness of such Beneficiary owing to Guarantor and any other property
of Guarantor held by a Beneficiary to or for the credit or the account of
Guarantor against and on account of the Guarantied Obligations and liabilities
of Guarantor to any Beneficiary under this Guaranty.

12.          Amendments and Waivers.  No amendment, modification, termination or
waiver of any provision of this Guaranty, and no consent to any departure by
Guarantor therefrom, shall in any event be effective without the written
concurrence of Guarantied Party and, in the case of any such amendment or
modification, Guarantor.  Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given.

13.          Miscellaneous.  It is not necessary for Beneficiaries to inquire
into the capacity or powers of Guarantor or Company or the officers, directors
or any agents acting or purporting to act on behalf of any of them.

The rights, powers and remedies given to Beneficiaries by this Guaranty are
cumulative and shall be in addition to and independent of all rights, powers and
remedies given

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to Beneficiaries by virtue of any statute or rule of law or in any of the Loan
Documents or the Lender Swap Agreements or any agreement between Guarantor and
one or more Beneficiaries or between Company and one or more Beneficiaries.  Any
forbearance or failure to exercise, and any delay by any Beneficiary in
exercising, any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.

In case any provision in or obligation under this Guaranty shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.

THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTOR, GUARANTIED PARTY AND
THE OTHER BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

This Guaranty shall inure to the benefit of Beneficiaries and their respective
successors and assigns.

ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR RELATING TO
THIS GUARANTY MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
GUARANTY GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY. 
Guarantor agrees that service of all process in any such proceeding in any such
court may be made by registered or certified mail, return receipt requested, to
Guarantor at its address set forth below its signature hereto, such service
being acknowledged by Guarantor to be sufficient for personal jurisdiction in
any action against Guarantor in any such court and to be otherwise effective and
binding service in every respect.  Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Guarantied Party or any Beneficiary to bring proceedings against Guarantor in
the courts of any other jurisdiction.

GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, GUARANTIED PARTY EACH
AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY.  THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
WITHOUT LIMITATION CONTRACT

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CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS.  GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF,
GUARANTIED PARTY EACH (I) ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT
FOR GUARANTOR AND GUARANTIED PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
GUARANTOR AND GUARANTIED PARTY HAVE ALREADY RELIED ON THIS WAIVER IN ENTERING
INTO THIS GUARANTY OR ACCEPTING THE BENEFITS THEREOF, AS THE CASE MAY BE, AND
THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS,
AND (II) FURTHER WARRANTS AND REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER WITH
ITS LEGAL COUNSEL AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
OF THIS GUARANTY.  In the event of litigation, this Guaranty may be filed as a
written consent to a trial by the court.

14.          Counterparts.  This Guaranty may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original for
all purposes; but all such counterparts together shall constitute but one and
the same instrument.

15.          Guarantied Party as Agent.

(a)           Guarantied Party has been appointed to act as Guarantied Party
hereunder by Lenders and, by acceptance of any of the benefits hereunder, each
Swap Counterparty.  Guarantied Party shall be obligated, and shall have the
right hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action, solely in
accordance with this Guaranty and the Credit Agreement; provided that Guarantied
Party shall exercise, or refrain from exercising, any remedies under or with
respect to this Guaranty in accordance with the instructions of (i) Requisite
Lenders, or (ii) after payment in full of all Obligations under the Credit
Agreement and the other Loan Documents, the cancellation, expiration or
collateralization with cash or a letter of credit of all Letters of Credit and
the termination of the Commitments, the holders of a majority of (A) the
aggregate notional amount under all Lender Swap Agreements (including Lender
Swap Agreements that have been terminated) or (B) if all Lender Swap Agreements
have been terminated in accordance with their terms, the aggregate amount then
due and payable (exclusive of expenses and similar payments but including any
early termination payments then due) under such Lender Swap Agreements
(Requisite Lenders or, if applicable, such holders being referred to herein as
“Requisite Obligees”).

(b)           Guarantied Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement.  Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Guarantied Party under this Guaranty;
and appointment of a successor

XV-8

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Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute appointment of a successor Guarantied Party under this
Guaranty.  Upon the acceptance of any appointment as Administrative Agent under
subsection 9.5 of the Credit Agreement by a successor Administrative Agent, that
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Guarantied Party
under this Guaranty, and the retiring Guarantied Party under this Guaranty shall
promptly (i) transfer to such successor Guarantied Party all sums held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Guarantied Party under this Guaranty, and (ii) take such other actions as may be
necessary or appropriate in connection with the assignment to such successor
Guarantied Party of the rights created hereunder, whereupon such retiring
Guarantied Party shall be discharged from its duties and obligations under this
Guaranty.  After any retiring Guarantied Party’s resignation hereunder as
Guarantied Party, the provisions of this Guaranty shall inure to its benefits as
to any actions taken or omitted to be taken by it under this Guaranty while it
was Guarantied Party hereunder.

16.          Notice of Lender Swap Agreements.  Guarantied Party shall not be
deemed to have any duty whatsoever with respect to any Swap Counterparty until
it shall have received written notice in form and substance satisfactory to
Guarantied Party from Company, Guarantor or the Swap Counterparty as to the
existence and terms of the applicable Lender Swap Agreement.

[Remainder of page intentionally left blank.]

XV-9

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IN WITNESS WHEREOF, Guarantor and, solely for purposes of the waiver of the
right to jury trial contained in Section 13, Guarantied Party have caused this
Guaranty to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.

FTD GROUP, INC.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WELLS FARGO BANK, N.A., as Administrative
Agent, as Guarantied Party

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

XV-S-1

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EXHIBIT XVI

[FORM OF NOTICE OF PREPAYMENT]

NOTICE OF PREPAYMENT

Pursuant to that certain Credit Agreement dated as of July 28, 2006, as amended,
supplemented or otherwise modified to the date hereof (said Credit Agreement, as
so amended, supplemented or otherwise modified, being the “Credit Agreement”,
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among FTD, Inc., a Delaware corporation (“Company”),
the lenders listed therein as Lenders, Wells Fargo Bank, N.A., as Administrative
Agent (“Administrative Agent”), and the other agents listed therein, this
represents Company’s notice of prepayment as follows:

1.               Date of Notice:                                  , 20     

2.               Type of Prepayment/Reduction/Termination:

o  a.                     Voluntary Prepayment of:

o i.             Swing Line Loan

o ii.            Term Loan

o iii.           Revolving Loan

o  b.                    Voluntary Reduction/Termination of Revolving Loan
Commitments

o  c.                     Mandatory Prepayment and/or Reduction of Revolving
Loan Commitments(1) (specify the circumstance requiring said prepayment and/or
reduction by checking the appropriate box below):

o i.         Receipt of Net Asset Sale Proceeds (check one of the options below)

o 1.                        Prepayment/Reduction of Revolving Loan Commitments
with Net Asset Sale Proceeds that will not be reinvested

o 2.                        Prepayment of Revolving Loans pending reinvestment
of Net Asset Sale Proceeds

o ii.        Receipt of Net Insurance/Condemnation Proceeds

o iii.       Receipt of Net Securities Proceeds from the issuance of equity
securities

o iv.       Receipt of Net Securities Proceeds from the issuance of indebtedness

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(1)                                  Mandatory prepayments or reductions in
Revolving Loan Commitments shall be applied as specified in subsections 2.4B(iv)
and 2.4D of the Credit Agreement.

XVI-1

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o v.          Consolidated Excess Cash Flow

3.               Amount of prepayment/reduction of Revolving Loan Commitments
(as applicable):

o  a.

Voluntary/Mandatory Prepayment:(2)

 

$

 

 

 

 

o  b.

Reduction/Termination of Revolving Loan Commitments:(3)

 

$

 

4.               If applicable, specify desired application of voluntary
prepayment:(4)

 

 

5.               Date of prepayment or date voluntary reduction/termination of
Revolving Loan Commitments will take effect:                       , 20   

6.               Attached hereto is (if applicable):

o            a.     Officer’s Certificate setting forth (x) the portion of any
Net Asset Sale Proceeds that Company or any Subsidiary intends to reinvest in
equipment or other productive assets of the general type used in the business of
Company or its Subsidiaries and (y) the proposed use of such portion of the Net
Asset Sale Proceeds and such other information with respect to such reinvestment
as Administrative Agent may reasonable request.

o            b.     Officer’s Certificate demonstrating the calculation of the
amount of the applicable Net Asset Sale Proceeds, Net Insurance/Condemnation
Proceeds, Net Securities Proceeds, or Consolidated Excess Cash Flow, as the case
may be, that gave rise to a mandatory prepayment and/or reduction in Revolving
Loan Commitments.

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(2)                                  This option should be selected for all
voluntary and mandatory prepayments of the Loans.

(3)                                  This option should be selected only if a
voluntary termination or reduction of the Revolving Loan Commitments is the
subject of this notice.

(4)                                  Irrespective of any application specified
by Company, voluntary prepayments shall first be applied as specified in
subsection 2.4B(iv)(a) of the Credit Agreement. 

XVI-2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned authorized officer of Company has executed
this notice as of the date set forth above.

FTD, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

XVI-3

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EXHIBIT XVII

[FORM OF MORTGAGE]

This space reserved for Recorder’s use only

MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING (                  )

by and from

“Mortgagor”

to

WELLS FARGO BANK, N.A., as Administrative Agent

“Mortgagee”

Dated as of                      , 200    

Location:

Municipality:

County:

State:

Tax ID Nos.:

 

THE SECURED PARTY (MORTGAGEE) DESIRES THIS FIXTURE FILING TO BE INDEXED AGAINST
THE RECORD OWNER OF THE REAL ESTATE DESCRIBED HEREIN

PREPARED BY, RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:

O’Melveny & Myers LLP

400 South Hope Street

Los Angeles, California 90071-2899

Attention:  Warren C. Jacob, Esq.

File 918,120-335

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MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING (ILLINOIS)

THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND LEASES AND FIXTURE
FILING (                        ) (this “Mortgage”) is dated as of
                , 200   and from                                            , a
                                          (“Mortgagor”), whose address is
                                                                            to
WELLS FARGO BANK, N.A., as Administrative Agent (“Mortgagee”), having an address
at 201 Third Street, Eighth Floor, MAC  A0187-081, San Francisco, California 
94103, as administrative agent for Lenders.

ARTICLE 1

DEFINITIONS

Section 1.1.           Definitions.  All capitalized terms used herein without
definition shall have the respective meanings ascribed to them in that certain
Credit Agreement dated as July 28, 2006 entered into by and among FTD, INC., a
Delaware corporation, as borrower, (“Borrower”), certain Subsidiaries of
Borrower including Mortgagor, as Subsidiary Guarantors, THE FINANCIAL
INSTITUTIONS PARTY FROM TIME TO TIME TO THE CREDIT AGREEMENT (each individually
referred to therein as a “Lender” and collectively as “Lenders”), WELLS FARGO
BANK, N.A., as syndication agent for Lenders, WELLS FARGO BANK, N.A., as
documentation agent for Lenders, and WELLS FARGO BANK, N.A., as administrative
agent for Lenders (as amended, supplemented, renewed, replaced or otherwise
modified from time to time, the “Credit Agreement”).  As used herein, the
following terms shall have the following meanings:

(a)           “Indebtedness”:  (1) All indebtedness of Borrower to Mortgagee and
Lenders, the full and prompt payment of which has been guaranteed by Mortgagor,
including, without limitation, the sum of all (a) principal, interest and other
amounts evidenced or secured by the Loan Documents or any Hedge Agreements (as
defined in the Subsidiary Guaranty), and (b) principal, interest and other
amounts which may hereafter be loaned under or in connection with the Credit
Agreement, any of the other Loan Documents or any Hedge Agreements, whether
evidenced by a promissory note or other instrument which, by its terms, is
secured hereby, and (2) all other indebtedness, obligations and liabilities now
or hereafter existing of any kind of Mortgagor or Borrower to Mortgagee under
the Subsidiary Guaranty and all other documents which recite that they are
intended to be secured by this Mortgage.  Pursuant to the Credit Agreement,
Lenders have agreed to provide Borrower with a term loan credit facility and
with a revolving credit facility, which permits Borrower to borrow certain
principal amounts, repay all or a portion of such principal amounts, and
reborrow the amounts previously paid to Lenders, all upon satisfaction of
certain conditions stated in the Credit Agreement.  The amount of such revolving
credit facility may increase and decrease from time to time as Lenders advance,
Borrower repays, and Lenders re-advance sums on account of the revolving credit,
all as more fully described in the Credit Agreement.  Additionally, pursuant to
the Credit Agreement, Borrower may enter into Hedge Agreements.  The term
“Indebtedness” includes without limitation all advances and re-advances under
the revolving credit feature of the Credit Agreement and all amounts under the
Hedge Agreements.

(b)           “Mortgaged Property”:  All of Mortgagor’s right, title and
interest in and to (1) the fee interest in the real property described in
Exhibit A attached hereto and incorporated herein by this reference, together
with any greater estate therein as hereafter may be acquired by Mortgagor (the
“Land”), (2) all improvements now owned or hereafter acquired by Mortgagor, now
or at any time

2

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situated, placed or constructed upon the Land (the “Improvements”; the Land and
Improvements are collectively referred to as the “Premises”), (3) all materials,
supplies, equipment, apparatus and other items of personal property now owned or
hereafter acquired by Mortgagor and now or hereafter attached to, installed in
or used in connection with any of the Improvements or the Land, and water, gas,
electrical, telephone, storm and sanitary sewer facilities and all other
utilities whether or not situated in easements (the “Fixtures”), (4) all
reserves, escrows or impounds required under the Credit Agreement and all
deposit accounts maintained by Mortgagor with respect to the Mortgaged Property
(the “Deposit Accounts”), (5) all leases, licenses, concessions, occupancy
agreements or other agreements (written or oral, now or at any time in effect)
which grant to any Person a possessory interest in, or the right to use, all or
any part of the Mortgaged Property, together with all related security and other
deposits (the “Leases”), (6) all of the rents, revenues, royalties, income,
proceeds, profits, security and other types of deposits, and other benefits paid
or payable by parties to the Leases for using, leasing, licensing possessing,
operating from, residing in, selling or otherwise enjoying the Mortgaged
Property (the “Rents”), (7) all other agreements, such as construction
contracts, architects’ agreements, engineers’ contracts, utility contracts,
maintenance agreements, management agreements, service contracts, listing
agreements, guaranties, warranties, permits, licenses, certificates and
entitlements in any way relating to the construction, use, occupancy, operation,
maintenance, enjoyment or ownership of the Mortgaged Property (the “Property
Agreements”), (8) all rights, privileges, tenements, hereditaments,
rights-of-way, easements, appendages and appurtenances appertaining to the
foregoing, (9) all property tax refunds (the “Tax Refunds”), (10) all
accessions, replacements and substitutions for any of the foregoing and all
proceeds thereof (the “Proceeds”), (11) all insurance policies, unearned
premiums therefor and proceeds from such policies covering any of the above
property now or hereafter acquired by Mortgagor (the “Insurance”), and (12) all
awards, damages, remunerations, reimbursements, settlements or compensation
heretofore made or hereafter to be made by any governmental authority pertaining
to the Land, Improvements, or Fixtures (the “Condemnation Awards”).  As used in
this Mortgage, the term “Mortgaged Property” shall mean all or, where the
context permits or requires, any portion of the above or any interest therein.

(c)           “Obligations”:  All of the agreements, covenants, conditions,
warranties, representations and other obligations of Mortgagor or Borrower under
the Credit Agreement, the other Loan Documents and any Hedge Agreements.

(d)           “UCC”:  The Uniform Commercial Code of                           
or, if the creation, perfection and enforcement of any security interest herein
granted is governed by the laws of a state other than                   , then,
as to the matter in question, the Uniform Commercial Code in effect in that
state.

ARTICLE 2

MORTGAGE OF MORTGAGED PROPERTY

Section 2.1.           Mortgage of Mortgaged Property.  To secure the full and
timely payment of the Indebtedness and the full and timely performance of the
Obligations, Mortgagor MORTGAGES, GRANTS, BARGAINS, ASSIGNS, SELLS and CONVEYS,
to Mortgagee the Mortgaged Property, subject, however, to the Permitted
Encumbrances, TO HAVE AND TO HOLD the Mortgaged Property to Mortgagee, and
Mortgagor does hereby bind itself, its successors and assigns to WARRANT AND
FOREVER DEFEND the title to the Mortgaged Property unto Mortgagee.

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ARTICLE 3

WARRANTIES, REPRESENTATIONS AND COVENANTS

Mortgagor warrants, represents and covenants to Mortgagee as follows:

Section 3.1.           Title to Mortgaged Property and Lien of this Instrument. 
Mortgagor owns the Mortgaged Property free and clear of any liens, claims or
interests, except the Permitted Encumbrances.  This Mortgage creates valid,
enforceable first priority liens and security interests against the Mortgaged
Property.

Section 3.2.           First Lien Status.  Mortgagor shall preserve and protect
the first lien and security interest status of this Mortgage and the other Loan
Documents.  If any lien or security interest other than the Permitted
Encumbrances is asserted against the Mortgaged Property, Mortgagor shall
promptly, and at its expense, (a) give Mortgagee a detailed written notice of
such lien or security interest (including origin, amount and other terms), and
(b) pay the underlying claim in full or take such other action so as to cause it
to be released or contest the same in compliance with the requirements of the
Credit Agreement (including the requirement of providing a bond or other
security satisfactory to Mortgagee).

Section 3.3.           Payment and Performance.  Mortgagor shall pay the
Indebtedness when due and shall perform the Obligations in full when they are
required to be performed.

Section 3.4.           Replacement of Fixtures.  Mortgagor shall not, without
the prior written consent of Mortgagee, permit any of the Fixtures owned or
leased by Mortgagor to be removed at any time from the Land or Improvements,
unless the removed item is removed temporarily for maintenance and repair or, if
removed permanently, is permitted to be removed by the Credit Agreement, or is
obsolete and is replaced by an article of equal or better suitability and value,
owned by Mortgagor subject to the liens and security interests of this Mortgage
and the other Loan Documents, and free and clear of any other lien or security
interest except such as may be permitted under the Credit Agreement or first
approved in writing by Mortgagee.

Section 3.5.           Inspection.  Mortgagor shall permit Mortgagee, and
Mortgagee’s agents, representatives and employees, upon reasonable prior notice
to Mortgagor, to inspect the Mortgaged Property and all books and records of
Mortgagor located thereon, and to conduct such environmental and engineering
studies as Mortgagee may reasonably require, provided that such inspections and
studies shall not materially interfere with the use and operation of the
Mortgaged Property.

Section 3.6.           Other Covenants.  All of the covenants of Borrower (and,
if a party thereto, Mortgagor) in the Credit Agreement are incorporated herein
by reference and, together with covenants in this Article 3, shall be covenants
running with the Land.

Section 3.7.           Condemnation Awards and Insurance Proceeds.

(a)           Condemnation Awards.  Mortgagor assigns all awards and
compensation to which it is entitled for any condemnation or other taking, or
any purchase in lieu thereof, to Mortgagee and authorizes Mortgagee to collect
and receive such awards and compensation and to give proper receipts and
acquittances therefor, subject to the terms of the Credit Agreement.

(b)           Insurance Proceeds.  Mortgagor assigns to Mortgagee all proceeds
of any insurance policies insuring against loss or damage to the Mortgaged
Property.  Mortgagor authorizes Mortgagee to collect and receive such proceeds
and authorizes and directs the issuer of each of such insurance policies to make
payment for all such losses directly to Mortgagee, instead of to Mortgagor and
Mortgagee jointly, subject to the terms of the Credit Agreement.

(c)           Collateral Protection Act.  Pursuant to the terms of the
Collateral Protection Act (815 ILCS 180/1 et seq.), Mortgagor is hereby notified
that unless Mortgagor provides Mortgagee with

4

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evidence of the insurance coverage required by this Mortgage, Mortgagee may
purchase insurance at Mortgagee’s expense to protect Mortgagor’s interests in
the Premises, which insurance may, but need not, protect the interests of
Mortgagor in the Premises.  The coverage purchased by Mortgagee may not pay any
claim made by Mortgagor or any claim made against Mortgagor in connection with
the Premises.  Mortgagor may later cancel any insurance purchased by Mortgagee,
but only after providing Mortgagee with evidence that Mortgagor has obtained the
insurance as required hereunder.  If Mortgagee purchases insurance, the
Mortgagor will be responsible for the costs of such insurance, including
interest and any other charges imposed in connection with the placement of the
insurance, until the effective date of the cancellation or expiration of the
insurance.  The costs of the insurance may be added to the total obligation
secured by this Mortgage.  The costs of such insurance may be greater than the
cost of insurance Mortgagor may be able to obtain for itself.

ARTICLE 4

[Intentionally Omitted]

ARTICLE 5

DEFAULT AND FORECLOSURE

Section 5.1.           Remedies.  If an Event of Default exists, Mortgagee may,
at Mortgagee’s election, exercise any or all of the following rights, remedies
and recourses:

(a)           Acceleration.  Declare the Indebtedness to be immediately due and
payable, without further notice, presentment, protest, notice of intent to
accelerate, notice of acceleration, demand or action of any nature whatsoever
(each of which hereby is expressly waived by Mortgagor), whereupon the same
shall become immediately due and payable.

(b)           Entry on Mortgaged Property.  Enter the Mortgaged Property and
take exclusive possession thereof and of all books, records and accounts
relating thereto or located thereon.  If Mortgagor remains in possession of the
Mortgaged Property after an Event of Default and without Mortgagee’s prior
written consent, Mortgagee may invoke any legal remedies to dispossess
Mortgagor.

(c)           Operation of Mortgaged Property.  Hold, lease, develop, manage,
operate or otherwise use the Mortgaged Property upon such terms and conditions
as Mortgagee may deem reasonable under the circumstances (making such repairs,
alterations, additions and improvements and taking other actions, from time to
time, as Mortgagee deems necessary or desirable), and apply all Rents and other
amounts collected by Mortgagee in connection therewith in accordance with the
provisions of Section 5.7.

(d)           Foreclosure and Sale.  Institute proceedings for the complete
foreclosure of this Mortgage by judicial action, in which case the Mortgaged
Property may be sold for cash or credit in one or more parcels.  With respect to
any notices required or permitted under the UCC, Mortgagor agrees that ten (10)
days’ prior written notice shall be deemed commercially reasonable.  At any such
sale by virtue of any judicial proceedings or any other legal right, remedy or
recourse, the title to and right of possession of any such property shall pass
to the purchaser thereof, and to the fullest extent permitted by law, Mortgagor
shall be completely and irrevocably divested of all of its right, title,
interest, claim, equity, equity of redemption, and demand whatsoever, either at
law or in equity, in and to the property sold and such sale shall be a perpetual
bar both at law and in equity against Mortgagor, and against all other Persons
claiming or to claim the property sold or any part thereof, by, through or under
Mortgagor.  Mortgagee may be a purchaser at such sale and if Mortgagee is the
highest bidder, Mortgagee may credit

5

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the portion of the purchase price that would be distributed to Mortgagee against
the Indebtedness in lieu of paying cash.  In the event this Mortgage is
foreclosed by judicial action, appraisement of the Mortgaged Property is waived.

(e)           Receiver.  Make application to a court of competent jurisdiction
for, and obtain from such court as a matter of strict right and without notice
to Mortgagor or regard to the adequacy of the Mortgaged Property for the
repayment of the Indebtedness, the appointment of a receiver of the Mortgaged
Property, and Mortgagor irrevocably consents to such appointment.  Any such
receiver shall have all the usual powers and duties of receivers in similar
cases, including the full power to rent, maintain and otherwise operate the
Mortgaged Property upon such terms as may be approved by the court, and shall
apply such Rents in accordance with the provisions of Section 5.7.

(f)            Other.  Exercise all other rights, remedies and recourses granted
under the Loan Documents, any Hedge Agreements or otherwise available at law or
in equity.

Section 5.2.           Separate Sales.  The Mortgaged Property may be sold in
one or more parcels and in such manner and order as Mortgagee in its sole
discretion may elect; the right of sale arising out of any Event of Default
shall not be exhausted by any one or more sales.

Section 5.3.           Remedies Cumulative, Concurrent and Nonexclusive. 
Mortgagee shall have all rights, remedies and recourses granted in the Loan
Documents and available at law or equity (including the UCC), which rights (a)
shall be cumulated and concurrent, (b) may be pursued separately, successively
or concurrently against Mortgagor or others obligated under the Loan Documents,
or against the Mortgaged Property, or against any one or more of them, at the
sole discretion of Mortgagee, (c) may be exercised as often as occasion therefor
shall arise, and the exercise or failure to exercise any of them shall not be
construed as a waiver or release thereof or of any other right, remedy or
recourse, and (d) are intended to be, and shall be, nonexclusive.  No action by
Mortgagee in the enforcement of any rights, remedies or recourses under the Loan
Documents, any Hedge Agreements or otherwise at law or equity shall be deemed to
cure any Event of Default.

Section 5.4.           Release of and Resort to Collateral.  Mortgagee may
release, regardless of consideration and without the necessity for any notice to
or consent by the holder of any subordinate lien on the Mortgaged Property, any
part of the Mortgaged Property without, as to the remainder, in any way
impairing, affecting, subordinating or releasing the lien or security interest
created in or evidenced by the Loan Documents or their status as a first and
prior lien and security interest in and to the Mortgaged Property.  For payment
of the Indebtedness, Mortgagee may resort to any other security in such order
and manner as Mortgagee may elect.

Section 5.5.           Waiver of Redemption, Notice and Marshalling of Assets. 
To the fullest extent permitted by law, Mortgagor hereby irrevocably and
unconditionally waives and releases (a) all benefit that might accrue to
Mortgagor by virtue of any present or future statute of limitations or law or
judicial decision exempting the Mortgaged Property from attachment, levy or sale
on execution or providing for any stay of execution, exemption from civil
process, redemption or extension of time for payment, (b) all notices of any
Event of Default or of Mortgagee’s election to exercise or the actual exercise
of any right, remedy or recourse provided for under the Loan Documents, and (c)
any right to a marshalling of assets or a sale in inverse order of alienation.

Section 5.6.           Discontinuance of Proceedings.  If Mortgagee shall have
proceeded to invoke any right, remedy or recourse permitted under the Loan
Documents and shall thereafter elect to discontinue or abandon it for any
reason, Mortgagee shall have the unqualified right to do so and, in such an
event, Mortgagor and Mortgagee shall be restored to their former positions with
respect to the

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Indebtedness, the Obligations, the Loan Documents, the Mortgaged Property and
otherwise, and the rights, remedies, recourses and powers of Mortgagee shall
continue as if the right, remedy or recourse had never been invoked, but no such
discontinuance or abandonment shall waive any Event of Default which may then
exist or the right of Mortgagee thereafter to exercise any right, remedy or
recourse under the Loan Documents for such Event of Default.

Section 5.7.           Application of Proceeds.  The proceeds of any sale of,
and the Rents and other amounts generated by the holding, leasing, management,
operation or other use of the Mortgaged Property, shall be applied by Mortgagee
(or the receiver, if one is appointed) in the following order unless otherwise
required by applicable law:

(a)           to the payment of the costs and expenses of taking possession of
the Mortgaged Property and of holding, using, leasing, repairing, improving and
selling the same, including, without limitation (1) receiver’s fees and
expenses, including the repayment of the amounts evidenced by any receiver’s
certificates, (2) court costs, (3) reasonable attorneys’ and accountants’ fees
and expenses, and (4) costs of advertisement;

(b)           to the payment of the Indebtedness and performance of the
Obligations in accordance with the Credit Agreement; and

(c)           the balance, if any, to the payment of the Person or Persons
legally entitled thereto.

Section 5.8.           Occupancy After Foreclosure.  Any sale of the Mortgaged
Property or any part thereof in accordance with Section 5.1(d) will divest all
right, title and interest of Mortgagor in and to the property sold.  Subject to
applicable law, any purchaser at a foreclosure sale will receive immediate
possession of the property purchased.  If Mortgagor retains possession of such
property or any part thereof subsequent to such sale, Mortgagor will be
considered a tenant at sufferance of the purchaser, and will, if Mortgagor
remains in possession after demand to remove, be subject to eviction and
removal, forcible or otherwise, with or without process of law.

Section 5.9.           Additional Advances and Disbursements; Costs of
Enforcement.

(a)           If any Event of Default exists, Mortgagee shall have the right,
but not the obligation, to cure such Event of Default in the name and on behalf
of Mortgagor.  All sums advanced and expenses incurred at any time by Mortgagee
under this Section 5.9, or otherwise under this Mortgage, any of the other Loan
Documents, any Hedge Agreements or applicable law, shall bear interest from the
date that such sum is advanced or expense incurred, to and including the date of
reimbursement, computed at the rate or rates at which interest is then computed
on the Indebtedness, and all such sums, together with interest thereon, shall be
secured by this Mortgage.

(b)           Mortgagor shall pay all expenses (including reasonable attorneys’
fees and expenses) of or incidental to the perfection and enforcement of this
Mortgage, the other Loan Documents and any Hedge Agreements, or the enforcement,
compromise or settlement of the Indebtedness or any claim under this Mortgage,
the other Loan Documents and any Hedge Agreements, and for the curing thereof,
or for defending or asserting the rights and claims of Mortgagee in respect
thereof, by litigation or otherwise.

Section 5.10.        No Mortgagee in Possession. Neither the enforcement of any
of the remedies under this Article 5, the assignment of the Rents and Leases
under Article 6, the security interests under Article 7, nor any other remedies
afforded to Mortgagee under the Loan Documents, at

7

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law or in equity shall cause Mortgagee to be deemed or construed to be a
mortgagee in possession of the Mortgaged Property, to obligate Mortgagee to
lease the Mortgaged Property or attempt to do so, or to take any action, incur
any expense, or perform or discharge any obligation, duty or liability
whatsoever under any of the Leases or otherwise.

ARTICLE 6

ASSIGNMENT OF RENTS AND LEASES

Section 6.1.           Assignment.  In furtherance of and in addition to the
assignment made by Mortgagor in Section 2.1 of this Mortgage, Mortgagor hereby
absolutely and unconditionally assigns, sells, transfers and conveys to
Mortgagee all of its right, title and interest in and to all Leases, whether now
existing or hereafter entered into, and all of its right, title and interest in
and to all Rents.  This assignment is an absolute assignment and not an
assignment for additional security only.  So long as no Event of Default shall
have occurred and be continuing, Mortgagor shall have a revocable license from
Mortgagee to exercise all rights extended to the landlord under the Leases,
including the right to receive and collect all Rents and to hold the Rents in
trust for use in the payment of the Indebtedness and performance of the
Obligations and to otherwise use the same.  The foregoing license is granted
subject to the conditional limitation that no Event of Default shall have
occurred and be continuing.  Upon the occurrence and during the continuance of
an Event of Default, whether or not legal proceedings have commenced, and
without regard to waste, adequacy of security for the Indebtedness or the
Obligations or solvency of Mortgagor, the license herein granted shall
automatically expire and terminate, without notice to Mortgagor by Mortgagee
(any such notice being hereby expressly waived by Mortgagor to the extent
permitted by applicable law).

Section 6.2.           Perfection Upon Recordation.  Mortgagor covenants that
upon recordation of this Mortgage Mortgagee shall have, to the extent permitted
under applicable law, a valid and fully perfected, first priority, present
assignment of the Rents arising out of the Leases and all security for such
Leases.  Mortgagor acknowledges and agrees that upon recordation of this
Mortgage Mortgagee’s interest in the Rents shall be deemed to be fully
perfected, “choate” and enforced as to Mortgagor and all third parties following
recovery of possession of the Mortgaged Property by Mortgagee.  For purposes of
this Section 6.2, “possession” shall mean any one of the following to the extent
permitted by applicable law: (a) actual possession of the Mortgaged Property or
(b) taking affirmative actions to gain possession of the Mortgaged Property that
would constitute constructive possession of the Mortgaged Property such as court
authorization to collect Rents or appointment of a receiver.  To the extent
permitted by applicable law, Mortgagee shall have the right to collect Rents
without taking possession of the Mortgaged Property.

Section 6.3.           Bankruptcy Provisions.  Without limitation of the
absolute nature of the assignment of the Rents hereunder, Mortgagor and
Mortgagee agree that (a) this Mortgage shall constitute a “security agreement”
for purposes of Section 552(b) of Title 11 of the United States Code (the
“Bankruptcy Code”), (b) the security interest created by this Mortgage extends
to property of Mortgagor acquired before the commencement of a case in
bankruptcy and to all amounts paid as Rents and (c) such security interest shall
extend to all Rents acquired by the estate after the commencement of any case in
bankruptcy.

Section 6.4.           No Merger of Estates.  So long as part of the
Indebtedness and the Obligations secured hereby remain unpaid and undischarged,
the fee and leasehold estates to the Mortgaged Property shall not merge, but
shall remain separate and distinct, notwithstanding the union of such estates
either in Mortgagor, Mortgagee, any tenant or any third party by purchase or
otherwise.

8

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ARTICLE 7

SECURITY AGREEMENT

Section 7.1.           Security Interest.  This Mortgage constitutes a “security
agreement” on personal property within the meaning of the UCC and other
applicable law and with respect to the Fixtures, Deposit Accounts, Leases,
Rents, Property Agreements, Tax Refunds, Proceeds, Insurance and Condemnation
Awards.  To this end, Mortgagor grants to Mortgagee a first and prior security
interest in the Fixtures, Deposit Accounts, Leases, Rents, Property Agreements,
Tax Refunds, Proceeds, Insurance, Condemnation Awards and all other Mortgaged
Property which is personal property to secure the payment of the Indebtedness
and performance of the Obligations, and agrees that Mortgagee shall have all the
rights and remedies of a secured party under the UCC with respect to such
property.  Any notice of sale, disposition or other intended action by Mortgagee
with respect to the Fixtures, Deposit Accounts, Leases, Rents, Property
Agreements, Tax Refunds, Proceeds, Insurance and Condemnation Awards sent to
Mortgagor at least ten (10) days prior to any action under the UCC shall
constitute reasonable notice to Mortgagor.

Section 7.2.           Financing Statements.  Mortgagor shall execute (if
applicable) and deliver to Mortgagee, in form and substance satisfactory to
Mortgagee, such financing statements and such further assurances as Mortgagee
may, from time to time, reasonably consider necessary to create, perfect and
preserve Mortgagee’s security interest hereunder and Mortgagee may cause such
statements and assurances to be recorded and filed, at such times and places as
may be required or permitted by law to so create, perfect and preserve such
security interest.  Mortgagor’s chief executive office is in the State of
                                  at the address set forth in the first
paragraph of this Mortgage.

Section 7.3.           Fixture Filing.  This Mortgage shall also constitute a
“fixture filing” for the purposes of the UCC against all of the Mortgaged
Property which is or is to become fixtures.  Mortgagor grants to Mortgagee a
security interest in all existing and future goods which are now or in the
future become fixtures relating to the Mortgaged Property and the proceeds
thereof.  For purposes of the UCC, the following information concerning the
security interest herein granted is furnished:

(a)           The name of the Debtor (Mortgagor) is:
                                      , a                            , having an
address as set forth in the first paragraph of this Mortgage, whose corporate
organizational number is                  .

(b)           The name of the Secured Party (Mortgagee) is: Wells Fargo Bank,
N.A., having an address as set forth in the first paragraph of this Mortgage.

(c)           Information concerning the security interest evidenced by this
instrument may be obtained from the Secured Party at its address above.

(d)           Mortgagor is the record owner of the real estate described in this
Security Instrument.

(e)           This document is to be filed in the real estate records.  A
description of the real estate is attached hereto as Exhibit A.

ARTICLE 8

 

[Intentionally Omitted]

9

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ARTICLE 9
MISCELLANEOUS

 

Section 9.1.           Notices.  Any notice required or permitted to be given
under this Mortgage shall be given in accordance with Section 10.8 of the Credit
Agreement.

Section 9.2.           Covenants Running with the Land.  All Obligations
contained in this Mortgage are intended by Mortgagor and Mortgagee to be, and
shall be construed as, covenants running with the Mortgaged Property.  As used
herein, “Mortgagor” shall refer to the party named in the first paragraph of
this Mortgage and to any subsequent owner of all or any portion of the Mortgaged
Property.  All Persons who may have or acquire an interest in the Mortgaged
Property shall be deemed to have notice of, and be bound by, the terms of the
Credit Agreement and the other Loan Documents; however, no such party shall be
entitled to any rights thereunder without the prior written consent of
Mortgagee.

Section 9.3.           Attorney-in-Fact.  Mortgagor hereby irrevocably appoints
Mortgagee and its successors and assigns, as its attorney-in-fact, which agency
is coupled with an interest and with full power of substitution, (a) to execute
and/or record any notices of completion, cessation of labor or any other notices
that Mortgagee deems appropriate to protect Mortgagee’s interest, if Mortgagor
shall fail to do so within ten (10) days after written request by Mortgagee, (b)
upon the issuance of a deed pursuant to the foreclosure of this Mortgage or the
delivery of a deed in lieu of foreclosure, to execute all instruments of
assignment, conveyance or further assurance with respect to the Leases, Rents,
Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance and
Condemnation Awards in favor of the grantee of any such deed and as may be
necessary or desirable for such purpose, (c) to prepare, execute and file or
record financing statements, continuation statements, applications for
registration and like papers necessary to create, perfect or preserve
Mortgagee’s security interests and rights in or to any of the Mortgaged
Property, and (d) while any Event of Default exists, to perform any obligation
of Mortgagor hereunder, however: (1) Mortgagee shall not under any circumstances
be obligated to perform any obligation of Mortgagor; (2) any sums advanced by
Mortgagee in such performance shall be added to and included in the Indebtedness
and shall bear interest at the rate or rates at which interest is then computed
on the Indebtedness; (3) Mortgagee as such attorney-in-fact shall only be
accountable for such funds as are actually received by Mortgagee; and (4)
Mortgagee shall not be liable to Mortgagor or any other person or entity for any
failure to take any action which it is empowered to take under this Section 9.3.

Section 9.4.           Successors and Assigns.  This Mortgage shall be binding
upon and inure to the benefit of Mortgagee and Mortgagor and their respective
successors and assigns.  Mortgagor shall not, without the prior written consent
of Mortgagee, assign any rights, duties or obligations hereunder.

Section 9.5.           No Waiver.  Any failure by Mortgagee to insist upon
strict performance of any of the terms, provisions or conditions of the Loan
Documents shall not be deemed to be a waiver of same, and Mortgagee shall have
the right at any time to insist upon strict performance of all of such terms,
provisions and conditions.

Section 9.6.           Credit Agreement.  If any conflict or inconsistency
exists between this Mortgage and the Credit Agreement, the Credit Agreement
shall govern.

Section 9.7.           Release or Reconveyance.  Upon payment in full of the
Indebtedness and performance in full of the Obligations or upon a sale or other
disposition of the Mortgaged Property permitted by the Credit Agreement,
Mortgagee, at Mortgagor’s expense, shall release the liens and security
interests created by this Mortgage or reconvey the Mortgaged Property to
Mortgagor.

10

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Section 9.8.           Waiver of Stay, Moratorium and Similar Rights.  Mortgagor
agrees, to the full extent that it may lawfully do so, that it will not at any
time insist upon or plead or in any way take advantage of any stay, marshalling
of assets, extension, redemption or moratorium law now or hereafter in force and
effect so as to prevent or hinder the enforcement of the provisions of this
Mortgage or the Indebtedness or Obligations secured hereby, or any agreement
between Mortgagor and Mortgagee or any rights or remedies of Mortgagee.

Section 9.9.           Applicable Law.  The provisions of this Mortgage
regarding the creation, perfection and enforcement of the liens and security
interests herein granted shall be governed by and construed under the laws of
the state in which the Mortgaged Property is located.  All other provisions of
this Mortgage shall be governed by the laws of the State of New York (including,
without limitation, Section 5-1401 of the General Obligations Law of the State
of New York), without regard to conflicts of laws principles.

Section 9.10.        Headings.  The Article, Section and Subsection titles
hereof are inserted for convenience of reference only and shall in no way alter,
modify or define, or be used in construing, the text of such Articles, Sections
or Subsections.

Section 9.11.        Entire Agreement.  This Mortgage and the other Loan
Documents embody the entire agreement and understanding between Mortgagee and
Mortgagor and supersede all prior agreements and understandings between such
parties relating to the subject matter hereof and thereof.  Accordingly, the
Loan Documents may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties.  There are no unwritten oral
agreements between the parties.

Section 9.12.        Mortgagee as Administrative Agent; Successor Agents.

(a)           Mortgagee has been appointed to act as Administrative Agent
hereunder by the Lenders and by acceptance of any of the benefits hereunder,
each Counterparty under a Hedge Agreement. Mortgagee shall have the right
hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of the Mortgaged Property) in
accordance with the terms of the Credit Agreement, any related agency agreement
among Mortgagee and the Lenders or any such Counterparty (collectively, as
amended, supplemented or otherwise modified or replaced from time to time, the
“Agency Documents”) and this Mortgage.  Mortgagor and all other persons shall be
entitled to rely on releases, waivers, consents, approvals, notifications and
other acts of Mortgagee, without inquiry into the existence of required consents
or approvals of the Lenders or any such Counterparty therefor.

(b)           Mortgagee shall at all times be the same Person that is
Administrative Agent under the Agency Documents.  Written notice of resignation
by Administrative Agent pursuant to the Agency Documents shall also constitute
notice of resignation as Mortgagee under this Mortgage.  Removal of
Administrative Agent pursuant to any provision of the Agency Documents shall
also constitute removal as Mortgagee under this Mortgage.  Appointment of a
successor Administrative Agent pursuant to the Agency Documents shall also
constitute appointment of a successor Mortgagee under this Mortgage.  Upon the
acceptance of any appointment as Administrative Agent by a successor
Administrative Agent under the Agency Documents, that successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Mortgagee under this Mortgage,
and the retiring or removed Mortgagee shall promptly (i) assign and transfer to
such successor Mortgagee all of its right, title and interest in and to this
Mortgage and the Mortgaged Property, and (ii) execute and deliver to such
successor Mortgagee such assignments and amendments and take such other actions,
as may be necessary or appropriate in connection with the

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assignment to such successor Mortgagee of the liens and security interests
created under this Mortgage. After any retired or removed Administrative Agent’s
resignation or removal hereunder as Mortgagee, the provisions of this Mortgage
and the Agency Documents shall inure to its benefit as to any actions taken or
omitted to be taken by it under this Mortgage while it was the Mortgagee
hereunder.

ARTICLE 10

LOCAL LAW PROVISIONS

Section 10.1.        Inconsistencies.  In the event of any inconsistencies
between the terms and conditions of this Article 10 and the other provisions of
this Mortgage, the terms and conditions of this Article 10 shall control and be
binding.

Section 10.2.        Maximum Principal Sum.  The Indebtedness and Obligations
may be secured by other mortgages and deeds of trust on other real estate in
other counties and other states.  Each and all of such mortgages and deeds of
trust are intended to and shall constitute security for the entire Indebtedness
and all of the Obligations without allocation.  Notwithstanding anything herein
to the contrary, it is agreed that the maximum amount of Indebtedness secured by
this Mortgage, including all advancements, at any one time shall not exceed Two
Hundred and Twenty Five Million Dollars ($225,000,000.00).

Section 10.3.        In Rem Proceedings.  Supplementing Section 5.1 hereof,
mortgage foreclosures and other In Rem proceedings against Mortgagor may be
brought in DuPage County, Illinois or any federal court of competent
jurisdiction in Illinois.

Section 10.4.          Future Advances; Revolving Credit.  This Mortgage
secures, among other things, “revolving credit” as that term is defined in 815
ILCS 205/4.1, and will secure not only existing indebtedness, but also future
advances, whether such advances are obligatory or to be made at the option of
the Mortgagor or the Lenders, or otherwise, as are made within twenty (20) years
from the date hereof, to the same extent as if such future advances were made on
the date of execution of this Mortgage, although there may be no advance made at
the time of execution hereof, and although there may be no indebtedness
outstanding at the time any advance is made.  The lien of this Mortgage shall be
valid as to all such indebtedness and future advances from the time this
Mortgage is recorded.

The proceeds of the indebtedness secured hereby referred to herein shall be used
solely for business purposes and in furtherance of the regular business affairs
of Mortgagor, and the entire principal obligation secured by this Mortgage
constitutes (i) a “business loan” as that term is defined in, and for all
purposes of, 815 ILCS 205/4 (1)(c), and (ii) a “loan secured by a mortgage on
real estate” within the purview and operation of 815 ILCS 205/4(1)(l).

Section 10.5.          Illinois Mortgage Foreclosure Law.  It is the intention
of Mortgagor and Mortgagee that the enforcement of the terms and provisions of
this Mortgage shall be accomplished in accordance with the Illinois Mortgage
Foreclosure Law (the “Act”), 735 ILCS 5/15-1101, et seq., and with respect to
such Act Mortgagor agrees and covenants that:

(a)           Mortgagor and Mortgagee shall have the benefit of all of the
provisions of the Act, including all amendments thereto which may become
effective from time

12

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to time after the date hereof.  In the event any provision of the Act which is
specifically referred to herein may be repealed, Mortgagee shall have the
benefit of such provision as most recently existing prior to such repeal, as
though the same were incorporated herein by express reference;

(b)           Wherever provision is made in this Mortgage or the Credit
Agreement for insurance policies to bear mortgage clauses or other loss payable
clauses or endorsements in favor of Mortgagee, or to confer authority upon
Mortgagee to settle or participate in the settlement of losses under policies of
insurance or to hold and disburse or otherwise control use of insurance
proceeds, from and after the entry of judgment of foreclosure, all such rights
and powers of Mortgagee shall continue in Mortgagee as judgment creditor or
mortgagee until confirmation of sale;

(c)           All advances, disbursements and expenditures made or incurred by
Mortgagee before and during a foreclosure, and before and after judgment of
foreclosure, and at any time prior to sale, and, where applicable, after sale,
and during the pendency of any related proceedings, for the following purposes,
in addition to those otherwise authorized by the Mortgage, or the Credit
Agreement or by the Act (collectively “Protective Advances”), shall have the
benefit of all applicable provisions of the Act, herein below referred to:

(1)           all advances by Mortgagee in accordance with the terms of the
Mortgage or the Loan Agreement to: (i) preserve, maintain, repair, restore or
rebuild the improvements upon the Mortgaged Property; (ii) preserve the lien of
the Mortgage or the priority thereof; (iii) enforce the Mortgage, as referred to
in Subsection (b) (5) of Section 5/15-1302 of the Act;

(2)           payments by Mortgagee of (i) principal, interest or other
obligations in accordance with the terms of any senior mortgage or other prior
lien or encumbrances; (ii) real estate taxes and assessments, general and
special, and all other taxes and assessments of any kind or nature whatsoever
which are assessed or imposed upon the Mortgaged Property or any part thereof;
(iii) other obligations authorized by the Mortgagee; (iv) with court approval,
any other amounts in connection with other liens, encumbrances or interests
reasonably necessary to preserve the status of title, as referred to in Section
5/15-1505 of the Act;

(3)           advances by Mortgagee in settlement or compromise of any claims
asserted by claimants under senior mortgages or any other prior liens;

(4)           reasonable attorneys’ fees and other costs incurred: (i) in
connection with the foreclosure of the Mortgage as referred to in Section
5/15-1504(d)(2) and 5/15-1510 of the Act; (ii) in connection with any action,
suit, or proceeding brought by or against the Mortgagee for the enforcement of
the Mortgage or arising from the interest of the Mortgagee hereunder; or (iii)
in preparation for or in connection with the commencement, prosecution or
defense of any other action related to the Mortgage or the Mortgaged Property;

(5)           Mortgagee’s fees and costs, including reasonable attorneys’ fees,
arising between the entry of judgment of foreclosure and the confirmation
hearings as referred to in Section 5/15-1508 (b)(1) of the Act;

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(6)           expenses deductible from the proceeds of sale as referred to in
Section 5/15-1512 (a) and (b) of the Act;

(7)           expenses incurred and expenditures made by Mortgagee for any one
or more of the following: (i) if the Mortgaged Property or any portion thereof
constitutes one or more units under a condominium declaration, assessments
imposed on the unit owner thereof; (ii) if Mortgagor’s interest in the Mortgaged
Property is a leasehold estate under a lease or sublease, rentals or other
payments required to be made by the lessee under the terms of the lease or
sublease; (iii) premiums for casualty and liability insurance paid by Mortgagee
whether or not Mortgagee or a receiver is in possession, if reasonably required
in reasonable amounts, and all renewals thereof, without regard to the
limitation to maintaining of existing insurance in effect at the time any
receiver or mortgagee takes possession of the Mortgage Property imposed by
Section 5/15-1704(c)(1) of Act; (iv) repair or restoration of damage or
destruction in excess of available insurance proceeds or condemnation awards;
(v) payments  deemed by Mortgagee to be required for the benefit of the
Mortgaged Property or required to be made by the owner of the Mortgaged Property
under any grant or declaration of easement, easement agreement, agreement with
any adjoining land owners or instruments creating covenants or restrictions for
the benefit of or affecting the Mortgaged Property; (vi) shared or common
expense assessments payable to any association or corporation in which the owner
of the Mortgaged Property is a member in any way affecting the Mortgaged
Property; (vii) if the loan secured hereby is a construction loan, as may be
authorized by the applicable commitment, loan agreement or other agreement;
(viii) payments required to be paid by Mortgagor or Mortgagee pursuant to any
lease or other agreement for occupancy of the Mortgaged Property; and (ix) if
the Mortgage is insured, payment of FHA or private mortgage insurance required
to keep such insurance in force.

All Protective Advances shall be so much additional indebtedness secured by this
Mortgage, and shall become immediately due and payable without notice and with
interest thereon from the date of the advance until paid at the rate of interest
payable after default under the terms of the Credit Agreement.

This Mortgage shall be a lien for all Protective Advances as to subsequent
purchasers and judgment creditors from the time this Mortgage is recorded
pursuant to Subsection (b)(5) of Section 15-1302 of the Act.

(d)           In addition to any provision of this Mortgage authorizing the
Mortgagee to take or be placed in possession of the Mortgaged Property, or for
the appointment of a receiver, Mortgagee shall have the right, in accordance
with Sections 15-1701 and 15-1702 of the Act, to be placed in possession of the
Mortgaged Property or at its request to have a receiver appointed, and such
receiver, or Mortgagee, if and when placed in possession, shall have, in
addition to any other powers provided in this Mortgage, all rights, powers,
immunities, and duties as provided for in Sections 15-1701 and 15-1703 of the
Act; and

(e)           Mortgagor acknowledges that the Mortgaged Property does not
constitute agricultural real estate, as said term is defined in Section 15-1201
of the Act or residential real estate as defined in Section 15-1219 of the Act. 
Pursuant to Section 15-1601(b) of the Act, Mortgagor hereby waives any and all
right of reinstatement or redemption.

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IN WITNESS WHEREOF, Mortgagor has on the date set forth in the acknowledgement
hereto, effective as of the date first above written, caused this instrument to
be duly EXECUTED AND DELIVERED by authority duly given.

MORTGAGOR:

 

                                                                        ,

 

 

a

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

S-1

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STATE OF

)

 

) ss.:

COUNTY OF

)

 

I,                                                       , a Notary Public in
and for said County and State, DO HEREBY CERTIFY, that  on the         day of
            , 200 ,                                       , personally known to
me to be the                                                 of
                                              , a
                                       , appeared before me and first being duly
sworn by me acknowledged that he/she signed the foregoing instrument in the
capacity therein set forth and acknowledged that he/she signed and delivered the
said instrument as his/her free and voluntary act and as the free and voluntary
act and deed of said corporation, for the uses and purposes therein set forth
and that the statements therein contained are true.

In Witness Whereof, I have hereunto set my hand and Notarial Seal, this       
day of             , 200  .

 

 

 

Notary Public

 

My Commission Expires:

 

N-1

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EXHIBIT A

Legal Description of premises located at
                                             :

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