Exhibit
10.1


 


CREDIT
AGREEMENT


 


DATED AS OF
AUGUST 4, 2008


 


AMONG


 


UNOLA CORP.,


as
Borrower,


 


THE LENDERS LISTED HEREIN,


as
Lenders,


 


WELLS FARGO BANK, NATIONAL
ASSOCIATION,


as
Administrative Agent


 


WELLS FARGO BANK, NATIONAL
ASSOCIATION,


as
Lead Arranger


 


LA SALLE
BANK NATIONAL ASSOCIATION,


as
Syndication Agent


 


ING
(U.S.) CAPITAL CORPORATION,


as
Documentation Agent


 

















 


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

  	
   

  	
  35

  
	
  1.3

  	
  Other Definitional Provisions and Rules of
  Construction

  	
   

  	
  35

  
	
  SECTION 2.

  	
  AMOUNTS AND TERMS OF COMMITMENTS
  AND LOANS

  	
   

  	
  36

  
	
  2.1

  	
  Commitments; Making of Loans; the Register; Optional
  Notes

  	
   

  	
  36

  
	
  2.2

  	
  Interest on the Loans

  	
   

  	
  44

  
	
  2.3

  	
  Fees

  	
   

  	
  48

  
	
  2.4

  	
  Repayments, Prepayments and Reductions of Revolving
  Loan Commitment Amount; General Provisions Regarding Payments; Application of
  Proceeds of Collateral and Payments Under Guaranty

  	
   

  	
  50

  
	
  2.5

  	
  Use of Proceeds

  	
   

  	
  60

  
	
  2.6

  	
  Special Provisions Governing Eurodollar Rate Loans

  	
   

  	
  60

  
	
  2.7

  	
  Increased Costs; Taxes; Capital Adequacy

  	
   

  	
  62

  
	
  2.8

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

  	
   

  	
  67

  
	
  2.9

  	
  Replacement of a Lender

  	
   

  	
  67

  
	
  SECTION 3.

  	
  LETTERS OF CREDIT

  	
   

  	
  68

  
	
  3.1

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

  	
   

  	
  68

  
	
  3.2

  	
  Letter of Credit Fees

  	
   

  	
  71

  
	
  3.3

  	
  Drawings and Reimbursement of Amounts Paid Under
  Letters of Credit

  	
   

  	
  72

  
	
  3.4

  	
  Obligations Absolute

  	
   

  	
  75

  
	
  3.5

  	
  Nature of Issuing Lenders’ Duties

  	
   

  	
  76

  
	
  SECTION 4.

  	
  CONDITIONS TO LOANS AND LETTERS
  OF CREDIT

  	
   

  	
  77

  
	
  4.1

  	
  Conditions to Effectiveness of Agreement

  	
   

  	
  77

  
	
  4.2

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

  	
   

  	
  77

  
	
  4.3

  	
  Conditions to All Loans

  	
   

  	
  84

  
	
  4.4

  	
  Conditions to Letters of Credit

  	
   

  	
  85

  
					



 


i

















 


	
  SECTION 5.

  	
  COMPANY’S REPRESENTATIONS AND
  WARRANTIES

  	
   

  	
  85

  
	
  5.1

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

  	
   

  	
  85

  
	
  5.2

  	
  Authorization of Borrowing, etc.

  	
   

  	
  86

  
	
  5.3

  	
  Financial Condition

  	
   

  	
  87

  
	
  5.4

  	
  No Material Adverse Change; No Restricted Junior
  Payments

  	
   

  	
  87

  
	
  5.5

  	
  Title to Properties; Liens; Real Property;
  Intellectual Property

  	
   

  	
  87

  
	
  5.6

  	
  Litigation; Adverse Facts

  	
   

  	
  88

  
	
  5.7

  	
  Payment of Taxes

  	
   

  	
  89

  
	
  5.8

  	
  Performance of Agreements

  	
   

  	
  89

  
	
  5.9

  	
  Governmental Regulation

  	
   

  	
  89

  
	
  5.10

  	
  Securities Activities

  	
   

  	
  89

  
	
  5.11

  	
  Employee Benefit Plans

  	
   

  	
  89

  
	
  5.12

  	
  Certain Fees

  	
   

  	
  90

  
	
  5.13

  	
  Environmental Protection

  	
   

  	
  90

  
	
  5.14

  	
  Employee Matters

  	
   

  	
  91

  
	
  5.15

  	
  Solvency

  	
   

  	
  91

  
	
  5.16

  	
  Matters Relating to Collateral

  	
   

  	
  91

  
	
  5.17

  	
  Disclosure

  	
   

  	
  92

  
	
  5.18

  	
  Subordinated Indebtedness

  	
   

  	
  93

  
	
  5.19

  	
  Related Agreements

  	
   

  	
  93

  
	
  5.20

  	
  Reporting to IRS

  	
   

  	
  93

  
	
  5.21

  	
  Foreign Assets Control Regulations, etc.

  	
   

  	
  93

  
	
  SECTION 6.

  	
  COMPANY’S AFFIRMATIVE COVENANTS

  	
   

  	
  94

  
	
  6.1

  	
  Financial Statements and Other Reports

  	
   

  	
  94

  
	
  6.2

  	
  Existence, etc.

  	
   

  	
  99

  
	
  6.3

  	
  Payment of Taxes and Claims; Tax

  	
   

  	
  99

  
	
  6.4

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

  	
   

  	
  99

  
	
  6.5

  	
  Inspection Rights; Lender Meeting

  	
   

  	
  101

  
	
  6.6

  	
  Compliance with Laws, etc.

  	
   

  	
  101

  
	
  6.7

  	
  Environmental Matters

  	
   

  	
  101

  
					



 


ii

















 


	
  6.8

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

  	
   

  	
  103

  
	
  6.9

  	
  Matters Relating to Additional Real Property
  Collateral

  	
   

  	
  104

  
	
  6.10

  	
  Interest Rate Protection

  	
   

  	
  104

  
	
  6.11

  	
  Other Post-Closing Matters

  	
   

  	
  105

  
	
  SECTION 7.

  	
  COMPANY’S NEGATIVE COVENANTS

  	
   

  	
  105

  
	
  7.1

  	
  Indebtedness

  	
   

  	
  105

  
	
  7.2

  	
  Liens and Related Matters

  	
   

  	
  107

  
	
  7.3

  	
  Investments; Acquisitions

  	
   

  	
  109

  
	
  7.4

  	
  Contingent Obligations

  	
   

  	
  112

  
	
  7.5

  	
  Restricted Junior Payments

  	
   

  	
  113

  
	
  7.6

  	
  Financial Covenants

  	
   

  	
  114

  
	
  7.7

  	
  Restriction on Fundamental Changes; Asset Sales

  	
   

  	
  116

  
	
  7.8

  	
  Consolidated Capital Expenditures

  	
   

  	
  118

  
	
  7.9

  	
  Transactions with Shareholders and Affiliates

  	
   

  	
  119

  
	
  7.10

  	
  Sales and Lease-Backs

  	
   

  	
  120

  
	
  7.11

  	
  Conduct of Business

  	
   

  	
  121

  
	
  7.12

  	
  Fiscal Year

  	
   

  	
  121

  
	
  SECTION 8.

  	
  EVENTS OF DEFAULT

  	
   

  	
  121

  
	
  8.1

  	
  Failure to Make Payments When Due

  	
   

  	
  121

  
	
  8.2

  	
  Default in Other Agreements

  	
   

  	
  121

  
	
  8.3

  	
  Breach of Certain Covenants

  	
   

  	
  122

  
	
  8.4

  	
  Breach of Warranty

  	
   

  	
  122

  
	
  8.5

  	
  Other Defaults Under Loan Documents

  	
   

  	
  122

  
	
  8.6

  	
  Involuntary Bankruptcy; Appointment of Receiver,
  etc.

  	
   

  	
  122

  
	
  8.7

  	
  Voluntary Bankruptcy; Appointment of Receiver, etc.

  	
   

  	
  123

  
	
  8.8

  	
  Judgments and Attachments

  	
   

  	
  123

  
	
  8.9

  	
  Dissolution

  	
   

  	
  123

  
	
  8.10

  	
  Employee Benefit Plans

  	
   

  	
  124

  
	
  8.11

  	
  Change in Control

  	
   

  	
  124

  
	
  8.12

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

  	
   

  	
  124

  
					



 


iii

















 


	
  8.13

  	
  Conduct of Business By Holdings

  	
   

  	
  124

  
	
  8.14

  	
  Conduct of Business By Dormant Subsidiaries

  	
   

  	
  124

  
	
  8.15

  	
  Failure to Consummate Acquisition or Merger

  	
   

  	
  125

  
	
  SECTION 9.

  	
  ADMINISTRATIVE AGENT

  	
   

  	
  125

  
	
  9.1

  	
  Appointment

  	
   

  	
  125

  
	
  9.2

  	
  Powers and Duties; General Immunity

  	
   

  	
  127

  
	
  9.3

  	
  Independent Investigation by Lenders; No
  Responsibility For Appraisal of Creditworthiness

  	
   

  	
  128

  
	
  9.4

  	
  Right to Indemnity

  	
   

  	
  129

  
	
  9.5

  	
  Resignation of Agents; Successor Administrative
  Agent and Swing Line Lender

  	
   

  	
  129

  
	
  9.6

  	
  Collateral Documents and Guaranties

  	
   

  	
  130

  
	
  9.7

  	
  Duties of Other Agents

  	
   

  	
  131

  
	
  9.8

  	
  Administrative Agent May File Proofs of Claim

  	
   

  	
  131

  
	
  SECTION 10.

  	
  MISCELLANEOUS

  	
   

  	
  132

  
	
  10.1

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

  	
   

  	
  132

  
	
  10.2

  	
  Expenses

  	
   

  	
  136

  
	
  10.3

  	
  Indemnity

  	
   

  	
  137

  
	
  10.4

  	
  Set-Off

  	
   

  	
  138

  
	
  10.5

  	
  Ratable Sharing

  	
   

  	
  139

  
	
  10.6

  	
  Amendments and Waivers

  	
   

  	
  139

  
	
  10.7

  	
  Independence of Covenants

  	
   

  	
  141

  
	
  10.8

  	
  Notices; Effectiveness of Signatures

  	
   

  	
  141

  
	
  10.9

  	
  Survival of Representations, Warranties and
  Agreements

  	
   

  	
  143

  
	
  10.10

  	
  Failure or Indulgence Not Waiver; Remedies
  Cumulative

  	
   

  	
  143

  
	
  10.11

  	
  Marshalling; Payments Set Aside

  	
   

  	
  143

  
	
  10.12

  	
  Severability

  	
   

  	
  144

  
	
  10.13

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

  	
   

  	
  144

  
	
  10.14

  	
  Release of Security Interest or Guaranty

  	
   

  	
  144

  
	
  10.15

  	
  Applicable Law

  	
   

  	
  145

  
	
  10.16

  	
  Construction of Agreement; Nature of Relationship

  	
   

  	
  145

  
					



 


iv

















 


	
  10.17

  	
  Consent to Jurisdiction and Service of Process

  	
   

  	
  145

  
	
  10.18

  	
  Waiver of Jury Trial

  	
   

  	
  146

  
	
  10.19

  	
  Confidentiality

  	
   

  	
  147

  
	
  10.20

  	
  Counterparts; Effectiveness

  	
   

  	
  148

  
	
   

  	
   

  	
   

  
	
  Signature pages

  	
   

  	
  S-1

  



 


v

















 


EXHIBITS


 


	
  I

  	
  FORM OF NOTICE OF BORROWING

  
	
  II

  	
  FORM OF NOTICE OF CONVERSION/CONTINUATION

  
	
  III

  	
  FORM OF REQUEST FOR ISSUANCE

  
	
  IV

  	
  FORM OF TRANCHE A TERM NOTE

  
	
  V

  	
  FORM OF TRANCHE B TERM NOTE

  
	
  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 ASSIGNMENT AGREEMENT

  
	
  XI

  	
  FORM OF FINANCIAL CONDITION CERTIFICATE

  
	
  XII

  	
  FORM OF GUARANTY

  
	
  XIII

  	
  FORM OF SECURITY AGREEMENT

  
	
  XIV

  	
  FORM OF MORTGAGE

  
	
  XV

  	
  FORM OF NOTICE OF PREPAYMENT

  



 


vi

















 


SCHEDULES


 


	
  2.1

  	
  COMMITMENTS

  
	
  3.1

  	
  EXISTING LETTERS OF CREDIT

  
	
  4.2K

  	
  CLOSING DATE MORTGAGED PROPERTIES

  
	
  5.1

  	
  CORPORATE STRUCTURE

  
	
  5.5B

  	
  REAL PROPERTY

  
	
  5.5C

  	
  INTELLECTUAL PROPERTY

  
	
  5.6

  	
  LITIGATION

  
	
  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

  



 


vii
















 


UNOLA
CORP.


 


CREDIT
AGREEMENT


 


This CREDIT AGREEMENT (this “Agreement”) is
dated as of August 4, 2008 and entered into by and among UNOLA CORP., a Delaware corporation (“Acquisition
Sub”), THE FINANCIAL INSTITUTIONS
PARTY HERETO FROM TIME TO TIME (each individually referred to herein
as a “Lender” and collectively as “Lenders”), WELLS FARGO BANK, NATIONAL
ASSOCIATION, as sole lead arranger and sole book manager (in such
capacity, “Lead Arranger”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative
agent for Lenders (in such capacity, “Administrative Agent”).


 


RECITALS


 


WHEREAS, at the Effective Time (capitalized
terms used in these recitals without definition shall have the meanings
assigned to such terms in Section 1), FTD Group, Inc. (“FTD”) shall be merged with and into Acquisition Sub,
pursuant to the Merger Agreement, with FTD being the surviving corporation (the
“Merger”) and becoming an indirect
wholly-owned subsidiary of United Online, Inc. (“United
Online”);


 


WHEREAS, Lenders, at the request of Acquisition
Sub, have agreed to extend certain credit facilities to Acquisition Sub, the
proceeds of which will be used together with the Cash proceeds of a capital
contribution by Holdings, to (i) fund the Acquisition Financing
Requirements and (ii) 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 Subsidiary Guarantors 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, Lead Arranger and Administrative Agent
agree as follows:


 


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
Merger Agreement.


 


“Acquisition Financing Requirements” means the aggregate
amount of cash necessary to (i) finance the purchase price payable in
connection with the Acquisition, (ii) consummate the Refinancing, and (iii) pay
Transaction Costs.


 


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


 


“Additional Contributions” means the proceeds of equity
issuances by Holdings and capital contributions by any direct or indirect
shareholder of Holdings, contributed to Company after the Closing Date.


 


“Additional Mortgaged Property” has the meaning assigned to
that term in subsection 6.9.


 


“Additional Mortgages” has the meaning assigned to that term
in subsection 6.9.


 


“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.


 


“Affiliated Funds” means Funds that are administered, advised
or managed by (i) a single entity or (ii) entities that are
Affiliates.


 


2

















 


“Agents” means Administrative Agent and Lead Arranger.


 


“Aggregate Amounts Due” has the meaning assigned to that term
in subsection 10.5.


 


“Approved Fund” means a Fund that is administered, advised or
managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an
entity or an Affiliate of an entity that administers, advises 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) pursuant to subsection 7.7(iv) of (i) any of the stock
of any of 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) Cash Equivalents, (c) sales, assignments, transfers or
dispositions of accounts in the ordinary course of business for purposes of
collection, and (d) 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 $1,000,000 or less).


 


“Assignment Agreement” means an Assignment and Assumption in
substantially the form of Exhibit X 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.


 


“Beneficially Own” has the meaning assigned to that term in Rules 13d-3
and 13d-5 of the Exchange Act.  The term “Beneficial Owner” shall have a corresponding meaning.


 


“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 California or
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 


 


3

















 


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 of or other equity
interests in 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 or
insured as to interest and principal by the United States Government or any
agency or instrumentality thereof 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 two years after such date and having, at the time
of the acquisition thereof, the one of the two highest ratings obtainable from
either Standard & Poor’s Rating Services (“S&P”)
or Moody’s Investors Service, Inc. (“Moody’s”) (or
reasonably equivalent ratings of another internationally recognized rating
agency); (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 at the time of
investment (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) repurchase obligations with a term of not more
than 28 days for underlying securities of the types described in clauses (i) and
(v) above entered into with any financial institution meeting the
qualifications specified in clause (iv) above; (vii) shares of any
money market mutual fund that has at least 95% of its assets invested
continuously in the types of investments referred to in clauses (i) through
(vi) above; or (viii) with respect to Investments by any Foreign
Subsidiary, any demand deposit account or other Investment having credit
quality (in the reasonable judgment of Company) similar to the foregoing
(taking into account Investments available to such Foreign Subsidiary in the
jurisdiction in which such Foreign Subsidiary operates) and available for
investment in the jurisdiction where such Foreign Subsidiary operates.


 


“Cash Merger Consideration” has the meaning given to that
term in the Merger Agreement.


 


“Change in Control”
means the occurrence of any one of the following:


 


4

















 


(i)            Holdings at any
time ceases to legally own and Beneficially Own and control 100% of the Voting
Stock of Company;


 


(ii)           prior to an IPO,
United Online ceases to Beneficially Own Voting Stock of Holdings representing
a majority of the voting power (in an election of members of the Governing Body
of Holdings) of the total outstanding Voting Stock of Holdings.;


 


(iii)          upon and following
an IPO, (i) United Online ceases to Beneficially Own Voting Stock of
Holdings representing more than 35% of the voting power (in an election of
members of the Governing Body of Holdings) of the total outstanding Voting
Stock of Holdings or (ii) any “person” or “group” (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act), other than United
Online and its wholly-owned Subsidiaries, is or becomes the Beneficial Owner of
Voting Stock of Holdings representing a higher percentage of the voting power
(in an election of members of the Governing Body of Holdings) of the total
outstanding Voting Stock of Holdings than is Beneficially Owned by United
Online and its wholly-owned Subsidiaries at such time; or


 


(iv)          upon and following
an IPO, during any period of two consecutive years, individuals who at the
beginning of such period constituted the Governing Body of Holdings (together
with any new members whose election to such Governing Body or whose nomination
for election was approved by a vote of a majority of the members of the
Governing Body of Holdings, which members comprising such majority are then
still in office and were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Governing Body of Holdings.


 


For
purposes of this definition, a person shall not be deemed to have Beneficial
Ownership of Capital Stock subject to a stock purchase agreement, merger
agreement or similar agreement until the consummation of the transactions
contemplated by such agreement.


 


“Change in Law” means the occurrence, after the date of this
Agreement, of any of the following:  (i) the
adoption or taking effect of any law, rule, regulation, treaty or order, (ii) any
change in any law, rule, regulation or treaty or in the administration,
interpretation or application thereof by any Government Authority, (iii) any
determination of a court or other Government Authority or (iv) the making
or issuance of any request, guideline or directive (whether or not having the
force of law) by any Government Authority.


 


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


 


“Closing Date” means the date on which the conditions
precedent set forth in subsection 4.2 are satisfied (or waived, as applicable)
and the initial Loans are made.


 


“Closing Date Certificate” means an Officer’s Certificate of
Company, substantially in the form of Exhibit XVI annexed hereto.


 


5

















 


“Closing Date Consolidated Adjusted EBITDA”
means Consolidated Adjusted EBITDA; provided, however, that (i) the
elements thereof shall be determined in conformity with GAAP as in effect on April 30,
2008, (ii) the amount of Transaction Costs to be included shall not exceed
$10,000,000 in the aggregate, and (iii) the amount of (a) extraordinary
losses, charges and expenses and (b) unusual or non-recurring losses,
charges and expenses that would not be classified as unusual or non-recurring
under Item 10(e) of Regulation S-K to be included shall not exceed
$10,000,000 in the aggregate.


 


“Closing Date Mortgage Policies” has the meaning assigned to
that term in subsection 4.2K.


 


“Closing Date Mortgaged Property” has the meaning assigned to
that term in subsection 4.2K.


 


“Closing Date Mortgages” has the meaning assigned to that
term in subsection 4.2K.


 


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


 


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


 


“Collateral Documents” means the Security Agreement, the
Foreign Pledge 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.


 


“Commitment Letter” has the meaning assigned to that term in
subsection 4.2Q.


 


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


 


“Communications” has the meaning assigned to that term in
subsection 10.8.


 


“Company” means (i) prior to the Merger, Acquisition Sub
and (ii) upon consummation of the Merger, FTD.


 


“Company Effects” has the meaning assigned to that term in
the Merger Agreement.


 


6

















 


“Company Material Adverse Effect” has the meaning assigned to
that term in the Merger Agreement.


 


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


 


“Confidential Information Memorandum” means the Confidential
Information Memorandum dated June 2008 prepared by Lead Arranger relating
to the credit facilities evidenced by this Agreement.


 


“Consolidated Adjusted EBITDA” means,
for any period, the sum, without duplication, of the amounts for such period of
(i) Consolidated Net Income, (ii) Consolidated Interest Expense and
any amounts referred to in subsection 2.3 payable on or before the Closing
Date, (iii) provisions for Taxes based on income, (including provisions
recorded to the extent necessary to permit any corporate parent (or any
Affiliate of such corporate parent) to discharge the consolidated, combined or
other group Tax liabilities of such corporate parent and its Subsidiaries), (iv) total
depreciation expense, (v) total amortization expense, (vi) Transaction
Costs, (vii) management or employee retention or incentive expenses under
any Loan Party’s cliff bonus plan or any other bonus or incentive plan, (viii) any
foreign currency translation or transaction gains or losses (including gains or
losses related to currency remeasurements of indebtedness), (ix) all  extraordinary, unusual or non-recurring losses, charges or
expenses (minus any extraordinary, unusual or non-recurring gains (other than
the proceeds of business interruption insurance)) (it being understood and
agreed that Item 10(e) of Regulation S-K under the Securities Act of 1933
(“Regulation S-K”) 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) all
other non-Cash items, including, without limitation, non-Cash stock
compensation expenses for officers, directors, employees and consultants (other
than any such non-Cash item to the extent it represents an accrual of or
reserve for Cash expenditures in any future period), (xi) all expenses incurred
in connection with the prepayment, amendment or refinancing of Indebtedness,
and (xii) (A) any impairment charge or asset write-off or write-down, in
each case relating to an intangible asset, pursuant to Financial Accounting
Standards Board Statements No. 142 and No. 144, (B) the
amortization of intangible assets arising pursuant to Financial Accounting
Standards Board Statement No. 141, (C) the amortization or write-off
deferred financing fees and (D) the amortization of other intangible
assets, but only, in the case of clauses (ii) through (xii) above, 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 items to the extent expected to 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 (as
in effect on the Closing Date).  The
foregoing notwithstanding, for purposes of determining Consolidated Adjusted
EBITDA for any period that includes any of the months ended June 30, 2007,
July 31, 2007, August 31, 2007, September 30, 2007, October 31,
2007, November 30, 2007, December 31, 2007, January 31, 2008, February 29,
2008, March 31, 2008, April 30, 2008, and May 31, 2008,
Consolidated Adjusted EBITDA for such periods shall be deemed to be $6,900,000,
$6,500,000, $6,700,000, $8,200,000, $7,600,000, $6,500,000, $11,100,000,
$4,700,000, $11,300,000, $11,500,000, $6,700,000 and $17,300,000, respectively.
Other than for purposes of 


 


7

















 


calculating Consolidated Excess Cash Flow and
Closing Date Consolidated Adjusted EBITDA, Consolidated Adjusted EBITDA shall
be calculated on a Pro Forma Basis.  For
periods prior to the Closing Date not referenced above, Consolidated Adjusted
EBITDA shall be the Consolidated Adjusted EBITDA of FTD and its Subsidiaries
for such period.


 


“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: (i) any Permitted Acquisition consummated during such period,
(ii) capital expenditures in respect of the reinvestment of Net Asset Sale
Proceeds in accordance with the terms of subsection 2.4B(iii)(a) during
such period, and (iii) 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 the current portions of Capital Leases
and Indebtedness of Company and its Subsidiaries.


 


“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 Adjusted EBITDA and (b) the
Consolidated Working Capital Adjustment minus (ii) the sum, without
duplication, of the amounts such period, of (a) Consolidated Cash Interest
Expense, (b) scheduled repayments of the Term Loans, (c) current
taxes based on income of Company and its Subsidiaries and paid in Cash with
respect to such period (including payments under a tax sharing agreement
entered into with an Affiliate of Company permitted by subsection 7.9), (d) Consolidated
Capital Expenditures (net of any proceeds of any related financings with
respect to such expenditure), (e) Permitted Acquisitions and other
Investments permitted by subsection 7.3 net of Additional Contributions
utilized for such purpose, (f) extraordinary Cash losses added in 


 


8

















 


the calculations of Consolidated Adjusted EBITDA, (g) to
the extent expensed in a prior Fiscal Year, the amount, if any, of cliff bonus
payments made during such Fiscal Year, (h) other Cash expenses added in
the calculation of Consolidated Adjusted EBITDA, or (i) RSU Payments.


 


“Consolidated Fixed Charge Coverage Ratio” means, as of the
last day of any Fiscal Quarter, the ratio of (i) Consolidated Adjusted
EBITDA for the consecutive four Fiscal Quarters ending on such day minus the
sum of (a) current taxes based on income of Company and its Subsidiaries
and paid in Cash with respect to such period and (b) the greater of
Maintenance Consolidated Capital Expenditures (net of any proceeds of any
related financings with respect to such expenditures) for such period and
$8,000,000 to (ii) Consolidated Cash Interest Expense plus scheduled
payments of Indebtedness (as such scheduled payments of Indebtedness may be
reduced from time to time by voluntary and mandatory prepayments) for such
period; provided, however, that for purposes of determining the
Consolidated Fixed Charge Coverage Ratio as of the last day of the first three
Fiscal Quarters following the Closing Date, Consolidated Cash Interest Expense
and scheduled payments of Indebtedness shall be annualized by multiplying the
sum of actual Consolidated Cash Interest Expense and scheduled payments of
Indebtedness for the first Fiscal Quarter following the Closing Date by four,
actual Consolidated Cash Interest Expense and scheduled payments of
Indebtedness for the first two Fiscal Quarters following the Closing Date by
two, and actual Consolidated Cash Interest Expense and scheduled payments of
Indebtedness for the first three Fiscal Quarters following the Closing Date by
1.33.


 


“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 (after giving effect to all Interest
Rate Agreements and payments received or made thereunder 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, 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.


 


“Consolidated Leverage Ratio” means, as of the last day of
any Fiscal Quarter, the ratio of (i) as of such day (and without
duplication), all indebtedness of Company and its Subsidiaries for borrowed money
including but not limited to (a) senior bank Indebtedness, senior notes,
and Subordinated Indebtedness, (b) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on a
balance sheet in conformity with GAAP, (c) issued and outstanding letters
of credit, (d) guarantees in respect of borrowed money, (e) any
obligation owed for all or any part of the deferred purchase price of property
or services (excluding any such obligations incurred under ERISA and any such
obligations subject to the satisfaction of a condition or contingency but only
to the extent of the portion of such obligations subject to such condition or
contingency and only as long as such condition or contingency has not been
satisfied), which purchase price is (1) due more than six months from the
date of incurrence of the obligation in respect thereof or (2) evidenced
by a note or similar written instrument, and (f) all Indebtedness secured
by any Lien on any property or asset owned or held by Company or any of its
Subsidiaries regardless of whether the Indebtedness secured thereby 


 


9

















 


shall have been assumed by Company or such Subsidiary
or is nonrecourse to the credit of Company or such Subsidiary (excluding
insurance premium financing)  to (ii) Consolidated
Adjusted EBITDA for the consecutive four Fiscal Quarters ending on such
day.  Notwithstanding anything herein to
the contrary, the Subordinate Notes will not be deemed outstanding for the
purpose of determining the Consolidated Leverage Ratio at any time following
the legal or covenant defeasance of the Subordinated Notes.


 


“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 financial ratio to the extent otherwise
provided in the related definitions), (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 Employee Benefit Plan (other than a
Multiemployer Plan), (v) non-Cash gains and losses attributable to the
movement in the mark to market valuation of Hedging Obligations pursuant to
Financial Accounting Standards Board Statement No. 133) and (vi) (to
the extent not included in clauses (i) through (v) above) any net
extraordinary gains or net extraordinary losses.


 


“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 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 


 


10

















 


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 clauses (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.


 


“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.


 


“Defaulted Loans”  has the
meaning assigned to that term in subsection 2.1C.


 


“Defaulting Lender” has the meaning assigned to that term in
subsection 2.9.


 


“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.


 


“Dissenting Common Stock” has the meaning assigned to that
term in the Merger Agreement.


 


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


 


11

















 


“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 (i) FTD
International Corporation, a Delaware corporation, (ii) Value Network
Service, Inc., a Delaware corporation, (iii) Flowers USA, Inc.,
a Connecticut corporation, (iv) FTD Holdings, Incorporated, a Delaware
corporation and (v) Renaissance Greeting Cards, Inc., a Maine
corporation.


 


“Effective Time” has the meaning assigned to that term in the
Merger Agreement.


 


“Eligible Assignee” means (i) if the assignment includes
assignment of a Tranche A Term Loan or a Tranche B Term Loan, (a) any
Lender, (b) an Affiliate of any Lender, (c) an Approved Fund of any
Lender and (d) any other Person approved by Administrative Agent and (ii) if
the assignment includes assignment of a Revolving Loan Commitment, (a) any
Revolving Lender and (b) any other Person approved by Administrative
Agent, Issuing Bank, Swingline Lender and Company; provided that in each case,
no approval of Company shall be required during the continuance of an Event of
Default; provided further that none of Company, any Subsidiary of
Company or any Person acting at the direction of Company or any Subsidiary
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, applicable 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 and industrial hygiene (as such matters related to Hazardous
Materials), 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.


 


12
















 


“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 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 connection with any
Employee Benefit Plan; (ix) receipt from the Internal Revenue Service of
notice of the failure of any Pension Plan (or any other 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 Pension Plan to qualify for 


 


13

















 


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.


 


“Escrow” has the meaning given to that term in subsection
4.2N(iii).


 


“Escrowed Term Loans” has the meaning given to that term in
subsection 2.1C.


 


“Eurodollar Rate” means, for any Interest Rate Determination
Date, with respect to any Interest Period for a Eurodollar Rate Loan, the
greater of (i) 3.00% per annum and (ii) the rate per annum obtained
by dividing (a) 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 (b) 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, as of any date of determination, the
nominal rate of exchange of Administrative Agent in the New York foreign
exchange market for the sale of the relevant currency in exchange for Dollars
at 12:00 noon (San Francisco time) one Business Day prior to such date,
expressed as a number of units of such currency per one Dollar.


 


14

















 


“Excluded Assets” means (i) any equipment that is
covered by a certificate of title, (ii) any foreign intellectual property,
(iii) any deposit account or securities account of a Loan Party used
solely for payroll, payroll taxes and other employee wage and benefit payments,
or containing a principal balance of $2,000,000 or less, and (iv) any
other assets as to which Administrative Agent shall determine in its sole
discretion that the cost of obtaining or perfecting such lien on such assets is
excessive in relation to the benefits to the Lenders of the security afforded
thereby.


 


“Excluded Perfection Assets” means (i) any equipment
that is covered by a certificate of title, (ii) any foreign intellectual
property, (iii) any deposit account or securities account of a Loan Party
used solely for payroll, payroll taxes and other employee wage and benefit
payments, or containing a principal balance of $2,000,000 or less, (iv) any
assets, the perfection of which requires action other than the filing of a UCC
financing statement, and (v) any other assets as to which Administrative
Agent shall determine in its sole discretion that the cost of obtaining or
perfecting such lien on such assets is excessive in relation to the benefits to
the Lenders of the security afforded thereby.


 


“Excluded Taxes” means, with respect to Administrative Agent,
any Lender, or any other recipient of any payment to be made by or on account
of any obligation of Company hereunder (i) taxes that are imposed on the
overall net income (however denominated) and 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, has its principal
office, maintains its applicable lending office, or otherwise engages in
business, or (c) by any Government Authority solely as a result of a
present or former connection between such recipient and the jurisdiction of
such Government Authority (other than any such connection arising solely from
such recipient having executed, delivered or performed its obligations or
received a payment under, or enforced, any of the Loan Documents), (ii) any
branch profits taxes imposed by the United States or any similar tax imposed by
any other jurisdiction in which Company is located, and (iii) in the case
of a Lender (other than an assignee pursuant to a request of Company under
subsection 2.9), any withholding tax that (x) is imposed on amounts
payable to such Lender at the time it becomes a party hereto (or designates a
new lending office) or (y) is attributable to such Lender’s failure or
inability (other than as a result of a Change in Law) to comply with its
obligations under subsection 2.7B(iv), except to the extent that such
Lender (or its assignor, if any) was entitled, at the time of designation of a new
lending office (or assignment), to receive additional amounts from Company with
respect to such withholding tax pursuant to subsection 2.7B.


 


“Existing Credit Agreement” means that certain First
Amended and Restated Credit Agreement dated as of August 7, 2006 among FTD, Inc.,
the lenders party thereto from time to time, Wells Fargo, as administrative
agent, Mizuho Corporate Bank, Ltd. and ING Capital LLC, as co-syndication
agents, and BMO Capital Markets, as documentation agent.


 


“Existing Letters of Credit” means those letters of credit
set forth on Schedule 3.1.


 


15

















 


“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.


 


“Fee Letter” has the meaning assigned to that term in
subsection 4.2Q.


 


“Financial Officer” means the chief financial officer,
treasurer, assistant treasurer, controller or senior vice president of finance
of a corporation, partnership, trust or limited liability company.


 


“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 permitted pursuant to clauses (i)-(vi) of
subsection 7.2A) and (ii) such Lien is the only Lien (other than
Liens permitted 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 (or, if Company
changes its fiscal year, December 31 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 Lender” means any Lender that is organized under the
laws of a jurisdiction other than that in which Company is resident for tax
purposes.  For purposes of this
definition, the United States, each state thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction.


 


“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 


 


16

















 


Government Authority other than the United States, 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 Subsidiary Guarantor that
owns Capital Stock of one or more Foreign Subsidiaries organized in such
country, in form and substance satisfactory to Administrative Agent.


 


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


 


“FTD” has the meaning assigned to that term in the recitals
of this Agreement.


 


“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 Office” means (i) the office of
Administrative Agent and Swing Line Lender located at 201 Third Street, Eighth
Floor, MAC A0187-08A San Francisco, California 94103 or (ii) such other
office of Administrative Agent and Swing Line Lender as may from time to time
hereafter be designated as such in a written notice delivered by Administrative
Agent and Swing Line Lender to Company and each Lender.


 


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


 


“GAAP” means, subject to the limitations on the application
thereof set forth in subsection 1.2, accounting principles generally
accepted in the United States 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).


 


17

















 


“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.


 


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


 


“Guaranty” means the Guaranty substantially in the form of Exhibit XII
annexed hereto.


 


“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.


 


“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,
location, Release, threatened Release, discharge, placement, generation,
transportation, processing, 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.


 


“Hedging Obligations”
means obligations under or with respect to Hedge Agreements.


 


“Holdings” means UNOL Intermediate, Inc., a Delaware
corporation.


 


“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 


 


18

















 


drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money (other than trade
payables in the ordinary course), (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, trade payables or any such obligations which
are not reflected as a liability on Company’s balance sheet under GAAP), 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.


 


“Indemnified Taxes” means Taxes other than Excluded Taxes.


 


“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 owned or
held by, or used in the conduct of the business of, Company or its
Subsidiaries.


 


“Interest Payment Date” means (i) with respect to any
Base Rate Loan, each March 31, June 30, September 30 and December 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 loan, advance (other 


 


19

















 


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 (but with deductions
for all amounts received in Cash or Cash Equivalents with respect to such
Investment, whether as principal, dividends, interest or otherwise).


 


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


 


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


 


“IPO” means
the first underwritten public offering by any Loan Party of its Capital Stock
after the Closing Date pursuant to a registration statement filed with the
Securities and Exchange Commission in accordance with the Securities Act.


 


“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 3.1B(ii) or, with
respect to Existing Letters of Credit, the applicable Revolving Lender that
issued such Existing Letter of Credit.


 


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


 


“Lead Arranger” has the meaning given to that term in the
introductory paragraph of this Agreement.


 


“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.


 


20

















 


“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.


 


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


 


“Loan” or “Loans” means
one or more of the Loans made by Lenders to Company pursuant to
subsection 2.1A.


 


“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 and the Collateral Documents.


 


“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.


 


“Maintenance Consolidated Capital Expenditures” means any
Consolidated Capital Expenditures by Company or any of its Subsidiaries that
are made to maintain, repair or replace (with assets of the same general type,
quality and purpose), in the ordinary course of business, the condition or
usefulness of property of Company and its Subsidiaries, but that are not
properly chargeable to repairs and maintenance in accordance with GAAP, and
excluding any Consolidated Capital Expenditures which add to or improve the
value or usefulness of any such property.


 


“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 a material adverse effect (i) upon
the business operations, assets or financial condition of Holdings and its
Subsidiaries taken as a whole or (ii) upon the ability of any Loan Party
to satisfy, or of Administrative Agent or Lenders to enforce, the Obligations.


 


21

















 


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


 


“Merger” has the meaning assigned to that term in the
recitals to this Agreement.


 


“Merger Agreement” means that certain Agreement and Plan of
Merger dated as of April 30, 2008, by and among United Online, Acquisition
Sub and FTD.


 


“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 XIV
annexed hereto or in such other form as may be approved by Administrative Agent
in its reasonable discretion, in each case with such reasonable 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.


 


“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 costs
incurred in connection with such Asset Sale, including (i) taxes
reasonably paid or estimated to be actually payable within two years of the
date of such Asset Sale (whether by Company, any Subsidiary of Company or any
parent of Company or pursuant to a tax sharing agreement entered into with an
Affiliate of Company permitted by subsection 7.9) 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 at or within 30 days of the time of
receipt of such Cash payment 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.


 


22
















 


“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 estimated to be actually payable within two years of the date
of such event (whether by Company, any Subsidiary of Company or any parent of
Company or pursuant to a tax sharing agreement entered into with an Affiliate
of Company permitted by subsection 7.9) as a result of any gain recognized in
connection with such event and actual and reasonable documented costs and
expenses 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.


 


“Net Securities Proceeds” means the Cash proceeds (net of
underwriting discounts and commissions and other 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.


 


“Non-Consenting Lender” has the meaning assigned to that term
in subsection 2.9.


 


“Non-Pro Rata Basket”  has the
meaning assigned to that term in subsection 2.4B(iv)(a).


 


“Notes” means one or more of the Tranche A Term Notes,
Tranche B 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 XV 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).


 


23

















 


“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 Responsible
Officers of such Person or one or more Responsible 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.


 


“Organizational Documents” means the documents (including
Bylaws, if applicable) pursuant to which a Person that is a corporation,
partnership, trust or limited liability company is organized.


 


“Other Taxes” means all present or future stamp or
documentary taxes or any other excise or property taxes, charges, fees,
expenses or similar levies arising from any payment made hereunder or under any
other Loan Document or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Loan Document.


 


“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 Acquisition” means the acquisition of all or
substantially all of the assets of any Person, all or substantially all of a
division or line of business of any Person or more than 50% of the Capital
Stock of any Person, in each case, excluding the Acquisition.


 


“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;


 


24

















 


(ii)           Liens
of landlords for unpaid rent, 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 similar contractual Liens of such Persons), 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 five 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 on or deposits of Cash or Cash Equivalents made in the ordinary course
of business in connection with (or to secure letters of credit or bankers
acceptances issued in connection with) workers’ compensation, unemployment
insurance and other types of social security, or to secure the performance of
statutory 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 the Collateral as security
for the Obligations;


 


(vi)          easements,
rights-of-way, restrictions, access agreements, licenses, encroachments, and
other exceptions to and/or 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 and, subject to subsection 6.11, UCC financing 


 


25

















 


statements previously filed and not yet terminated in
connection with Indebtedness that has been repaid;


 


(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 Government
Authority 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;


 


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


 


(xv)          Liens
arising by virtue of deposits made in the ordinary course of business to secure
liability for premiums to insurance carriers and Liens on insurance policies or
proceeds thereof securing obligations relating to the financing of insurance
premiums;


 


(xvi)         Liens
on any cash earnest money deposits made by Company or any of its Subsidiaries
in connection with any letter of intent or purchase agreement permitted by
subsection 7.3;


 


(xvii)        the
existence of an “equal and ratable” clause in any Subordinated Indebtedness
(but not any security interests granted pursuant thereto);


 


(xviii)       Liens
on amounts deposited to defease the Subordinated Notes or amounts held by the
paying agent in connection with the tender for the Subordinated Notes; and


 


(xiv)         Liens securing Indebtedness in respect
of sale and lease-back transactions permitted by subsection 7.10.


 


“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 Government
Authorities.


 


26

















 


“Platform” means an electronic delivery system,
such as IntraLinks or a substantially similar electronic system.


 


“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.


 


“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 Forma Basis” means, with respect to compliance with any
test or covenant hereunder, compliance with such test or covenant after giving
effect to (i) any proposed Permitted Acquisition, (ii) any Asset Sale
of a Subsidiary or operating entity for which historical financial statements
for the relevant period are available or (iii) any incurrence of
Indebtedness to the extent such incurrence is for the purpose of financing any
proposed Permitted Acquisition (including pro forma adjustments arising out of
events which are directly attributable to the proposed Permitted Acquisition,
Asset Sale or incurrence of Indebtedness, are factually supportable and are
expected to have a continuing impact, in each case as determined on a basis
consistent with Article 11 of Regulation S-X of the Securities Act, as
interpreted by the Staff of the Securities and Exchange Commission, and such
other adjustments as are reasonably satisfactory to Administrative Agent and
Company, in each case as certified by a Financial Officer of Company) using,
for purposes of determining such compliance, the historical financial
statements of all entities or assets so acquired or sold and the consolidated
financial statements of Company and its Subsidiaries, which shall be reformulated
as if such Permitted Acquisitions or Asset Sale, and all other Permitted
Acquisitions or Asset Sales that have been consummated during the period, and
any Indebtedness or other liabilities to be incurred or repaid in connection
therewith had been consummated and incurred or repaid at the beginning of such
period (and assuming that such Indebtedness to be incurred bears interest
during any portion of the applicable measurement period prior to the relevant
acquisition at the weighted average of the interest rates applicable to
outstanding Loans incurred during such period).


 


“Pro Forma Compliance” means, at any date of determination,
that Company shall be in pro forma compliance with any or all of the covenants
set forth in subsections 7.6A and 7.6B as applicable, as of the date of such
determination or the last day of the most recently 


 


27

















 


completed Fiscal Quarter, as the case may be (computed
on the basis of (i) balance sheet amounts as of such date and (ii) income
statement amounts for the most recently completed period of four consecutive
Fiscal Quarters for which financial statements shall have been delivered to
Administrative Agent and calculated on a Pro Forma Basis in respect of the
event giving rise to such determination).


 


“Pro Rata Share” means (i) with respect to all payments,
computations and other matters relating to the Tranche A Term Loan Commitment
or the Tranche A Term Loan of any Lender, the percentage obtained by dividing
(x) the Tranche A Term Loan Exposure of that Lender by (y) the
aggregate Tranche A Term Loan Exposure of all Lenders, (ii) with respect
to all payments, computations and other matters relating to the Tranche B Term
Loan Commitment or the Tranche B Term Loan of any Lender, the percentage
obtained by dividing (x) the Tranche B Term Loan Exposure of that
Lender by (y) the aggregate Tranche B Term Loan Exposure of all
Lenders, (iii) 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 by dividing (x) the
Revolving Loan Exposure of that Lender by (y) the aggregate
Revolving Loan Exposure of all Lenders, and (iv) for all other purposes
with respect to each Lender, the percentage obtained by dividing (x) the
sum of the Tranche A Term Loan Exposure of that Lender plus the Tranche
B Term Loan Exposure of that Lender plus the Revolving Loan Exposure of
that Lender by (y) the sum of the aggregate Tranche A Term Loan
Exposure of all Lenders plus the aggregate Tranche B 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), (iii) and (iv) of the
preceding sentence is, as of the Signing Date, set forth opposite the name of
that Lender in Schedule 2.1 annexed hereto.


 


“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.


 


“Refinancing” means (i) the repayment of all amounts
outstanding under the Existing Credit Agreement (except for the Existing
Letters of Credit) and (ii) the acquisition by Company of its 7.75% senior
subordinated notes pursuant to a tender offer and consent solicitation and the
legal or covenant defeasance of any such notes not so acquired in such tender
offer.


 


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


 


“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.


 


28

















 


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


 


“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.


 


“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, (ii) for the Class of Lenders having
Tranche A Term Loan Exposure, Lenders having or holding more than 50% of the
aggregate Tranche A Term Loan Exposure of all Lenders, and (iii) for the Class of
Lenders having Tranche B Term Loan Exposure, Lenders having or holding more
than 50% of the aggregate Tranche B Term Loan Exposure of all Lenders.


 


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


 


“Responsible Officer” means the president, chief executive
officer, 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.


 


“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.


 


29

















 


“Revolving Loan Commitment” means the commitment of a
Revolving Lender to make Revolving Loans to Company pursuant to
subsection 2.1A(iii), 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 the fifth
anniversary of the Closing Date.


 


“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
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(iii).


 


“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.


 


“RSU Payments” means payments by Company or Restricted Junior
Payments made by Company to Holdings (i) to reimburse United Online for
the purchase of, or for Holdings to purchase, restricted stock or restricted
stock units of United Online granted to employees, directors and officers of
Holdings, Company and its Subsidiaries for the purpose of satisfying
withholding tax obligations related to the vesting of restricted stock or
restricted stock units of such employees, directors and officers in an
aggregate amount not to exceed $2,500,000 per calendar year and (ii) with
respect to (or to reimburse United Online for) dividends and distributions (and
similar payments) paid in respect of restricted stock or restricted stock units
(and payments to satisfy withholding tax obligations related thereto) of United
Online granted to officers, directors or employees of Holdings, Company and its
Subsidiaries in an aggregate amount not to exceed $2,500,000 per calendar year.


 


“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, 


 


30

















 


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 XIII
annexed hereto.


 


“Significant Subsidiary”
means any Subsidiary 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.


 


“Signing Date” means August 4, 2008.


 


“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.


 


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


 


“Specified Representations” means (i) the representations
set forth in subsections 5.1A, 5.2A, 5.2D, 5.10 and 5.16A, (ii) the
representation that all written information, other than the Projections,
forward looking information and information of a general economic or industry
nature, which has been made available to Administrative Agent or Lenders by
United Online or any of its representatives in connection with the Transactions
is, when taken as a 


 


31

















 


whole, complete and correct in all material respects
and does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements contained therein not materially
misleading in light of the circumstances under which such statements were made,
and (iii) the representation that all financial projections concerning FTD
and its Subsidiaries that have been made available to Administrative Agent or
Lenders by United Online or any of its representatives in connection with the
Transactions (the “Projections”)
have been prepared in good faith based upon assumptions that were believed by
the preparer thereof to be reasonable at the time made, it being understood and
agreed that the Projections are not a guarantee of financial performance and
actual results may differ from the Projections and such differences may be
material.


 


“Standby Letter of Credit” means any letter of credit or
similar instrument other than a Commercial Letter of Credit.


 


“Subject Lender” has the meaning assigned to that term in
subsection 2.9.


 


“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, pursuant
to which the Subordinated Notes were issued.


 


“Subordinated Notes” means the 7.75% Senior Subordinated
Notes due 2014 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 Guaranty on the Closing Date or from
time to time thereafter pursuant to subsection 6.8.  For the avoidance of doubt, in no event shall
any Dormant Subsidiary or Interflora, Inc. be a Subsidiary Guarantor.


 


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


 


“Swap Counterparty” means any person that was a Lender or an
Affiliate of a Lender at the time that it entered into a Hedge Agreement with
Company or one of its Subsidiaries, the obligations under which are secured
pursuant to the Collateral Documents and guarantied pursuant to the Guaranty.


 


32
















 


“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(iv).


 


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


 


“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.


 


“Synthetic Lease Obligation” means the monetary obligation of
a Person under (i) a so-called synthetic, off-balance sheet or tax
retention lease, or (ii) 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, fee, assessment, deduction,
withholding or other charge imposed, levied, collected, withheld or assessed by
any Government Authority, including interest, penalties, additions to tax and
any similar liabilities with respect thereto.


 


“Term Loans” means, collectively, the Tranche A Term Loans
and the Tranche B Term Loans.


 


“Title Company” means one or more title insurance companies
reasonably satisfactory to Administrative Agent.


 


“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.


 


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


 


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


 


“Tranche A Term Loan Maturity Date” means the fifth
anniversary of the Closing Date.


 


33

















 


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


 


“Tranche A Term Notes” means any promissory notes of Company
issued pursuant to subsection 2.1E to evidence the Tranche A Term Loans of
any Lenders, substantially in the form of Exhibit IV annexed
hereto.


 


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


 


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


 


“Tranche B Term Loan Maturity Date” means the sixth
anniversary of the Closing Date.


 


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


 


“Tranche B Term Notes” means any promissory notes of Company
issued pursuant to subsection 2.1E to evidence the Tranche B Term Loans of
any Lenders, substantially in the form of Exhibit V annexed hereto.


 


“Transaction” means the Acquisition, Merger, refinancing of
all Indebtedness outstanding under the Existing Credit Agreement and other
related transactions.


 


“Transaction Costs” means the fees, costs and expenses
payable by Holdings or any of its Subsidiaries in connection with the
Transaction.


 


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


 


“Unasserted Obligations” means, at any time, Obligations for
taxes, costs, indemnifications, reimbursements, damages and other liabilities
(except for (i) the principal of and interest on, and fees relating to,
any Indebtedness and (ii) contingent reimbursement obligations in respect
of amounts that may be drawn under Letters of Credit) in respect of which no
claim or demand for payment has been made (or, in the case of Obligations for
indemnification, no notice for indemnification has been issued by the
Indemnitee) at such time.


 


“United Online” means United Online, Inc., a Delaware
corporation.


 


“Voting Stock”
means, with respect to any Person, any issued and outstanding shares of Capital
Stock of such Person entitled (without regard to the occurrence of any
contingency) to vote for the election of members of the Governing Body of such
Person.


 


34

















 


“Wells Fargo” means Wells Fargo Bank, National Association.


 


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 (ii), (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)).  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 in GAAP 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 or such accounting practices 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 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.


 


D.            References to any Person shall mean such Person and
its successors and assigns.


 


35

















 


E.             Unless otherwise expressly provided herein, references
to Organizational Documents, agreements (including the Loan Documents) and
other contractual instruments shall be deemed to include all subsequent amendments,
restatements, extensions, supplements and other modifications thereto.


 


F.             For purposes of this Agreement and the other Loan
Documents, where the permissibility of a transaction or determination of
required actions or circumstances depends upon compliance with, or is
determined by reference to, amounts stated in Dollars, any requisite currency
translation shall be based on the applicable Exchange Rate with respect to the
date of such transaction or determination or the date Company or any of its
Subsidiaries enters into a definitive agreement with respect to a transaction
(as determined by Company) and shall not be affected by subsequent fluctuations
in the Exchange Rate.  For purposes of
determining compliance with any Dollar denominated restriction on the
incurrence of Indebtedness, the Dollar-equivalent principal amount of
Indebtedness denominated in a foreign currency shall be calculated based on the
applicable Exchange Rate with respect to the date such Indebtedness was
incurred, in the case of term debt, or first committed or first incurred
(whichever yields the lower Dollar-equivalent ), in the case of revolving
credit debt; provided that if such Indebtedness is incurred to refinance
other Indebtedness denominated in a foreign currency, and such refinancing
would cause the applicable Dollar-denominated restriction to be exceeded if
calculated based on the applicable Exchange Rate with respect to the date of
such refinancing, such Dollar-denominated restriction shall be deemed not to
have been exceeded so long as the Dollar- equivalent principal amount of such
refinancing Indebtedness does not exceed the Dollar-equivalent principal amount
of such Indebtedness being refinanced (plus the amount of interest, fees
and expenses associated therewith). 
Notwithstanding any other provision of this Agreement, (i) the
maximum amount of Indebtedness that Company or any Subsidiary may incur shall
not be deemed to be exceeded solely as a result of fluctuations in the Exchange
Rate, (ii) this provision shall not apply to the calculation of the
Consolidated Leverage Ratio, and (iii) in the event that the
Dollar-equivalent principal amount of Indebtedness that Company and its
Subsidiaries has incurred exceeds the maximum amount of permitted Indebtedness
under any clause of subsection 7.1 at any time as a result of fluctuations in
the applicable Exchange Rate, no additional Indebtedness (other than the
refinancing of existing Indebtedness as provided above) may be incurred under
such clause until such maximum amount is no longer exceeded.


 


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), 2.1A(ii) and 2.1A(iii) and Swing Line Lender hereby agrees
to make the Swing Line Loans as described in subsection 2.1A(iv).


 


(i)            Tranche A Term Loans. 
Each Lender that has a Tranche 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 Tranche A Term Loan 


 


36

















 


Commitments
to be used for the purposes identified in subsection 2.5A.  The amount of each Lender’s Tranche A Term
Loan Commitment, as of the Signing Date, is set forth opposite its name on Schedule
2.1 annexed hereto and the aggregate amount of the Tranche A Term Loan
Commitments is $75,000,000; provided that the amount of the Tranche A
Term Loan Commitment of each Lender shall be adjusted to give effect to any
assignment of such Tranche A Term Loan Commitment pursuant to
subsection 10.1B.  Each Lender’s
Tranche A Term Loan Commitment shall expire immediately and without further
action at 4:30 p.m. (New York time), on October 30, 2008 if the
Tranche A Term Loans are not made on or before that date.  Company may make only one borrowing under the
Tranche A Term Loan Commitments.  Amounts
borrowed under this subsection 2.1A(i) and subsequently repaid or
prepaid may not be reborrowed.


 


(ii)           Tranche B Term Loans. 
Each Lender that has a Tranche B 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 Tranche B Term Loan Commitments to be used
for the purposes identified in subsection 2.5A.  The amount of each Lender’s Tranche B Term Loan
Commitment, as of the Signing Date, is set forth opposite its name on Schedule
2.1 annexed hereto and the aggregate amount of the Tranche B Term Loan
Commitments is $300,000,000; provided that the amount of the Tranche B
Term Loan Commitment of each Lender shall be adjusted to give effect to any
assignment of such Tranche B Term Loan Commitment pursuant to
subsection 10.1B.  Each Lender’s
Tranche B Term Loan Commitment shall expire immediately and without further
action on at 4:30 p.m. (New York time), October 30, 2008 if the
Tranche B Term Loans are not made on or before that date.  Company may make only one borrowing under the
Tranche B Term Loan Commitments.  Amounts
borrowed under this subsection 2.1A(ii) and subsequently repaid or
prepaid may not be reborrowed.


 


(iii)          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, as of the Signing
Date, is set forth opposite its name on Schedule 2.1 annexed hereto and
the original Revolving Loan Commitment Amount is $50,000,000; provided
that the amount of the Revolving Loan Commitment of each Revolving Lender shall
be adjusted to give effect to any assignment of such Revolving Loan Commitment
pursuant to subsection 10.1B and shall be reduced from time to time 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 


 


37

















 


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 at 4:30 p.m. (New York time), on October 30,
2008 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 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 Commitment
Amount then in effect.


 


(iv)          Swing Line Loans.


 


(a)           General Provisions. 
Swing Line Lender hereby agrees, subject to the limitations set forth in
the last paragraph of subsection 2.1A(iii) and 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 amount of 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 at 4:30 p.m.
(New York time), October 30, 2008 if the Term Loans are not made on or
before that date.  Amounts borrowed under
this subsection 2.1A(iv) may be repaid and reborrowed to but
excluding the Revolving Loan Commitment Termination Date.


 


(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 


 


38

















 


its sole and
absolute discretion, deliver to Administrative Agent (with a copy to Company),
no later than 10:00 a.m. (San Francisco 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
such Swing Line Loan or (2) the Revolving Loan Commitments are terminated
at a time when such Swing Line Loan is outstanding, upon notice from Swing Line
Lender as provided below, each Revolving Lender shall fund 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 Loan
together with accrued interest thereon. 
Upon one Business Day’s notice from Swing Line 


 


39

















 


Lender, each
Revolving Lender shall deliver to Swing Line Lender such amount in same day
funds at the Funding and Payment Office. 
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 with respect to which other Revolving Lenders have funded
the purchase of assignments as provided in this paragraph, Swing Line Lender
shall promptly distribute 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(iv)(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.


 


B.         Borrowing Mechanics.  Loans made on
any Funding Date (other than Swing Line Loans, Revolving Loans made pursuant to
a request by Swing Line Lender pursuant to subsection 2.1A(iv) 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;
provided that Loans made as Eurodollar Rate Loans 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 


 


40

















 


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. (San Francisco 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 Administrative Agent a duly
executed Notice of Borrowing no later than 12:00 noon (San Francisco 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 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 on or before the
applicable Funding Date.


 


Neither
Administrative Agent nor any Lender shall incur any liability to Company in
acting upon any telephonic notice referred to above that Administrative Agent
believes in good faith to have been given by an Responsible 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 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, or a Notice of Conversion/Continuation for conversion to, or continuation
of, a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to make a borrowing or to effect a conversion or
continuation in accordance therewith.


 


Notwithstanding
the foregoing provisions of this subsection 2.1B, if Administrative Agent
receives a duly executed Notice of Borrowing at least three Business Days in
advance of the Closing Date, all Loans made on the Closing Date shall be
Eurodollar Rate Loans.  If Administrative
Agent does not receive a duly executed Notice of Borrowing at least three Business
Days in advance of the Closing Date, all Loans made on the Closing Date shall
be Base Rate Loans that may not be converted into a Eurodollar Rate Loan until
the earlier of the fifteenth day after the Closing Date and the date specified
by Administrative Agent to Company on which the primary syndication of the
Loans has been completed.


 


41

















 


C.            Disbursement of Funds. 
All Term Loans and Revolving Loans shall be made by Lenders
simultaneously and proportionately to their respective Pro Rata Shares, it
being understood that, except as provided in the succeeding sentence, (i) 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 (ii) shall the amount of the Commitment of any Lender to
make the particular type of Loan requested 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. 
Anything to the contrary herein notwithstanding, if the conditions set
forth in subsection 4.2 have been satisfied or waived and any Lender fails to
timely make its Pro Rata Share of the Loans requested by Company to be made on
the date on which the Merger is scheduled to occur (such Loans, the “Defaulted Loans”), Wells Fargo shall make Loans to Company
in an amount equal to the Defaulted Loans. 
In such event, such Lender which has failed to fund its Loans shall be
deemed to have assigned its Commitments to Wells Fargo.  No such funding of Defaulted Loans by Wells
Fargo shall relieve any Lender that has failed to fund its Loans from liability
to Company or Wells Fargo.  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 or Swing Line Lender, as
the case may be, of the proposed borrowing. 
Each such Lender (other than Swing Line Lender) shall make the amount of
its Loan available to Administrative Agent not later than 1:00 p.m. (San
Francisco time) on the applicable Funding Date (provided that with
respect to Loans made on the Closing Date, such time shall be 10:00 a.m.
(San Francisco time), and Swing Line Lender shall make the amount of its Swing
Line Loan available to Administrative Agent not later than 2:00 p.m. (San
Francisco time) on the applicable Funding Date, in each case in same day funds
in Dollars, at the Funding and Payment Office. 
Except as provided in subsection 2.1A(iv) and
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 4.2 (in the case of Loans made on
the Closing Date) and 4.3 (in the case of all Loans other than Loans made on
the Closing Date), Administrative Agent 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 (and all Loans required to be made by Wells
Fargo on the Closing Date as a result of Defaulted Loans) to be credited to the
account of Company at the Funding and Payment Office; provided, however,
that if an Escrow is established pursuant to subsection 4.2N(iii),
Administrative Agent, shall deposit in the Escrow proceeds of the Tranche B
Term Loans made on the Closing Date in an amount equal to the Cash Merger
Consideration that would have been payable in respect of all Dissenting Common
Stock (the “Escrowed Term Loans”).  The Escrowed Term Loans shall be released
from the Escrow on the earlier of (i) the settlement or resolution of the
appraisal proceedings with respect to any particular holder of Dissenting
Common Stock in proportion to the amount of Dissenting Common Stock for which
such resolution or settlement relates and (ii) the one year anniversary of
the Closing Date.


 


Unless
Administrative Agent shall have been notified by any Lender prior to a Funding
Date 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 


 


42

















 


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, except in the case of Defaulted Loans, 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; provided that this sentence shall not
apply to Defaulted 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.


 


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, to
the extent Administrative Agent has received notice of participation,
Participants and the respective amounts of the Tranche A Term Loan Commitment,
Tranche B Term Loan Commitment, Revolving Loan Commitment, Swing Line Loan
Commitment, Tranche A Term Loan, Tranche B Term Loan, Revolving Loans and Swing
Line Loans of each Lender and, to the extent Administrative Agent has received
notice of participation, Participant 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.


 


43
















 


E.             Optional Notes. 
If so requested by any Lender by written notice to Company (with a copy
to Administrative Agent) 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 Tranche A Term Loan, Tranche B Term Loan, Revolving
Loans or Swing Line Loans, substantially in the form of Exhibit IV,
Exhibit V, 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 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 Tranche A Term Loans and 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):


 


44

















 


	
   

  	
   

  	
  Consolidated

  Leverage Ratio

  	
   

  	
  Eurodollar Rate

  Margin

  	
   

  	
  Base

  Rate Margin

  	
   

  
	
  Greater than

  	
   

  	
  3.25:1.00

  	
   

  	
  3.50

  	
  %

  	
  2.50

  	
  %

  
	
  Greater than but
  less than or equal to

  	
   

  	
  2.25:1.00

  3.25:1.00

  	
   

  	
  3.00

  	
  %

  	
  2.00

  	
  %

  
	
  Greater than but
  less than or equal to

  	
   

  	
  1.75:1.00

  2.25:1.00

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  
	
  Less than

  	
   

  	
  1.75:1.00

  	
   

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  



 


provided that, for the first two full Fiscal Quarters after
the Closing Date, the applicable margin for Tranche A Term Loans and Revolving
Loans that are Eurodollar Rate Loans shall be 3.50% per annum and for Tranche A
Term Loans and Revolving Loans that are Base Rate Loans shall be 2.50% per
annum.


 


(ii)           Subject to the provisions of subsections
2.2E, 2.2G and 2.7, the Tranche B 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 or
  equal to

  	
   

  	
  2.50:1.00

  	
   

  	
  4.50

  	
  %

  	
  3.50

  	
  %

  
	
  Less than

  	
   

  	
  2.50:1.00

  	
   

  	
  4.25

  	
  %

  	
  3.25

  	
  %

  



 


provided that, for the first two full Fiscal Quarters after
the Closing Date, the applicable margin for Tranche B Term Loans that are
Eurodollar Rate Loans shall be 4.50% per annum and for Tranche B Term Loans
that are Base Rate Loans shall be 3.50% 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 


 


45

















 


Margin shall
automatically be adjusted, such adjustment to become effective on the third
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 third
Business Day 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 minus a rate equal to the commitment fee percentage then
in effect as determined pursuant to subsection 2.3A.


 


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, 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 Tranche A Term Loans shall extend beyond the Tranche A Term Loan
Maturity Date, no Interest Period with respect to any portion of the Tranche B
Term Loans shall extend beyond the Tranche B Term Loan Maturity Date, and no
Interest Period with respect to any portion 


 


46

















 


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.


 


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 of that Loan (including final maturity of
that Loan); 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. (San Francisco 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 


 


47

















 


Conversion/Continuation to Administrative Agent on or
before the proposed conversion/continuation date.  Administrative Agent shall notify each Lender
of any Loan subject to a Notice of Conversion/Continuation.


 


E.             Default Rate. 
From and after the occurrence and during the continuation of any Event
of Default under subsection 8.1, 8.3 (with respect to failure of Company to
perform or comply with any term or condition contained in Section 7 of
this Agreement), 8.6 or 8.7, upon election by Administrative Agent or Requisite
Lenders, the outstanding principal amount of all Loans and, to the extent
permitted by applicable law, any interest payments thereon not paid when due and
any fees and other amounts then due and payable hereunder, shall, commencing
with the date of the occurrence of such Event of Default, bear interest
(including post-petition interest in any proceeding under the Bankruptcy Code
or other applicable bankruptcy laws) payable upon demand by Administrative
Agent 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 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, 


 


48

















 


commitment fees for the period from and including the
Closing Date to and excluding the Revolving Loan Commitment Termination Date
equal to the average of the daily excess of the Revolving Loan Commitment
Amount over the sum of (i) the aggregate principal amount of outstanding
Revolving Loans (but not any outstanding Swing Line Loans) plus (ii) the
Letter of Credit Usage multiplied by a rate per annum equal to the
percentage set forth in the table below opposite the 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

  	
   

  	
  Commitment Fee

  Percentage

  	
   

  
	
  Greater than

  	
   

  	
  3.25:1.00

  	
   

  	
  0.50

  	
  %

  
	
  Greater than but
  less than or equal to

  	
   

  	
  2.25:1.00 

  3.25:1.00

  	
   

  	
  0.40

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than but
  less than or equal to

  	
   

  	
  1.75:1.00 

  2.25:1.00

  	
   

  	
  0.30

  	
  %

  
	
  Less than

  	
   

  	
  1.75:1.00

  	
   

  	
  0.25

  	
  %

  






 


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 March 31, June 30, September 30 and December 31
of each year, commencing on the first such date to occur after the Closing
Date, and on the Revolving Loan Commitment Termination Date; provided
that for the first two full Fiscal Quarters after the Closing Date, the
applicable commitment fee percentage shall be 0.50% per annum.  Upon delivery of the Pricing Certificate by
Company to Administrative Agent pursuant to subsection 6.1(v), the
applicable commitment fee percentage shall automatically be adjusted, such
adjustment to become effective on the third succeeding Business Day following
the receipt by Administrative Agent of such Pricing Certificate; 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 delivery of such Pricing
Certificate, the applicable commitment fee percentage shall be the maximum
percentage amount set forth above.


 


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


 


49

















 


2.4          Repayments, Prepayments
and Reductions of Revolving Loan Commitment Amount; General Provisions
Regarding Payments; Application of Proceeds of Collateral and Payments Under
Guaranty.


 


A.            Scheduled Payments of Term Loans.


 


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


 


 


	
  Date

  	
   

  	
  Scheduled Repayment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2008 

  	
   

  	
  $

  	
  937,500 

  	
   

  
	
  March 31,
  2009 

  	
   

  	
  $

  	
  937,500 

  	
   

  
	
  June 30,
  2009 

  	
   

  	
  $

  	
  937,500 

  	
   

  
	
  September 30,
  2009

  	
   

  	
  $

  	
  937,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2009 

  	
   

  	
  $

  	
  1,406,250 

  	
   

  
	
  March 31,
  2010 

  	
   

  	
  $

  	
  1,406,250 

  	
   

  
	
  June 30,
  2010

  	
   

  	
  $

  	
  1,406,250

  	
   

  
	
  September 30,
  2010

  	
   

  	
  $

  	
  1,406,250

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2010 

  	
   

  	
  $

  	
  1,875,000

  	
   

  
	
  March 31,
  2011 

  	
   

  	
  $

  	
  1,875,000 

  	
   

  
	
  June 30,
  2011 

  	
   

  	
  $

  	
  1,875,000 

  	
   

  
	
  September 30,
  2011

  	
   

  	
  $

  	
  1,875,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2011

  	
   

  	
  $

  	
  1,875,000

  	
   

  
	
  March 31,
  2012 

  	
   

  	
  $

  	
  1,875,000

  	
   

  
	
  June 30,
  2012 

  	
   

  	
  $

  	
  1,875,000

  	
   

  
	
  September 30,
  2012

  	
   

  	
  $

  	
  1,875,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2012 

  	
   

  	
  $

  	
  2,343,750

  	
   

  
	
  March 31,
  2013 

  	
   

  	
  $

  	
  2,343,750

  	
   

  
	
  June 30,
  2013

  	
   

  	
  $

  	
  2,343,750

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Tranche A Term
  Loan Maturity Date

  	
   

  	
  $

  	
  43,593,750

  	
   

  



 


provided that the scheduled installments of
principal of the Tranche A Term Loans set forth above shall be reduced in
connection with any voluntary or mandatory prepayments of the Tranche A Term
Loans in accordance with subsection 2.4B(iv); and provided, further
that the Tranche A Term Loans and all other amounts owed hereunder with respect
to the Tranche A Term Loans shall be paid in full no later than the Tranche A
Term Loan Maturity Date, and the final installment payable by Company in
respect of the 


 


 


50

















 


Tranche A 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 Tranche A Term Loans.


 


(ii)           Scheduled Payments of Tranche B Term
Loans.  Company shall make principal payments on the
Tranche B Term Loans in installments on the dates and in the amounts set forth
below:


 


51

















 


	
  Date

  	
   

  	
  Scheduled Repayment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2008 

  	
   

  	
  $

  	
  750,000

  	
   

  
	
  March 31,
  2009 

  	
   

  	
  $

  	
  750,000

  	
   

  
	
  June 30,
  2009 

  	
   

  	
  $

  	
  750,000

  	
   

  
	
  September 30,
  2009

  	
   

  	
  $

  	
  750,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2009 

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
  March 31,
  2010 

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
  June 30,
  2010

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
  September 30,
  2010

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2010 

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
  March 31,
  2011 

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
  June 30,
  2011 

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
  September 30,
  2011

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2011 

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
  March 31,
  2012 

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
  June 30,
  2012 

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
  September 30,
  2012

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2012 

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
  March 31,
  2013 

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
  June 30,
  2013 

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
  September 30,
  2013

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2013 

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
  March 31,
  2014 

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
  June 30,
  2014

  	
   

  	
  $

  	
  750,000 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Tranche B Term
  Loan Maturity Date

  	
   

  	
  $

  	
  282,750,000

  	
   

  



 


provided that the scheduled installments of
principal of the Tranche B Term Loans set forth above shall be reduced in
connection with any voluntary or mandatory prepayments of the Tranche B Term
Loans in accordance with subsection 2.4B(iv); and provided, further
that the Tranche B Term Loans and all other amounts owed hereunder with 


 


52

















 


respect to the
Tranche B Term Loans shall be paid in full no later than the Tranche B Term
Loan Maturity Date, and the final installment payable by Company in respect of
the Tranche B 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 Tranche B Term Loans.


 


B.            Prepayments and Unscheduled
Reductions in Revolving Loan Commitment Amount.


 


(i)            Voluntary Prepayments. 
Company may, upon written or telephonic notice to Administrative Agent
on or prior to 11:00 a.m. (San Francisco time) on the date of prepayment,
which notice, if telephonic, shall be promptly confirmed in writing, 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 or
telephonic notice, in the case of Base Rate Loans, and three Business Days’
prior written or telephonic notice, in the case of Eurodollar Rate Loans, in
each case given to Administrative Agent by 11:00 a.m. (San Francisco time)
on the date required and, if given by telephone, promptly confirmed in writing
to Administrative Agent, 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.  All written notices
delivered pursuant to this subsection 2.4B(i) shall be in the form of a
Notice of Prepayment and all notices whether written or telephonic delivered
pursuant to this subsection 2.4B(i) shall be irrevocable, and once given
as aforesaid, the principal amount of the Loans specified in such notice shall
become due and payable on the prepayment date specified therein.  Any such voluntary prepayment shall be
applied as specified in subsection 2.4B(iv).


 


(ii)           Loan Call Protection. 
In the event that the Tranche B Term Loans are repaid or prepaid in
whole or in part on or prior to the second anniversary of the Closing Date,
other than prepayments pursuant to subsections 2.4B(iv)(a), (b), (c) and
(e), Company shall pay to Lenders having any Tranche B Term Loan Exposure a
prepayment premium on the amount repaid or prepaid as follows:


 


	
  Relevant Period

  	
   

  	
  Prepayment premium as a percentage of the

  amount so repaid or prepaid

  	
   

  
	
  On or prior to
  the first anniversary of the Closing Date

  	
   

  	
  2

  	
  %

  
	
  On or prior to
  the second anniversary of the Closing Date

  	
   

  	
  1

  	
  %

  



 


53
















 


(iii)          Voluntary
Reductions of Revolving Loan Commitments. 
Company may, upon not less than three Business Days’ prior written or
telephonic notice confirmed in writing 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 Commitment Amount 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 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).


 


(iv)          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(v) and subsection 2.4D:


 


(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 Subsidiary Guarantor 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, deliver to
Administrative Agent an Officer’s Certificate setting forth that portion
of such Net Asset Sale Proceeds that, subject to subsection 7.3, Company or
such Subsidiary intends to reinvest in equipment or other productive assets
(directly or through the acquisition of Capital Stock of a Person that owns
such assets) within 360 days of such date of receipt, and Company shall, or
shall cause one or more of its Subsidiaries to (A) apply such portion to
such reinvestment purposes or (B) no later than 360 days after receipt of
such Net Asset Sale Proceeds make a prepayment of the Loans (and/or the
Revolving Loan Commitment Amount shall be permanently reduced) in an amount
equal to such Net Asset Sale Proceeds that are not so reinvested.


 


(b)           Prepayments
and Reductions from Net Insurance/Condemnation Proceeds.  No later than the fifth Business Day
following the following the date of receipt by Administrative Agent or by
Company or any Subsidiary Guarantor of any Net Insurance/Condemnation Proceeds
that are required to be applied to 


 


54

















 


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.  No later than the fifth Business Day following
the date of receipt of the Net Securities Proceeds from the issuance of any
Capital Stock of Holdings, Company or any Domestic Subsidiary of Company after
the Closing Date (excluding the issuance of any such Capital Stock to United
Online or its Subsidiaries or to any Loan Party or to management, directors or
employees of Company or Holdings or any capital contributions to Company,
Holdings or Subsidiaries of Company by any holder of Capital Stock thereof
after the Closing Date), 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.


 


(d)           Prepayments
and Reductions Due to Issuance of Indebtedness.  On the date of receipt of the Net Securities
Proceeds from the issuance of any Indebtedness of Holdings, Company or any
Subsidiary Guarantor 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 Fiscal Year 2009 (which,
for the avoidance of doubt, shall be the year ended December 31, 2009 if
Company changes its Fiscal Year end from June 30)), 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) 75% of such Consolidated Excess Cash Flow minus
(ii) voluntary prepayments 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 Fiscal Year in which the Consolidated Leverage Ratio as of the last day
of such Fiscal Year is less than 3.00:1.00, the amount in clause (i) shall
be reduced to 50%; provided  further that for any Fiscal Year in
which the Consolidated Leverage Ratio as of the last day of such Fiscal Year is
less than 2.00:1.00, no prepayment shall be required under this subsection
2.4B(iii)(e).


 


(f)            Calculations
of Net Proceeds Amounts; Additional Prepayments and Reductions Based on
Subsequent Calculations. 
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 


 


55

















 


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 Commitment Amount.  Company shall from time to time prepay first
the Swing Line Loans and second the Revolving Loans (and, after
prepaying all Revolving Loans, Cash collateralize any outstanding Letters of
Credit by depositing the requisite amount in the Collateral Account) 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.  At such time as the Total
Utilization of Revolving Loan Commitments shall be equal to or less than the
Revolving Loan Commitment Amount, if no Event of Default has occurred and is
continuing, to the extent any Cash collateral was provided by Company and has
not been applied to any Obligations as provided in the Security Agreement, such
amount may, at the request of Company, be released to Company.


 


(v)           Application
of Prepayments and Unscheduled Reductions of Revolving Loan Commitment Amount.


 


(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; provided,
however, that voluntary prepayments applied exclusively to the Tranche A
Term Loans or among the Tranche A Term Loans and the Tranche B Term Loans on a
non-pro rata basis shall not exceed $5,000,000 during any Fiscal Year (the “Non-Pro Rata Basket”) (with the unused amount of the Non-Pro
Rata Basket in any Fiscal Year being available for use in succeeding Fiscal
Years in an amount not to exceed $15,000,000 in the aggregate for all such
amounts carried forward (it being understood that, if $15,000,000 were carried
forward to any Fiscal Year, $20,000,000 would be available in the Non-Pro Rata
Basket in such Fiscal Year)).  In the
event Company fails to specify the Loans to which any such prepayment shall be
applied, 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 and to prepay the Tranche A
Term Loans and the Tranche B Term Loans on a pro rata basis (in accordance with
the respective outstanding principal 


 


56

















 


amounts
thereof).  Any voluntary prepayments of
the Term Loans pursuant to subsection 2.4B(i) shall be applied to
reduce the scheduled installments of principal thereof set forth in
subsection 2.4A(i) or 2.4A(ii), as the case may be, (i) first,
in forward chronological order for the next succeeding 12 months and (ii) thereafter,
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(iv)(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, and 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, provided that
to the extent any such reduction of the Revolving Loan Commitment Amount would
result in the Total Utilization of Revolving Loan Commitments exceeding the
Revolving Loan Commitment Amount, Company promptly shall Cash collateralize
outstanding Letters of Credit by depositing the requisite amount in the
Collateral Account.  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 Tranche A Term Loans and Tranche B
Term Loans and 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 prepay the Tranche A Term Loans and the Tranche B Term Loans on a
pro rata basis (in accordance with the respective outstanding principal amounts
thereof) and shall be applied on a pro rata basis (in accordance with the
respective outstanding principal amounts thereof) to each scheduled installment
of principal of the Tranche A Term Loans or the Tranche B Term Loans, as the
case may be, set forth in subsection 2.4A(i) or 2.4A(ii) that is
unpaid at the time of such prepayment.  
Notwithstanding the foregoing, in the case of any mandatory prepayment
of the Tranche B Term Loans, so long as there are Tranche A Term Loans
outstanding, Lenders of the Tranche B Term Loans may waive the right to receive
the amount of such mandatory prepayment of the Tranche B Term Loans.  If any Lender or Lenders elect to waive the
right to receive the amount of such mandatory prepayment, all of the amount
that otherwise would have been applied to mandatorily prepay the Tranche B Term
Loans of such Lender or Lenders shall 


 


57

















 


be applied instead
to the further prepayment of the Tranche A Term Loans and any amount remaining
after such further prepayment of the Tranche A Term Loans may be retained by
Company.


 


(d)           Application
of Prepayments to Base Rate Loans and Eurodollar Rate Loans.  Considering Tranche A Term Loans, Tranche B
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 (San Francisco 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 payments of
principal and interest shall be apportioned among all outstanding Loans to
which such payments relate, in each case proportionately to Lenders’ respective
Pro Rata Shares.  Administrative Agent
shall promptly distribute to each Lender, at the account specified in the
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 subsections 2.3 and 3.2.  Notwithstanding the foregoing provisions of
this subsection 2.4C(iii), if, pursuant to the provisions of subsection 2.6C,
any Notice 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.


 


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(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 succeeding Business Day
and such extension of time shall be included in the computation of the payment
of interest hereunder or of the commitment fees hereunder, as the case may be.


 


(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, or upon acceleration of the Obligations pursuant to Section 8,
(a) all payments received by Administrative Agent, whether from Company,
Holdings or any Subsidiary Guarantor 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 Hedge Agreement between a Loan Party and a Swap Counterparty for the
ratable benefit of the holders thereof (subject to the provisions of
subsection 2.4C(ii) hereof); and


 


(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.


 


59

















 


2.5                               Use
of Proceeds.


 


A.            Term Loans.  The proceeds of the Term Loans shall be
applied by Company to fund the Acquisition Financing Requirements.


 


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 (including Permitted Acquisitions and any other
Investments permitted hereunder), 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 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 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.


 


60

















 


C.            Illegality or Impracticability of Eurodollar Rate Loans.  In the event that on any date any Lender
shall have 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 but excluding loss of anticipated profit) which that Lender has
sustained: (i) if for any reason (other than a default by that Lender) a
borrowing of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Borrowing or a telephonic request therefor, or a
conversion to or continuation of any Eurodollar Rate Loan does 


 


61

















 


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.  From and after the occurrence and during the
continuation of any Event of Default, upon election by Administrative Agent or
Requisite Lenders, (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; 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 Change in Law:


 


(i)            subjects
such Lender to any additional tax of any kind whatsoever 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 (except for the imposition of, or any change in the rate of, any
Excluded Tax payable by such Lender);


 


62
















 


(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, which shall be governed solely by subsection 2.7B) 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.


 


B.            Taxes.


 


(i)            Payments
to Be Free and Clear.  Any and all
payments by or on account of any obligation of Company under this Agreement and
the other Loan Documents shall be made free and clear of, and without any
deduction or withholding on account of, any Indemnified Taxes or Other Taxes.


 


(ii)           Grossing-up
of Payments.  If Company is required
by law to make any deduction or withholding on account of any 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;


 


(b)           Company
shall timely pay any such Tax to the relevant Government Authority when such
Tax is due, in accordance with applicable law;


 


(c)           unless
such Tax is an Excluded Tax, the sum payable by Company shall be increased to
the extent necessary to ensure that, after making the required deductions
(including deductions applicable to additional sums payable under this subsection 2.7B(ii)),
Administrative Agent or such Lender, as the case may be, receives on the due
date a net sum equal to the sum it would have received had no such deduction
been required or made; and


 


63

















 


(d)           within
30 days after paying any sum from which it is required by law to make any such
deduction, 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, upon the written
request of Administrative Agent, deliver to Administrative Agent documentation
reasonably satisfactory to the other affected parties to evidence the payment
and its remittance to the relevant Government Authority.


 


(iii)          Indemnification by Company.  Company shall indemnify Administrative Agent
and each Lender, within 10 days after demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes (including for the full amount of any
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts
payable under this subsection 2.7B(iii)) paid by Administrative Agent or
such Lender, as the case may be, and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto.  With respect to any such payments made by
Administrative Agent or such Lender paid pursuant to an assessment by a
Government Authority, such indemnification shall be made within such period,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Government Authority, and a certificate as
to the amount of such payment or liability delivered to Company by a Lender
(with a copy to Administrative Agent), or by Administrative Agent on its own
behalf or on behalf of a Lender, shall be conclusive absent manifest error.


 


(iv)          Tax
Status of Lenders.


 


(a)           Any
Lender, if requested by Company or Administrative Agent, shall deliver such
forms or other documentation prescribed by applicable law or reasonably
requested by Company or Administrative Agent as will enable Company or
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements;


 


(b)           Any
Foreign Lender that is entitled to an exemption from or reduction of any Tax
with respect to payments hereunder or under any other Loan Document shall
deliver to Company and Administrative Agent, on or prior to the date on which
such Foreign Lender becomes a Lender under this Agreement (and from time to
time thereafter, as may be necessary in the determination of Company or
Administrative Agent, each in the reasonable exercise of its discretion), such
properly completed and duly executed forms or other documentation prescribed by
applicable law as will permit such payments to be made without withholding or
at a reduced rate of withholding;


 


(c)           Without
limiting the generality of the foregoing, in the event that Company is resident
for tax purposes in the United States, any Foreign Lender, to the extent it is
legally entitled to do so, shall deliver to Company and Administrative Agent
(in such number of copies as shall be requested by the recipient) on or prior
to the date on which such Foreign Lender becomes a Lender under this Agreement
(and from time to time thereafter, as may be necessary in 


 


64

















 


the determination
of Company or Administrative Agent, each in the reasonable exercise of its
discretion), whichever of the following is applicable:


 


(1)           properly
completed and duly executed copies of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the United
States is a party,


 


(2)           properly
completed and duly executed copies of Internal Revenue Service Form W-8ECI,


 


(3)           in
the case of a Foreign Lender claiming the benefits of the exemption “portfolio
interest” under Section 881(c) of the Internal Revenue Code, (a) a
duly executed certificate to the effect that such Foreign Lender is not (i) a
“bank” within the meaning of Section 881(c)(3)(a) of the Internal
Revenue Code, (ii) a ten-percent shareholder (within the meaning of Section 881(c)(3)(b) of
the Internal Revenue Code) of Company or Holdings or (iii) a controlled
foreign corporation described in Section 881(c)(3)(c) of the Internal
Revenue Code and (b) properly completed and duly executed copies of
Internal Revenue Service Form W-8BEN,


 


(4)           properly
completed and duly executed copies of any other form prescribed by applicable
law as a basis for claiming exemption from or a reduction in any Tax,


 


in each case together
with such supplementary documentation as may be prescribed by applicable law to
permit Company and Administrative Agent to determine the withholding or
deduction required to be made, if any;


 


(d)           without
limiting the generality of the foregoing, in the event that Company is resident
for tax purposes in the United States, any Foreign Lender that 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 Company (in such number of copies as shall be requested by the
recipient), on or prior to the date such Foreign Lender becomes a Lender, or on
such later date when such Foreign Lender ceases to act for its own account with
respect to any portion of any such sums paid or payable, and from time to time
thereafter, as may be necessary in the determination of Company or
Administrative Agent (each in the reasonable exercise of its discretion):


 


(1)           duly
executed and properly completed copies of the forms and statements required to
be provided by such Foreign Lender under clause (c) of
subsection 2.7B(iv), to establish the portion of any such sums paid or
payable with respect to which such Lender acts for its own account 


 


65

















 


and may be
entitled to an exemption from or a reduction of the applicable Tax, and


 


(2)           duly
executed and properly completed copies of Internal Revenue Service Form W-8IMY
(or any successor forms) properly completed and duly executed by such Foreign
Lender, together with any information, if any, such Foreign Lender chooses to
transmit with such form, and any other certificate or statement of exemption
required under the Internal Revenue Code or the regulations thereunder, to
establish that such Foreign Lender is not acting for its own account with
respect to a portion of any such sums payable to such Foreign Lender;


 


(e)           without
limiting the generality of the foregoing, in the event that Company is resident
for tax purposes in the United States, any Lender that is not a Foreign Lender
and has not otherwise established to the reasonable satisfaction of Company and
Administrative Agent that it is an exempt recipient (as defined in Section 6049(b)(4) of
the Internal Revenue Code and the United States Treasury Regulations
thereunder) shall deliver to Company and Administrative Agent (in such number
of copies as shall be requested by the recipient) on or prior to the date on
which such Lender becomes a Lender under this Agreement (and from time to time
thereafter as prescribed by applicable law or upon the request of Company or
Administrative Agent), duly executed and properly completed copies of Internal
Revenue Service Form W-9; and


 


(f)            without
limiting the generality of the foregoing, each 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
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 entitled to an exemption from or reduction of any
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.


 


C.            Capital Adequacy
Adjustment.  If any Lender shall have
determined that any Change in Law regarding capital adequacy has 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 Change in Law (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 


 


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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.


 


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; provided, however, that Company
shall  not be required to compensate a
Lender pursuant to subsection 2.7A or 2.7C in respect of any period occurring
more than nine months prior to the date on which such Lender delivers such
written statement, except that if a Change in Law is retroactive, no such time
limitation shall apply so long as such Lender delivers such written notice
within nine months after the date on which the applicable Governmental
Authority informed such Lender of such Change in Law.


 


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 Lender defaults in its obligations to fund a Loan pursuant to
this Agreement (a “Defaulting Lender”),
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 and consent of at least Requisite
Lenders or a majority of Lenders with Obligations directly affected, as the
case may be, has been obtained or a Lender becomes an Affected Lender (any such
Lender, a “Subject Lender”), so long as (i) Company
has obtained a commitment from another Lender or 


 


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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 pursuant to subsection 2.8 and/or is unwilling to remedy its
default upon two Business 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 (excluding any claims against such Subject
Lender if it is a Defaulting Lender), (2) the processing fee required to
be paid by subsection 10.1B(i) shall have been paid to Administrative
Agent, (3) all of the requirements for such assignment contained in
subsection 10.1B, 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 (4) 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.  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.  Company may request, in accordance with the
provisions of this subsection 3.1, from time to time during the period
from and including 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 general corporate purposes of Company or a
Subsidiary of Company.  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 Revolving Lenders
may, but (except as provided in subsection 3.1B(ii)) shall not be
obligated to, issue such Letters 


 


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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 then in effect;


 


(ii)           any
Letter of Credit if, after giving effect to such issuance, the Letter of Credit
Usage would exceed $15,000,000;


 


(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 that in the
judgment of Administrative Agent or the applicable Issuing Lender is not
readily and freely available.


 


B.            Mechanics of Issuance.


 


(i)            Request
for Issuance.  Whenever Company
desires the issuance of a Letter of Credit, it shall deliver to the proposed
Issuing Lender (with a copy to Administrative Agent if Administrative Agent is
not the proposed Issuing Lender) a Request for Issuance no later than 12:00
noon (San Francisco 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 


 


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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) on which 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 a
proposed Issuing Lender of a Request for Issuance pursuant to
subsection 3.1B(i) requesting the issuance of a Letter of Credit, (a) in
the event Administrative Agent is the proposed Issuing Lender, Administrative
Agent shall be the Issuing Lender with respect to such Letter of Credit,
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 the amount of Administrative
Agent’s Revolving Loan Commitment then in effect; and (b) in the event any
other Revolving Lender is the proposed Issuing Lender, such Revolving Lender
shall promptly notify Company and Administrative Agent whether or not, in its
sole discretion, it has elected to issue such Letter of Credit, and (1) if
such Revolving Lender so elects to issue such Letter of Credit it shall be the
Issuing Lender with respect thereto and (2) if such Revolving Lender fails
to so promptly notify Company and Administrative Agent or declines to issue
such Letter of Credit, Company may request Administrative Agent or another
Revolving Lender to be the Issuing Lender with respect to such Letter of Credit
in accordance with the provisions of this subsection 3.1B.


 


(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.


 


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(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 and such notice shall be accompanied by a copy of such
Letter of Credit or amendment.  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.  Upon receipt of such report, Administrative
Agent shall notify each Revolving Lender in writing of the contents thereof.


 


C.            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 (x) $500 and (y) 0.25% per annum of the daily amount
available to be drawn under such Standby Letter of Credit 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 rates of 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 payable in arrears on and to (but excluding)
each March 31, June 30, September 30 and December 31 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 (x) $500 and (y) 0.25% per annum of the daily amount
available to be drawn under such Commercial Letter of Credit and (b) a
letter of credit fee, payable to Administrative Agent for the account of
Revolving Lenders, equal to the applicable 


 


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Eurodollar
Rate Margin for Revolving Loans plus, upon the application of increased
rates of 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) each March 31, June 30, September 30
and December 31 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
weekly based on the applicable Exchange Rate for such currency as of the applicable
date of determination.


 


3.3          Drawings
and Reimbursement of Amounts Paid Under Letters of Credit.


 


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”) 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 (San Francisco 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 


 


72

















 


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 promptly
notify each Revolving Lender of the unreimbursed amount of such honored drawing
and of such 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, in same day funds, at the Funding and Payment Office, not later than
12:00 noon (San Francisco 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 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 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 rate customarily used by such
Issuing Lender for the correction of errors among banks for three Business Days
and thereafter at the Base 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 payments were
made by Revolving Lenders constituted gross negligence or willful misconduct on
the part of such Issuing Lender.


 


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(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 (including the Issuing
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 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 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 


 


74

















 


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 shall, 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);


 


(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;


 


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(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
Material Adverse Effect on 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 substantially 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.


 


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 


 


76

















 


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

  



 


 


4.1                               Conditions
to Effectiveness of this Agreement.


 


This Agreement shall become effective upon
satisfaction of the following conditions:


 


(i)            Administrative
Agent shall have received this Agreement executed and delivered by Acquisition
Sub (with sufficient originally executed copies for each Lender to follow
promptly thereafter);


 


(ii)           Administrative
Agent shall have received copies of the Organizational Documents of Acquisition
Sub, certified by the Secretary of State of its jurisdiction of organization
or, if such document is of a type that may not be so certified, certified by
the secretary or similar officer of Acquisition Sub, together with a good
standing certificate from the Secretary of State of its jurisdiction of
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 each of such jurisdictions, each
dated a recent date prior to the Signing Date; and


 


(iii)          the
representations and warranties in subsections 5.1A, 5.2A, 5.2D and 5.10 with
respect to Acquisition Sub shall be true and correct in all material respects
on and as of the Signing 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 and correct in all material respects on and as
of such earlier date.


 


4.2                               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 and to issue the Letters of Credit to
be issued on the Closing Date are subject only to the 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 to follow promptly 


 


77

















 


thereafter) 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, 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 of its jurisdiction of 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 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; and


 


(iv)          Executed
originals of the Loan Documents (in substantially the form attached to this Agreement)
to which such Person is a party.


 


B.            Fees. 
Company shall have paid (or will pay substantially concurrently with the
disbursement of Loans to be made on the Closing Date) to Administrative Agent,
for distribution (as appropriate) to Administrative Agent and Lenders, the fees
payable on the Closing Date referred to in subsection 2.3.


 


C.            Representations and Warranties; Performance of Agreements.  Company shall have delivered to
Administrative Agent an Officer’s Certificate, in form and substance satisfactory
to Administrative Agent, to the effect that the Specified Representations shall
be accurate 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 accurate in all
material respects on and as of such earlier date; provided that if a
representation and warranty, covenant or condition is qualified as to
materiality, the applicable materiality qualifier set forth above shall be
disregarded with respect to such representation and warranty for purposes of
this condition.  The representations and
warranties of FTD set forth in the Merger Agreement shall be true and correct
as of the date of the Merger Agreement and the Closing Date as if made at and
as of such dates (except for those representations and warranties which address
matters only as of an earlier date which shall have been true and correct as of
such earlier date), disregarding for these purposes any exception in such
representations and warranties relating to materiality or a Company Material
Adverse Effect, except for such failures to be true and correct which do not
result in a Company Material Adverse Effect.


 


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D.            Financial Statements; Pro Forma Financial Statements.  On or before the Closing Date, Lenders shall
have received from Company (i) audited consolidated financial statements
of FTD and its Subsidiaries for Fiscal Years 2005, 2006, 2007 and, if the
Closing Date occurs after October 1, 2008, Fiscal Year 2008, consisting of
consolidated balance sheets and the related consolidated statements of income,
stockholders’ equity and cash flows for such Fiscal Years, (ii) unaudited
consolidated financial statements of FTD and its Subsidiaries for each Fiscal
Quarter ending after Fiscal Year 2007 and at least 45 days prior to the Closing
Date, consisting of a consolidated balance sheet and the related consolidated
statements of income and cash flows for each such Fiscal Quarter, all in
reasonable detail and certified by a Financial Officer of FTD that they fairly
present in all material respects the financial condition of FTD and its
Subsidiaries as at the dates indicated and the results of their operations and
cash flows for the periods indicated, subject to changes resulting from audit
and normal year-end adjustments, (iii) unaudited consolidated financial
statements of FTD and its Subsidiaries for each calendar month ending after the
most recently completed Fiscal Quarter for which unaudited financial statements
have been delivered pursuant to clause (ii) and at least 35 days prior to
the Closing Date, consisting of a consolidated balance sheet and the related
consolidated statements of income and cash flows for each such calendar month,
all in reasonable detail and certified by a Financial Officer of FTD that they
fairly present in all material respects the financial condition of FTD and its
Subsidiaries as at the dates indicated and the results of their operations and
cash flows for the periods indicated, subject to changes resulting from audit
and normal year-end adjustments, and (iv) pro forma consolidated financial
statements of FTD and its Subsidiaries as of the 12 month period ended June 30,
2008, consisting of a consolidated balance sheet and the related consolidated
statement of income for such 12 month period, giving effect to the Transactions
as if the Transactions had occurred on such date (in the case of the balance
sheet) or at the beginning of such period (in the case of such statement of
income).


 


E.             Opinions of Counsel to Loan Parties.  Administrative Agent shall have received an
originally executed copy of one or more favorable written opinions of Skadden,
Arps, Slate, Meagher & Flom LLP, counsel for the Loan Parties (and
such local counsel for the Loan Parties as may be necessary in jurisdictions
other than New York, Illinois and Delaware), in form and substance reasonably
satisfactory to Administrative Agent and its counsel, dated as of the Closing
Date and, in the case of the opinion of Skadden, Arps, Slate, Meagher &
Flom LLP, setting forth substantially the matters in the opinions designated in
Exhibit IX annexed hereto (this Agreement constituting a written
request by each Loan Party to such counsel to deliver such opinions to
Lenders).


 


F.             Solvency Assurances.  Administrative Agent and Lenders shall have
received an Officer’s Certificate of FTD dated the Closing Date,
substantially in the form of Exhibit XI annexed hereto and with
appropriate attachments, in each case demonstrating that, after giving effect
to the consummation of the transactions contemplated by the Loan Documents, FTD
and its Subsidiaries on a consolidated basis will be Solvent.


 


G.            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 


 


79

















 


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.


 


H.            Necessary Governmental Authorizations and Consents;
Expiration of Waiting Periods, etc.  Company shall have obtained
all Governmental Authorizations required by the Merger Agreement.


 


I.              Security Interests in Personal and Mixed Property.  Holdings, Company and Subsidiary Guarantors
shall have delivered to Administrative Agent (i) 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) representing all Capital Stock (to the extent such
Capital Stock is evidenced by certificates) pledged pursuant to the Security
Agreement, and (ii) duly completed UCC financing statements with respect
to all personal property Collateral of each Loan Party, for filing in all
domestic 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.


 


J.             Additional Collateral.  Holdings, Company and Subsidiary Guarantors
shall have used commercially reasonable efforts 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 (other than Excluded Assets), which
shall include the use of commercially reasonable efforts to:


 


(i)            Instruments.  Deliver to Administrative Agent all
promissory notes or other instruments with a principal amount in excess of
$1,000,000 (duly endorsed, where appropriate, in a manner satisfactory to
Administrative Agent) evidencing any Collateral;


 


(ii)           Lien
Searches.  Deliver to Administrative
Agent 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;


 


(iii)          Fixture
Filings.  Deliver to Administrative
Agent, where appropriate, fixture filings, 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)          Cover
Sheets, etc.  Deliver to
Administrative Agent all cover sheets or other documents or instruments
required to be filed with any IP Filing Office in order to create or perfect
Liens in respect of any IP Collateral, together with releases duly executed (if
necessary) of security interests by all applicable Persons for filing in all
applicable jurisdictions as may be necessary to terminate any effective filings
in any IP 


 


80

















 


Filing
Office in respect of any IP Collateral (other than any such filings in respect
of Liens permitted to remain outstanding pursuant to the terms of this
Agreement);


 


(v)           Foreign
Pledge Agreements.  Deliver to
Administrative Agent executed Foreign Pledge Agreements with respect to 66% of
the Capital Stock owned by Company or a Subsidiary Guarantor of all Foreign
Subsidiaries with respect to which Administrative Agent deems a Foreign Pledge
Agreement necessary or advisable to perfect or otherwise protect the First
Priority Liens granted to Administrative Agent on behalf of Lenders in such
Capital Stock, and the taking of all such other actions under the laws of such
jurisdictions as Administrative Agent may deem necessary or advisable to
perfect or otherwise protect such Liens; and


 


(vi)          Opinions
of Foreign Local Counsel.  Deliver to
Administrative Agent an opinion of counsel (which counsel shall be reasonably
satisfactory to Administrative Agent) under the laws of each foreign
jurisdiction for which a Foreign Pledge Agreement is executed and delivered
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.


 


K.            Closing Date Mortgages; Closing Date Mortgage Policies;
etc.  Holdings, Company
and Subsidiary Guarantors shall have used commercially reasonable efforts to
deliver to Administrative Agent:


 


(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 owned Real Property Asset with a value equal to
or greater than $5,000,000 and listed in Schedule 4.2K annexed
hereto (each a “Closing Date Mortgaged Property”
and, collectively, the “Closing Date Mortgaged
Properties”);


 


(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;


 


(iii)          Title
Insurance.  (a) ALTA mortgagee
title insurance policies or unconditional commitments therefor (the “Closing Date Mortgage Policies”) issued by the Title Company
with respect to the Closing Date Mortgaged Properties listed in Part A of Schedule
4.2K annexed hereto, in amounts not less than the respective amounts
designated therein with respect to any particular Closing Date Mortgaged
Properties, insuring fee simple title to each such Closing Date Mortgaged
Property vested in such Loan Party and assuring Administrative Agent that the
applicable Closing Date 


 


81

















 


Mortgages
create valid and enforceable First Priority mortgage Liens on the respective
Closing Date Mortgaged Properties encumbered thereby, subject only to Permitted
Encumbrances and a standard survey exception, which Closing Date Mortgage
Policies (1) shall include an endorsement for mechanics’ liens, for future
advances under this Agreement and for any other matters reasonably requested by
Administrative Agent and (2) shall provide for affirmative insurance and
such reinsurance as Administrative Agent may reasonably request, all of the foregoing
in form and substance reasonably satisfactory to Administrative Agent; and (b) evidence
satisfactory to Administrative Agent that such Loan Party has (i) delivered
to the Title Company all certificates and affidavits reasonably required by the
Title Company in connection with the issuance of the Closing Date Mortgage
Policies and (ii) paid to the Title Company or to the appropriate
Government Authorities all expenses and premiums of the Title Company in
connection with the issuance of the Closing Date Mortgage Policies and all
recording and stamp taxes (including mortgage recording and intangible taxes)
payable in connection with recording the Closing Date Mortgages in the
appropriate real estate records;


 


(iv)          Title
Reports.  With respect to each Closing
Date Mortgaged Property listed in Schedule 4.2K annexed hereto, a title
report issued by the Title Company with respect thereto;


 


(v)           Copies
of Documents Relating to Title Exceptions. 
Copies of all recorded documents listed as exceptions to title or
otherwise referred to in the Closing Date Mortgage Policies or in the title
reports delivered pursuant to subsection 4.2K(iv); and


 


(vi)          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.


 


L.            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 


 


82

















 


lend
or make other extensions of credit thereunder, (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, and (d) made arrangements satisfactory to Administrative Agent
with respect to any letters of credit outstanding thereunder.


 


(ii)           Redemption
of Subordinated Notes.  Company shall
have redeemed or defeased or acquired and canceled all of the Subordinated
Notes.


 


M.           Merger Agreement.  Administrative Agent shall have received a
fully executed or conformed copy of the Merger Agreement and any documents
executed in connection therewith, and the Merger Agreement shall be in full
force and effect.


 


N.            Consummation of Acquisition and Merger; Equity
Contribution; Escrow.


 


(i)            Acquisition
and Merger.  The Transaction shall be
consummated in accordance in all material respects with the Merger Agreement
and no provisions thereof shall have been amended, supplemented, waived or
otherwise modified in any manner which is materially adverse to Lenders, in
each case without the written consent of Lead Arranger.


 


(ii)           Equity
Contribution.  Company shall have
received a Cash capital contribution in an aggregate amount of not less than
the amount necessary to fund the Acquisition Financing Requirements to the
extent required to be paid by Acquisition Sub (and not funded by available Cash
at FTD or under the credit facilities evidenced by this Agreement).


 


(iii)          Escrow.  In the event that there is Dissenting Common
Stock (as defined in the Merger Agreement) and the Lead Arranger so requests,
an escrow or similar arrangement (the “Escrow”) shall
have been established on terms reasonably satisfactory to Lead Arranger and
United Online.


 


(iv)          United
Online Debt Documents.  Lead Arranger
shall have received a fully executed or conformed copy of the credit agreement
and related documents entered into by United Online in connection with the
Transaction, and the terms thereof shall be reasonably satisfactory to
Administrative Agent.


 


O.            Closing Date Consolidated Adjusted EBITDA.  Lead Arranger shall have received a Closing
Date Certificate signed by a Financial Officer of Company, demonstrating in
reasonable detail Closing Date Consolidated Adjusted EBITDA of at least
$97,500,000 for the most recently completed trailing 12 month period ended at
least 35 days prior to the Closing Date for which financial statements have
been delivered pursuant to subsection 4.2D.


 


83

















 


P.            Company Material Adverse Effect.  From June 30, 2007 through April 30,
2008, there have not been any Company Effects that constitute a Company
Material Adverse Effect.


 


Q.            Market Material Adverse Change.  There shall not have been any material
disruption or material adverse change occurring after April 30, 2008 in
the financial or capital markets generally or in the market for syndicated
credit facilities generally that in the reasonable judgment of Lead Arranger
would materially adversely affect the Successful Syndication (as defined in
that certain Fee Letter dated April 30, 2008 (the “Fee Letter”)
between United Online and Administrative Agent) of the Facilities as
contemplated by that certain Commitment Letter dated April 30, 2008 (the “Commitment Letter”) between United Online and Administrative
Agent, including after giving effect to changes to the Facilities permitted
pursuant to the Fee Letter.


 


R.            Competing Offers.  There shall not have been any competing
offering, placement or arrangement for any debt security or bank financing
other than (i) the obligations under the United Online Debt Documents, (ii) senior
debt of United Online in an amount not to exceed $60 million or (iii) Alternative
Online Debt (as defined in the Commitment Letter).


 


4.3                               Conditions
to All Loans.


 


The
obligations of any Lender to make its Loans on each Funding Date (other than
the Closing 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, a duly executed Notice of Borrowing, in each case signed
by a duly authorized Responsible 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, the materiality qualifier set forth above shall be disregarded
with respect to such representation and warranty 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; and


 


84
















 


(iii)          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.


 


4.4                               Conditions
to Letters of Credit.


 


The
issuance of any Letter of Credit hereunder (other than any Letter of Credit
issued on the Closing Date) is subject to the following further conditions
precedent:


 


A.            On or before the date of issuance of
such Letter of Credit, Administrative Agent shall have received, in accordance with
the provisions of subsection 3.1B(i), an originally executed Request for
Issuance (or a facsimile copy thereof) in each case signed by a duly authorized
Responsible Officer of Company, together with all other information specified
in subsection 3.1B(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.


 


B.            On the date of issuance of such Letter
of Credit, all conditions precedent described in subsection 4.3B 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 represents and warrants to
each Lender; provided, however, notwithstanding anything to the
contrary expressed or implied in this Agreement or the other Loan Documents,
the parties hereto acknowledge and agree that the only representations and
warranties made under the Loan Documents (i) on the Signing Date are those
set forth in subsection 4.1(iii) and (ii) on the Closing Date are
those constituting the Specified Representations:


 


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


 


A.            Organization and Powers.  Each of Holdings, Acquisition Sub and FTD is
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization as specified in Schedule 5.1
annexed hereto.  Each of Holdings,
Acquisition Sub and FTD 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 to which it is a
party and to carry out the transactions contemplated thereby.


 


B.            Qualification and Good Standing.  Each of Holdings, Acquisition Sub and FTD is
qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, except in 


 


85

















 


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.


 


C.            Conduct of Business.  Holdings, Acquisition Sub, FTD and their
respective Subsidiaries are engaged only in the businesses permitted to be
engaged in pursuant to subsections 7.11 and 8.14.


 


D.            Subsidiaries.  All of the Subsidiaries of Acquisition Sub
and FTD and their jurisdictions of organization 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(xvi).  The Capital Stock of each of the Subsidiaries
identified in Schedule 5.1 annexed hereto (as so supplemented by
Company) is duly authorized and validly issued and none of such Capital Stock
constitutes Margin Stock and, except as set forth in Schedule 5.1
annexed hereto (as so supplemented), is fully paid and nonassessable.  Each of the Subsidiaries identified in Schedule 5.1
annexed hereto (as so supplemented by Company) is a corporation, partnership,
trust or limited liability company duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of organization 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 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 the ownership interest of Acquisition Sub
and FTD and each of their respective Subsidiaries in each of the Subsidiaries
of Acquisition Sub and FTD identified therein.


 


5.2                               Authorization
of Borrowing, etc.


 


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


 


B.            No Conflict.  The execution, delivery and performance by
the Loan Parties of the Loan Documents to which they are parties and the
consummation of the transactions contemplated by the Loan Documents 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 except, in each case, to the extent such
violation, conflict, 


 


86

















 


breach, Lien or failure to obtain such approval or
consent could not reasonably be expected to result in a Material Adverse
Effect.


 


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


 


D.            Binding Obligation.  Each of the Loan Documents has been duly
executed and delivered by each Loan Party that is a party thereto and is the
legally valid and binding obligation of such Loan Party, enforceable against
such Loan Party 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, the financial
statements and information described in subsection 4.2D.  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 or quarter-end adjustments.  As of the Signing Date, neither Company nor
any of its Subsidiaries has any Contingent Obligation, contingent liability or
liability for taxes, long-term lease or unusual forward or long-term commitment
that is not reflected in the foregoing financial statements available as of the
Signing Date or the notes thereto and that, in any such case, would have a
Material Adverse Effect.


 


5.4                               No
Material Adverse Change; No Restricted Junior Payments.


 


Since June 30,
2007, no event or change has occurred that has resulted in or evidences, either
in any case or in the aggregate, a Material Adverse Effect.  Since and including the Closing Date, 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 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 


 


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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 by subsection 7.7
and except for such defects that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect.  All such properties and assets are free and
clear of Liens except for Liens permitted pursuant to subsection 7.2A.


 


B.            Real Property.  As of the Signing Date, Schedule 5.5B
annexed hereto contains a true, accurate and complete list of (i) all fee
interests in any Real Property Assets of Acquisition Sub, FTD and their
respective Subsidiaries and (ii) all material 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.


 


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 and is pending by any Person challenging the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does any Responsible 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.  To Company’s knowledge, 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
registrations of and applications for Intellectual Property that are owned or
licensed by Acquisition Sub and FTD or any of their respective Domestic
Subsidiaries on the Signing 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 Acquisition Sub, FTD or
any of their respective 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 Responsible Officer of Company,
threatened against or affecting Acquisition Sub, FTD or any of their respective
Subsidiaries or any property of Acquisition Sub, FTD or any of their respective
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 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.


 


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5.7                               Payment
of Taxes.


 


Except
as could not reasonably be expected to have 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 except to the extent permitted by
subsection 6.3, 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
other than those (i) currently payable without penalty or interest, or (ii) being
contested in good faith by appropriate proceedings; provided that
Holdings or such Subsidiary, as the case may be, has set aside on its books
adequate reserves therefor in accordance with GAAP and the failure to pay such
amounts would not reasonably be expected to result in a Material Adverse
Effect.


 


5.8                       Performance
of Agreements.


 


Neither Company 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.


 


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.


 


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, each of its Subsidiaries and
each of their respective ERISA Affiliates are in compliance in all material
respects with all applicable provisions and 


 


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requirements of ERISA and the regulations and
published interpretations thereunder with respect to each Employee Benefit
Plan, and have performed all their obligations under each Employee Benefit
Plan.  Each 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, any of its Subsidiaries or any of their respective ERISA
Affiliates.


 


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), does not exceed
$5,000,000.


 


E.             As of the most recent valuation date
for each Multiemployer Plan for which the actuarial report is available, the
potential liability of Company, its Subsidiaries and their respective ERISA
Affiliates 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 $5,000,000.


 


F.             As of the Signing Date hereof, Company
and its Subsidiaries have made full payment when due of all required
contributions to any Foreign Plan, except where the failure to do so would not
result in a Material Adverse Effect.


 


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 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, 


 


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individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect;


 


(ii)           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, in each case, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect;


 


(iii)          to
any Responsible Officer of Company’s knowledge there are, and 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
Responsible 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, in each case, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect; and


 


(v)           compliance
with all current or reasonably foreseeable future requirements pursuant to or
under Environmental Laws could 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.


 


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 4.2, 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 


 


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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 (other than Excluded Perfection Assets), and all filings of UCC
financing statements necessary to perfect and maintain the perfection and First
Priority status of such Liens that can be perfected by filing UCC financing statements
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 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.  The foregoing notwithstanding,
from and including the Closing Date to the date that is 90 days after the
Closing Date, this representation will be deemed satisfied (including for its
purpose as a Specified Representation) to the extent Company has used
commercially reasonable efforts to take the actions described in subsection
4.2J.


 


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 the
Collateral Documents 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 the Collateral Documents and to
evidence permitted lease obligations and other Liens permitted pursuant to
subsection 7.2A and those that are being terminated in connection with the
termination 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 any IP Filing Office.


 


D.            Margin Regulations.  The pledge of the Pledged Collateral pursuant
to the Collateral Documents does not violate Regulation 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 any of the Collateral
(in each case taken as a whole with respect to any particular Collateral) is
accurate and complete in all material respects.


 


5.17                        Disclosure.


 


No
information (excluding projections, forward-looking information and information
of a general economic or industry nature) furnished by or on behalf of any Loan



 


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Party to Administrative Agent or any Lender in
connection with the negotiation of any Loan Document or included therein or
delivered pursuant thereto (including the Confidential Information Memorandum),
taken as a whole, contained or contains any untrue statement of a material fact
or omitted or omits to state a material fact necessary to make the statements
contained therein not materially misleading, in light of the circumstances
under which they were or are made as of the date such information is dated or
certified.  All projections furnished by
or on behalf of any Loan Party to Administrative Agent or any Lender in
connection with the negotiation of any Loan Document were prepared in good
faith based upon assumptions that were believed by the preparer thereof to be
reasonable at the time made, it being understood and agreed that such
projections are not a guarantee of financial performance and actual results may
differ from the projections and such differences may be material.


 


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 its
Subsidiaries.


 


5.19                Merger Agreement.


 


Company has delivered to Lenders complete and correct
copies of the Merger Agreement and of all exhibits and schedules thereto.


 


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.


 


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 (i) 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 (ii) 


 


93

















 


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                        Insignificant
Subsidiaries.


 


As of
the Closing Date, FTD Canada, Inc. is not a Significant Subsidiary.


 


Section 6.              COMPANY’S AFFIRMATIVE COVENANTS


 


Company
covenants and agrees that from and including the Closing Date, 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 (other than Unasserted Obligations)
and the cancellation, expiration or collateralization (in a manner reasonably
acceptable to Administrative Agent) of all Letters of Credit, unless Requisite
Lenders shall otherwise give 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:


 


(i)            Events
of Default, etc.:  promptly upon any
Responsible Officer of Company obtaining knowledge (a) of any condition or
event that constitutes an 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 change in Company’s
independent certified accountants, any changes in Company’s Organizational
Documents, or any restatement of Company’s financial statements 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)           Monthly
Financials: as soon as available and in any event within 45 days after the
end of each month ending after the Signing Date and on or prior to September 30,
2008, the consolidated balance sheet of Company and its Subsidiaries as at the
end of such month and the related consolidated statements of income and cash
flows of Company and its Subsidiaries for such month, all in reasonable detail
and certified by a Financial Officer of Company that they fairly present, in
all material respects, the financial condition of Company and its Subsidiaries
as at the dates indicated and the 


 


94

















 


results
of their operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end and quarter end adjustments;


 


(iii)          Quarterly
Financials:  as soon as available and
in any event within 45 days after the end of each Fiscal Quarter, other than
the last Fiscal Quarter of any Fiscal Year (commencing with the first such
complete Fiscal Quarter that began after the Closing Date), (a) the
consolidated balance sheet of Company and its Subsidiaries as at the end of
such fiscal period and the related consolidated statements of income and cash
flows of Company and its Subsidiaries for such fiscal period and for the period
from the beginning of the then current Fiscal Year to the end of such fiscal
period, setting forth in each case (commencing with the Fiscal Year ending December 31,
2010) in comparative form the corresponding figures for the corresponding
periods of the previous Fiscal Year, to the extent prepared for such fiscal
period, all in reasonable detail and certified by a Financial Officer of
Company that they fairly present, in all material respects, the financial
condition of Company 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) revenue
and gross profits for the international, floral and consumer divisions of
Company’s business for such period;


 


(iv)          Year-End
Financials:  as soon as available and
in any event within 90 days after the end of each Fiscal Year (commencing with
the Fiscal Year ending December 31, 2008), (a) the consolidated
balance sheets of Company and its Subsidiaries and the related consolidated
statements of income and cash flows of Company and its Subsidiaries for such
Fiscal Year (which, in the case of the Fiscal Year ended December 31,
2008, shall be for the period from the Closing Date to December 31, 2008),
setting forth in each case (commencing with the Fiscal Year ending December 31,
2010) in comparative form the corresponding figures for the previous Fiscal
Year, all in reasonable detail and certified by a Financial Officer of Company
that they fairly present, in all material respects, the financial condition of
Company and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, (b) in the case
of such consolidated financial statements, a report thereon of
PricewaterhouseCoopers LLP or other independent certified public accountants of
recognized national standing selected by Company and reasonably satisfactory to
Administrative Agent, which report shall be unqualified, including concerning
the ability of Company 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 Company 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 excluding any such prior year which commenced before January 1.
2009) and that the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with generally
accepted auditing standards, and (c) revenue and gross profits 


 


95

















 


for
the international, floral and consumer divisions of the Company’s business for
such period;


 


(v)           Pricing
and Compliance Certificates: 
together with each delivery of financial statements pursuant to clauses (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 Company 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 subsections 7.1, 7.2, 7.3, 7.4, 7.6, 7.7,
7.8 and 7.9, 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 45th day following the end of each of the
first three Fiscal Quarters of each Fiscal Year and on or before the 90th day
following the end of each Fiscal Year, 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 Company and its Subsidiaries delivered
pursuant to clauses (ii), (iii) or (xii) of this subsection 6.1 will
differ in any material respect from the consolidated financial statements that
would have been delivered pursuant to such clauses had no such change in
accounting principles and policies been made, then (a) together with the
first delivery of financial statements pursuant to clause (ii), (iii), (iv) or
(xiii) of this subsection 6.1 following such change, consolidated
financial statements of Company 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 clause (ii), (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 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 clause (iii) above
to the extent available from 


 


96

















 


Company’s
independent certified public accountants on commercially reasonable terms and
in accordance with the standards of the Public Company Accounting Oversight Board
(United States), a written statement by the independent certified public
accountants giving the report thereon stating whether, in connection with
their audit examination, any condition or event that constitutes an Event of
Default under subsection 7.6A or B 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;


 


(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 Company 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, a notice of the filing of 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 the
Securities and Exchange Commission and all press releases made available
generally by Company or any of its Subsidiaries to the public concerning
developments that are material to the business of Company or any of its
Subsidiaries, taken as a whole;


 


(x)            Litigation
or Other Proceedings:  promptly upon
any Responsible Officer of Company obtaining knowledge of (1) the
institution of, or non-frivolous written 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:


 


(x)            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 a Responsible
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 


 


97

















 


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 Company and its Subsidiaries for each such Fiscal Year,
together with a pro  forma Compliance Certificate 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
Company and its Subsidiaries for each quarter of each 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 or principal executive
officer 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);


 


(xvii)       Good
Standing Certificates:  promptly upon
request of Administrative Agent (but no more frequently than once each Fiscal
Quarter), good standing certificates as to each Loan Party from its
jurisdiction of organization;


 


(xviii)      Notices
from Holders of Subordinated Indebtedness: 
promptly, upon receipt, copies of material 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


 


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(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
Administrative Agent.


 


6.2                       Existence,
etc.


 


Except
as permitted by 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
(as supplemented by the Company from time to time) 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.


 


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, fees,
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 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, fee,
assessment, charge or claim need be paid if it is being contested in good faith
by appropriate proceedings, so long as (i) 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.


 


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 and casualty events or accidents
excepted, all material properties used or useful 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 


 


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its Subsidiaries as may customarily be carried or
maintained under similar circumstances by companies 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 companies 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 policy of liability insurance (excluding director and officer
liability policies) shall name Administrative Agent for the benefit of Lenders
as an additional insured thereunder as its interests may appear and each
business interruption and casualty insurance policy shall 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 (except
in the case of non-payment of premium). 
In connection with the renewal of each such policy of insurance, Company
promptly shall deliver to Administrative Agent a certificate from Company’s
insurance broker or other evidence satisfactory to Administrative Agent that
Administrative Agent on behalf of Lenders has been named as additional insured
and/or loss payee thereunder.


 


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 from business
interruption insurance, (a) so long as no Event of Default pursuant to
subsection 8.1, 8.6 or 8.7 shall have occurred and be continuing, Company
or such Subsidiary may retain and apply such Net Insurance/Condemnation
Proceeds for working capital and any other corporate purposes, and (b) if
an Event of Default pursuant to subsection 8.1, 8.6 or 8.7 shall have occurred
and be continuing, Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds, to the extent such Net Insurance/Condemnation
Proceeds exceed $2,500,000, to prepay the Loans (and/or the Revolving Loan
Commitment Amount shall be reduced) as provided in subsections 2.4B and 2.4D.


 


(ii)           Other
Net Insurance/Condemnation Proceeds. 
Upon receipt by Company or any of its Subsidiaries or by Administrative
Agent as loss payee of any Net Insurance/Condemnation Proceeds in excess of
$2,500,000 other than from business interruption insurance:


 


(a)           so
long as no Event of Default shall have occurred and be continuing,
Administrative Agent, if it received such Net Insurance/Condemnation Proceeds,
shall deliver them to Company, and Company shall, or shall cause one or more of
its Subsidiaries to apply any such Net 


 


100

















 


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
at any time an Event of Default shall have occurred and be continuing,
Administrative Agent, if it holds such Net Insurance/Condemnation Proceeds, is
hereby authorized by Company to, and Company, if it or one of its Subsidiaries
holds such Net Insurance/Condemnation Proceeds, 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 and
subsection 2.4D.


 


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), (i) so long as no Event of Default has  occurred and is continuing, upon reasonable
notice and at such reasonable times during normal business hours as may
reasonably be requested but not to exceed once each Fiscal Year or (ii) at
any time or from time to time following the occurrence and during the
continuation 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:


 


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(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, Government 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 Government Authority under any applicable Environmental Laws, (b) any
remedial action taken by Company or any other 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 that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.


 


(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
Government Authority that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect, and (c) any request
for information from any Government Authority that suggests such Government
Authority is investigating whether Company or any of its Subsidiaries may be
potentially responsible for any Hazardous Materials Activity that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect.


 


(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 


 


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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, in each case, 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 required under Environmental
Laws to remove, remediate, clean up or abate any Hazardous Materials Activity
on, under or about any Facility that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and 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 Guaranty and Personal Property Collateral Documents After the Closing Date.


 


A.            Execution of Guaranty and Personal Property Collateral
Documents.  In the
event that any Person becomes a Subsidiary of Company after the date hereof,
Company will promptly notify Administrative Agent of that fact and cause such
Subsidiary to execute and deliver to Administrative Agent a counterpart of the
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 4.2I
and 4.2J) 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 (to the extent included in the definition of Collateral) of
such Subsidiary described in the applicable forms of Collateral Documents other
than any personal or mixed property asset subject to a Lien permitted by
subsection 7.2A(ii) or (v).  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.  Notwithstanding the provisions of
subsection 6.8A, (i) no Foreign Subsidiary shall be required to
execute and deliver the Guaranty or the Security Agreement, and (ii) no
Capital Stock of a Foreign Subsidiary in excess of 66% of the Capital Stock of
such Foreign Subsidiary shall be required to be pledged pursuant to the
provisions of the Security Agreement.


 


C.            Subsidiary Organizational Documents, Legal Opinions, etc.  Company shall deliver to Administrative
Agent, together with the Loan Documents required to be delivered under
subsection 6.8A, (i) certified copies of the Organizational Documents of
any Person that becomes a Subsidiary of Company after the date hereof executing
the Guaranty and Security Agreement, together with 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 


 


103

















 


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, and (iii) a favorable opinion of counsel to such
Subsidiary, in form and substance satisfactory to Administrative Agent and its
counsel, as to (a) the due organization and good standing 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 Collateral
pursuant to such Loan Documents) as Administrative Agent may reasonably
request, all of the foregoing to be 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 with a value in excess of $5,000,000 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 $5,000,000, 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, documents, title
insurance and environmental reports as may be reasonably required by
Administrative Agent.


 


B.            Real Estate Appraisals.  Upon request of Administrative Agent in
connection with the delivery of an Additional Mortgage, Company shall, and
shall cause each of its Subsidiaries to, permit an independent real estate
appraiser satisfactory to Administrative Agent, upon reasonable notice, to
visit and inspect such 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                        Interest
Rate Protection.


 


For
the period from and including the date that is 90 days after the Closing Date
to and including the third anniversary of the Closing Date, Company shall
maintain one or more 


 


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Interest Rate Agreements in form and substance
reasonably satisfactory to Administrative Agent with respect to the Term Loans,
in an aggregate notional principal amount of not less than 40% of the Term
Loans then outstanding during such period.


 


6.11                        Post-Closing
Items.


 


To the
extent not satisfied prior to the Signing Date pursuant to subsection 4.2, not
later than the date that is 90 days after the Signing Date (or such longer
period as Administrative Agent may agree), Company shall take or cause to be
taken all such actions, executed and delivered or cause to be executed and
delivered all such agreements, documents and instruments, and made or caused to
be made all such filings and recordings that may be necessary or, in the
opinion of Administrative Agent, desirable in order to create in favor of
Administrative Agent, for the benefit of Lenders, a valid and perfected First
Priority security interest in the entire personal and mixed property Collateral
(other than Excluded Assets), including the delivery of duly completed UCC
termination statements, and authorization of the filing thereof from the
applicable secured party, as may be necessary to terminate any effective UCC
financing statements or fixture filings (other than any such financing statements
or fixture filings in respect of Liens permitted to remain outstanding pursuant
to the terms of this Agreement).


 


Section 7.              COMPANY’S
NEGATIVE COVENANTS


 


Company
covenants and agrees that from and including the Closing Date, 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 (other than Unasserted Obligations)
and the cancellation, expiration or collateralization (in a manner reasonably
acceptable to Administrative Agent) 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)            Company
and its Subsidiaries may become and remain liable with respect to the
Obligations;


 


(ii)           Company
and its Subsidiaries (other than Dormant 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 (other than Dormant Subsidiaries) may become and remain
liable with respect to Indebtedness in respect of Capital Leases and
Indebtedness of Company and its Subsidiaries secured by Liens permitted by 


 


105

















 


subsection 7.2A(ii) in
an aggregate principal amount not to exceed $20,000,000 at any time
outstanding;


 


(iv)          Company
may become and remain liable with respect to Indebtedness to any Subsidiary,
and any wholly-owned Subsidiary of Company (other than any Dormant Subsidiary)
may become and remain liable with respect to Indebtedness to Company or any
Subsidiary Guarantor, and any Foreign Subsidiary may become and remain liable
with respect to Indebtedness to another Foreign Subsidiary; provided
that (a) a Lien on all such intercompany Indebtedness owing to a Loan
Party (excluding Indebtedness of a Foreign Subsidiary except as provided below)
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 owing to a Loan Party, such promissory note or instrument shall have
been pledged to Administrative Agent pursuant to the Security Agreement, and (c) the
aggregate amount (without duplication) of all such Indebtedness of Foreign
Subsidiaries to Company or any Subsidiary Guarantor, all Investments in Foreign
Subsidiaries permitted by subsection 7.3(ix) and all Contingent
Obligations permitted by subsection 7.4(ix) does not exceed $40,000,000
(plus any Additional Contributions not being utilized by Company or any of its
Subsidiaries for any other purpose under this subsection 7.1 or subsection 7.3
or 7.4 (other than Additional Contributions loaned to a Foreign Subsidiary
under this subsection 7.1(iv), and the corresponding Investment in respect of
such loan, for the purpose of (1) Permitted Acquisitions under subsection
7.3(viii), (2) Permitted Acquisitions or Investments under subsection
7.3(xiv) or (3) satisfying Contingent Obligations under subsection
7.4(ix))) at any time outstanding; 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 (except to the extent
such note or instrument would result in a tax or otherwise have adverse
consequences on or with respect to such Foreign Subsidiaries) and such
promissory note or other instrument shall be pledged to Administrative Agent;


 


(v)           Company
and its Subsidiaries (other than Dormant 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 amount not to exceed the aggregate principal amount thereof
outstanding on the Closing Date; provided that the Subordinated Notes
have been subject to legal or covenant defeasance;


 


(vii)         Company
and its Subsidiaries (other than Dormant 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;


 


(viii)        Company
and its Subsidiaries (other than Dormant Subsidiaries) may become and remain
liable with respect to Indebtedness of any Person assumed in 


 


106

















 


connection
with any acquisition of such Person permitted by subsection 7.3 and a Person
that becomes a direct or indirect wholly-owned Subsidiary of Company as a
result of any acquisition permitted by 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)           Company
and its Subsidiaries (other than Dormant Subsidiaries) may become and remain
liable with respect to refinancings or renewals of Indebtedness described in
clause (viii) above; provided that (a) any such refinancing
Indebtedness is in an aggregate principal amount not greater than the aggregate
principal amount of the Indebtedness being renewed or refinanced, plus the
amount of any interest, fees and premiums required to be paid thereon and
reasonable fees and expenses associated therewith, (b) such refinancing
Indebtedness has a later or equal final maturity and longer or equal weighted
average life than the Indebtedness being renewed or refinanced, (c) the
covenants, events of default, subordination and other provisions thereof
(including any guarantees thereof) shall be, in the aggregate no less favorable
to Lenders than those contained in the Indebtedness being renewed or
refinanced, and (d) no Event of Default shall have occurred or be
continuing immediately prior and after giving effect thereto;


 


(x)            Company
and its Subsidiaries may become and remain liable with respect to Indebtedness
consisting of insurance premium financing;


 


(xi)           Company
and its Subsidiaries (other than Dormant Subsidiaries) may become and remain
liable with respect to obligations in respect of purchase price or other
similar adjustments incurred by Company and its Subsidiaries (other than
Dormant Subsidiaries) in a Permitted Acquisition or any other Investment or
disposition expressly permitted hereunder; and


 


(xii)          Company
and its Subsidiaries (other than Dormant Subsidiaries) may become and remain
liable with respect to Indebtedness in respect of sale and lease-back transactions
permitted by subsection 7.10(b).


 


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;


 


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(ii)           Liens
on any asset existing at the time of acquisition of such asset by Company or a
Subsidiary (other than Dormant Subsidiaries), 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 (other than Dormant Subsidiaries) or to secure
any Indebtedness permitted hereby incurred by Company or a Subsidiary (other
than Dormant Subsidiaries) 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 any such Lien shall apply only to the asset so acquired and proceeds
thereof and accessions thereto; and provided  further, that the
aggregate principal amount of all Indebtedness secured by such Liens and all
Indebtedness in respect of Capital Leases permitted by subsection 7.1(iii) does
not exceed $20,000,000 at any time outstanding;


 


(iii)          Liens
described in Schedule 7.2 annexed hereto and any Lien granted as a
replacement or substitute therefor, so long as such Lien covers the same
property as is secured by the Lien described in Schedule 7.2;


 


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


 


(v)           Liens
securing Indebtedness described in subsections 7.1(viii) and 7.1(ix) in
an aggregate principal amount not to exceed $5,000,000 at any time outstanding;
and


 


(vi)          Liens
securing Indebtedness refinancing or renewing the Indebtedness secured by Liens
described in clauses (ii), (iii) and (v) of this subsection 7.2A; provided
that such Liens encumber the same or substantially the same property encumbered
by the original Liens (including after-acquired property to the extent that the
Liens securing the Indebtedness being refinanced or renewed extended to
after-acquired property) and no other property and the principal or commitment
amount of Indebtedness secured thereby does not increase.


 


B.            Equitable Lien in Favor of Lenders.  If Company or any of its Subsidiaries shall
create or assume any Lien upon any of its properties or assets, whether now
owned or hereafter acquired, other than Liens excepted by the provisions of
subsection 7.2A, it shall make or cause to be made effective provision
whereby the Obligations will be secured by such Lien equally and ratably with
any and all other Indebtedness secured thereby as long as any such Indebtedness
shall be so secured; provided that, notwithstanding the foregoing, this
covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.


 


C.            No Further Negative Pledges.  Neither Company nor any of its Subsidiaries
shall enter into any agreement (other than the Subordinated Note Indenture)
prohibiting the creation or assumption of any Lien upon any of its properties
or assets as security for the Obligations or any Indebtedness that refinances
the Obligations, whether now owned or hereafter acquired, other than (i) any
agreement (a) prohibiting only the creation of Liens securing Subordinated
Indebtedness or (b) containing an “equal and ratable” clause, (ii) any



 


108

















 


agreement evidencing Indebtedness secured by Liens
permitted by subsection 7.2A(ii), as to the assets securing such
Indebtedness or subject to Liens permitted under subsection 7.2A(v) or
7.2A(vi) or Permitted Encumbrances referred to in clauses (iii), (xv),
(xvi), (xviii) or (xix) of the definition thereof, (iii) any agreement
evidencing an asset sale, as to the assets being sold, (iv) provisions
restricting Liens on assets of and interests in Joint Ventures; (v) leases
and licenses containing customary non-assignment or negative pledge
restrictions entered into in the ordinary course of business; and (vi) agreements
binding on property or Persons acquired in a Permitted Acquisition (or
Investment permitted hereunder), not entered into in contemplation of such
Permitted Acquisition (or Investment permitted hereunder) and not applicable to
any Person other than the Person acquired, or to any property other than the
property so acquired.


 


D.            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 (a) as
provided in this Agreement or any other Loan Documents, (b) as to
transfers of assets, as may be provided in an agreement with respect to a sale
of such assets, (c) the Subordinated Note Indenture, (d) in any
agreement of any Person assumed in connection with any acquisition of such
Person permitted by subsection 7.3 that apply only to property of such Person,
including restrictions under any acquired Indebtedness of such Person not
incurred in violation of this Agreement relating to the property of such Person
or any of its Subsidiaries, which restriction in each case existed at the time
of acquisition, was not put into place in connection with or in anticipation of
such acquisition and is not applicable to any Person other than the Person
acquired, or to any property other than the property so acquired, (e) as
to transfers of assets, as may be provided in leases or licenses entered into
in the ordinary course of business, (f) any agreement that amends,
refinances or replaces any agreement containing restrictions permitted by the
preceding clause (d); provided that the terms and conditions of such
agreement, as they relate to any such restrictions, are no less favorable to
Company or any such Subsidiary, as applicable, than those under the agreement
so amended, refinanced or replaced, (g) restrictions contained in
Indebtedness of a Foreign Subsidiary permitted by subsection 7.1(vii); provided
that such restrictions relate only to one or more Foreign Subsidiaries, (h) as
to transfers of assets, as may be provided in any agreement relating to Liens
permitted by subsection 7.2A, and (i) encumbrances or restrictions
relating to Joint Ventures.


 


7.3                       Investments;
Acquisitions.


 


Company
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, make 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 of any Person, or any division or
line of business of any Person except:


 


109
















 


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


 


(ii)           (a) Company
and its wholly-owned Domestic Subsidiaries (other than Dormant Subsidiaries)
may make and own additional equity Investments in their respective wholly-owned
Domestic Subsidiaries (other than Dormant Subsidiaries) and (b) Foreign
Subsidiaries may make and own additional equity Investments in other Foreign
Subsidiaries;


 


(iii)          Company
and its Subsidiaries (other than Dormant Subsidiaries) may make Investments in
the form of Indebtedness permitted by subsection 7.1(iv);


 


(iv)          Company
and its Subsidiaries (other than Dormant 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 Merger 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 Subsidiaries (other than Dormant Subsidiaries) may make Permitted
Acquisitions (including the acquisition of the Capital Stock of Subsidiaries
formed in connection with any such Permitted Acquisition) for a purchase price
(including all Cash, Securities and Indebtedness (other than Capital Leases)
permitted by subsection 7.1(viii)) not to exceed $80,000,000 (plus any
Additional Contributions not being utilized by Company or any of its
Subsidiaries for any other purpose under subsection 7.1, 7.3(ix) or 7.4
which, (a) when aggregated with any Additional Contributions made for
purposes of Permitted Acquisitions permitted by subsections 7.3(viii) and
7.3(xiv), do not exceed $40,000,000 and (b) when aggregated with any
Additional Contributions made for purposes of Permitted Acquisitions and other
Investments permitted by subsections 7.3(viii) and 7.3(xiv) do not
exceed $60,000,000) and continue to own such assets after the acquisition
thereof; provided that (a) no Potential Event of Default or Event
of Default shall have occurred and be continuing at the time such acquisition
occurs or after giving effect thereto, (b) Company shall, and shall cause
its Subsidiaries to, comply with the applicable requirements of subsections 6.8
and 6.9 with respect to each such acquisition that results in a Person becoming
a Subsidiary and (c) Company shall be in Pro Forma Compliance at the time
of such acquisition;


 


(viii)        any
Foreign Subsidiary of Company may make Permitted Acquisitions (including the
acquisition of the Capital Stock of Subsidiaries formed in connection with any
such Permitted Acquisition) for a purchase price (including all Cash,
Securities and Indebtedness (other than Capital Leases) permitted by subsection
7.1(viii)) not to exceed $40,000,000 (plus any Additional Contributions not
being utilized by Company or any of its Subsidiaries for any other purpose
under subsection 7.1, 7.3(ix) or 7.4 (other than 


 


110

















 


Additional  Contributions  loaned  to  a  Foreign  Subsidiary  under  subsection  7.1(iv),  and  the  corresponding  Investment  in  respect  of  such  loan,  for  the  purpose  of  (a)  Permitted  Acquisitions  under  subsection  7.3(viii),  (b)  Permitted  Acquisitions  or  Investments  under  subsection  7.3(xiv)  or  (c)  satisfying  Contingent  Obligations  under  subsection  7.4(ix))  which,  (a)  when  aggregated  with  any  Additional  Contributions  made  for  purposes  of  Permitted  Acquisitions  permitted  by  subsections  7.3(vii)  and  (xiv),  do  not  exceed  $40,000,000  and  (b)  when  aggregated  with  any  Additional  Contributions  made  for  purposes  of  Permitted  Acquisitions  and  other  Investments  permitted  by  subsections  7.3(vii)  and  7.3(xiv)  do  not  exceed  $60,000,000)  and  continue  to  own  such  assets  after  the  acquisition  thereof;  provided  that  (a)  no  Potential  Event  of  Default  or  Event  of  Default  shall  have  occurred  and  be  continuing  at  the  time  such  acquisition  occurs  or  after  giving  effect  thereto  and  (b)  Company  shall  be  in  Pro  Forma  Compliance  at  the  time  of  such  acquisition;


 


(ix)           Company
and its wholly-owned Domestic Subsidiaries (other than Dormant Subsidiaries)
may make additional Investments in their respective Foreign Subsidiaries; provided
that the aggregate amount (without duplication) of all such Investments under
this subsection 7.3(ix), all Indebtedness of Foreign Subsidiaries to Company or
any Subsidiary Guarantor permitted by subsection 7.1(iv) and all
Contingent Obligations permitted by subsection 7.4(ix) does not exceed
$40,000,000 (plus any Additional Contributions not being utilized by Company or
any of its Subsidiaries for any other purpose under this subsection 7.3 or
subsection 7.1 or 7.4 (other than Additional Contributions loaned to a Foreign
Subsidiary under subsection 7.1(iv), and the corresponding Investment in respect
of such loan, for the purpose of (a) Permitted Acquisitions under
subsection (viii), (b) Permitted Acquisitions or other Investments under
subsection 7.3(xiv) or (c) satisfying Contingent Obligations under
subsection 7.4(ix))) at any time outstanding;


 


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


 


(xi)           Company
and its Subsidiaries (other than Dormant Subsidiaries) may acquire Securities
or Investments in connection with the satisfaction or enforcement of
Indebtedness or claims due or owing to Company or any of its Subsidiaries,
including Securities or Investments 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;


 


(xii)          Company
and its Subsidiaries (other than Dormant 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 at any time outstanding (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);


 


111

















 


(xiii)         Company
and its Subsidiaries (other than Dormant 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 time
outstanding;


 


(xiv)        Company
and its Subsidiaries (other than Dormant Subsidiaries) may make Permitted
Acquisitions and make and own other Investments in an aggregate amount (without
duplication) not to exceed $20,000,000 at any time outstanding (plus (a) in
the case of Permitted Acquisitions, any Additional Contributions not being
utilized by Company or any of its Subsidiaries for any other purpose under
subsection 7.1, 7.3(ix) or 7.4 (other than Additional Contributions loaned
to a Foreign Subsidiary under subsection 7.1(iv), and the corresponding
Investment in respect of such loan, for the purpose of (1) Permitted
Acquisitions or other Investments under subsection 7.3(viii) or
7.3(xiv) or (2) satisfying Contingent Obligations under subsection
7.4(ix)), which, when aggregated with any Additional Contributions made for
purposes of Permitted Acquisitions permitted by subsection 7.3(vii) or
7.3(viii), do not exceed $40,000,000 at any time outstanding and (b) in
the case of other Investments, any Additional Contributions not being utilized
by Company and its Subsidiaries for any other purpose under subsection 7.1 ,
7.3(ix) or 7.4 (other than Additional Contributions loaned to a Foreign
Subsidiary under subsection 7.1(iv)), and the corresponding Investment in
respect of such loan, for the purpose of (1) Permitted Acquisitions or
other Investments under subsection 7.3(viii) or 7.3(xiv) or (2) satisfying
Contingent Obligations under subsection 7.4(ix)), which, when aggregated with
any Additional Contributions made for purposes of Permitted Acquisitions
permitted by subsection 7.3(vii) or 7.3(viii), do not exceed $60,000,000
at any time outstanding); and


 


(xv)         Company
and its Subsidiaries (other than Dormant Subsidiaries) may make loans and
advances to officers, directors or employees for business-related travel
expenses, moving expenses and other similar expenses, in each case incurred in
the ordinary course of business or consistent with past practice.


 


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:


 


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


 


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


 


(iii)          Company
and its Subsidiaries (other than Dormant Subsidiaries) may become and remain
liable with respect to Contingent Obligations under Hedge Agreements;


 


112

















 


(iv)          Company
and its Subsidiaries (other than Dormant 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 (other than Dormant Subsidiaries) may become and remain
liable with respect to Contingent Obligations in respect of any Indebtedness of
Company or any of its Domestic Subsidiaries permitted by subsection 7.1;


 


(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 remain liable with respect to Contingent Obligations arising
under their subordinated guaranties of the Subordinated Notes, provided
that the Subordinated Notes have been defeased;


 


(viii)        Company
and its Subsidiaries (other than Dormant Subsidiaries) may become and remain
liable with respect to other Contingent Obligations; provided that the
amount of such Contingent Obligations shall not exceed $5,000,000 at any time
outstanding;


 


(ix)           Company
and its Subsidiaries (other than Dormant Subsidiaries) may become and remain
liable with respect to Contingent Obligations in respect of any obligations of
any Foreign Subsidiary; provided that the aggregate amount (without
duplication) of all such Contingent Obligations, all Indebtedness of Foreign
Subsidiaries to Company or any Subsidiary Guarantor permitted by subsection 7.1(iv) and
all Investments in Foreign Subsidiaries permitted by subsection 7.3(ix) does
not exceed $40,000,000 (plus any Additional Contributions not being utilized by
Company or any of its Subsidiaries for any other purpose under this subsection
7.4 or subsections 7.1 or 7.3) at any time outstanding;


 


(x)            Company
and the Subsidiary Guarantors may become and remain liable with respect to
Contingent Obligations in respect of any obligations of Company or any
Subsidiary Guarantor not prohibited by this Agreement; and


 


(xi)           Any
Subsidiary of Company (other than the Subsidiary Guarantors) may become and
remain liable with respect to Contingent Obligations in respect of any other
Subsidiary not prohibited by this Agreement.


 


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 Company may (i) 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, 


 


113

















 


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 by this Agreement; (ii) make
Restricted Junior Payments to Holdings or United Online (a) provided such
amounts are reflected in the calculation of Consolidated Net Income, to the
extent necessary to permit Holdings to pay Company’s allocated share of general
administrative costs and expenses to United Online, (b) to the extent
necessary to permit Holdings to reimburse United Online for the allocated tax
liabilities of Company, in each case so long as Holdings applies the amount of
any such Restricted Junior Payment for such purpose or to make payments under a
tax sharing agreement with United Online permitted under subsection 7.9 which
provides for payment by Company and its Subsidiaries of the taxes of United
Online allocable to Holdings, Company and its Subsidiaries, and (c) for
RSU Payments that constitute Restricted Junior Payments; and (iii) Company
may make all payments necessary in connection with the Merger Agreement
(including payments to defease and/or repurchase Subordinated Notes).


 


7.6                       Financial
Covenants.


 


A.            Minimum Consolidated Fixed Charge Coverage Ratio.  Company shall not permit the Consolidated
Fixed Charge Coverage Ratio as of the last day of the most recently ended
Fiscal Quarter to be less than the ratio set forth below opposite the
applicable Fiscal Quarter:


 


114

















 


	
  Period

  	
   

  	
  Minimum Consolidated Fixed Charge

  Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2008

  	
   

  	
  1.65:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2009

  	
   

  	
  1.65:1.00

  	
   

  
	
  June 30,
  2009

  	
   

  	
  1.65:1.00

  	
   

  
	
  September 30,
  2009

  	
   

  	
  1.65:1.00

  	
   

  
	
  December 31,
  2009

  	
   

  	
  1.65:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2010

  	
   

  	
  1.65:1.00

  	
   

  
	
  June 30,
  2010

  	
   

  	
  1.65:1.00

  	
   

  
	
  September 30,
  2010

  	
   

  	
  1.65:1.00

  	
   

  
	
  December 31,
  2010

  	
   

  	
  1.65:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2011

  	
   

  	
  1.65:1.00

  	
   

  
	
  June 30, 2011

  	
   

  	
  1.65:1.00

  	
   

  
	
  September 30,
  2011

  	
   

  	
  1.65:1.00

  	
   

  
	
  December 31,
  2011

  	
   

  	
  1.65:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2012

  	
   

  	
  1.65:1.00

  	
   

  
	
  June 30,
  2012

  	
   

  	
  1.65:1.00

  	
   

  
	
  September 30,
  2012

  	
   

  	
  1.65:1.00

  	
   

  
	
  December 31,
  2012

  	
   

  	
  1.65:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2013

  	
   

  	
  1.65:1.00

  	
   

  
	
  June 30,
  2013

  	
   

  	
  1.65:1.00

  	
   

  
	
  September 30,
  2013

  	
   

  	
  1.65:1.00

  	
   

  
	
  December 31,
  2013 and any Fiscal Quarter thereafter

  	
   

  	
  1.70:1.00

  	
   

  



 


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


 


115

















 


	
  Period

  	
   

  	
  Maximum Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2008

  	
   

  	
  4.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2009

  	
   

  	
  4.75:1.00

  	
   

  
	
  June 30,
  2009

  	
   

  	
  4.75:1.00

  	
   

  
	
  September 30,
  2009

  	
   

  	
  4.75:1.00

  	
   

  
	
  December 31,
  2009

  	
   

  	
  4.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2010

  	
   

  	
  4.50:1.00

  	
   

  
	
  June 30,
  2010

  	
   

  	
  4.50:1.00

  	
   

  
	
  September 30,
  2010

  	
   

  	
  4.50:1.00

  	
   

  
	
  December 31,
  2010

  	
   

  	
  4.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2011

  	
   

  	
  4.00:1.00

  	
   

  
	
  June 30,
  2011

  	
   

  	
  4.00:1.00

  	
   

  
	
  September 30,
  2011

  	
   

  	
  4.00:1.00

  	
   

  
	
  December 31,
  2011

  	
   

  	
  3.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2012

  	
   

  	
  3.50:1.00

  	
   

  
	
  June 30,
  2012

  	
   

  	
  3.50:1.00

  	
   

  
	
  September 30,
  2012

  	
   

  	
  3.50:1.00

  	
   

  
	
  December 31,
  2012

  	
   

  	
  3.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2013

  	
   

  	
  3.00:1.00

  	
   

  
	
  June 30,
  2013

  	
   

  	
  3.00:1.00

  	
   

  
	
  September 30,
  2013

  	
   

  	
  3.00:1.00

  	
   

  
	
  December 31,
  2013 and any Fiscal Quarter thereafter

  	
   

  	
  2.50:1.00

  	
   

  



 


7.7                       Restriction
on Fundamental Changes; Asset Sales.


 


Company
shall not, and shall not permit any of its Subsidiaries to 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:


 


(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 


 


116

















 


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 (other than Dormant 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 (other than Dormant Subsidiaries) may dispose of obsolete,
worn out or surplus property in the ordinary course of business;


 


(iv)          Company
and its Subsidiaries (other than Dormant Subsidiaries) may make Asset Sales of
assets having a fair market value not in excess of $10,000,000 and may sell
Florists’ Transworld Delivery, Inc.’s headquarters located at 3113
Woodcreek Drive, Downers Grove, Illinois; 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 or Cash Equivalents; (c) no Event of Default shall have occurred
or be continuing after giving effect thereto; and (d) the proceeds of such
Asset Sales shall be applied as required by subsection 2.4B(iv)(a) or
subsection 2.4D;


 


(v)           Company
and its Subsidiaries may sell real property located in Sleaford, England owned
by any Subsidiary of Company;


 


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


 


(vii)         Company
or a Subsidiary (other than a Dormant 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;


 


(viii)        any
Person may be merged with or into Company or any Subsidiary (other than any
Dormant 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 subsections 6.8 and 6.9 and
(c) no Potential Event of Default or Event of Default shall have occurred
or be continuing after giving effect thereto;


 


(ix)           Company
or a Subsidiary (other than a Dormant Subsidiary) may, in the ordinary course
of business, dispose of Hedge Agreements;


 


117

















 


(x)                                   Company
and its Subsidiaries (other than Dormant 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;


 


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


 


(xii)                             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(xii);


 


(xiii)                          Company
and its Subsidiaries may transfer property as a result of casualty or
condemnation events;


 


(xiv)                         Company
and its Subsidiaries may enter into leases and subleases of real and personal
property in the ordinary course of business;


 


(xv)                            Company
and its Subsidiaries 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; and


 


(xvi)                         Company
and its Subsidiaries may dispose of Cash or Cash Equivalents in transactions
not prohibited by this Agreement.


 


7.8                       Consolidated
Capital Expenditures.


 


Company
shall not, and shall not permit its Subsidiaries to, make or incur Consolidated
Capital Expenditures, in any calendar year indicated below, in an aggregate
amount in excess of the corresponding amount (the “Maximum
Consolidated Capital Expenditures Amount”) set forth below opposite
such calendar year; provided that the Maximum Consolidated Capital
Expenditures Amount for any calendar year shall be increased by an amount equal
to the excess, if any, of the Maximum Consolidated Capital Expenditures Amount
for the previous calendar year (without giving effect to any adjustment in
accordance with this proviso) over the actual amount of Consolidated Capital
Expenditures for such previous calendar year with the Consolidated Capital
Expenditures in such following calendar year to be applied first to such unused
amounts; provided, further that in no event shall the amount of
such increase exceed 50% of the Maximum Consolidated Capital Expenditures
Amount for such previous calendar year (prior to any adjustment in accordance
with this proviso); provided  further that the foregoing
limitations shall not restrict Consolidated Capital Expenditures funded with
Net Securities Proceeds:


 


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  Calendar Year

  	
   

  	
  Maximum Consolidated

  Capital Expenditures

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  $

  	
  14,000,000

  	
   

  
	
  2009

  	
   

  	
  $

  	
  18,000,000

  	
   

  
	
  2010

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
  2011

  	
   

  	
  $

  	
  11,000,000

  	
   

  
	
  2012

  	
   

  	
  $

  	
  11,000,000

  	
   

  
	
  2013

  	
   

  	
  $

  	
  12,000,000

  	
   

  



 


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 Affiliate of Company, on terms that are
less favorable to Company or that Subsidiary in any material respect, taken as
a whole, as the case may be, than those that would have been obtained at the
time from Persons who are not an 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)           indemnification
payments (including reimbursement of fees and expenses) to officers, directors,
employees or consultants of Company or any of its Subsidiaries;


 


(iii)          any
Restricted Junior Payment permitted by subsection 7.5;


 


(iv)          Investments
permitted by subsection 7.3;


 


(v)           any
transaction involving consideration of $2,000,000 or less per annum;


 


(vi)          any
employment agreement, employee benefit plan, officer or director
indemnification agreement or any similar arrangement entered into by Company or
any of its Subsidiaries in the ordinary course of business and payments or
issuances of Equity Interests of United Online pursuant thereto;


 


(vii)         any
tax sharing agreements of Company or any of its Subsidiaries entered into with
United Online and any of its Subsidiaries providing for Company and 


 


119

















 


its
Subsidiaries to pay the portion of United Online’s consolidated taxes directly
attributed to Holdings, Company and its Subsidiaries;


 


(viii)        the
existence of, or the performance by Company or any its Subsidiaries of its
obligations under the terms of, the Merger Agreement; and


 


(ix)           marketing,
advertising and cross promotional arrangements regarding the promotion and sale
of the products and services of Company or any of its Subsidiaries, on one
side, and the promotion and sale of the products and services of United Online
or any of its Subsidiaries, on the other side, provided (a) with
respect to such marketing, advertising and cross promotional arrangements
provided by Company and its Subsidiaries, the amounts paid to Company and its
Subsidiaries shall be at least equal to the out-of-pockets cost incurred by
Company and its Subsidiaries and shall not exceed $15,000,000 in any calendar
year and (b) with respect to marketing, advertising and cross promotional
arrangements provided to Company and its Subsidiaries, the amount paid by
Company and its Subsidiaries shall be reasonable in the good faith judgment of
Company taking into account all relevant factors including the market value of
the benefit received by Company and the market value of such promotions,
products or services to the extent ascertainable and shall not exceed
$15,000,000 in any calender year;


 


(x)            agreements
in connection with RSU Payments; and


 


(xi)           agreements
between United Online and its Subsidiaries (other than the Loan Parties and their
Subsidiaries) on the one hand, and the Loan Parties, on the other hand, with
respect to good faith allocations of expenses relating to, and cost sharing
arrangements relating to, general and administrative matters.


 


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 (other than Dormant 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 by 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, Company or any of its
Subsidiaries may sell and become and remain liable as lessee with respect to a
lease for (x) 


 


120

















 


Company’s headquarters located at 3113 Woodcreek
Drive, Downers Grove, Illinois and (y) any real property owned by Company
or its Subsidiaries and located in Sleaford, England, in each case, 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 reasonably ancillary, complementary, similar or related
businesses and (ii) such other lines of business as may be consented to by
Requisite Lenders.


 


7.12                        Fiscal
Year.


 


Company shall not change its Fiscal Year-end from June 30;
provided that notwithstanding the foregoing, Company may change its
Fiscal Year-end to December 31.


 


Section 8.                                                  EVENTS
OF DEFAULT


 


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


 


8.1                               Failure
to Make Payments When Due.


 


(a) 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; or (b) 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),  Contingent
Obligations in respect of Indebtedness, Hedging Obligations or letters of
credit in an individual principal amount of $7,500,000 or more or an aggregate
principal amount of $12,500,000 or more, in each case beyond the end of any
grace period provided therefor (provided that, in the case of any
Hedging Obligation, the amount counted for this purpose shall be the amount
payable by Holdings, Company or any of its Subsidiaries if such Hedging
Obligation were terminated at such time); 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 


 


121

















 


Contingent
Obligations in respect of Indebtedness, Hedging Obligations or letters of
credit) in the aggregate principal amount referred to in clause (i) above
or (b) any loan agreement, mortgage, indenture or other agreement relating
to such 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 (provided such
breach or default has not been cured or waived or ceased to be continuing); 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) a Responsible 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 Significant 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
Significant 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 


 


122

















 


Holdings,
Company or any of its Significant 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 Significant 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 part of the
property of Holdings, Company or any of its Significant 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 Significant 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 Significant
Subsidiaries shall make any assignment for the benefit of creditors; or


 


(ii)           Holdings,
Company or any of its Significant 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


 


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 $15,000,000,
in any case to the extent not adequately covered by insurance as to which a
solvent and unaffiliated insurance company has acknowledged coverage, (i) 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 consecutive days (in any event later than five days
prior to the date of any action to foreclose or collect upon its judgment); or


 


8.9                       Dissolution.


 


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


 


123

















 


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 could
reasonably be expected to result in a Material Adverse Effect; or


 


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 material 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 portion of
the 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 shall (i) engage in any business other
than entering into and performing its obligations incidental to, under and in
accordance with the Loan Documents to which it is a party (which, for the
avoidance of doubt, shall include the ability to make Restricted Junior
Payments to the extent permitted by this Agreement) or related to or incidental
to its ownership of Company or (ii) own 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 (excluding funds permitted to be paid or
distributed to Holdings or capital contributions to and issuances of equity by
Holdings); 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, incidental to and in accordance with
the Loan Documents to which it is a party (if any) or (ii) owns any assets
(other than Renaissance Greeting Cards, Inc. in respect of the
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 Consummate Acquisition or Merger.


 


The conditions set forth in subsection 4.2N shall not
be satisfied concurrently with the making of the initial Loan, or the
Acquisition or Merger shall be unwound, reversed or otherwise rescinded in
whole or in part for any reason;


 


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(iv).


 


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.  Wells Fargo
agrees to act upon the express conditions contained in this Agreement and the
other Loan Documents, as applicable.  The
provisions of this Section 9 are solely for the benefit of Agents 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.


 


125

















 


Administrative
Agent may execute any of its duties under this Agreement or any other Loan
Document by or through agents, employees or attorneys-in-fact appointed by
Administrative Agent in its sole discretion. 
Administrative Agent and any such sub-agent may perform any and all of
the duties of Administrative Agent and exercise the rights and powers of
Administrative Agent by or through their respective Affiliates and the
partners, directors, officers, employees, agents and advisors of such Person
and of such Person’s Affiliates (“Related Parties”).  The exculpatory provisions of this Article shall
apply to any such sub-agent and to the Related Parties of Administrative Agent
and any such sub-agent.


 


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 


 


126

















 


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.


 


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.            Notice of Default.  If any Lender has given any
notice to Company or taken any other action with respect to a claimed Event of
Default or Potential Event of Default, it shall promptly provide a copy of such
notice to Administrative Agent.


 


C.            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.


 


D.            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 


 


127

















 


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 or (where so
instructed) refrain from acting, or to exercise such power, discretion or
authority, in accordance with such instructions; provided that no Agent
shall be required to take any action that, in its opinion or the opinion of its
counsel, may expose such Agent to liability or that is contrary to any Loan
Document or applicable law.  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 (including any electronic message, Internet or intranet website
posting or other distribution), 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).


 


E.             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 


 


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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 may be imposed on, incurred by or asserted against an Agent or
such other Person 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                               Resignation
of Agents; Successor Administrative Agent and Swing Line Lender.


 


A.            Resignation; 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 by
Administrative Agent, 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.  If no such successor shall have been so
appointed by Requisite Lenders and shall have accepted such appointment within
30 days after the retiring Administrative Agent gives notice of its
resignation, the retiring Administrative Agent may, on behalf of Lenders,
appoint a successor Administrative Agent. 
If Administrative Agent shall notify Lenders and Company that no Person
has accepted such appointment as successor Administrative Agent, such
resignation shall nonetheless become effective in accordance with
Administrative Agent’s notice and (i) the retiring Administrative Agent
shall be discharged from its duties and obligations under the Loan Documents,
except that any Collateral held by Administrative Agent will continue to be
held by it until a Person shall have accepted the appointment of successor
Administrative Agent, and (ii) all payments, communications and determinations
provided to be made by, to or through Administrative Agent shall instead be
made by, to or through each Lender directly, until such time as Requisite
Lenders appoint a successor Administrative Agent in accordance with this
subsection 9.5A.  Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, 


 


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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 (if
not already discharged as set forth above). 
After any retiring Agent’s resignation hereunder, 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 amount of the Swing Line
Loan Commitment then in effect and with other appropriate insertions.


 


9.6                       Collateral
Documents and Guaranties.


 


Each
Lender (which terms shall include, for purposes of this subsection 9.6 any Swap
Counterparty) 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 the Guaranty,
and each Lender agrees to be bound by the terms of each Collateral Document and
the Guaranty; provided that Administrative Agent shall not (i) enter
into or consent to any material amendment, modification, termination or waiver
of any provision contained in any Collateral Document or the 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 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 clauses (ii) and (iii) of
subsection 7.2A; provided that, in the case of a sale of such item
of Collateral or stock referred to in clause (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 the Guaranty, it
being understood and agreed that all powers, rights and remedies under the
Collateral Documents and 


 


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the Guaranty 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 that any 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 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 


 


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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 nor 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
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(iv) 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.


 


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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, Tranche A Term
Loan Exposure or Tranche B 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, unless each of Administrative Agent and, so long as no
Event of Default has occurred and is continuing, Company otherwise consents
(each such consent not to be unreasonably withheld or delayed), provided
that concurrent assignments by or to two or more Affiliated Funds shall be
aggregated for purposes of determining the minimum assignment amount, (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 Loan or the Commitment assigned, and any assignment of all or
any portion of a Revolving Loan Commitment, Revolving Loan or Letter of Credit
participation 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 and (c) the parties to each assignment
shall execute and deliver to Administrative Agent an Assignment Agreement,
together with a processing and recordation fee of $3,500 (unless the assignee
is a Lender, an Affiliate or an Approved Fund of a Lender, in which case no fee
shall be required, and provided that only one such processing and recordation
fee shall be required in connection with concurrent assignments by or to two or
more Affiliated Funds), and the Eligible Assignee, if it shall not be a Lender,
shall deliver to Administrative Agent information reasonably requested by
Administrative Agent, including 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(iv).


 


Upon such execution,
delivery and any required consent, and recording in the Register
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 (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, 


 


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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, Exhibit V
or Exhibit VI annexed hereto, as the case may be, with appropriate
insertions, to reflect the amounts of the new Commitments and/or outstanding
Revolving Loans and/or outstanding Tranche A Term Loans and/or Tranche B Term
Loans, as the case may be, of the assignee and/or the assigning Lender.  Other than as provided in
subsection 2.1A(iv) 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(iv), Administrative Agent shall, if each of 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), (b) record
the information contained therein in the Register, and (c) give prompt
notice thereof to Company. 
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this
subsection 10.1B(ii).  No Assignment
Agreement shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this
subsection 10.1B(ii).


 


(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
not to 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 


 


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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 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 Subsidiaries) 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) an
extension of the scheduled final maturity date of any Loan allocated to such
participation, (ii) a reduction of the principal amount of or the rate of
interest payable on any Loan allocated to such participation or (iii) an
increase in the Commitment 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 (i) in



 


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the case of subsection 2.7, to the rights or benefits
set forth thereunder 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(iv) as though it were a Lender and (ii) in
the case of subsections 2.6D, 2.7 and 10.4, to the rights or benefits set forth
thereunder, unless such Participant provides written notice of its name and
address to Administrative Agent for recordation in the Register.


 


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 and its 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 agrees, and each Lender that becomes a party hereto pursuant to an
Assignment Agreement shall be deemed to 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 t; and (iii) that it will make or purchase
Loans for its own account in the ordinary course of its business and without a
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).


 


10.2                Expenses.


 


Whether or not the transactions contemplated hereby
shall be consummated, Company agrees to pay promptly:  (i) all reasonable and documented 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 customarily provided in such situations by
nationally recognized law firms) 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; (iii) all reasonable
and documented fees, expenses and disbursements of counsel to Administrative
Agent (but excluding costs of internal counsel) 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; provided that in the
event the initial Loans are not funded, Company’s Obligations under this clause
shall not exceed $200,000; (iv) all costs and 


 


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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, title insurance premiums, and reasonable and documented
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 and
documented 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 appraisals provided for under subsection 4.2 or 6.9B and any
environmental audits or reports provided for under subsection 6.9A; (vi) all
costs and expenses incurred by Administrative Agent in connection with the
custody or preservation of any of the Collateral following the occurrence and
during the continuance of an Event of Default; (vii) all other costs and
expenses incurred by Administrative Agent in connection with any syndication of
the Commitments prior to and for the first 90 days after the Closing Date; (viii) all
costs and expenses, including reasonable attorneys’ fees (but excluding costs
of internal counsel) 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; provided that such costs and expenses shall not exceed
$50,000 prior to the occurrence of an Event of Default without Company’s prior
consent (such consent not to be unreasonably withheld); and (viii) all
costs and expenses, including attorneys’ fees (but excluding costs of internal
counsel), 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 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, trustees, employees, agents, 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 from the gross negligence or willful misconduct of, or breach
of any Loan Document by, 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, damages (including natural
resource damages), penalties, actions, judgments, suits, claims (including
Environmental Claims), costs (including the costs of any 


 


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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 documented
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 or the other Loan Documents 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 Guaranty)) 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 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 and during the
continuation of any Event of Default each of the Lenders 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 due and payable to that Lender or to 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 that Lender shall
have made any demand hereunder.


 


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10.5                Ratable
Sharing.


 


Lenders
hereby agree among themselves that if any of them shall, whether by voluntary
or mandatory payment (other than a payment or 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 (a) 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 of such recovery, but without
interest and (b) the foregoing provisions shall not apply to (1) any
payment made by Company pursuant to and in accordance with the express terms of
this Agreement or (2) any payment obtained by a Lender as consideration
for the assignment (other than an assignment pursuant to this
subsection 10.5) of or the sale of a participation in any of its
Obligations to any Eligible Assignee or Participant pursuant to
subsection 10.1B.  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 


 


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Loan, (2) postpone
the scheduled final maturity date of any Loan, or postpone the date or reduce
the amount of any scheduled payment (but not prepayment) of principal of any
Loan, (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 an Event of Default) excluding any decrease
resulting from a 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 (other than
any waiver of any increase in the fees applicable to any Letter of Credit
pursuant to subsection 3.2), (6) extend the expiration date of any Letter
of Credit beyond the Revolving Loan Commitment Termination Date (unless all
unfunded risk participations with respect to any Letter of Credit are released
by the Issuing Lender (in its sole discretion), in which case, the Issuing
Lender may extend the stated expiration date of such Letter of Credit beyond
the Revolving Commitment Termination Date), (7) extend the Revolving
Commitment Termination Date or (8) 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 from
an increase in the aggregate amount of the Commitments or Loans 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 or FTD, Inc. from its obligations under the Guaranty
or release all or substantially all of the Subsidiary Guarantors from their
obligations under the 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 2.4D, subsection 8.1, subsection 10.5
or this subsection 10.6.


 


In
addition, no amendment, modification, termination or waiver of any provision (i) of
any Note shall be effective without the written concurrence of the Lender which
is the holder of that Note, (ii) of subsection 2.1A(iv) 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, (iii) 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, 


 


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(iv) 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) of subsection 2.4 that
alters the application of any mandatory or voluntary prepayment as between
Classes without the written concurrence of Requisite Class Lenders of each
Class that is being allocated a lesser amount of any such prepayment as a
result thereof, provided that Requisite Lenders may waive, in whole or
in part, any mandatory prepayment and Requisite Lenders (in addition to each
Lender that thereby increases its Commitment) may increase the aggregate amount
of the Commitments or Loans, in each case so long as the application, as
between Classes, of any portion of such prepayment which is still required to
be made is not altered, and (vi) that increases the amount of a Commitment
of a Lender shall be effective without the consent of such Lender.


 


Notwithstanding
anything to the contrary in this subsection 10.6, in determining whether
Requisite Lenders have consented to any amendment, modification, termination,
waiver or consent, Loans held by United Online or its Subsidiaries shall be
excluded from the calculation of Requisite Lenders, both in calculating the
votes in favor of a particular matter and the aggregate Tranche A Term Loan
Exposure, Tranche B Term Loan Exposure and Revolving Loan Exposure.


 


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.


 


In
addition to the foregoing, Company may supplement the Schedules hereto as contemplated
by this Agreement.


 


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 


 


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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 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.  Administrative Agent or Company may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it, provided
that approval of such procedures may be limited to particular notices or
communications.


 


Loan
Documents and notices under the Loan Documents may be transmitted and/or signed
by telefacsimile and by signatures delivered in ‘PDF’ format by electronic
mail; provided, however, that no signature with respect to any
notice, request, agreement, waiver, amendment or other document that is
intended to have binding effect may be sent by 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
signature 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.


 


Notwithstanding
the foregoing, Company agrees that Administrative Agent may make any written
material delivered by Company to Administrative Agent, as well as any
amendments, waivers, consents and other written information, documents,
instruments and other materials relating to Company, any of their respective
Subsidiaries, or any other materials or matters relating to the Loan Documents
or any of the transactions contemplated hereby that Administrative Agent is
required or authorized pursuant to the terms hereof or of any Loan Document to
provide to Lenders (collectively, the “Communications”)
available to Lenders by posting such notices on a Platform; provided, however,
that any Communications that Company deems to contain material non-public
information (or to be otherwise unsuitable for posting on the Platform) and are
identified in writing to Administrative Agent as such may also be designated in
writing by Company as unauthorized for posting on a Platform and Administrative
Agent will not so post such Communications. 
Company acknowledges that (a) the distribution of material through
an electronic medium is not necessarily secure and that there are
confidentiality and other risks associated with such distribution, (b) a
Platform is provided “as is” and “as available” and (c) neither
Administrative Agent nor any of its Affiliates warrants the accuracy,
completeness, timeliness, sufficiency, or sequencing of the Communications
posted on a Platform.  Administrative
Agent and its Affiliates expressly disclaim with respect to a Platform any
liability for errors in transmission, incorrect or incomplete downloading,
delays in posting or delivery, or problems accessing the Communications posted
on such Platform and any liability for any losses, costs, expenses or
liabilities that may be suffered or incurred in connection with such Platform
(other than losses, costs, expenses or liabilities resulting from
Administrative 


 


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Agent’s gross negligence, willful misconduct or breach
of the Loan Documents).  No warranty of
any kind, express, implied or statutory, including any warranty of
merchantability, fitness for a particular purpose, non-infringement of third
party rights or freedom from viruses or other code defects, is made by
Administrative Agent or any of its Affiliates in connection with any Platform.


 


Each
Lender agrees that notice to it (as provided in the next sentence) specifying
that any Communication has been posted to a Platform shall for purposes of this
Agreement constitute effective delivery to such Lender of such information,
documents or other materials comprising such Communication.  Each Lender agrees (1) to notify, on or
before the date such Lender becomes a party to this Agreement, Administrative
Agent in writing of such Lender’s e-mail address to which a notice may be sent
(and from time to time thereafter to ensure that Administrative Agent has on
record an effective e-mail address for such Lender) and (2) that any
notice may be sent to such e-mail address.


 


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 


 


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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
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 except that
Wells Fargo shall be obligated to fund any Defaulted Term Loans as described in
subsection 2.1D.  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 or
consequential 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.  No Indemnitee shall be liable
for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with the
Loan Documents or the transactions contemplated thereby except as a result of
the Indemnitee’s gross negligence or willful misconduct or breach of any Loan
Document.


 


10.14         Release
of Security Interest or Guaranty.


 


Upon
the sale or other disposition of any Collateral to any Person (other than a
Loan Party) 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 a Loan Party)
that is permitted by this Agreement or to which Requisite Lenders have otherwise
consented, Administrative Agent’s security interest in such Collateral or the
Guaranty of such Subsidiary Guarantor, as applicable, shall be automatically
released without 


 


144

















 


any further act or action by Administrative Agent or
the Lenders simultaneously with the consummation of such sale or other
disposition.  Upon the sale or other
disposition of any Collateral to any Person (other than a Loan Party) that is permitted
by subsection 7.7(iv) or (v) or for which Requisite Lender consent is
required, Company shall deliver to Administrative Agent an Officer’s
Certificate (i) specifying the Collateral or Capital Stock to be sold or
otherwise disposed of in the proposed transaction and (ii) stating that the
Collateral or the Capital Stock subject to such disposition is being sold or
otherwise disposed of in compliance with such subsections or requesting the
consent of Requisite Lenders to such sale. 
If a Loan Party desires additional evidence of the release referenced in
this subsection 10.14, upon delivery to Administrative of the Officer’s
Certificate referenced in the preceding sentence, 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 interest
in such Collateral or such Guaranty as may be reasonably requested by such Loan
Party.


 


10.15         Applicable
Law.


 


THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
IN ANY SUCH LOAN DOCUMENT), AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING SUBSECTION 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 


 


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DOCUMENT, OR ANY OBLIGATIONS HEREUNDER AND
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 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 SUBSECTION 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 


 


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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.


 


10.19         Confidentiality.


 


Each
Lender shall hold all non-public information obtained pursuant to the
requirements of this Agreement 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 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 agree 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, (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 nonconfidential 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
and that no written or oral communications from counsel to an Agent and no
information that is or is designated as privileged or as attorney work product
may be disclosed to any Person unless such Person is a Lender or a Participant
hereunder; provided that, unless specifically prohibited by applicable
law or court order, each Lender shall notify Company in writing 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 


 


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event shall any Lender be obligated or required to
return any materials furnished by Company or any of its Subsidiaries.  In addition, from and after the Closing Date
or the public disclosure of this Agreement by Company, Administrative Agent 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 Agreement shall become
effective upon the execution of a counterpart hereof by each of the parties
hereto.


 


10.21         USA
Patriot Act.


 


Each
Lender hereby notifies Company that pursuant to the requirements of the Patriot
Act , it is required to obtain, verify and record information that identifies
Loan Parties, which information includes the name and address of each Loan
Party and other information that will allow such Lender to identify such Loan
Party in accordance with the Patriot Act.


 


[Remainder
of page intentionally left blank]


 


148
















 


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.


 


COMPANY:


 


	
   

  	
  UNOLA
  CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Mark R.
  Goldston

  
	
   

  	
  Title: 

  	
  Chairman,
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  	
  21301 Burbank
  Boulevard

  
	
   

  	
   

  	
  5th
  Floor

  
	
   

  	
   

  	
  Woodland Hills,
  CA 91367 - 6677

  
	
   

  	
   

  	
   

  
				



 


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LENDERS:


 


	
   

  	
  WELLS
  FARGO BANK, NATIONAL 

  ASSOCIATION,

  
	
   

  	
  individually and as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Bradford E.
  Chambers

  
	
   

  	
  Title: 

  	
  Senior Vice
  President & Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  	
  333 South Grand
  Avenue, 9th Floor

  
	
   

  	
   

  	
  MAC E2064-09C

  
	
   

  	
   

  	
  Los Angeles, CA
  90071

  
	
   

  	
   

  	
  Attn: Brad
  Chambers

  
				



 


S-2

















 


	
   

  	
  AMERICAN AGCREDIT, PCA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary Van
  Schuyver

  
	
   

  	
  Name: 

  	
  Gary Van
  Schuyver

  
	
   

  	
  Title:

  	
  Vice President

  



 


S-3

















 


	
   

  	
  LASALLE BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Travis J.
  Burns

  
	
   

  	
  Name: 

  	
  Travis J. Burns

  
	
   

  	
  Title:

  	
  Senior Vice
  President

  



 


S-4

















 


	
   

  	
  HSBC BANK USA, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Molly
  Drennan

  
	
   

  	
  Name: 

  	
  Molly Drennan

  
	
   

  	
  Title:

  	
  Vice President

  



 


S-5

















 


	
   

  	
  ING (U.S.) CAPITAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven G.
  Fleenor

  
	
   

  	
  Name: 

  	
  Steven G.
  Fleenor

  
	
   

  	
  Title:

  	
  Managing Director

  



 


S-6

















 


FTD
GROUP, INC.(1)


 


FTD Group, Inc. (“FTD”)
shall have no obligations hereunder until the consummation of the Merger.  Prior to that time, the obligations of
Company pursuant to this Agreement and the other Loan Documents shall be solely
those of Acquisition Sub.  Upon
consummation of the Merger, FTD shall (by delivery of this counterpart to
Administrative Agent following consummation of the Merger) assume, and hereby
assumes, all the obligations and other liabilities of Acquisition Sub under
this Agreement and all references to Company contained in this Agreement and
the other Loan Documents shall be deemed to refer to FTD.


 


	
   

  	
  FTD GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
					



 






(1) To be executed
and delivered by FTD Group, Inc. to Administrative Agent on the Closing
Date.


 


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